The government errs, the consumer pays

In contravention of all laws, Naftohaz Ukrainy, Ukraine’s largest state-run company, has been working without governmental supervision for more than six months — since Nov. 15, when the government reversed the decision on appointing members of the company’s supervisory board. The fuel and energy minister introduced the company’s new top executives to the Naftohaz staff only last Tuesday. They are Oleksiy Ivchenko, chairman of the Supervisory Board (who just made his final choice between this post and a seat in parliament) and Oleksandr Bolkisiev, chairman of the Board of Directors.

What prompted the government to announce these appointments now that there is a glimmer of hope that the coalition-forming marathon is drawing to a close? It looks as though the current cabinet, a creature of Our Ukraine, is very afraid that the BYuT, now pushing for power with its white-and-red hearts flying (under the coalition agreement, Naftohaz is this bloc’s preserve), will use its control over the gas monopolist to take Ukraine’s financial strings into its hands. Politically, this amounts to Yulia Tymoshenko’s victory in the next presidential elections (nobody seriously considers her protestations that she will not take part in them).

So, like several times before, the government had to be guided by revolutionary expediency rather than obey the law. Naturally, the innately honest Prime Minister Yuriy Yekhanurov, who was apparently forced to make this decision in a clear breach of ethics with respect to his democratic coalition partners, looked somewhat off-color when he was explaining to journalists the reason why MP Ivchenko was being appointed chair of the oil and gas supervisors. Asked bluntly why no one but Ivchenko was appointed to this post, the head of government emphasized that this decision was made because his candidature was proposed by the Ministry for Fuel and Energy.

It’s ludicrous for this ministry to be dictating to the rest of the government on how to staff offices that wield a great deal more real power, not titular, than any other government posts. It is no accident that Ivchenko, who has not yet formally and publicly given up his parliamentary seat, came to be introduced to the company that knows him very well. The impression is that the intrigue with the chief Naftohaz supervisor is going to be a long one.

But Ivchenko should be given credit for his courage. All those who know about his relationship with Tymoshenko-who is taking the final measurements for her prime ministerial chair — cannot help worrying about his future. In these circumstances, very few people will advise him to relinquish his parliamentary mandate. However, this piece of advice may have come from the president, who is seriously concerned about Tymoshenko’s intention to revise the January 2006 Ukrainian-Russian gas deal that, one way or another, is still helping to supply our country with gas, which is not so expensive by European standards. What guarantees did Ivchenko receive from the guarantor of the constitution?

Asked by The Day to comment on the appointment of Naftohaz’s top executives, Valeriy Borovyk, chairman of the board of the New Energy of Ukraine alliance, said, “All of our existing gas problems and the shady system of relations in the gas sector are the result of the work of former top Naftohaz executives. It is very surprising that this appointment was made so hastily (on the second attempt at that) before the new cabinet was formed. This decision is incorrect, at the very least.”

Last Wednesday Borovyk also accused the government of unfairly and monopolistically shifting responsibility for its clumsy policies in the gas and housing/public utilities sectors, which have seen no reforms in 15 years of independence and in the past 18 months, onto consumers.

“New Energy of Ukraine’s calculations show that payments for consumed energy resources and services exceed the cost of supplied resources by more than 2.5 times. Payments for consumed resources and services in 2004 totaled UAH 79.03 billion, while supplies of primary and secondary resources and services were worth UAH 30.97 billion — this is more than a twofold difference,” Borovyk told journalists.

According to the head of the new energy alliance, it was “unfair” to raise domestic gas rates by 85 percent, and the methods of assessing these rates were “incorrect”... There are two diametrically opposing poles in Ukraine: one, usually the powers-that-be, says that we will eventually have to accept the tariff increase, otherwise we will pull the plug on the housing and public utilities sector, while the other suggests that tariff increases be subsidized at state expense. We are offering a third option: to establish a single state-run energy resources monitoring system and set up a special state-owned enterprise,” said Borovyk.

The government will probably not hear or will just ignore these accusations. As for the proposed state-run primary and secondary energy resources monitoring enterprise, it will most likely be nipped in the bud — who cares about such control when, as someone famously said, in the conditions of systemic disintegration there will always be people who know how to line their pockets?