Deputies told in Donetsk why they should back miners
Last Wednesday and Thursday coal mines had for the first time the honor of being visited en masse by people’s deputies, most of whom had never seen underground tunnels and drifts and never studied so deeply (in the literal and figurative sense) the problems of coal mining. The subterranean legislative tour, generously seasoned with more or less “white-knuckle” experiences (such as traveling in a man cage and a cargo car), was organized by the Verkhovna Rada Committee for the Fuel-and-Energy Complex, Nuclear Policy, and Nuclear Safety.
Nobody concealed that the purpose of this crawl (the best word to describe the way miners move) into the bowels of earth was make the deputies feel the problems personally just before the second hearing of the 2003 budget, that the state must step up support for the coal industry. Another purpose was, according the committee’s chairman Andriy Kliuyev, “to decide at last what laws should be passed to restructure mines and attract investment to the coal industry while taking into account the social problems in the coal-basin cities.”
Obviously, the ingeniously-conceived action was a success. Led by Chairman Kliuyev (formerly a mining engineer with a considerable record of coal production work), the people’s deputies felt a sincere desire to help the miners and their families. The financial situation is as follows. The first-read draft budget includes UAH 2.2 billion to support coal miners. This more than outraged the latter who even resorted to a brief work stoppage. As the parliament was not very much impressed with the resulting underproduction of coal, it only increased the coal money to 2.6 billion. Yet, the coal-mining region with its political clout flatly rejected this sop. We must say this sounded especially convincing at a depth of 500 meters. According to Mr. Kliuyev, the Ministry for Fuel and Energy has opted for UAH 3.2 billion. Only in this case will the coal industry be able to produce as many tons of coal — 80 million — as it did last year. But if the previous option remains in force or even if the state raises a little its support (at least to UAH 2.7 billion), then this country will lose, according to the committee chairman, 10-15 million tons of coal and will have to shut down 65 mines, thus losing 150,000 jobs. Or take another figure: it takes at least UAH 140,000 to create one job in the coal-mining industry today. Is it not easier to scrape the bottom of the budgetary barrel? Incidentally, committee members are sure to be reproached for using a host of suitable opportunities to raise the support to the level envisaged by the Ukrainian Coal program but failing to try and find some additional sources to finance our lean budget.
The Ukrayina Mine, where an accident claimed 35 lives on July 7, has already been under reconstruction for twenty years. Although very much has been done, the acute shortage of budget money earmarked for capital construction in the past few years has brought about a situation such that the mine, with a workforce of 2000, now produces not more than 300,000 tons of coal a year. Viktor Remizov, former mine manager and now mayor of Selidove, one of the depressed coal-mining towns, says, “If we finish the reconstruction, we will in fact have a new mine capable of producing up to 1.5 million tons of coal at a lower production cost.” But, to do so, the Ukrayina needs four million.
So far, answering The Day’s “underground questions,” the miners emphasized the hard working conditions and low wages. “It is very difficult to work, though the collective is determined to do the job,” foreman Hennady Momot said, “We lack everything: materials, equipment...”
We’re severely underpaid for this sweatshop labor. Moreover, we’ve been paid just 20-25% of the amount we earned this year,” team leader Mykola Shvetsov added.
Having left the ailing Selidove coal enterprise, the people’s deputies also visited Chervonoarmiyska-Zakhidna No. 1, one of the eleven successful Ukrainian mines, which produces over four million tons of coal annually. The “coal generals” regard Chervonoarmiyska’s performance as a showpiece example for this industry in the immediate future. Whatever the case, this is the last stage of corporatization and the rehearsal of their gradual privatization by investors. From this perspective, Chervonoarmiyska is a standard-bearer. It has already managed to attract more than 100 million in investments, showed the people’s deputies how to effectively utilize this money, and how to develop its social sphere. People’s Deputy Leonid Baisarov, president of the Chervonoarmiyska-Zakhidna No. 1 joint- stock company, is convinced that the coal industry’s future lies in the investment-based model of development. But will they manage to extend this experience to the whole coal-mining sector? This is extremely difficult to answer. And the problem is, according to Deputy Kliuyev, that the coal industry should make its own efforts to convince prospective investors that the money they have contributed will not go down the drain. “Only then will private investment come here,” he says.
Meanwhile, Minister for Fuel and Energy Vitaly Haiduk, who attended the Donetsk session of the parliamentary committee, outlined quite graphically the difficulties of investing in the coal industry due to the existing tax system which, according to the minister, is literally destroying the sector and even hampers it from receiving the UAH 5.4-billion state aid package under the Ukrainian Coal Program. Among the other factors is the outdated system of payments for electricity and imperfect basic laws. He even admitted he had deliberately suspended privatization by refusing to sign the list of investment- attractive businesses, “on which the State Property Fund head publicly insisted,” because he does not think that the sale of a business is the only way to privatize. Perhaps we will soon witness another, this time decisive, clash between the State Property Fund head and the coal-mining lobby — if, of course, SPF Chairman Oleksandr Bondar da res to join the fray this time.
