"THE ACTION UKRAINE REPORT"
In-Depth Ukrainian News, Analysis, and Commentary
"The Art of Ukrainian History, Culture, Arts, Business, Religion,
Sports, Government, and Politics, in Ukraine and Around the World"
KUCHMA'S FAMILY MAY WANT TO BUY MORE OF UKRAINE
"Commenting on the government's decision to privatize the Ukrtelekom
telecommunications monopoly this year, a Ukrainian analytical web site has
said that members of President Leonid Kuchma's family may want to buy
the company.........
"To understand the magnitude of the intrigue it is worth saying that
Ukrtelekom is not even a plant named after Illich [an allusion to the
Mariupol Illich metalworks]. It is sort of a telephone Kryvorizhstal [giant
steelworks, recently sold to Kuchma's son-in-law Viktor Pinchuk and
Donetsk businessman Rinat Akhmetov].
"The likeness between the gigantic plant [Kryvorizhstal] and the company
[Ukrtelekom] is shown by the fact that their sales marked the end of the
era of big domestic privatization (read the epoch of initial accumulation of
capital). Both are profitable. And the interests guiding those who are
selling the geese laying golden eggs is not clear. However, there is great
doubt that these are the interests of the state." (article number one)
"THE ACTION UKRAINE REPORT" Year 04, Number 118
Action Ukraine Coalition (AUC), Washington, D.C.
Ukrainian Federation of America (UFA), Huntingdon Valley, PA
morganw@patriot.net, ArtUkraine.com@starpower.net (ARTUIS)
Washington, D.C.; Kyiv, Ukraine, MONDAY, July 19 2004
-----INDEX OF ARTICLES-----
"Major International News Headlines and Articles"
1. KUCHMA'S FAMILY REPORTED READY TO BUY TELECOM
Yuriy Tumanov brother of the wife of President Leonid Kuchma, Lyudmyla
"We'll have Ukrtelekom, please"
By Yuliya Lymar, Glavred, Kiev, Ukraine, in Ukrainian, 16 Jul 04
BBC Monitoring Service, UK, in English, Sunday, Jul 18, 2004
2.UKRAINIAN PRESIDENTIAL CANDIDATE VIKTOR YUSHCHENKO
SAYS HE HAS HONESTLY DECLARED ALL FAMILY ASSETS
Press Service of Viktor Yushchenko, Kyiv, Ukraine, Friday, July 16, 2004
3. UKRAINIAN POLITICAL AND BUSINESS LEADER VIKTOR
PINCHUK ACCUSES USA OF HYPOCRISY AND DOUBLE
STANDARDS OVER IRAQ CONTRACTS
Claims he bought large steel mill honestly; believes mass media have
to be free and that honest and open presidential elections are what
his family and the whole of Ukraine need.
Zerkalo Nedeli, Kiev, Ukraine, in Russian 17 Jul 04
BBC Monitoring Service, UK, in English, Saturday, Jul 17, 2004
4. YUSHCHENKO GUARANTEES FREEDOM OF SPEECH FOR
MASS MEDIA IN UKRAINE WHEN HE BECOMES PRESIDENT
Our Ukraine website, Kyiv, Ukraine, Friday, July 16, 2004
5. UKRAINIAN INDEPENDENT ORTHODOX CHURCH NOT
TO BACK ANY PRESIDENTIAL CANDIDATE
Church suggests criteria for believers to elect a president
ICTV television, Kiev, Ukraine, in Ukrainian, 16 Jul 04
BBC Monitoring Service, UK, in English, Friday, Jul 16, 2004
6. YUSHCHENKO: ENSURING THOSE MILLIONS OF UKRAINIANS
ABROAD THE RIGHT TO VOTE IS VERY IMPORTANT
Press service of Viktor Yushchenko, Kyiv, Ukraine, Fri, July 16, 2004
7. UKRAINIAN OPPOSITION WEEKLY NEWSPAPER DENIED
PRINTING SERVICE IN THREE REGIONS
[Another form of political repression in Ukraine]
UNIAN news agency, Kiev, in Ukrainian, 14 Jul 04
BBC Monitoring Service, UK, in English, Wednesday, Jul 14, 2004
8.FORMER UKRAINIAN PRIME MINISTER ANATOLIY KINAKH
