According to Secretary of the National Security and Defense Council Yevhen Marchuk, a recent meeting on fuel and energy problems focused on the fulfillment of presidential instructions to amend the energy policy and “neutralize the negative effect of fuel and energy debts.”
Mr. Marchuk explained that the meeting was a logical continuation of the measures President Kuchma is taking personally in “such a complex field as energy.” He emphasized that the energy sector has recently seen some “foreseen and unforeseen” negative phenomena.
Mr. Marchuk concluded that nuclear power plant safety has become a “highly sensitive” problem because “the hands-on pattern of distributing funds, instead of using an algorithm, worked out on the energy market.” As the secretary noted, what is dubbed as “hands-on control” was applied over 200 times last year, such that “payments for electrical power were not redistributed in the energy market algorithm.” Mr. Marchuk said that “a regional leader, speaking of the Southern Ukrainian Nuclear Power Plant which had received only 5% of the funds needed for repairs and preventive maintenance,” confirmed the negative effect of such “hands- on control.” To prevent such irregularities, the president’s instruction sets out measures to make impossible administrative intervention in the distribution of funds among energy market participants and violations of contracts, and also calls for the cancellation of government decisions that cause enterprises to incur losses and break the transparent system of payments on the energy market.
Mr. Marchuk believes today’s Ukraine “is essentially a world leader in burning (imported — Ed.) gas,” which must be paid for in hard currency. Although “the winter is quite warm,” Mr. Marchuk stated that Ukraine has begun to burn more gas than in years when the winter was colder. This is “something of a paradox,” he noted. According to his information, Ukraine is now burning almost 45 million cubic meters of natural gas a day. Simultaneously, Mr. Marchuk noted, some regional leaders “have not paid proper attention” to the problem of payments. Speakers at the meeting pointed out “rather serious negative phenomena” connected with the choice of “payment priorities” by some oblast leaders. Then the meeting heard managers of the indebted and the most power-consuming enterprises. According to Mr. Marchuk’s information, Luhansk and Donetsk oblasts top the list of those who delay payments for the power resources they use (one presidential instructions provides for criminal liability for the nonpayment of money for large-scale energy resources).
According to Mr. Marchuk, the president “categorically rejects barterization” and debt write-offs in the energy sector. Mr. Marchuk added that “barter settlements can be allowed within the energy industry, but only as an exception, not the rule.” He noted that the meeting “was told in no uncertain terms that no debts will ever be written off,” but the restructuring debts from previous years is possible. The president instructed the Fuel and Energy Ministry along with oblast leaders “to quickly restructure” the debts of some enterprises, because failure to solve this problem will lead to increased penalties and fines, civil court cases, and bankruptcy of the enterprises. As a source at this ministry explained to The Day, the instruction calls for the gradual creation of conditions such that payments for electrical power will be exclusively in the form of money.
According to Secretary Marchuk, Prime Minister Viktor Yushchenko said at the meeting that the government had basically accepted the program of coal industry reforms. Mr. Marchuk noted that “there were serious complaints” about this program from the Ministries of Fuel and Energy, Finance, and the Economy. Thus the coal sector reform program will be revised and the government will decide “at what stage” it will be adopted in final form. Mr. Marchuk thinks one of the vice premiers will be made responsible for program implementation. Mr. Marchuk recalled that formerly “the fuel- and-energy complex was taken care of” by the first vice premier.
Chairman of the Zaporizhzhia Oblast Administration Oleksiy Kucherenko told The Day’s correspondent that President Kuchma had described an extremely difficult situation in the fuel and energy complex and said personal responsibility for this should be borne by the prime minister, minister for fuel and energy, Naftohaz Ukrayiny (Oil & Gas of Ukraine State Company) president, oblast administration chairpersons, and the managers of the enterprises deepest in debt. But, Mr. Kucherenko said, he was disappointed by many statements at the meeting. We just have no alternative to timely and full payments for energy. Meanwhile, the meeting heard some diametrically opposed viewpoints of factory managers, on the one hand, and energy executives, on the other. Next week the problems of energy will be discussed, perhaps more constructively, Mr. Kucherenko hopes, at the gubernatorial level. In the Zaporizhzhia governor’s opinion, the energy sector can be put right only by means of decentralization, with the center of responsibility and related powers, including financial, being shifted to the regions.
