Tymoshenko under fire for presenting allegedly distorted report on energy sector (10/15/00)

Tymoshenko under fire for presenting allegedly distorted report on energy sector

by Roman Woronowycz
Kyiv Press Bureau

KYIV - Ukraine's beleaguered Vice Prime Minister Yulia Tymoshenko, already under pressure from business oligarchs and politicians to back away from fuel and energy sector reforms, came under further attack - this time from within her own government - for allegedly presenting a distorted financial picture of the state of the sector.

Ms. Tymoshenko reported on October 10 to the Verkhovna Rada during a Government Day presentation that conditions in the fuel and energy industry were much improved, that fuel production was up, and that payments to the government for coal, oil and gas consumption had increased considerably in the last eight months.

Just hours later, State Tax Administration Chairman Mykola Azarov fired off a statement in which he labeled Ms. Tymoshenko's figures inaccurate. Ukraine's chief tax collector said that, contrary to Ms. Tymoshenko's assertions, the situation in the sector was reaching catastrophic dimensions.

Prime Minister Viktor Yuschenko, maintaining the strong support he has displayed repeatedly for his "energy tsarina," quickly sided with her in the conflict between members of his government. During a Cabinet of Ministers meeting the next day Mr. Yuschenko chastised Mr. Azarov for "unwise steps" in airing in public what the prime minister said amounted to "discussions on arithmetic" and called on his ministers to become "team players" working for a common goal.

"Each person should care for his functional responsibilities and not provoke political mischief," said Mr. Yuschenko during the Cabinet meeting.

Nonetheless the prime minister directed that an inquiry take place to determine whose numbers were accurate.

During a 25-minute presentation to Ukraine's Verkhovna Rada the day before, Ms. Tymoshenko had told lawmakers that by pressuring commercial consumers she had increased repayment for energy usage from 7 percent in 1999 to 70 percent in 2000. She said that 2.75 billion hrv had entered state coffers from energy payments in the first eight months of 2000, up over the 1.39 billion hrv received for the same period in 1999.

She also took credit for what she termed was growth in every branch of the sector, except for oil refining. She presented figures that showed a 0.1 percent increase in oil extraction, a 2.2 increase in gas extraction and a 6 percent increase in coal output. Only oil refining has shown a precipitous drop this year, according to Ms. Tymoshenko, falling by 41 percent thus far.

Ms. Tymoshenko also asserted, in contrast to allegations by some lawmakers and energy sector business moguls, that Ukraine is well-prepared for the heavy energy consumption of the fall and winter months. She said this was chiefly because the government had purchased a sufficient amount of nuclear fuel from Russia to assure that 12 nuclear plants would run full-time this winter, a substantial increase over the nine blocks that functioned continuously last year.

"I see no energy shortages this winter," said Ms. Tymoshenko, "unless we somehow undermine the system or destroy our stockpiles."

In a wide-ranging defense of her efforts to bring the unwieldy and debt-ridden sector - which is totally dependent on Russia for supplies - under control she said the Ukrainian government was close to agreement on a 10-year repayment deal on debts to Russia's gas monopoly, Gazprom.

Ms. Tymoshenko underscored that in order for Ukraine's energy problems to go away the sector must be restructured so that there is a diversification of the country's future supplies. She said the government must develop agreements with Turkmenistan as a strategic energy partner, not only to supply much-needed gas but as an associate in the development of a gas pipeline.

Ukraine's chief energy official attempted to paint an optimistic picture of the current situation in the fuel and energy sector. She said that, in addition to the increase in consumption reimbursement and production, she had managed to pay wage arrears to workers, had brought the country's chief energy wholesaler, Naftohaz Ukrainy, under control and had succeeded in resolving construction delays at the nuclear reactors in Khmelnytskyi and Rivne.

But Ms. Tymoshenko was not ready to say that all was hunky-dory.

"I will not give any guarantees that by the end of the year everything in this sector will be okay," said Ms. Tymoshenko.

She said the major problem the energy industry and the government must face is the continued high level of corruption, while emphasizing that the coal industry in particular is nearly unregulated, with corruption found at all levels. She blamed laxness by Ukraine's law enforcement agencies in particular and the government in general for continued corruption and criminal activity in the energy sector.

"There is no such thing as insufficient resources, there is no such thing as insufficient finances, there is only insufficient political will," Ms. Tymoshenko stated.

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