ISSUES HIS PRESIDENTIAL ELECTION MANIFESTO
Interfax-Ukraine news agency, Kiev, Ukraine, in Russian, 10 Jul 04
BBC Monitoring Service, UK, in English, Saturday, Jul 10, 2004
9. UKRAINIAN COMMUNIST CONTENDER STRESSES SOCIAL
SECURITY IN ELECTION MANIFESTO
Interfax-Ukraine news agency, Kiev, in Russian, 12 Jul 04
BBC Monitoring Service, UK, in English, Monday, Jul 12, 2004
10. MEDVEDCHUK URGES SDPU(u) NOT TO ALLOW OPPOSITION
LEADERS IN UKRAINE TO GET ELECTED PRESIDENT
Andrii Derkach, Ukrainian News, Kyiv, Ukraine, Sunday, July 11, 2004
11. TURKEY ASKS UKRAINE TO GIVE UP REVERSE OF
ODESSA-BRODY OIL PIPELINE
Russian News & Information Agency, NOVOSTI, Kiev, July 16, 2004
12. UKRAINIAN JOURNALIST WARNS OF PROBLEMS AHEAD
FOR NEW REVERSE ODESSA-BRODY DEAL
"The Odessa-Brody pipeline will operate in the reverse direction
for a theoretical three years"
COMMENTARY By Vitaliy Kysil
Invest-Gazeta, Kiev, Ukraine, in Russian 13 Jul 04; p 1, 2
BBC Monitoring Service, UK, in English, Friday, Jul 16, 2004
13. WORLD WILDLIFE FUND CALLS FOR COUNTRIES
TO PRESSURE UKRAINE TO HALT DANUBE CANAL PLAN
REUTERS, Bucharest, Hungary, Tuesday, July 13, 2004
========================================================
ACTION UKRAINE REPORT-04, No. 118: ARTICLE NUMBER ONE
========================================================
1. KUCHMA'S FAMILY REPORTED READY FOR TELECOM SALE
Yuriy Tumanov brother of the wife of President Leonid Kuchma, Lyudmyla
"We'll have Ukrtelekom, please"
By Yuliya Lymar, Glavred, Kiev, Ukraine, in Ukrainian, 16 Jul 04
BBC Monitoring Service, UK, in English, Jul 18, 2004
Commenting on the government's decision to privatize the Ukrtelekom
telecommunications monopoly this year, a Ukrainian analytical web site has
said that members of President Leonid Kuchma's family may want to buy the
company. The web site has also forecast that the German and Russian
telecommunications companies will try to win a tender for Ukrtelekom, though
the Germans may not really be interested in winning.
The Donetsk business group will hardly vie for Ukrtelekom, as Prime Minister
Yanukovych already has political support from Kuchma and will not seek
economic support too, the web site said. Kuchma's circle will be concerned
with keeping Ukrtelekom after it is sold to them, no matter what political
forces come to power after the presidential election.
The following is the text of the article by Yuliya Lymar, entitled "We'll
have Ukrtelekom, please", published on the Ukrainian Glavred web site on
16 July; subheadings have been inserted editorially:
All happy families are alike, the classic [Count Leo Tolstoy] wrote [in Anna
Karenina]. The Political Family of the country [an allusion to President
Leonid Kuchma's family] is troubled in its own way. So many things to do
before leaving! What an effort to private Ukrtelekom, about which they have
been speaking for about eight years. And now it has to be accomplished in a
number of weeks... [ellipsis as published]
LUCRATIVE BUSINESS
And so, the commission on privatizing the Ukrtelekom company decided to
announce and hold a tender on selling a 42.86-per-cent state stake in the
company by October 2004. State Property Fund Chairman Mykhaylo
Chechetov said the conditions for privatizing would be approved by the
cabinet. After the sale, a controlling stake (50 per cent plus one share) is
to be left as state property.
