Wednesday, 24 September 2003

KYRGYZSTAN’S ENERGY SECTOR MIGHT SOON FACE CRISIS

Published in Field Reports

By Gulzina Karim kyzy (9/24/2003 issue of the CACI Analyst)

On September 18 at a press conference held in the information agency AKIpress, the Chairman of the Legislative Assembly (lower chamber of the Kyrgyz parliament) Committee on matters of fuel and energy Tairbek Sarpashev said that if the situation keeps its current pace, a crisis in the energy sector can come in January or February of 2004. According to him, at present there are three important issues in the energy sector of Kyrgyzstan. Since the division of the “Kyrgyzenergo” into three companies, a system of interrelation among them has not been worked out yet.
On September 18 at a press conference held in the information agency AKIpress, the Chairman of the Legislative Assembly (lower chamber of the Kyrgyz parliament) Committee on matters of fuel and energy Tairbek Sarpashev said that if the situation keeps its current pace, a crisis in the energy sector can come in January or February of 2004. According to him, at present there are three important issues in the energy sector of Kyrgyzstan. Since the division of the “Kyrgyzenergo” into three companies, a system of interrelation among them has not been worked out yet. The population’s debt for used gas has reached an unprecedented level, constituting 2,622 million som (ca 42 som/$1). Social tensions are rising. Besides, this year’s rainy season negatively influenced the energy sector. Uzbekistan and Kazakhstan’s need for water was not significant, which led to the reduction in generating electric power. Consequently there will be no gas from Uzbekistan in exchange for electrical energy. According Sarpashev, on top of that power engineering specialists owe Uzbekistan 7 million US dollars for supplying the Bishkek thermoelectric plant. Corruption and theft are being named as the main reasons for the poor state of the country’s energy sector. As Sarpashev says, corruption and theft in this sector have become systematic, beginning with minor theft and ending with exerting influence on the decision-making processes on top governmental levels. Recently at the session of the Legislative Assembly, during which the issues within the country’s energy sector were discussed, deputies agreed that corruption in the energy sector has been acquiring a new and more massive character. According to the deputies, billing non-existent users has become a usual phenomenon. Then these sums turn into consumers’ debts, which in turn result in massive power cuts. For example, in rural areas power cuts take place almost on daily basis. The supply of electricity in many villages is carried out according to a certain schedule. Stealing energy by individuals as well as various enterprises has also become quite natural in Kyrgyzstan. For example, the head of the financial department of the state company “Kyrgyzgaz” Salamat Aitikeev said that users’ debt for natural gas only for July constituted $5 million. The company has been unsuccessfully trying to stop massive theft of gas from pipelines. Only in Bishkek during the past five months, 54 bills on violation of rules of gas use were drawn up. Besides, as the representatives of “Kyrgyzgaz” point out, by stealing gas people not only bring harm to the state, but they also put their own lives and health under threat since they join the gas distributing network without following any security norms. Deputy Sarpashev and other specialists in this sphere think that the only way out of this situation and of preventing crisis in the energy sector is to toughen measures and administrative as well as material punishment for stealing. Another suggestion is technical re-equipment in controlling the use of resources and structural change, which envisage electronic meters and establishment of Major Users’ Directorate. For this purpose the World Bank is going to allocate US$5 million to Kyrgyzstan. The situation in the energy sector is indeed alarming since its worsening consequences may not only result in everyday inconveniences for the population, but it may also put the economic well-being of the country under threat. The support of the World Bank could become an important step in the fight against infringers. However, without joint efforts of all parties even such a generous help cannot drag the country’s energy sector out of the trap of corruption and theft.
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The Central Asia-Caucasus Analyst is a biweekly publication of the Central Asia-Caucasus Institute & Silk Road Studies Program, a Joint Transatlantic Research and Policy Center affiliated with the American Foreign Policy Council, Washington DC., and the Institute for Security and Development Policy, Stockholm. For 15 years, the Analyst has brought cutting edge analysis of the region geared toward a practitioner audience.

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