Books on Ukraine
Update No: 293 - (27/05/05)
PM the key figure
All the world knows about President Viktor Yushchenko, the victor of the Orange
Revolution last year. He now bestrides the world's stage and is feted in every
capital he visits, bar Moscow. The Euro-Vision Song Contest took place in Kiev
on May 21st, watched by 170 million viewers. Ukraine is coming up in the 'pop'world.
The key figure domestically is not Yushchenko, but his premier, Prime Minister
Yulia Timoshenko, who played a major role in the revolution after he was
incapacitated for weeks from September 9th, when he was poisoned by his
political enemies in the election campaign.
She is now deciding the course of the government.
Privatisation revision to finish by year-end
A vital matter is whether, or rather how, the sale of state assets in the 1990s
is to be revisited. As in Russia, the population deeply resent what they see as
the rape of their nation by a few corrupt oligarchs, enabled by a corrupt
The irony is that Timoshenko was one of them until targeted by the previous
regime. She made a fortune out of selling Russian gas in the previous decade.
She is not likely to mount a huge purge. There are to many skeletons in the
cupboard for that. Indeed, she has as her first vice-premier no less a figure
than Anotoly Kinakh, head of the Party of Ukrainian Industrialists and
Entrepreneurs, a former premier himself and the arch representative of the
She said recently all questions concerning the legality of privatisation would
be solved by the end of 2005. She said a special law would be adopted to name
the enterprises that were privatised in violation of the law.
The prime minister said the government was not preparing any list of problem
enterprises as mass media reported. "I want to say officially that the
government did not approve any such list at its meeting," she said.
In her words, the ministers received a draft law on the revaluation of the
enterprises that were privatised with violations. Timoshenko said she would
present it to the president shortly. The draft law lists criteria by which to
judge whether privatisation was lawful or not. These include privatisation
contests, compliance with investment obligations, etc.
The prime minister stressed that the list would not include medium-sized and
small enterprises. The owner of an enterprise privatised with violations will be
allowed to pay the difference. The funds will be used to pay compensations to
the depositors of the former Soviet savings bank who lost their savings and to
finance housing credit programmes.
Steel giant to be auctioned
A recent move is indicative of the pragmatic way things are developing. The
Ukrainian cabinet recently decided to start the process of renationalising and
then re-privatising the big Kryvorizhstal steel mill. But this is a very special
case, as has been made clear.
Kryvorizhstal controls a fifth of Ukraine's steel market. It was sold at a
tender in May last year. Mittal steel, in consortium with US Steel, offered
US$1.5bn for the company, which was sold for only US$800m to the Ukrainian
Investment and Metallurgical Union (IMU).
IMU incorporates nine shareholders: the Interpipe corporation, comprising also
the Nyzhnedniprovsky pipe plant, the Ukrainian-Cypriot company Bipe Co Ltd, the
Credit-Dnipro bank and the insurance company Aura; the Ukrinvest company, which
is an UkrSibBank shareholder, and also the metallurgical combine Azovstan, the
Avdiyivka coking and chemical plant, and the Markokhim coking and chemical plant
controlled by the Donetsk-based company System Capital Management.
Viktor Pinchuk, son-in-law of ex-Ukrainian President Leonid Kuchma, is the
founder of the Interpipe corporation. Last September the Polish magazine Wprost
rated Pinchuk, who is also a member of the Ukrainian parliament, as the 10th
richest person in the Central and Eastern Europe, worth an estimated US$2.5bn.
Donetsk businessman Rinat Akhmetov was rated the 6th, which makes him the
richest Ukrainian according to Wprost. Akhmetov's enterprises also took part in
the Kryvorizhstal tender.
Yushchenko and Timoshenko have said Ukraine should revise the privatisation
result because the tender conditions rendered the result of the sale
The Pechersk court in Kiev at the end of January froze 92.02% of Kryvorizhstal.
IMU, which the court banned from alienating the shares, filed an appeal. Mittal
Steel has said it is still interested in purchasing Kryvorizhstal. Russia's
Severstal is also thought to be interested in the asset.