To understand the magnitude of the intrigue it is worth saying that
Ukrtelekom is not even a plant named after Illich [an allusion to the
Mariupol Illich metalworks]. It is sort of a telephone Kryvorizhstal [giant
steelworks, recently sold to Kuchma's son-in-law Viktor Pinchuk and
Donetsk businessman Rinat Akhmetov]. The likeness between the gigantic
plant [Kryvorizhstal] and the company [Ukrtelekom] is shown by the fact
that their sales marked the end of the era of big domestic privatization
(read the epoch of initial accumulation of capital). Both are profitable.
And the interests guiding those who are selling the geese laying golden eggs
is not clear. However, there is great doubt that these are the interests of
the state.
The objective reality is as follows. Ukrtelekom is a monopolist on the
market of telecommunication services. According to expert evaluations,
together with its subsidiary companies it controls 60 per cent of the
country's telecommunications market. The company has its own primary
network, based on fibre-optic communications lines with an aggregate length
of over 12,000 kilometres and services 9m subscribers of land-line telephone
connections (80 per cent of the general number).
Figures are no less impressive. Last year alone, Ukrtelekom increased its
profits by 15 per cent. It is also the country's largest company (of those
whose shares are sold on the market) in terms of capitalization - at 9.74bn
hryvnyas [over 1.8bn dollars]. It is also important to not forget that of
the 7.14 per cent of shares sold during the privileged sale, only 2 per cent
remain with small shareholders, while nearly 5 per cent has been
concentrated. As Glavred already reported, according to unofficial data,
these shares are controlled by Stanislav Dovhyy, a "man in a case" of the
telecommunications sector [allusion unclear]. By the way, just days ago,
Dovhyy ended up in the body of the commission on privatizing Ukrtelekom.
Although it is hard to suppose that Mr Dovhyy will be able to play first
fiddle. And this is why.
POSSIBLE BIDDERS
If one believes [US writer] Erik Bern, then dynamo is a type of game. In the
simple version of dynamo it is a flirt, promising much but without
consequences. In our case, that is in the case of Ukrtelekom privatization,
it is extreme dynamo, the cynical variation on the theme "I'll give, but to
you". The crux of the game, apparently, boils down to the following: the
conditions of the privatization tender will be such that everyone can bid,
but winning is for a predetermined well-known personage. But we'll start at
the beginning.
Among companies, long and stalwartly stalking Ukrtelekom, it seems there
will be no firms with Ukrainian tax codes. Objectively the required legal
capital does not exist. If, of course, one does not recall the names of
Pinchuk and Akhmetov. But they already won Kryvorizhstal. By the way, with
the silent agreement of other affluent people, who command an impressive
political lobby and connections on a level which allows them to borrow a
couple of billion in the course of a day. In a word, Pinchuk and Akhmetov
both have other reasons for not trying to "eat" the sweet bit. We'll talk
about them a bit later.
But such monsters of the telecommunications market as "Deutschekom" [as
published, should be Deutsche Telekom] (Germany), Sistema and Rostelekom
(Russia) will probably appear in the list of bidders. Ambitions of the
Germans look rather circumspect in this case, and one can presume that in
this tussle, participation is more important for them than victory. As for
the eastern neighbours it's a bit more complicated. Back as far as mid-March
[2004], the then acting and now head of the board at Ukrtelekom, Hryhoriy
Dzekon, announced that "these two companies are the only ones which are
interested and which are in consultations with us. Besides them, no one is
expressing interest in Ukrtelekom".
The slight irritation with which these words were pronounced did not escape
the attention of observers. Then many thought Mr Dzekon was ashamed for the
country: such an enterprise and those dyed-in-the-wool capitalists are not
biting. But today shows: Mr Dzekon was not irritated by that, no, not that
at all. The thing is, that the pressure with which the Russians are now
grabbing the telecommunications market in Ukraine is in nature like a
panther in heat.
Informally, but in sufficiently understandable language, perhaps with the
use of classic words such as "lavatory" and "beat up" [reference to Vladimir
Putin's 1999 presidential election campaign slogan, promising to beat up
Chechen terrorists in the lavatory], the Russian side announced that in the
tussle for Ukrtelekom, they would not be mere extras. "Blood brothers"
[Russians] are going to fight. If needed, with the Family itself. That very
[Family] which is getting ready for a well-earned vacation at the beginning
of this winter [that is, President Leonid Kuchma, whose term in office
expires and who has said he will not run again].
