Publication: Monitor Volume: 4 Issue: 11

A government delegation headed by Energy Minister Sergei Kirienko is in Kemerovo today in a fresh effort to resolve the decade-long crisis in Russia’s coal industry. Last week, miners throughout the Kuzbass staged a one-day warning strike to protest continuing wage arrears. The mines are now directly subordinated to the Ministry of Energy, the administrative powers of the state-owned company Rosugol having been substantially curtailed on January 1. (This was done on the insistence of the World Bank as a condition of its loan for coal-industry re-structuring, announced in December. Rosugol was widely regarded as having mis-directed funds from earlier World Bank credits to the industry.)

Addressing a press conference prior to his departure for Kemerovo, Kirienko laid the blame for wage-arrears on the vicious circle of inter-enterprise debt. He said coal went to power stations to be turned into electricity for use by industrial and domestic consumers. If consumers did not pay their electricity bills, the power stations could not pay the coal producers. Kirienko said state subsidies were inadequate to bridge the gap, leading to the paradoxical situation where loss-making mines that are due for closure are fully supported by the state and are able to pay their workers, whereas mines that are producing and selling coal have no money coming in. He said the problem was not specific to the coal industry, where restructuring was proceeding according to plan, and that the solution lay outside the industry, in reform of electricity prices.

Kirienko’s message to the miners is therefore a gloomy one: he said he did not expect a significant improvement in the situation this year. (RTR, January 17) The miners are still reeling from the fact that, after a visit to Moscow to try to persuade Prime Minister Chernomyrdin to come up with more money for the region, Communist regional governor Aman Tuleev returned to Kemerovo last week and denounced the strike as "utter madness" that would hurt the miners more than their employers. (NTV, January 18)

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