The Ukrainian EBRD representative has sent a letter to the Ukrainian government and Presidential Administration reporting that EBRD management thinks it necessary to combine the Odesa oil terminal construction and Odesa-Brody pipeline projects, because of their integral relationship. Derzhnaftohazprom (State Oil and Gas Committee) told to UNIAN that in this case the EBRD is ready to consider the question of financing construction of these two objects on a commercial basis with no government guarantee.
The US government will announce a tender for nuclear fuel supply to Ukraine by the mid-October. The tender will be announced for American companies to supply the experimental load of nuclear fuel to Ukrainian nuclear power stations, the US Ministry of Energy representative Terry Lash reported to Infobank. In particular, America’s Westinghouse Co. will be invited to participate in the bidding. The winner will be announced by the end of the year, and the approximate delivery will be in May 1999.
The International Monetary Fund will support the temporary measures that Ukraine is taking now in order to stop unjustified price rises on condition they will be discussed with the IMF, Interfax-Ukraine learned from well informed sources in the Ukrainian government (but not IMF mission - Ed.).
IMF keeps track of all measures in the hard currency market taken by the government and NBU and will stop them from using "discriminatory tools." At the same time Standard & Poor's international rating agency evaluates the conditions offered by the Ukrainian Government to investors possessing state bonds nominated in hryvnias as a real default, i.e., one-sided refusing to keep own promises.
According to the agency, a default also means non-paying off bonds at due time or offering investors exchange conditions which are less profitable than the previous ones. Standard & Poor's specialists think that investors will get back only up to 40-50% of their money. That is more than on Russian bonds, whose buyers are expected to recover less than 10%.
The same kind measures on restructuring state debt to foreign investors caused the collapse of the ruble in Russia while for Bolivia it for 12 years precluded any chance for loans on international financial markets. Interesting whether our government takes such experience into account.
The first anniversary of Procter & Gamble Ukraine, which in 1997 alone it invested $1.7 billion (the last IMF loan was $2.2 billion) in producing its wares in Ukraine, was less than festive because of our deepening crisis. But it brought the important news of Christopher R. Delany's appointment as new general manager.
Company spokesman refused to disclose their losses over the past month, calling it a commercial secret, but pointed out that "the next several months will be as bad, if not worse." P&G production in Russia has stopped. In Ukraine, promotion and sales expenses had to be reduced because the prices of company goods (80% are imported to Ukraine) rose while the people's buying has capacity dropped. The new general manager told journalists, "If the situation is not stabilized in the next 3-6 months, we will have to lower the output at our plant in Boryspil and cut staff (525 on payroll at present)."
P&G so far refrains from comments on the possibility of stopping production in Ukraine, but the Russian experience shows that this alternative should not be ruled out, despite the fact that 60% of P&G products made in Ukraine are exported to other European countries. If production is stopped in Ukraine, this country will lose hard currency export income and tax revenues to the budget will drop sharply (over the past two years P&G has paid over $22 million in taxes).