PRESIDENT'S FAMILY ALLEGEDLY EYEING UKRTELEKOM
Who is Tumanov, you will ask. Yuriy Tumanov is the brother of the wife of
President Leonid Kuchma, Lyudmyla. In 2000-01 he had the status of aide to
the president of Ukraine
(http://goverment.mosreg.ru/pgobladm/nov2003/nov2502a.htm), and, together
with Kiev [Region] governor Anatoliy Zasukha, was a member of an official
delegation establishing relations with Moscow colleagues. Apropos, the
relation of the Family in the person of Tumanov with the family of Zasukha
is long and mutually beneficial. But that is another story, unrelated to
telecommunications, though no less interesting.
Back in 1999, the Russian Nezavisimaya Gazeta [Independent Newspaper]
named Tumanov in the context of the practical monopolization by the Family
of the telecommunications sector
(http://www.ng.ru/cis/1999-09-30/relation.html).
The [Ukrainian Internet] publication Ukraina Kriminalnaya [Criminal Ukraine]
(http://www.cripo.com.ua/stati/rub-4/r4-s9.htm) reports that the Storm
association is among the founders of [Ukrainian mobile communications
company] Kyivstar GSM. The association owns a 21-per-cent stake in Kyivstar
GSM and its director is Yuriy Tumanov. "MP Olena Mazur claims that Tumanov
is a Russian citizen, a man from the KGB of the USSR, a man close to the
Russian oligarch Potanin", the article reads.
According to Glavred's information, Tumanov did actually have a relationship
with military and secret agencies in the USSR. It turns out that Mrs
Kuchma's brother was, in his time, how should it be said, in charge of her
husband, Leonid Kuchma, in a family way, Kuchma directing one of the
strategic enterprises [belonging to] 1/5 of the earth's land mass [that is,
the USSR], [rocket design bureau] Pivdenmash [Yuzhmash]. The ties which
arose in those distant times can be followed today in Ukrtelekom, which is
close to the Family.
For example, a certain Serhiy Tsepennikov today is the deputy director of
the company [Ukrtelekom]
(http://www.ukrtelecom.ua/ua/about/general/bosses/). Of course, Mr
Tsepennikov directs economics and finances. In the past this son of
Dnipropetrovsk worked as chief accountant at the production association
"Pivdennyy Mashynobudivelnyy Zavod" [Yuzhmash]. Of course, this was during
Kuchma's time as director. Tsepennikov gained the experience of
communications expert in a Dnipropetrovsk affiliate of Kyivstar, from whence
he came to Kiev.
Those in the know say that the appointment of Serhiy Tsepennikov was very
unpleasant news for his immediate supervisor Hryhoriy Dzekon. Mr Dzekon, by
the way, also has fairly good relations with Tumanov. Is it because Dzekon
is from Vinnytsya and not from Dnipropetrovsk? Or is it because he did not
get his ties thanks to Tumanov? Whatever was the case, today they say that,
de facto, no decision is made at Ukrtelekom without the express permission
or instruction of Mr Tumanov personally.
Why did Dzekon agree to the role he was given? On the one hand, according
to sources, his structures were given a limited "construction zone" on the
telecommunications field. On the other, Dzekon, like so many of his
predecessors, does not have any choice. For example, one can recall the fate
of Stanislav Dovhyy, who was completely sidelined at one time. And even
those shares which he today holds, are probably a burden to Mr Dovhyy rather
than pleasure. As far as can be seen, in the fuss surrounding the
privatization of Ukrtelekom, he will be offered to sell his shares. And,
judging by the many "footprints" Dovhyy has left behind him, he will do so.
Even at a loss to himself.
As for the team of Dovhyy-Mykola Honchar (former head of the state
telecommunication committee), and Serhiy Sichkarenko (former head of
Ukrtelekom, who left under pressure from Serhiy Lyovochkin), today they
have no interests in the sector.
The figure of Lyovochkin deserves especial mention in the context of
Ukrtelekom. He is the first aide to the president and chairman of the
supervisory board of Ukrtelekom. Mr Lyovochkin, long and well
recommending himself in [Kuchma's] family affairs, has been entrusted with
the last global privatization. If the Family, as we suppose, has expressed
interest in Ukrtelekom, then it appears this is dictating the zeal of the
first aide, who is barrelling into activities of privatization.