Timoshenko said after the February 5th cabinet meeting that the government
decided to analyse the "legal aspects of the resolutions and orders passed
on privatisation of Kryvorizhstal."
"Today's government meeting annulled all documents that had been passed
unlawfully. This means that we have started the process of returning
Kryvorizhstal to the state," she explained.
Timoshenko said the process would be as intensive as the laws permit. At the
same time, she noted that there will be no mass re-privatisation, and the
government will act strictly within the framework of law.
The new prime minister said the new cabinet would spend a while making a
far-reaching and systemic analysis of all privatisation processes and devise a
strategy on the issue. She said the government would take "very balanced
and of course legal steps."
Valentina Semeniuk of the Socialist party has accepted an invitation from
Ukrainian President, Viktor Yushchenko and Timoshenko to replace the current
State Property Fund Chairman, said Alexander Moroz, the Socialist party leader.
The change is expected shortly.
Ukrainian energy company, Shell sign cooperation agreement
The national joint-stock company Naftohaz Ukrayiny and Shell Exploration and
Production Services (RF) B.V. have signed an agreement on cooperation in the
area of technical research with the further joint exploration and extraction of
hydrocarbon resources in the Dnieper-Donetsk valley, the press centre of
Naftohaz Ukrayiny said recently, Interfax-Ukraine News Agency reported.
According to the document, Naftohaz and Shell will jointly research "the
zone of mutual interest" with an overall area of more than 30,000 sq.km.
with the aim of expanding it.
According to a geological survey, there are still considerable amounts of
undiscovered natural gas in the depth of the Dnieper-Donetsk valley and their
exploration requires complex technological solutions and the most up-to-date
achievements of modern science and technology.
Naftohaz Ukrayiny is pleased with the signing of the contract with Shell:
"We think that the deep knowledge of the Naftohaz Ukrayiny staff and the
experience of exploiting the basin using up-to-date technologies will become a
key to achieving mutually beneficial results," the deputy chairman of
Naftohaz, Illya Rybchych, said.
Ukraine plans to build 11 nuclear reactors by 2030
Ukraine intends to build 11 nuclear generating sets by 2030, the national
nuclear energy company Enerhoatom has said, Interfax-Ukraine News Agency
The decision was taken at a meeting chaired by Prime Minister, Yuliya Tymoshenko,
on 6 May. The meeting discussed a strategy for the development of the country's
fuel and energy complex by 2030.
It is planned to build the first two generating sets at the Khmelnytskyy nuclear
power plant. An international tender will be invited to choose the type of
It is necessary to build new generating sets as the service life of the oldest
generating sets will expire starting from 2011. In this connection, it is
necessary to set a deadline and task to decommission the operating nuclear power
plants or prolong the generating sets' service life very soon. World practice
shows that it is advisable to prolong the service life of generating sets for
their safe use.
Stepping up the safety, reliability and effectiveness of generating sets was set
as a priority. Although the level of safety at nuclear generating sets with
VVER-440 and VVER-1,000 reactors is in line with modern principles of safety,
"the potential for stepping up safety at nuclear power plants remains
Another strategic area for the development of the nuclear industry involves
treatment of spent nuclear fuel at the existing nuclear power plants. As a
solution, it is proposed to build a centralized storage site for spent nuclear
fuel of the "dry" type.
The meeting tackled separately the development of some elements of [Ukraine's]
own nuclear fuel cycle. It is advisable to develop them, as Ukraine has uranium
and zirconium deposits and uranium deposits are shrinking in the world, which
will lead to increases in the price of nuclear fuel.
The prime minister issued an instruction to prepare appropriate feasibility
studies and analyse the possibility of increasing the share of nuclear power
plants in the country's general electricity output by 2030.
At present, 15 generating sets are in operation at four Ukrainian nuclear power
EU commissioner, energy minister ink nuclear deal
The agreement between the European Atomic Energy Community (EURATOM) and the
cabinet of minister of Ukraine for cooperation in the peaceful uses of nuclear
energy was signed in Kiev on April 28th by the EU Energy Commissioner, Andris
Piebalgs, and the Minister of Fuel and Energy of Ukraine, Ivan Plachkov, New
The agreement opens a new way of cooperation between Ukraine and the EU in the
field of peaceful uses of nuclear energy and, inter alia, in areas of nuclear
safety, controlled nuclear fusion, nuclear research and development.
