Jubilee-timed Consortium

Russian President Vladimir Putin marked his 50th jubilee in Chisinau, at the CIS summit. Here the biggest news was the signing of an agreement on strategic partnership in the sphere of gas by the Ukrainian and Russian premiers, with their heads of state attending the ceremony. Gazprom and Naftohaz Ukraiyny heads Aleksei Miller and Yury Boiko, also in the presidents’ presence, signed an agreement setting up an international gas consortium. Another news was, according to Interfax Ukraine, that Vladimir Putin proposed the other presidents to consider, before March 2003, electing Leonid Kuchma the next chairman of the CIS Council. The next summit is expected to be held in Ukraine, two years from now. Prior to the Chisinau summit, Leonid Kuchma and Vladimir Putin celebrated another jubilee, the 70th anniversary of the Dnipro Hydropower Station (DniproHES). Interfax Ukraine quotes Mr. Kuchma as saying, on that particular occasion, that Russia is and will remain Ukraine’s “major partner,” and that “friendship and cooperation with Russia are the cornerstone of the Ukrainian foreign policy.” One can only wonder whether it was a manifesto or a courteous gesture, considering Moscow’s support of Kyiv over the past two years, and of course, in conjunction with Mr. Putin’s jubilee. Be it as it may, the Ukrainian President declared that “we have repeatedly become convinced that trusting relationships with the Russian Federation are a powerful factor in Ukraine’s European integration effort.” The next year, to be celebrated as the Year of Russia in Ukraine, he continued, is “important in terms of even closer relationships.” This year is marked as the Year of Ukraine in Russia; also, it is marked by a considerable trade exchange decline. Incidentally, President Kuchma celebrated his birthday this year in Mr. Putin’s company, near Moscow.

And so the gas transportation consortium idea, mentioned in a joint statement by Leonid Kuchma, Vladimir Putin, and German Chancellor Gerhard Schroeder (June 2002, St. Petersburg), is being translated into life. It is to be set up on “mutually advantageous terms, in the form of an economic association to transport gas and secure a safe and stable performance of the Ukrainian gas transportation system.” The head office will be in Kyiv and the consortium will operate on a parity basis, in accordance with Ukrainian legislation. In addition to joint transit, the document envisages the construction and development of gas pipelines, joint projects traversing Ukraine and Russia, and delivering gas to foreign markets; companies in third countries will also be involved. The terms of participation of European gas companies will be determined jointly, on the consensus principle. The term of the agreement is 30 years and it can be automatically renewed for five years. As was reported earlier, French and Italian companies have already shown interest, while official and business quarters n Germany and France are in no hurry to respond.

Vladimir Putin stated after signing the agreement that “there are reasons for greetings” and at the same time pointed out that it is far from being the final solution to the problem. The Verkhovna Rada plans to consider Ukraine’s gas transportation system May 12. Many questions are likely to be raised. Premier Kinakh will have to operate facts to prove that the consortium will indeed serve Ukraine’s benefit — as he has been trying to prove of late — rather than that of Gazprom and Kremlin; that the contracting parties will actually be placed on an equal footing, that the involvement of foreign capital will keep Moscow from getting the whole thing under control; that the project will not be used for political purposes; that the subject of bypasses will indeed be closed. No mention has been made before of keeping the whole affair transparent. European companies’ participation is to be discussed before the end of the year.

The other results of Chisinau summit were mostly routine. The member countries once again called on the CIS bodies to show a better performances (their personnel has been cut by almost one quarter), for measures to implement the free trade zone agreement — but without any noticeable degree of enthusiasm, compared to the atmosphere three years ago. They approved the experience of CIS observers at the Ukrainian parliamentary elections — they are likely to be invited to monitor the Armenian campaign next year. The Azerbaijani and Armenian presidents communicated, a rather rare occurrence over the last years; all the CIS functionaries present were treated to famous Moldovan wines and then peacefully parted company.