ANALYSIS: Ukraine's Cabinet wants cash for energy (05/28/00)

ANALYSIS

Ukraine's Cabinet wants cash for energy

by Jan Maksymiuk
RFE/RL Poland, Belarus and Ukraine Report

PRAGUE - Ukraine's Cabinet of Ministers has revoked 23 resolutions allowing non-cash payment for energy and fuel supplies, Interfax reported on May 12. Among the resolutions canceled was the May 21, 1999, resolution "On Improving Payments for Heat and Electricity," which introduced barter settlements between thermal power plants and their customers and the January 21, 1998, resolution "On Securing the Supply of Fuel, Equipment and Materials to Nuclear Power Stations," which allowed the national atomic energy company, Enerhoatom, to supply cheaper electricity as well as use middlemen in deals involving barter. In 1999 cash was paid for only 7.7 percent of all electricity sold in Ukraine, while nearly 70 percent of electricity was traded in barter deals.

In what seems to be an immediate response to the Cabinet's decisions, Enerhoatom on May 12 cut off power supplies to eight enterprises in Vinnytsia Oblast, demanding 100 percent cash payments for electricity.

Vice Prime Minister Yulia Tymoshenko, who is overseeing reform in Ukraine's energy sector, told the newspaper Den on May 15 that "the government and I personally have stirred all the quagmire that exists in the energy sector. We have stirred it not just to frighten a little or threaten [somebody]. No. We are constructing new rules of the game - transparent, clear-cut, understandable for everybody. ... And we have already achieved a result - we are actually limiting the shadow sphere in an essential way and introducing normal market instruments that do not give opportunities to steal from the state."

Mykhailo Brodskyi, head of the Verkhovna Rada's Committee on Industrial Policy, expressed doubts about the government's achievements in generating more money for energy supplies.

He told Den: "I do not think that the government is making any progress. I think that the government now is a talk shop. Everybody has forgotten, for some reason, that it was I who announced that Enerhoatom had been ruined, that benefiting comrades had been stealing money [from] there. The government has won an incomprehensible victory - it has begun to collect 100 million [hrv] instead of 10 [for power supplies]. I have a question: And where was that 90 million - which appeared suddenly - taken from? Who had been taking that 90 million every month until now? [Has the government] clarified this question?"

Jan Maksymiuk is the Belarus, Ukraine and Poland specialist on the staff of RFE/RL Newsline.

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