On the basis of this agreement the parties will coordinate closer their actions
with regard to international transfers, trade in nuclear materials and provision
of nuclear fuel cycle services. This positive development proves that Ukraine
and the EU have started implementing the extended action plan with regard to the
enhancement of the energy dialogue, widening one of the most important areas of
their cooperation ie nuclear energy and nuclear safety. Ukraine relies on its
nuclear power plants to generate electricity.
30 agreements on the cards
Ukrainian President Yushchenko announced his country plans to sign up to 30
agreements with Russia this year, covering border issues, the status of the
Black Sea Fleet and the terms of its presence in Crimea and cooperation in the
energy sector, New Europe reported recently.
"If we cope with these 3 major groups of issues today, get 25-30 agreements
signed and make this the mark of the year 2005, the nation will applaud the
young team that does it," Yushchenko told the press in Kiev on April 18th.
He said recent talks with the Russian leadership produced an agreement to devote
this year to settling the border issue, "beginning from the demarcation,
delimitation and recognition of the border in the Kerch Strait, the border
regime and readmission." According to Yushchenko, "We are to sign 6 or
7 agreements which we must start preparing from scratch." He said 5
agreements regulate the Russian Black Sea Fleet's status and terms of its
presence in Ukraine.
"But much in the agreements' content is at variance with the actual
situation. If we are friends, let us look at each other and admit that this must
be changed," said Yushchenko.
He announced that the Ukrainian and Russian Security Council chiefs have been
instructed to check whether the actual conditions of the Black Sea Fleet's
presence in Ukraine comply with the agreements.
He said Ukraine and Russia "have a unique chance to promote cooperation in
the energy sector," adding: "If we are active enough, these projects
will be with us. Or else, they will be implemented without us."
Meanwhile, Timosheko's trip to Moscow was postponed. Asked about the date of her
future visit to Moscow, Timoshenko said: "The date is not so important now.
What matters is that we have powerful projects to accomplish jointly."
MINERALS & METALS
Ukraine sustains steel output in 4 months
Ukraine's steel industry produced 10.81m tonnes of finished roll in
January-April, as much as in the same period of last year, the Industrial Policy
Ministry said recently, Interfax News Agency reported.
Crude steel production edged up 0.05 per cent to 13.03m tonnes and pig iron
production grew 2 per cent to 10.6m tonnes, the ministry said. Steel pipe
production jumped 25 per cent to 712,000 tonnes. The ministry said steel output
could fall this year overall due to growth in prices for ion ore, coke and rail
freight and an anticipated drop in metal product prices in the second half of
Scrap metal supplies to steel mills fell 4 per cent to 2.17m tonnes in the four
Iron ore concentrate production rose, by 8 per cent to 17.589m tonnes, with
increases of 4 per cent to 16.22m tonnes of sinter and 15 per cent to 6.24m
tonnes of pellets. Crude ore production grew 8 per cent to 22.87m tonnes.
Ukrainian coke production fell 8 per cent to 6.87m tonnes, ferroalloy output was
down 5 per cent 532,000 tonnes and manganese ore production fell 26 per cent to
620,000 tonnes. Metalware production also fell, by 6 per cent to 133,000 tonnes.
Finished roll output grew 4 per cent to 30.16m tonnes in 2004.
Ukraine, Belarus agree to step up transport cooperation
Ukraine and Belarus will step up cooperation in the transport field, according
to an agreement reached during a meeting in Kiev recently between the ministers
of transport and communications, [of Ukraine] Yevhen Chervonenko and [of
Belarus] Mikhail Baravy, the press service of the Ukrainian Ministry of
Transport and Communications said, Interfax-Ukraine News Agency reported.
According to the agreement, a bilateral working group will be set up soon to
look into possibilities of solving topical issues of partnership. These issues
cover an increase in the flow of cargo through the Mikolayiv sea port (Ukraine),
search for internal reserves to increase bilateral cargo delivery and the
lifting of the additional road tax on Ukrainian hauliers in Belarus.