by Tammy Lynch
The ISCIP Analyst
The Institute for the Study of Conflict,
Ideology & Policy
Boston University
On 6 January, Ukraine’s former Prime Minister and current opposition
leader Yulia Tymoshenko and her allies were able to celebrate an important
victory, when the parliament supported a bill to prohibit any reorganization of
the ownership of Ukraine’s gas infrastructure.
Earlier, Prime Minister Viktor Yanukovych’s ruling
coalition had refused to place the bill on the parliamentary agenda. But
a blockade led by The Yulia Tymoshenko Bloc, coupled with the resulting
media attention, forced Speaker Oleksandr Moroz to call the bill for a
vote. Once the measure was placed on the agenda, deputies with an eye on
possible upcoming special elections, and faced with massive public opposition
to any foreign ownership of the country’s energy infrastructure, had little
choice; all but nine MPs in the hall voted in favor.
Ukraine earlier banned the “privatization” of all gas
infrastructure, but this new law goes much further.
The measure states, “The reorganization (merger,
incorporation, separation, spin-off, transformation), concession, renting,
leasing, mortgaging, privatization, or other actions to change the ownership of
state trunk pipeline enterprises as well as the transfer of shares of such enterprises
to the authorized capital of other companies shall be prohibited.''
In addition, "State trunk pipeline enterprises
may not be declared bankrupt and liquidated under bankruptcy legislation.”
The
law will at least begin to answer one of the opposition’s main concerns – that
Ukraine’s state gas company, Naftohaz Ukrainy is being intentionally mismanaged
in order to drive it into bankruptcy and create an opening for private
ownership.
The law also will put a stop to the apparent proposal
of the Yanukovych government to provide Russia part of its gas transportation
system in exchange for a stake in Russian gas extraction or a lower gas
price. Although the Yanukovych government is now adamantly denying that
it ever would have considered providing any country with part ownership of its
most lucrative and strategically important asset, there have been numerous
statements in recent days that suggest just the opposite.
Russian President Vladimir Putin set off the alarm
for Ukraine’s opposition during his annual press conference. “We are
talking about merging our assets,” he said. “Our Ukrainian partners would
like not only to form a gas transmission consortium, but also to have the
opportunity to enter gas production in the territory of Russia.” Putin
called the idea “revolution,” and said, “There is interest.”
Following criticism of the idea, Deputy Prime
Minister Mykola Azarov then suggested that “nobody will give anybody the
ownership of Ukraine’s gas transportation system.” However, there were
discussions about “joint management” in order to “receive cheaper gas,” he
said. According to Azarov, “joint management” would decrease the “huge
sums” Ukraine spends annually on its pipelines to maintain them. He
failed to explain why Russia would absorb Ukraine’s “huge” expenses in exchange
for the right to “manage,” but not “own” the pipelines.
The day after Putin’s comment, a Naftohaz Ukrainy
spokesman confirmed, “A political decision has been taken at the top level
giving the green light for drafting specific projects by economic entities
[Gazprom and Naftohaz] of the two countries, Ukraine and Russia.”
And further, Minister for Fuel and Energy Yuriy Boyko
said, “Ukraine has made a series of proposals to Russia, and we have already
selected a model that will be further developed and improved.”
Finally, soon after Putin’s comment, an unidentified
“Ukrainian source” told Russia’s Vedomosti that privatization of the gas
transportation network was outlawed in Ukraine, but “if its companies are
guaranteed access to Russian gas fields, Ukraine may change its mind.”
Or maybe not. In fact, the suggestion
that assets would be turned over caused the quickest policy about-face thus far
for the Yanukovych government. On the state-owned and increasingly less
objective UT-1 television station, journalists portrayed the passage of the
opposition’s bill as “a small victory for The Yulia Tymoshenko Bloc,” but
“nothing new” since privatization of the pipelines already was banned. In
reality, said the commentator, the ruling coalition simply voted for the bill
“for a quiet life” – a reference to Tymoshenko’s loud declarations.
But the attempt to downplay the "victory" clearly suggests that the
event caused concern inside the ruling coalition.
Regardless, the passage of the bill should send a
strong statement to President Putin and members of the Ukrainian government who
apparently expected no response to their statements and proposals. Ukraine
may be struggling to create a consolidated democracy, but its parliament is far
from a rubber stamp and its opposition is far from cowed.
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