Timoshenko blames Ukrainian President for organizing an ‘epoch-making scam’ / News / News agency Inforos
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Timoshenko blames Ukrainian President for organizing an ‘epoch-making scam’

European Union has urged Kiev to wind up process of separating and privatizing gas transport system

21.12.2018 17:18 Irina Dmitrieva, political commentator

Timoshenko blames Ukrainian President for organizing an ‘epoch-making scam’
Context:

Yulia Timoshenko, the leader of the Batkivshchina Party and presidential candidate, has claimed that the official Kiev is seeking to give away the country’s gas transmission system (GTS) that brings $3 bln to the state budget annually, to private companies.

“Amid historic religious events the authorities are attempting to undertake an epoch-making scam – to grab the largest state property, the Ukrainian gas transmission system,” Timoshenko wrote on Facebook.

She suggests that the president with his companies is directly involved in that. “Today in the parliament I called for adoption of our bill No. 8107, which prohibits any manipulations with the gas transmission system. I warned all crooks, including Pyotr Poroshenko: whatever you do now, the new president of Ukraine will recover the gas transmission system to the state, but will not recover the funds that will be paid for it.”

On Monday, the European Union urged Kiev to finalize the process of separating and privatizing the country’s gas transmission and electricity transmission systems, according to the final statement of the EU-Ukraine Association Council held in Brussels.

Currently the main volume of Russian gas for Gazprom’s European customers is pumped through the country’s gas transport system. As requested by European partners, Ukraine is spinning off the GTS from the system of state-run monopolist Naftogaz of Ukraine into a separate firm, 49% of which is planned to be sold out to foreign companies to ensure reliable transit.

“The situation is much more complicated than meets the eye,” Vladimir Bruter, an expert of the International Institute for Humanitarian-Political Research, said in an interview with correspondent of Inforos. “Timoshenko is simply playing to the gallery. Ukraine’s gas transmission system has never passed into Poroshenko’s ownership, no particular decisions have been taken regarding the issue. That's a bunch of Timoshenko’s malarkey,” he said.

The expert has no doubts that the team of Poroshenko is trying to appropriate those financial flows, though that does not mean that the GTS has passed into the ownership of presidential structures.

“As of today the gas transport system is all but the most sizeable un-privatized property in Ukraine,” Bruter assumes. “Privatization of the GTS or the search for foreign investors for it is a big business. Evidently, Poroshenko and members of this team are interested in the issue, but that does not mean that they will get the gas transmission system easily and quickly. Timoshenko is known as a rabble-rousing politician, whose comments can spark public uproar. I think that we will hear quite a few such statements from Timoshenko before the election,” he noted.

The question of selling Ukraine’s gas transmission system to foreign companies was not brought up prior to 2014. The situation changed after pro-western politicians came to power as Kiev passed the law ‘On natural gas market’, which stipulates the possibility of attracting investors to the operations and management of the GTS through acquisition of up to 49% of shares of the gas transport system’s operator.

Despite the commitment of Kiev’s leadership, the future of the GTS currently being in an emergency state, particularly considering Ukraine’s loss of the status of a transit country for Russian gas after the Nord Stream 2 launch, is highly questionable today. The construction of Nord Stream 2 is nearing completion, and against that background, western investors are hardly interested in the Ukrainian gas infrastructure, all the more so as Russia’s fuel transit through Ukraine to Europe decreases each year.

Ukraine’s strive for saving the income-producing gas transport system is understandable. Today Naftogaz is experiencing many difficulties related to the fact that being under the western pressure, the country has let in independent traders to its energy market. The company is dancing to all IMF’s whims: for the sake of loans, its management has to raise tariffs consistently. If Naftogaz is cut off from the Russian gas transit funding, it will be forced to declare bankruptcy.

Today Ukraine’s gas sector is having hard times. When Nord Stream 2 is put into operation, Russia will be able to give up gas transit supplies via the territory of Ukraine, which inevitably will turn the country’s gas transmission system into a heap of scrap.

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