On November 9 Prime Minister Anatoly Kinakh, reacting to presidential and media criticism and bowing to pressure from the coal miners’ trade union, held a cabinet meeting on the question of coal. The governmental Ukrainian Coal Program for 2001-2010 is not working. Nor is it regarded by miners as a basis for cooperation because it is not being funded from budget sources. The coal miners’ union leader Viktor Turmanov told The Day that, as this problem still remains unsolved, it is not ruled out that, following the protest actions in front of the Cabinet of Ministers and Verkhovna Rada, miners will again choose to suspend coal deliveries, although thermal power plant coal stores are not filled to capacity.
That same day, the World Bank announced bluntly that progress in oblenerho (regional power generation and supply companies — Ed.) privatization is an indispensable condition for Ukraine receiving the second part of a program loan installment before the end of 2001. After talks with First Vice Premier Oleh Dubyna, World Bank Country Director for Belarus and Ukraine Luca Barbone announced that Kyiv stands “very high” chances of getting the $100 million before the end of 2001. He explained quite plainly that by progress in oblenerho privatization he means fulfillment by the Ukrainian government of its commitments to raise rates for electricity supplied by the privatized oblenerho. “I am absolutely sure that unless you fulfill these conditions about charges, privatization progress, and the participation of conciliatory boards in privatization, there can be no progress in this area,” he said. The World Bank “expects” the Ukrainian government to make the corresponding decisions. In case ministerial chairs screech positively in the morning, the bank might also make its own decision in late November or early December... Asked if he had noticed political will of the current government to solve these problems, Mr. Barbone said, “Yes, we were told this quite sincerely.”
Following an official meeting with Mr. Barbone, First Vice Speaker of Verkhovna Rada Viktor Medvedchuk announced that funds to pay the higher rates had already been factored into the budget. Yet, Interfax-Ukraine quotes him as saying, “This is a criminal decision for Ukraine, and I am deliberately using this categorical expression.” According to the Vice Speaker, Ukraine now faces a dilemma. On the one hand, it is necessary to raise electricity rates and continue to privatize the oblenerho. On the other hand, the higher rates “will inevitably push up the cost of living in Ukraine.”
Until recently, energy fees were increased at the expense of raised wholesale prices for electricity, Olha Patramanska, Chernihivoblenerho financial controller, told The Day, while the price of electric power transport and delivery, that is, the oblenerho’s share, has remained unchanged for years. In the financial controller’s opinion, the current condition of power-transmission grids is close to critical. According to her, the charge also does not take into account the necessity of insuring the grids now being pilfered almost without obstacles, because there are no funds to keep them under guard. “The price should realistically compensate the companies for the expenses they incur for the transport and delivery of electrical energy,” the expert says. “Otherwise, the customer could simply be left without electricity, without light, as it was last year when all Ukraine was offsetting the consequences of a natural calamity that affected the power-supply system in a number of regions. Therefore, following the much publicized innovations in the energy market and the sale of six oblenerho, Ukraine is facing a dilemma: either not to raise rates and thus create problems with loans and watch the oblenerho system degrade, or to raise the rates and thus hit its own citizens.
