Saturday, October 21, 2006

Striking hard bargains..

According to an article in today's 'Kommersant-Ukraina', Ukraine has has to agree to a number of political and economic conditions in exchange for Russia guaranteeing to fix the price of natural gas in 2007 at $130 per 1000 cu.m,

They are: Ukraine has to conduct a referendum in the near future on Ukraine's entry [or otherwise] into NATO,

Ukraine has to agree to extend the treaty which allows the Russian Black Sea fleet to use Ukrainian ports and territory after 2017 [when current agreements expire],

and Ukraine has to agree to use the monopolist intermediary gas trading company, RosUkrEnergo for the next five years for its gas purchases.

However, this would only postpone hikes in the price of gas for one year. Yanukovych has already stated that, "The price of the gas for the Ukraine will be $200-210 per thousand of cubic meters in the following (2008 -7) year."

Another article in the same newspaper describes conflicts between some of Ukraine's biggest industrial corporations and their suppliers of raw materials.

I've translated a bit:
On Wednesday about 300 workers from the Alchevsk Metallurgical Kombinat (AMK) which is controlled by "Industrial Union of Donbass" (IUD), blocked the work of the Makeyevka Metallurgical Plant (MMZ), which is part of Vadim Novinskiy's "Smart- group".

The management and workers of AMK were reacting to an increase in the prices of iron-ore raw material supplied by the ['Smart-group'-controlled] Ingulets GOK [ore enrichment plant] which is actually situated much further away, near Kryviy Rih. Experts consider that similar conflicts could be repeated with other participants in the market.

The annual turnover of IUD is about $3,5 billion - its joint owners are Sergey Taruta and Vitaliy Hayduk, who President Yushchenko recently appointed secretary of the National Security and Defense Council.

MMZ published a press release, reporting that on 18th October approximately 300 AMK workers from Lugansk travelled to the Donetsk region to block the work of the MMZ enterprise. Two of five railway lines were partially blocked by some of the men, disrupting railroad freight traffic to MMZ. Another group of workers from AMK, headed by the chairman of trade-union committee Boris Shevel'gin, arrived at MMZ's administration offices, which they picketed. Their actions were precipitated by Inguletsk GOK's sudden steep price increases for iron-ore raw material from November 2006.

The tangled web of ownership of enterprises that form 'Smart-Group' is partially revealed in this informative website.

More on similar struggles here and here.

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