They say that the terms of the privatization tender will be announced on
Monday 19 July. Perhaps the tender will be held no later than 28 July. And
Oleksiy Marynchuk, current president of UTEL [Ukrtelekom's company],
will almost certainly be dismissed from his position. If suddenly some
"shortcomings" in his work are discovered, Mr Marynchuk will be left with
little choice - dismissal at best?
In this context it would not be too much to point out that UTEL is one of
the "sweet" bits of Ukrtelekom. Its inventory list contains stations,
sub-stations, lines and, most importantly, traffic which is counted very
approximately according to the old Ukrainian tradition that has been formed
in this sector; this opens possibilities for "leaks and shake-outs".
Therefore, in the near future all the conditions will be created for the
privatization of Ukrtelekom to be held with a minimum of scandal and
without creating unexpected consequences. Some of them, both scandals
and consequences, can be forecast even today.
UKRAINIAN RIVALS SIDELINED
Besides Serhiy Lyovochkin, people from Donetsk are represented in the
make-up of the Ukrtelekom privatization commission, such as First Deputy
Prime Minister Mykola Azarov and an aide to Prime Minister [Viktor
Yanukovych], Eduard Prutnyk. We point out right away that Lyovochkin is not
as "Donetsk team member" as many want to believe. He was just born there.
But Mr Lyovochkin's business methods and way of thinking are not like the
psychology of the prime minister's team.
That's the snag the prime minister's team is not Akhmetov's team. The
latter, in turn, it seems, will get what he wants. Today it has already been
announced that the DCC company [Donetsk-based mobile telephone company]
has signed a contract with Swedish Ericsson on the delivery, development and
installation of a new GSM-standard system. DCC signed the same kind of
contract with Nokia to build a GSM/EDGE system. The latter deal was worth
125 euros. In all, DCC has spent over 200m euros on developing its network.
The joke lies in that today DCC does not have a licence allowing it to make
use of the above-mentioned standards, including for GSM-900. But if the
company has risked the funds, that means it has some guarantee of obtaining
the relevant documents. Is it worth mentioning that that is enough to
warrant "non-participation" in the sale of Ukrtelekom?
As for the interests of those surrounding the presidential candidate from
Donetsk region [Yanukovych], Ukrtelekom is not their party. Counting on the
political support of the Family, Yanukovych will not be likely to fight for
economic interests. Moreover, it is wholly possible, that in signing the
terms of [Ukrtelekom's] privatization, which, by the way is being done by
the Cabinet of Ministers, the interests of its individual members will be
satisfied.
One more influential group (read Viktor Pinchuk) will also not hinder the
deal: they are relatives after all. Moreover, Mr Pinchuk has always shown
little interest in the telecommunications market. Why would he begin in such
a way?
Thus, the biggest snag standing in the way of the people who will privatize
Ukrtelekom in the end is the manner of carrying out the deal. Indeed,
Tumanov, the citizen of Russia, cannot come to the State Property Fund to
say, "We'll have Ukrtelekom, please!" As far as can be seen, things will
have to be done via foreign companies. It will not be hard to identify them
in the list of solid bidders. One just needs to wait for that list to be
published. Perhaps that company will be Alfa which now owns Kyivstar and
bears a relationship to Mr Tumanov.
The most important task of the Family after Ukrtelekom's privatization will
be retaining the status quo. That is, the impossibility of the deal being
retracted under any political regimes. In this case, it will be most
comfortable to appoint their own men for the posts of head and several
members of the National Telecommunications Regulatory Commission - a new
body which is to be created according to the law on telecommunications.
In short, many market participants view the beginning of [Ukrtelekom's]
privatization as a deal which has already been completed. In particular, one
insider told Glavred that market operators are already getting prepared for
the life under a new boss. For example, they say that Kyivstar will lose a
bit of the market share when the Family leaves big politics. Thus, UMC (read
[Russian company] MTS) will gain.
