Ukraine to Crack on Debtors to Avoid Energy Crisis

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Ukraine to Crack on Debtors to Avoid Energy Crisis

KIEV, Sep 26, 2000 -- (Reuters) Ukraine's government will get tough with customers failing to pay electricity bills to avoid a new energy crisis in the winter, Fuel and Energy Minister Serhiy Yermilov said on Monday.

"The issue of payments for electricity is vital, as cash collection fell to 60 percent (of electricity cost) in September from 70 percent in August," Yermilov told a news conference.

"...If customers fail to pay we will see another crisis in the sector. We have warned all customers who have debts they will have their electricity cut off starting October 1."

Ukraine's energy sector was on the brink of collapse last winter. Officials say they have eliminated many problems by doing away with barter payments and improving debt collection.

Higher collection is critical to attract strategic investors as the government plans to sell stakes in seven regional power distributors. Energy reform is also a key condition to resume a stalled USD 2.6 billion International Monetary Fund loan.

Yermilov said coal stocks totaled 2.8 million tons, with plans to increase them to four million tons by mid-October.

He also said the government was scrupulously paying for fuel to be supplied to the five nuclear power stations, which produce more than 40 percent of Ukraine's electricity.

The government, however, was behind schedule in accumulating fuel oil for thermal stations and the situation with fourth quarter gas deliveries was unclear. Yermilov said Ukraine, which annually consumes around 72 billion cubic meters (bcm) of natural gas, needed 26 bcm in the last quarter.

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http://www.russiatoday.com/investorinsight/business.php3?id=203324

-- Martin Thompson (mthom1927@aol.com), September 26, 2000


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