ECONOMY
While IMF loans remained frozen, the World Bank showed Ukraine some cautious signs of support. The Bank approved a $28 million loan to improve energy efficiency in Sevastopol. The project, which foresees replacing 40 percent of Sevastopol’s municipal heating systems, will cost $35 million, still needs parliamentary approval. Separately, a top World Bank official said the Bank would consider a $60 million loan to support administrative reform in Ukraine, which has stalled almost completely after a brief period of government sackings in early 2000.
Stepping up efforts to fight the shadow economy, President Leonid Kuchma proposed limiting the number of accounts that businesses may have with commercial banks. Kuchma signed a decree giving the government and the National Bank of Ukraine until June to draft a law imposing the limitations. Under present law, there is no limit to the number of bank accounts businesses may maintain.
ENERGY
The Cabinet of Ministers is prepared to connect the Ukrainian power grid with the Russian power grid on April 1, but has vowed not to import Russian electricity, Deputy Prime Minister Oleh Dubyna said on the eve of a visit to Russia to discuss the issue. Dubyna said, however, that Ukraine would agree to exchange electricity between the two power grids. Ukraine’s former Fuel and Energy Minister Serhy Yermilov signed a memorandum on reconnection of the Ukrainian and Russian power grids with Russia on Feb. 12.
OIL & GAS
TNK-Ukraine said it received the largest loan ever arranged for a private Ukrainian company without a sovereign guarantee. The company, a subsidiary of Russia’s Tyumen Oil Company, received a one-year, $50 million revolving loan that will enable the firm to upgrade the Lysychansk-based Lynos refinery, which it controls.
U.S.-registered Itera, a gas transportation company linked to Russia’s Gazprom, said it had filed suits in a Moscow court to try and recover $48 million from Ukrainian consumers. The suit covers more than $24 million owed by Ukrainian energy generator Tsentrenergo, $16.8 owed by gas wholesaler Ukrainian Energy Company, and $7.3 million owed by gas wholesaler Ukrenergosbyt. Itera says Ukraine owes it about $350 million. The suit follows a similar suit by Gazprom (See story, front business page).
BANKING AND FINANCE
Parliament’s Finance Committee said it opposes President Kuchma’s proposals to cancel write-offs of arrears on excise taxes, citizens’ income taxes, Pension Fund contributions, and Social Security Fund taxes. First deputy committee chair Serhy Teriokhin said attempts to prevent the debt write-offs are economically and legally unjustified and could lead to more corruption. The STA has already approved the law for implementation and plans to write off debt by April 1.
The PFTS over-the-counter stock exchange de-listed shares of shipper Ukrrichflot. According to the PFTS, the company was de-listed because it changed the basic parameters of its securities without providing the corresponding information to PFTS. Ukrrichflot Vice President Pavlo Podlesny said the company would sue the PFTS over the decision and has filed a complaint on the actions of the PFTS with the State Securities and Exchange Commission.
Banks that issue credit cards have created a trade group aimed at combating fraud. The new Forum for Security and Credit Card Settlements will set uniform security standards for cards, according to Oleksandr Karpov, director of the Ukrainian Association of Europay Member Banks.
AGRICULTURE
The United States Agency for International Development stepped up its efforts support to see more land titles issued in Ukraine. USAID said it will grant Ukraine $14 million to finance a project for issuing some 1.8 million land titles to farmers, a top Ukrainian agricultural official said, according to Ukrainian News. This is about 28 percent of the total number of government land titles that will be issued. The United States and the World Bank are reportedly in on the project.
The country’s 23 percent export duty on sunflower seed must be scrapped, not just cut, a group of Ukrainian agricultural traders said. Traders were reacting to a bill approved for first reading by parliament last week that would cut the duty to 17 percent. Only full cancellation of the duty will do, the Ukrainian League of the Agroindustrial Complex said in a statement.
AUTOMOTIVE
Parliament wrote off Hr 4.8 million in fines and penalties imposed on the AvtoZAZ automobile factory in connection with a loan it obtained from a German bank under government guaranty in 1993. In 1997, parliament required the Finance Ministry to write off the company’s Hr 20.776 million debt, but the Finance Ministry wrote off only Hr 16 million, claiming that the law was contradictory. The Rada’s most recent action forgives the balance of the debt.