It's just too bad for those people who will "perish" in this fight for
"metal". After all, it's understood that many top-managers of the leading
company will have to leave: they cannot do business under the laws of
animals, preferring legal laws. So MTS will keep fighting. But that will be
after the epoch of the Family... [ellipsis as published] (END)
=========================================================
ACTION UKRAINE REPORT-04, No. 118: ARTICLE NUMBER TWO
The Action Ukraine Report...A major source of news about Ukraine
=========================================================
2. UKRAINIAN PRESIDENTIAL CANDIDATE VIKTOR YUSHCHENKO
SAYS HE HAS HONESTLY DECLARED ALL FAMILY ASSETS
Press Service of Viktor Yushchenko, Kyiv, Ukraine, Friday, July 16, 2004
"Victor Yushchenko was completely honest before the law and before the
voters when he filled the [property] declaration. He has honestly stated his
income and family assets," declared Iryna Gerashchenko, the press secretary
of the presidential candidate Victor Yushchenko, commenting on Victor
Yushchenko's declaration to the "Syogodni" ("Today") newspaper.
In 2003, she reminded, the income of the Yushchenko family was made up
of Victor Yushchenko's salary of the people's deputy (29350 UAH a year),
dividends on a bank deposit (1728 UAH), and the income of his wife
Kateryna Yushchenko (Chumachenko).
According to Iryna Gerashchenko, Victor Andriyovych's wife Kateryna
Yushchenko is occupied with raising three small children at present.
Nevertheless, being registered as an entrepreneur, she has a private income
from leasing apartments. Three apartments with general area of 399.4 square
meters have netted 363 thousand 955 UAH for 2003. The apartments, which
were purchased prior to her marriage to Victor Yushchenko, are owned by
Kateryna Mykhailivna and her mother Sophia Yukhymivna Chumachenko.
In 2003, Kateryna Yushchenko also received dividends in the amount of 115
thousand 545 UAN. The source of the dividends: securities and bank
deposits - joint property of Kateryna Yushchenko, her mother Sophia
Yukhymivna, and sister Lidiya. This sum also includes the money from the
personal pension fund, which Kateryna Mykhailivna had set aside during 20
years of work, and her father's inheritance; at the end of his life Mykhail
Andriyovych Chumachenko had fulfilled his dream to return to his
Motherland, died and is buried in Kyiv.
The assets mentioned above are a joint property of the Chumachenko family,
the work of two generations of this family. Kateryna Mykhailivna herself
started working as a student to cover the cost of education.
As an economist by trade (she has graduated two prestigious American
universities: Georgetown and Chicago), Kateryna Mykhailivna had a successful
career working for financial institutions in the West. Then, for close to
ten years she worked as a high-paid professional for the Ukrainian
representative office of the "Barange Group" - a department of an
international consulting company KPMG, which specializes in finance and
banking consulting.
Besides a house in Bezradychi in Kyiv oblast to which Victor Yushchenko has
invited journalists on numerous occasions, he owns 4.98 hectares of land in
his native village of Khoruzhivka in Sumy region. The Yushchenko family
received this land during land sharing.
Victor Yushchenko also has a bank account with approximately 60 thousand
UAH in savings. The Yushchenkos do not own an automobile because Victor
Andriyovych is using official transport, provided to him as the leader of
the "Our Ukraine" Bloc. The declared trailers are used in looking after the
bee-garden.
"Victor Yushchenko's declaration," says Iryna Gerashchenko, "proves the
frankness of the Yushchenko family. They have nothing to hide. Openness is
Victor Yushchenko's principle. His honesty meets European standards of
transparent public politics." (www.yushchenko.com.ua/org) (END)
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ACTION UKRAINE REPORT-04, No. 118: ARTICLE NUMBER THREE
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3. UKRAINIAN POLITICAL AND BUSINESS LEADER VIKTOR
PINCHUK ACCUSES USA OF HYPOCRISY AND DOUBLE
STANDARDS OVER IRAQ CONTRACTS
Claims he bought large steel mill honestly; believes mass media have
to be free and that honest and open presidential elections are what his
family and the whole of Ukraine need.
