100% gas network coverage of Dubossary, but debt continues to mount

In time for winter, all of Dubossary will be 100% "gasified." (file)

DUBOSSARY (Tiraspol Times) - In Dubossary, the completion of 100% coverage of gas mains to all homes and businesses will be completed by November, just in time for winter and just days before the country's 10 December presidential election.

The announcement was made by the Dubossary city administration to local news agency New Region Press on Wednesday, as part of a large infrastructure upgrade financed entirely with PMR's domestic funding.

The completion of the full extent of the gas network covers Dubossary and 23 surrounding towns and villages, many of whom are home to ethnic Moldovans. In building the infrastructure, there has been no minority discrimination, affirms local Moldovan leaders who - like their non-Moldovan neighbors - overwhelmingly rejected unification with the Republic of Moldova in the country's 17 September independence referendum.

" - But we did have one kind of discrimination," says a city official. "We gave preferential treatment to pensioners and World War II vets, all of whom got new gas installation free of charge in their homes."

Market rates for gas, and a huge debt

Starting 1 January 2006, Pridnestrovie suffered a sticker shock when its main supplier or gas - Russia - raised its prices. Pridnestrovie currently gets gas for $110/1,000 c.m., much the same rate as others in this part of Europe.

On the other side of the Dniester, in Moldova, critics claim that Russia is propping up Pridnestrovie with cheap gas. But at $110, Pridnestrovie gets no special treatment: This is the same price paid by Georgia, a country which is not getting any favorable treatment from Russia and which, like Pridnestrovie, has to pay market rates.

The new higher rates meant a hike in the debt which Pridnestrovie maintains with its supplier, Russia's Gazprom. With penalties, the debt in arrears is estimated at more than $1Bn. In 2005 alone, the country's debt to Gazprom grew by $96,9 million, and for the first quarter of 2006 by $23,5 million USD. Debt service has ranged in recent years from a high of 65,3% in 2005 to a low of just 24,9% in the first quarter of 2006.

On a per capita basis, the gas debt represents nearly $2,000 for every man, woman and child in the small country of just 555,000 inhabitants. This is a huge amount for a place which is tied with Moldova for the dubious record of being the poorest country in Europe. Now, however, something is being done about it.

Last week, the country's opposition-led parliament put the gas debt on the agenda, calling for more oversight on how gas revenue is collected and spent, and full transparency in managing the income. Speaker and opposition leader Yevgeny Shevchuk questioned the current system, asking publicly is all gas revenue went to service the Gazprom debt or if some of it went elsewhere. With the newly established Ombudsman, a public website at vspmr.org and an increased number of active oversight committees, the local parliament has led the fight against corruption, which in an August 2006 opinion poll was seen as a serious problem by the citizens of the unrecognized country.

Gazprom has made it clear to Pridnestrovie that it expects to be paid, and hopefully sooner rather than later. With parliament clamping down on corruption and making sure that gas money goes to pay for gas - and not anything else - foreign pressure is bringing better governance to PMR. There is no fear in the country that anyone will go cold this winter, as long as Gazprom sees that debt is being serviced and that the government, led by the opposition-controlled parliament, is serious about bringing the monster debt under control.

Gas infrastructure doubled in size

In gas infrastructure and improvements, Pridnestrovie currently leads its neighbors. During its 16 years of independence, the country doubled the length of its gas lines to 3,376 km.

More than fifty villages, 118 industrial companies, 769 communal organizations (223 of them in rural areas), and 82,000 individual houses and apartments got new gas lines installed in the period after independence in 1990 and until 2006.

The length of gas mains was doubled and reached 3,376 km's in the same time frame. Tooting their own horn, spokesmen for the PMR government points out that this is actually a world record in infrastructure improvements: "No other country in the world has been able to double its gas infrastructure in such a short time."

At present, the energy needs of the Pridnestrovie is met by a totally independent gas system which does not rely on supplies from Moldova of any kind. Contained within the country, and independent from the Moldovan network, it consists of 360 kilometers of main pipelines and more than 3,300 kilometers of distributed gas mains.

Pridnestrovie, better known as Transdniester or Transnistria, declared independence in 1990. It gets no state funding from Moldova or Ukraine, its two neighbors, and all infrastructure upgrades are paid for by property taxes and other local tax revenues.