RUSSIA: Far East Faces Major Energy Crisis And Power Rationing

By IPS Correspondents Reprint | | Print |

Andrei Ivanov

MOSCOW, Aug 20 1996 (IPS) - With energy shortages reaching catastrophic levels and an all-out miners’ strike expected in a few days, Moscow officials have publicly reprimanded the governor of Russia’s far eastern territory and given him a deadline to put things right.

The energy situation in the far eastern Maritime (Primorsky) Territory is the worst in Russia, governor Yevgeny Nazdratenko was told by his federal government bosses in Moscow this week.

He has been given until Sep. 15 to sort out the mess, stabilise the energy situation and ensure the payment of outstanding wages to the miners and power workers. However a nationwide coal mines strike to recover unpaid wages is planned for Aug. 25.

The deadline order followed two months of strikes by energy workers which virtually paralysed the economy of the region.

The federal authorities have also completed a government investigation into financial irregularities and ordered Nazdratenko to sack his deputy, Mikhail Savchenko, who diverted government funds sent to pay miners’ wage arrears in an earlier crisis.

And the national power supply utility YES Rossii has been advised to dismiss Yuri Basharov as head of Dalenergo, the local subsidiary power utility supposed to supply the Territory.

A chain of unpaid bills from consumer to power utility, to power generator to coal shippers and miners has starved all of the cash they need to pay wages. Some miners have not been paid since January and are striking for their money.

The governor’s office tried to break the circle at the last minute by raising electricity charges and ordering enterprises to pay Dalenergo with goods in kind.

But Dalenergo, the sole supplier of electricity in Maritime Territory, was forced to cut power supplies to consumers as power stations ran out of funds to pay for fuel oil and coal. Consumers owed Dalenergo nearly 1,500 billion roubles (293 million dollars), and the company had been unable to lay in fuel stocks for winter.

Finally 300 workers at the Territory’s key Primorskaya thermal power station in Luchegorsk — unpaid for over five months — came out on strike in support of the region’s 12,000 striking coal miners.

The plant provides half the Maritime Territory’s electricity. The region’s other main plant, the Artem power station, shut down on Jul. 12. It was the first stoppage through lack of fuel in the Artem plant’s 60-year history.

Savchenko and Basharov considered desperate measures to get themselves out of trouble, even jointly appealing to Moscow to impose a local state of emergency in the region after the Primorskaya plant came out.

A stockpile of 1.5 million tonnes of coal will be needed on hand to ensure an orderly return to normal production, by Oct. 1 at the latest. But what coal that does arrive goes straight to the furnaces at the plants. This lack of flexible reserve means that long-term power rationing now seems unavoidable.

The chief engineer for Dalenergo, Yuriy Likhoyda, even appealed to the Russian Navy’s Pacific Fleet command for emergency fuel oil supplies. “If the fleet does not help us, we will be compelled to disconnect all consumers without distinction — objects of federal importance, kindergartens and hospitals,” Likhoyda said.

Supplies have been allocated on a priority basis to water pumping stations, maternity homes, hospitals, child-care’ and medical establishments and federal government bodies, but many homes remain without power.

Russian border troops were forced to disconnect the alarm system on the Russian-Chinese border and 33 military units in the territory were left without electricity.

Large-scale financial irregularities in the region were blamed in part for the crisis after it was discovered that government money allocated to pay the miners earlier in the year had never reached them.

A commission of the Russian Presidential Control and Auditing Board arrived in Vladivostok in mid-August to investigate the fate of 60 billion roubles (11.7 million dollars) allocated to the Maritime Territory miners in February and a further 82 billion allocated in March.

It found that only 76 billion ever reached the miners, 20 billion in February and 56 billion in March. Of another 77 billion roubles allocated in August only 38.8 billion had been paid out.

If the miners had received all the money due to them the crisis would not have been so acute, says Control Board head Alexei Kudrin. “The use of the miners’ money the purposes other than those intended is one of the reasons for the tense atmosphere in mines,” conceded Yuri Malyshev, head of the Russian federal coal utility Rosugol.

The investigators also identified deeper underlying causes for the crisis including a decision by the regional energy commission, headed by Savchenko, to set electricity prices too low which in turn undermined attempts by Dalenergo to become self-financing.

However, Dalenergo was criticised for its own financial shortcomings. For the future, a new programme is being worked out by Rosugol and YES Rossii involving a system of mutual payments using financial ‘bills’ instead of cash with the aim of increasing liquidity and preventing another build up of arrears.

But this has failed to satisfy the miners who are calling for the resignation of management in both companies.

Minister of Fuel and Energy Yuri Shafranik says that in future Dalenergo will receive payments for power directly from its consumers, by-passing intermediaries. The Ministry is investigating over 3,000 intermediaries involved in the sale of electricity and has agreed to forgive all the territory’s miners’ and energy workers’ debts.

Moscow has earmarked 4,600 billion roubles to help the region’s fuel and energy sector but is demanding changes. Shafranik says electricity prices will be increased to 530 roubles per kWh.

The head of the coal department at the Economics Ministry, Igor Kozhukovskiy blames the crisis on ineffective state regulation of the national grid and the railways, the national monopolies vital to competitive coal production. He also cited inefficient coal companies and the poor social infrastructure in mining towns.

To avoid future crises the government plans to “send money for paying wages, bypassing local administrations”, according to Malyshev.

He is critical of the management of the Maritime Territory’s mining management for expecting state aid “as they did in the days of old”.

He has advised the company: “Show more initiative in making use of economic independence granted to you,” adding, “No one is going to tackle your problems for you.”