Zerkalo Nedeli, Kiev, Ukraine, in Russian 17 Jul 04
BBC Monitoring Service, UK, in English, Saturday, Jul 17, 2004
Viktor Pinchuk, the steel and mass media tycoon and son-in-law of Ukrainian
President Leonid Kuchma, has accused the US government of "hypocrisy and
double standards", commenting on the results of a tender regarding steel
pipe supplies to Iraq.
Speaking in a rare interview, published by the Ukrainian weekly Zerkalo
Nedeli on 17 July, Pinchuk suggested that the US government made a strategic
decision to allow access to Iraqi orders only to US companies. "Tell me
please how can I compete with the Halliburton company on equal terms?"
Pinchuk said. He said his company's offer of pipes for Iraq at prices 20-30
per cent lower than prices of US competitors was rejected.
Pinchuk and his wife, Kuchma's daughter Olena Franchuk, said in the
interview they hailed Kuchma's decision not to seek re-election this year.
But they hinted that Kuchma will not leave the political arena after the
poll scheduled for 31 October. "Perhaps I will distress some of your
readers," Pinchuk told the weekly, which asked him whether an "epoch of
Kuchma" will end in November 2004, "but I will not conceal my opinion - I
think it will not end".
Pinchuk denied rumours saying that President Kuchma has a stake in the
Kryvorizhstal, Ukraine's biggest steelworks. Pinchuk and Donetsk-based
tycoon Rinat Akhmetov bought Kryvorizhstal from the state earlier this
summer in a commercial tender whose conditions were seen as biased in their
favour by many domestic and foreign observers.
Pinchuk claimed the tender conditions were fair. "This is business," he told
Zerkalo Nedeli. "I am sure that we did it honestly. Business includes, among
other things, competition of character and psychology. Those who were afraid
lost."
Pinchuk said that he believes mass media have to be free and that honest and
open presidential elections are what his family and the whole of Ukraine
need. Asked about his preferences, Pinchuk said he would do his utmost so
that Kuchma-backed candidate Prime Minister Viktor Yanukovych win the
election "in an honest and equal competition". Pinchuk said he prefers
Yanukovych's team over the team of Yanukovych's main rival, centre-right
opposition leader Viktor Yushchenko. The interview will be processed as an
excerpt. (END) (ARTUIS)
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ACTION UKRAINE REPORT-04, No. 118: ARTICLE NUMBER FOUR
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4. YUSHCHENKO GUARANTEES FREEDOM OF SPEECH FOR
MASS MEDIA IN UKRAINE WHEN HE BECOMES PRESIDENT
Our Ukraine website, Kyiv, Ukraine, Friday, July 16, 2004
IVANO-FRANKIVSK - Victor Yushchenko is convinced that democracy is
impossible without providing complete information to the people. He stated
this while speaking at the press conference in Ivano-Frankivsk.
"Your freedom of speech, mass media, means the freedom of choice for the
people," said Yushchenko to journalists, "A politician who cannot guarantee
the freedom of speech will not bring progress to the nation."
The presidential contender declared that supporting the freedom of speech
was a consistent view of the forces, headed by him. In the parliament "Our
Ukraine" carefully and consistently fights for the journalists' rights and
understands their problems in fighting for political rights as well as in
fiscal and professional spheres.
Victor Yushchenko reminded that it was his faction that had initiated the
hearings on the freedom of speech and renewed tax benefits for media. "Our
Ukraine" has also came up with numerous other initiatives, aimed at
improving the work of mass media.
"We see the freedom of speech as the primary task for the new government;
journalists must be free and the press must not be persecuted," emphasized
Yushchenko. (www.yuschenko.com.ua/eng) (www.razom.org.ua) (END)
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ACTION UKRAINE REPORT-04, No. 118: ARTICLE NUMBER FIVE
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5. UKRAINIAN INDEPENDENT ORTHODOX CHURCH NOT
TO BACK ANY PRESIDENTIAL CANDIDATE
Suggests criteria for believers to elect a president
ICTV television, Kiev, Ukraine, in Ukrainian, 16 Jul 04
BBC Monitoring Service, UK, in English, Friday, Jul 16, 2004
KIEV - The Ukrainian Orthodox Church of the Kiev Patriarchate is not
going to support any [presidential] candidate but will be actively urging
its believers to take part in the [October] election.
