13 of 16 SECs on formation of stabilization funds unprofitable – Uskenbayev

ASTANA. August 13. KAZINFORM - Socio-entrepreneurial corporations (SECs) involved in the creation of stabilization funds are unprofitable, First Deputy Minister of Regional Development Kairbek Uskenbayev told a meeting of the Government on Tuesday, according to astana.kz.

"At the moment 13 of 16 SECs incur losses on the formation of stabilization funds," he said.

According to him, this is due to the fact that the SECs cover overhead costs for the formation and use of the stabilization fund through the difference between the fixed and the market price, and by the revenues from idle funds on deposits in banks.

"Given the fact that the market price is constantly fluctuating, very often there are situations when the market price falls below the fixed price, and the selling price for SECs goods is lower than the purchase price," the Deputy Minister emphasized.

Also, SECs have to cover the costs of storage and transportation of goods, since they do not have the necessary quality infrastructure, own storage spaces, special transport and market places.

Thus, there are problems with the mechanism of implementation and prediction of market prices.

"All this leads to the fact that the SECs often cover the costs associated with a reduction in market prices, food spoilage, VAT payments," Uskenbayev concluded.