Last Wednesday, addressing the Verkhovna Rada Committee on the Fuel- and-Energy Complex, Nuclear Policies and Nuclear Safety, Vice-Prime Minister Yulia Tymoshenko submitted the draft law On Amending the Law ‘On Electric Energy’ coordinated with all ministers and signed by the prime minister, The Day was told in the committee.
The vice-premier motivated the proposed changes by the necessity to streamline relations on the electric energy wholesale market, and ensure energy safety and a trouble-free functioning of Ukraine’s united power- supply system. The draft legitimizes the procedure of transferring the funds raised on the wholesale electric energy market exclusively onto the distribution account of a wholesale electric power supplier.
Meanwhile, the independent trade union of energy workers demands that the situation in the energy sector be discussed at a meeting of the National Security and Defense Council. This union’s conference, held in Kyiv with participation of regional power-supply agencies (oblenerho) representatives, appealed to President Leonid Kuchma, Verkhovna Rada Speaker Ivan Pliushch, and Prime Minister Viktor Yushchenko, “to stop he destructive experiment of re- carving the energy market” and dismiss the official in charge of the energy sector, Vice-Premier Ms. Tymoshenko, who “keeps the sector in tension without proposing any constructive step to ride out the crisis.” The conference participants subjected to criticism the latest decisions of the Cabinet of Ministers and the National Bank of Ukraine to authorize commercial banks to distribute through the sector’s distribution accounts the funds coming from electric power consumers. Besides, the conference participants think that if the government passes the resolution On Improving Relations between the Subjects of the Electric Energy Market, power-supply enterprises will be pushed aside from the distribution of the sector’s money flows, while “the power-supply workers’ funds will be managed by bureaucrats and the related commercial structures.”
Of course, Ms. Tymoshenko’s press service denies the trade union’s statements, calling them speculative and aimed at defending the interests of the owners of the privatized oblenerho, and claiming that, according to most experts, it is the activities of the privatized oblenerho that has put Ukraine’s energy security on the brink of a disaster.
What is more, deputy chairman of the State Property Fund of Ukraine, Yury Hryshan, said last Thursday that the sales of shares of the first group of oblenerho would begin in December. But will they be able to find investors in this situation? A German economic consultative group attached to the government of Ukraine makes a conclusion in the Comments on the Electric Energy Sector Debates issued with the participation of experts from the research, educational and banking institutions of Germany, that the problems of the Ukrainian energy sector are as follows: Ukraine has failed to create preconditions for any effective model of a market economy. The German experts advise our government, in particular, to set competition rules on the energy market well before privatization has been carried out.
Meanwhile, The Day’s experts point out that Mr. Yushchenko signed the above-mentioned draft law in the absence of the opponents, Serhiy Tyhypko and Serhiy Tulub, who seem to have decided to discontinue struggle for tactical reasons (the former is running for parliament, the latter is ill). However, the “retreat” of the anti-Tymoshenko forces seems to have stopped. Last Friday the ministry for fuel and energy leadership with Mr. Tulub at the head met in Kyiv with the US energy secretary J. Richardson, which will undoubtedly strengthen the minister’s positions in his continuous, if played down, dispute with the vice-premier.
PS. President Leonid Kuchma has forbidden Prime Minister Viktor Yushchenko and acting president of Naftohaz Uktrainy JSC, Ihor Didenko, to take off Russian gas without permission and to deliver gas to insolvent consumers. As the President’s press service told UNIAN, this decision was made because the non-sanctioned gas take-off still continues, reaching 1.2 billion cu. m. in May alone.
COMMENT
Oleksandr NARBUT, president, Pulsar holding company :
“Reforming the energy sector is undoubtedly the challenge of time. But is it realistic to reform any market, especially in such an important field for Ukraine as energy, by constant revolutionary intervention in some of its elements? The answer is obvious: revolutionary intervention in the market only worsens the situation.
What is participation of the state, as a payments intermediary, in the market fraught with? It is easy to find examples. Therefore, concentration of financial and material resources in a state-run enterprise is very likely to lead to their loss or ineffective utilization, while administrative control over the flow of money will not solve the problems. The government should concentrate on the creation of a natural competitive environment on this market, clearly distinguishing the rights to own electric energy. When sales are carried out blindly via the Enerhorynok enterprise, everything boils down to the question: who, whom to, and how much owes? And it is not clear whether payments between oblenerho and the energy market are improving or deteriorating. In other words, the current reform leads us to, rather than takes out of, a kind of a tortuous maze. This raises an absolutely natural question: is it realistic to attract investors to oblenerho privatization on the conditions good for Ukraine if our model essentially differs from one in the economically developed countries? Suffice it to recall the European Union’s Energy Directive which clearly describes the system of relations in the energy complex, as well as all the areas of the latter where state intervention is necessary and obligatory and the sectors where only market competition should exist. This document also says that governmental regulation must extend to the prices of monopoly enterprises, i.e., in our conditions, oblenerho ’s electric power transportation tariffs, while energy sale prices should be set on the competitive market.
Failing to solve all these problems today, the government pushes itself into a blind alley. What also remains dubious in all this debate is the prime minister’s stand. This is the economic sector about which he must clearly state his position. If all i’s are not dotted and t’s crossed, this will automatically complicate not only the problems of preparation for winter but also the problem of the government’s viability.”
