"Donbass" on gas

Even Ukrainians in the eastern part of the country, which some observers simplistically consider 'pro-Russian', are disturbed by the means gas is procured for Ukraine's consumers. The popular "Donbass" daily runs a story today entitled:

"From hand to hand"

.. it constantly seems that any minute now the system of corruption and opaque state/commercial actions, by means of which someone can acquire billions, will collapse... This edifice of murky affairs started wobbling as early as 1985 - and is still crumbling.

Authority changes, from criminal to [supposedly] one of the people, but the schemes of enrichment remain, because no one destroys them, [on the contrary,] the mechanisms are transferred carefully from hand to hand.

....we thought that after the [March 2006] elections - gas businessmen would be banished in disgrace.. the new authorities would expose the [fraudulent] schemes, and state structures would take over [responsibility] for deliveries of gas into Ukraine, so earning money for the state, and not for the benefit of some unknown budget. But hopes were dashed. No one hurried to return the 'hen which lays gold eggs' to the people. Instead it was handed over with great care to the hands of the [election] winners. RosUkrEnergo" lives and flourishes.

What do the gas magnates hide from the people?

The bill proposed to the VR by Yuliya Tymoshenko on the formation of a temporary investigation commission to investigate the illegal activity of mediators in the Ukrainian gas market and the participation and abuse of power of high ranking officials in this sphere, (N2430) has been ditched because it allegedly does comply with VR regulations... it is only possible to fight with the incomprehensible goings-on in gas dealings when one is in opposition. [We are talking here] according to different unofficial estimates, of tens of millions of dollars a day. Or three and one-half billions of dollars per year.

Change of guard without change of direction.

So someone who is incomprehensible and very serious governs the sole supplier of gas into the Ukraine..with the full blessing of authorities. But as always - the main prize comes last. The most valuable asset in our country is its gas transport system. When Yuriy Boyko was in opposition he exposed Aleksey Ivchenko for the fact that under the management of this main nationalist of the Ukraine "Naftogaz" was accumulating debts just as dog gathers fleas. These criticisms were fair. Now Ivchenko is in parliament, and Boyko himself has taken "Naftogaz" under his wing.

It seemed things would be sorted out, debts repaid, and the schemes set up by predecessors cleaned up, and then everything will be beautifully and it is stable. It didn't happen. [Even] with a change of captain, the ship continues on the same course.

"Naftogaz Ukrainy" intends to draw credit of $550m. for five years in the Credit Suisse International bank, in two tranches, including the first - $350 million - before the end of the year.

Even in June 2006 the management of "Naftogaz" stated that it plans to draw credit for the purchase of gas for the underground depositories. In July "RosUkrEnergo" and JV "UkrGazEnergo" stated that they intended to pump 10.2 billion cubometers of gas for its own needs prior to the start of the heating season 2006-2007. Also part of the proposed credit had to go to the repay $320 million of debts of the state company to "RosUkrEnergo" and "Ukrgazenergo". So most of the first bank tranche will go to pay off debts to "RosUkrEnergo".

Interestingly - in spite of the colossal debts of "NaftoGaz", "RosUkEnergo" (50% of whose shares belong to Gazprom) continues to pump into gas into the Ukrainian depositories for its own purposes. This could be considered as the noble gesture if we believed in the decency of large and important companies. But we are not so naive. And we know that if people do not hurry to get large sums of money back, it means, in the course of time they want to obtain even larger sums. But if they do not hurry even with very large sums? Well, probably, after a time they'll want to seize everything. Don't forget that the debt of Ukraine becomes increasingly greater with each cubic meter of gas consumed.

If the government does not pay soon, according to calculations, then in the course of time the gas transport system of Ukraine will become the subject of haggling between the creditors, in the first place, "Naftogaz". On 18th September "BYuTovets" Nikolai Sivul'skiy declared, "In one of the agreements between the State company and a London company, which during June provided Naftogaz 200 million dollar's worth of credit, it is stated in clear text that the guarantee property, which ensures the recovery of loan, is the gas transport system of the Ukraine".

If we observe the [developing] spectacle then it would be foolish not to be surprised at the actions of of parliamentary leaders, who are clearly preventing an investigation being conducted into the gas system. Serious people divide serious money. But the people, whose labor created everything in this country are passed by with the cash box, just as with previous authorities.

Meanwhile, the lead story in today's 'FT' includes this:

A confidential study by Nato’s economics committee, said Russia was seeking to use energy policy to pursue political ends, particularly in dealings with neighbours such as Georgia and Ukraine.