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Where there is no law, but every man does what is right in his own eyes, there is the least of real liberty
Henry M. Robert

CRIMEAN GOVERNMENT WANTS NEW GAME RULES Energy market control and no shoot-outs

13 November, 2012 - 00:00

Despite polarized aspirations, Premier Sergei Kunitsyn's optimism has yielded fruit as the Crimean Parliament considered a new Cabinet structure. Among other things, it stipulates two new ministries - fuel and energy - and the dissolution of four committees, including two headed by people from Lev Mirimsky's Union Party.

This must have complicated matters. After receiving Cabinet portfolios as a reward for Mr. Mirimsky's assistance to Speaker Leonid Hrach who kept his word and had Premier Franchuk retired, the Union could not put up with being taken in. And so the issue of the fuel and energy ministries, being of fundamental importance to the Crimean leadership, was resolved only after it was decided to retain the Committee for the Protection of Monuments, headed by a Union ideologues.

The new Ministry of Energy is meant to control the autonomous republic's energy market. Sergei Kunitsyn explained from the rostrum that it will supervise "Krymgas and stuff like that." Making this decision was not easy, because it will be a thorn in the side of "all those corporations which had their cut of the budget and sold fuel pricing it out of the market." In other words, the Crimean government wants to fight all those "unnatural monopolists" which Speaker Leonid Hrach mentioned when the peninsula found itself with zero fuel supplies on the eve of the harvest campaign, because the Crimean monopolist tried to bring the republic's new leadership to its knees. It is interesting to note that even when resorting to such crucial measures no one mentioned what everyone knows: the Franchuks' fuel empire. And this empire is precisely what the new government is trying to destroy. Premier Kunitsyn overruled Anatoly Franchuk's directive instructing Krimtelekomunenergo (Crimean Telecommunications and Energy) to "take out a Hr 6 million commercial loan against the Council of Ministers' guarantee." Krimtelekomunenergo was supposed to use this money to pay Ihor Franchuk's TER-Holding as its principal supplier. At the same time it is an established fact (and Mr. Kunitsyn cited facts and figures) that it had to pay $15 more per ton of fuel oil than the market price. All it takes now to find out that such commercial loans were taken from banks controlled by the Franchuk dynasty. Then the enigmatic issue of corruption in Ukraine will receive a new perspective.

Sergei Kunitsyn is convinced that there is an opportunity now to "control fuel influx and outflow in a new manner." He promises a "different ideology, because if we oust some and let in others there will be more shoot-outs. Instead, we will offer new rules of the game, equal for all players. We will let them swim in a pool of clear water. Those accustomed to fishing in troubled waters and receiving huge profits on the sly will not be able to play by our rules." He is also confident that the Crimean market is attractive to such prospective partners as Lukoil (which effectively masters Crimean fields). This, of course, does not make "clans and even some of the Crimean financial oligarchs" any happier.

So what would make them happy? Quite possibly they are now getting prepared for the election campaign. Is there any connection between petroleum and oil fuel problems and the Tavriya Games (whose management suggested that Mr. Kuchma become their patron)? The answer is very simple: cherchez Franchuk! Aware of the inevitable loss of Crimean budget injections in his fuel operations, Ihor Franchuk, being one of the key figures in the private joint stock company "Tavriya Games," may well be the author of the idea of switching over to the Ukrainian presidential election budget. This is especially important, considering that that Franchuk's family ties with the Ukrainian President have weakened. In this sense divorce should be regarded as a force majeure circumstance.

 

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