Vicious circle of power industry

Yesterday a meeting of the Defense Council was held in Bishkek. On the agenda one issue - the condition of power industry. The situation in the industry is critical, and therefore didn't wait for formation of the new cabinet. We decided to discuss the problem with acting Ministers.

Leader in black mood

"Power industry of Kyrgyzstan from the locomotive turned into a brake of the economy. Because of the critical state of power turned into a subsidized industry. Moreover, investments in the sector are to the detriment of other areas of the state. Over the last year the budget allocated 10 billion soms to support the energy sector, but there was no desired result," the President was indignant.

Almazbek Atambaev accused leaders of the industry in all the troubles. Including the Government. Head of State also considered the decisions of the Cabinet incorrect. "The policy of the energy sector managers prevents its development. This is especially true in addressing corporate issues. Everybody manage the industry: Fund for State Property Management, the government, deputies, the board of directors. The board of directors gathers on the proposal of parties. As a result, too many cooks spoil the broth. The existing system of energy management is unable to ensure energy security of the country. As a result, decisions simmer down to combating the effects," Almazbek Atambaev said.

Focus on reforms 

Acting Deputy Prime Minister Valery Dil, acting Minister of Energy and Industry Kubanychbek Turdubaev advisedly agreed with the president. Both unanimously repeated: energy is on the decline, it is necessary to revive it urgently.

"Ministry of Energy now is ready to present its version of the reform of the energy sector of Kyrgyzstan. State Agency for Regulation of Energy is developing a methodology for calculating tariffs. It will bring clarity to the formation of the final cost of electricity to consumers," Valery Dil added.

Ministry of Energy and Industry can't boast of innovation in the management of the industry. Kubanychbek Turdubaev reiterated that next year the country won't be able to refuse the import of electricity. Otherwise Toktogul HPP will remain without water by April 2016.

At the meeting it was proposed to transfer the right to management of shares of energy companies to the Ministry of Energy. At the same time the Foundation for State Property Management remains a shareholder. The promised reform "pleased" even more. The leadership of the Energy Ministry offers three scenarios. One can create a single energy company on the basis of the existing or transfer the right to manage to one organization. The third option - the creation of the energy holding company.

Fall into the same trap

Originality - not favorite subject of domestic officials from energy sector. And, it seems, they have problems with memory. After deep thought the Energy Ministry has not found anything better than going back to start.

In 1996, Kyrgyzenergoholding, created on the basis of existing power facilities, was transformed into Kyrgyzenergo JSC. Energy workers assumed that corporate governance will be introduced into the main facility of the energy sector. Later, "Kyrgyzenergo" was closed down. Instead, there were eight limited liability companies for production, transmission and distribution of electricity: Electric Stations, National Grid, Severelectro, Vostokelektro, Oshelectro, Jalal-Abadelektro, Bishkekteploset, Chakan HPP.

I remember that the idea to combine the distribution companies in 2012 was voiced by the Energy Minister Askarbek Shadiev. However, the idea was not supported. Experts blamed the power engineering of unprofessionalism. They noted that the union will only ruin the sector. Three years passed and the situation is repeated.

It is still unknown what a way of "reform" the Ministry of Energy will choose in the end. It hasn't yet decided. "The Ministry is working on all fronts. We understand that this is not an easy task. But soon we will determine the main directions of development of the energy sector," Kubanychbek Turdubaev reports.

Experts do not hurry to evaluate the proposal of the Energy Ministry. Kyrgyzstan is waiting for parliamentary elections in four months. After it the composition of the cabinet will change as well. There are no guarantees that the current Minister will be able to stay in the post. That is why the ideas of reforms are likely to remain beautiful tale on paper again.