Publication: Monitor Volume: 3 Issue: 101

First Deputy Fuel and Energy Minister Sergei Kirienko has negotiated an end to the energy crisis which has gripped the Far Eastern province for the last few weeks. (ORT, 21 May) Primorsky governor Yevgeny Nazdratenko flew to Moscow and signed an agreement with Kirienko and the Federal Energy Commission, under which the Luchegorsk coal mine will be taken from the local coal producer Primorskugol and given to the electricity company Dalenergo, whose non-payments to the coalmines have caused the crisis. Dalenergo also pledged to equalize tariffs for all industrial users. Currently, some favored local firms pay one third of the price charged to federally-owned institutions. (Interfax, May 20) In return for these reforms, Kirienko pledged to release a one-time payment of 100 billion rubles ($17 million) from federal funds to pay the miners’ wages.

Primorsky krai has suffered repeated energy crises over the past two years. The current emergency began on May 1, when workers at the Primorskugol mining company stopped shipping coal to the region’s monopoly electricity producer, Dalenergo, protesting the five month delay in payment of their wages. By the end of the week the city of Vladivostok was experiencing power cuts of 12 hours a day, and the city declared a state of emergency on May 9. The federal government sent 40 billion rubles to enable payment of the miners’ wages for December, and some coal was brought in from neighboring provinces. However, the power cuts lengthened, leading to street clashes on May 12-14 between police and demonstrators.

In part the Primorsky crisis is a microcosm of general problems endemic to the entire Russian economy, such as wage arrears, indebtedness, and irrational energy pricing. Nationally, wage arrears now total 52 trillion rubles, and the stock of inter-firm debts now exceeds 1,000 trillion rubles (or more than one quarter of annual GDP). (Reuter, May 20) However, there are also features specific to the region — which means that the "Primorsky syndrome" may not spread to other provinces. Governor Nazdratenko has pursued a deliberate policy of forcing Dalenergo to subsidize local industrial producers, which Kirienko claims has cost the company 800 billion rubles. Nazdratenko, who has clashed with First Deputy Prime Minister Anatoly Chubais, has also engaged in a long-running feud with the mayor of Vladivostok, Viktor Cherepkov, whom he had fired in 1994 on grounds of corruption. Cherepkov was reinstated last September by President Yeltsin, and since then he has been fighting to hold onto his job in the face of a court challenge mounted by Nazdratenko’s supporters in the krai’s Duma. Cherepkov claims that his opponents have deliberated instigated interruptions in energy supplies to discredit him.

Opposition Builds to St. Petersburg Governor.