Trucks Open Capitalist Road : Russia: Auction of 60 state-owned vehicles offers first chance to break hauling monopoly and to use privatization vouchers.

NIZHNY NOVGOROD, Russia —  With its flat tire, shattered windshield and corroded chassis, the dump truck didn’t look capable of carting a pebble out of the parking lot. But Alexander Migunov was counting on it to carry him smack into the middle of Russia’s chaotic market economy.

The mud-splattered truck was one of 60 state-owned vehicles sold to entrepreneurs in this Volga River city Saturday in a bold effort to break the government’s stranglehold on cargo transport.

Historic “firsts” have come fast and furious in post-Communist Russia, and Saturday’s raucous auction marked another: the first time in seven decades that ordinary citizens could buy their own trucks and establish private transport businesses to challenge the government monopoly.

What’s more, the selloff presented Russians with the first opportunity to use their “privatization checks”--10,000-ruble investment vouchers that the government has given each citizen in an attempt to divvy up state property accumulated under Communist rule.

“With all this unemployment cropping up, I figure I could be out of work at any time, so this truck could mean my daily bread,” Migunov, 35, said as he examined the fleet of battered trucks slated to go on the auction block.

Exuberantly, he outlined plans to start a one-man transport firm to ferry wood to suburbs where construction of country homes is booming. “There’s the potential for a lot of work,” he said sagely.

Confident that small private operations will siphon customers from the inefficient, overpriced government monopoly, more than 600 people turned up to bid for trucks at Saturday’s auction.

“What we’ve done today is not just sell 60 trucks--we’ve created 40 to 50 new businesses,” declared Edward Nassim, coordinator of European projects for the International Finance Corp., which devised the privatization plan.

Under the program, Nizhny Novgorod’s 42 government-owned trucking enterprises--all subsidiaries of a nationwide transportation conglomerate--will convert to private entities by issuing stock.

To open the business to competition, the plan requires each former state firm to put up 20% of its fleet for auction--and to relinquish most of the sale proceeds to municipal and federal authorities.

“Of course it’s not profitable for us to sell 20% of our trucks,” Vitaly Yanover, director of the newly privatized Progress transport firm, said.

“But this is the regional plan, and whether we like it or not, we have to follow it,” he added, with the resignation of a man who has followed many an order.

There was some resistance, but the brash reformers spearheading Nizhny Novgorod’s drive toward a market economy managed to get the program through.

Outside this region in Russia’s heartland, however, President Boris N. Yeltsin’s ambitious plans to sell state property have stalled miserably. The government still employs a whopping 87% of the national work force, and the state transportation monopoly still controls 75% of Russia’s 350,000 trucks.

Worse, the state-run transportation industry plays by old rules: It establishes an inflexible schedule of routes catering mainly to government-owned enterprises. As a result, managers of newly privatized shops have to scramble to find drivers.

“People go up to trucks or taxis on the streets, flag them down and say, ‘Please help us move our boxes,’ ” Alan Bigman, an International Finance Corp. consultant, said.

“Clearly, that is not efficient or reliable,” Bigman added. “If you can’t get the goods to stores, you can’t have a market economy.”

At Saturday’s truck sale, a tuxedo-clad auctioneer with a voice to rival a circus barker slammed his wooden gavel emphatically as bids climbed as high as 1 million rubles--only $2,500, but higher than the price of some brand new trucks.

Buyers eagerly snapped up the vehicles, undeterred by the skyrocketing price of gasoline, the dubious roadworthiness of some of the trucks and the daunting prospect of breaking into a field dominated by enormous enterprises.

Most took advantage of a protocol allowing Nizhny Novgorod residents to pay half the price with privatization checks--a bargain, since the vouchers are credited at face value but currently sell on the street for half their nominal worth.

Introduced with great fanfare earlier this fall, Yeltsin’s voucher program has fallen flat. Only 15% of 148 million eligible Russians have bothered to pick up their privatization checks.

Reformers hailed Saturday’s auction as a milestone because it proved that vouchers could actually be used to buy something tangible; buyers took home a truck, rather than paper stock in a firm that could go bankrupt overnight.