Opening the meeting, the Panel’s member, people’s deputy Dmytro Andriievskyi stressed that the privatization process in the sphere of electric power of Ukraine conducted over the last years “shows the presence of several problems causing threats to the state interests”.
The speaker drew attention of all the present to the problem of “shadow control over electric power companies and processes of their privatization by financial and industrial groups as a result of which capitalization of electric distribution companies in 2013 decreased by 80% comparing to 2007”.
According to D. Andriievskyi, concentration of assets of electric power objects in property of “a narrow circle of national companies” can lead to a dramatic deterioration of competitive conditions on the electric power market.
People’s deputies called all present to pay attention to several topical problems in the sphere, among which:
“Retail sale of eclectic power companies’ assets but not of a control stake causing its cheapening;
ensuring competitiveness and transparency of privatization process;
increasing capitalization of electric power companies;
order of using funds received from privatization of electric power objects;
establishing at the legislative level the criteria for determining strategic investors;
ensuring rights of minority shareholders when conducting purchase and sale of state shares of electric power companies;
maximum attraction of foreign investors into the privatization processed”, etc.
As participants of the discussion stressed, although privatization of state property of electric power sphere within the framework of current legislation is almost over, the level of shared responsibility of state and business for the power security of the country is unsatisfactory. As a result of this, almost 80% of power equipment is worn out, particularly:
102 pit of 104 of electrical power units of thermal power plants and combined heat and power plants have already worked off the estimated life and require modernization or change;
42,19% of overhead power transmission lines of 220-330 kilowatt have been operated for over 40 years, 64,41% of main equipment of transformer substations have worked off their estimated service life;
in power
distribution network: 40,5% of power networks and 37,4% of transformer
substations require a total overhaul, reconstruction or change.
According to the participants of the event, non-fulfillment of requirements of final provisions of the Law “On Electric Power” is one of the reasons of such state of affairs. It was noted that the Government has limited itself merely to adoption of the resolution of 13/06/2012 No. 525, which led to complications in operation of electric power.
“At present, assets of energy companies are concentrated in the hands of several owners who, at the same time, are owners of coal mining assets as, for example, System Capital Management,” emphasized participants of the event.
Following the results of discussion, the participants made several recommendations to the structures of executive power. Particularly, the speakers believe that the Government should secure:
establishment of equal conditions for competition between all participants of the market;
determination of the single approach to privatization of electricity generation facilities focusing on attraction of strategic investors;
establishment of efficient state control over their activity in the post-privatization period;
introduction of a transparent stimulating tariff methodology.
Under the recommendation, the Cabinet of Ministers should also:
take measures to reduce the level of concentration of assets in the hands of separate owners;
set criteria for classifying enterprises and investors as strategic and legislate these criteria;
conduct further privatization of energy companies after fulfillment of requirements regarding their division in line with requirements of the Law “On Fundamentals of Functioning of the Electricity Market of Ukraine”.
It was mentioned that these and other recommendations should be elaborated by the Commission and taken into consideration in the course of further work.