You're reading: Kyiv city administration hopes Kyivenergo won’t shut off heat despite city’s Hr 1 billion in debts to energy distribution company

Kyiv municipal state administration hopes for uninterruptible heating supplies to the city by the energy distribution company Kyivenerho during the New Year and Christmas holidays, first deputy head of Kyiv municipal administration Anatolii Holubchenko has announced in an exclusive interview with Ukrainian News.



“But I think this [gas delivery limitations by the national joint-stock company Naftohaz Ukrainy] won’t happen,” Holubchenko said.

Alongside with this he stressed, Naftohaz Ukrainy has provided not particular guarantees to Kyiv municipal administration about this, on the contrary it has threatened with gas cuts.

Although, he is confident that Naftohaz Ukrainy understands the impossibility of cutting heating to houses.

Also Holubchenko pointed to the danger of suspending supplies of heat into the heating delivery systems at the air temperatures below zero degrees.

In his words, if we had frost on December 11-15, when Kyivenerho limited gas supplies with the result of hot water shutoffs, it would have frozen the pipes.

“And now if Naftohaz tries its experiments again, the system would freeze in three days and then the pipes would stay burst until spring. This can be such an accident that Alchevsk would seem manna from heaven,” Holubchenko is confident.

On top he acknowledged that Kyivenerho had no contracted gas volumes for the first ten days of January.

As Ukrainian News earlier reported, Kyivenerho claimed its technical preparedness for uninterruptible provision of its services to Kyivans during the New Year and Christmas holidays but said it cannot bear response for the third party effects that can influence stability of the company operation.

Kyivenerho said on December 23 that the Kyiv municipal administration owed it UAH 976.52 million, excluding value-added tax, in compensation for the difference between the tariff set for heat energy in Kyiv and the actual cost of heat energy.

On December 11-15, Kyivenerho cut hot-water supplies to about 5,000 residential buildings in Kyiv.

Full text of the interview is available at the home page of the Ukrainian News agency (www.ukranews.com)

The Kyiv city state administration has said it cannot compensate the Kyivenerho power distribution company for the difference between the rates of services set by the city authorities and the cost of services, as the city budget has no funds.

Anatolii Holubchenko, the first deputy head of the Kyiv city state administration, said this in an exclusive interview with Ukrainian News.

“Today, UAH 140 million that came to the city budget has been withdrawn to the last kopeck to the national budget… The problem is not that we don’t want to pay, the problem is that we have no money and nothing can be done about it,” Holubchenko said.

According to him, there are two options of quick redemption of the debt: raising a loan under the security of property or holding cross-cancellation of debts with the Naftohaz Ukrainy national oil and gas company.

However, the first option cannot be realized at present, according to Holubchenko, as banks do not give credits in the environment of the financial and economic crisis, whereas the second option is not good for Naftohaz Ukrainy and the national company refuses to hold cross-cancellation of debts.

That is why the Kyiv city state administration has proposed Naftohaz Ukrainy to redeem the debt in equal parts starting from January 15-20, after the 2009 city budget is endorsed.

“The Naftohaz Ukrainy national oil and gas company does not agree with the proposal so far. Naftohaz Ukrainy wants to receive everything and at once,” he said.

He further said that statements by Kyivenerho that the city owes the company UAH 976.52 million are ungrounded.

He said the debt was nearly UAH 80 million for utility services rendered to budget organizations that the city budget did not fund.

Moreover, the company calculates the difference in the tariff for the whole 2008, while the State Inspection for prices endorsed economic justification of the rates only in October.

“They want to calculate the difference in rates to have as much as possible. However, according to the law, there should be a different way of calculation. We can endorse only the difference which is calculated according to the rules. It is UAH 270 million in 2008, as of December 26,” he said.

The difference in rates for previous years Holubchenko branded as irrevocable, since the difference is not registered as the debt.

As Ukrainian News earlier reported, Kyivenerho on December 23 said the Kyiv city budget owed the company UAH 976.52 million (VAT exclusive) in compensation for the difference between the rates of services set by the city administration and the economically viable rates of the services.

The full text of the interview is posted on the first page of the Web site of the Ukrainian News information agency (www.ukranews.com)