Archbishop Dymytriy told a news conference [in Kiev] today that the synod
of the church advised the believers to elect a president according to the
following criteria.
A candidate must have administrative experience, possess high spiritual and
moral values, primarily love for his people and the state, take care of
Ukraine's sovereignty, its political and economic independence and enhance
the spiritual nature of the people on the basis of Christian and common
human values. (END) (ARTUIS)
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6. YUSHCHENKO: ENSURING THOSE MILLIONS OF UKRAINIANS
ABROAD THE RIGHT TO VOTE IS VERY IMPORTANT
Press service of Viktor Yushchenko, Kyiv, Ukraine, Friday, July 16, 2004
IVANO-FRANKIVSK - "Ensuring that those millions of Ukrainians who
have gone to other countries as migrant workers can vote is a very important
issue today," said Victor Yushchenko during the briefing in Ivano-Frankivsk.
He noted that the "laborers," as a rule, are critical of the government:
"These are thinking, democratic voters, who occupy an active social
position. This is why it is tempting for the government to make it
impossible for some of those migrant workers to participate in the elections
in order to minimize their influence," the leader of "Our Ukraine" is
convinced.
Yushchenko underlined that he, as a presidential candidate and
representative of all democratic forces, understands this threat; he
reminded that he started a project - "The Fourth Wave" - six months ago
in order not only to help solve the problems of the migrant workers but
also to ensure their electoral right.
The projects provides for establishing contacts with members of Ukrainian
society abroad to develop special initiatives at the legal level, which will
be supported by the Ministry of Foreign Affairs and the Central Electoral
Committee, in order to make sure that the people abroad can vote.
Victor Yushchenko thinks that the people responsible for this process have
to make sure that there will be enough polling stations in the places of
concentrated residence of Ukrainian citizens abroad.
"The Fourth Wave" is one of the special projects we will present in the
nearest future. This will also be our answer to the question: "How the
citizens abroad will be able to exercise their electoral right?" stressed
Victor Yushchenko. (www.yuschenko.com.ua/eng) (www.razom.org.ua)
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7. UKRAINIAN OPPOSITION WEEKLY NEWSPAPER DENIED
PRINTING SERVICE IN THREE REGIONS
[Another form of political repression in Ukraine]
UNIAN news agency, Kiev, in Ukrainian, 14 Jul 04
BBC Monitoring Service, UK, in English, Wednesday, Jul 14, 2004
DONETSK - On 13 July the Dnipropetrovsk-based Zarya printing house
refused to print the Donetsk [opposition-leaning] weekly Ostrov, thereby
becoming the 13th printing works to refuse to provide services to the
newspaper in the last three weeks.
UNIAN reports that previously the paper was refused printing services in the
Luhansk and Donetsk regions. The paper's deputy head, Serhiy Furmanyuk,
said that all the printing houses said their refusal was due to technical
reasons.
The manager of Zarya said the reason for his decision was that his company
does not have the technical resources and that "our printing press is
broken". [Passage omitted: Furmanyuk doubts whether the refusal of the other
12 printing works were genuine]
The paper's editor, Yevhen Talyshev, explains the actions against his paper
as "a clearly expressed allergy towards an opposition publication". Talyshev
says that his editorial board is preparing a statement to the union of
journalists and the Kiev independent media trade union. He does not rule out
that the paper will have to look for a printing works abroad to publish the
paper.
[Passage omitted: On 17 June the printing house of the regional newspaper
Donbass in Donetsk told the editors of Ostrov that it would not be printing
the weekly] (END) (ARTUIS)
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8. FORMER UKRAINIAN PRIME MINISTER ANATOLIY KINAKH
ISSUES HIS PRESIDENTIAL ELECTION MANIFESTO
Interfax-Ukraine news agency, Kiev, Ukraine, in Russian, 10 Jul 04
BBC Monitoring Service, UK, in English, Saturday, Jul 10, 2004
KIEV - A contender for Ukrainian president and leader of the Party of
Industrialists and Entrepreneurs, Anatoliy Kinakh, sees as his strategic
goal changing the model of the country's socioeconomic development under
which Ukraine is to switch from the tactics of survival to the strategy of
accelerated development.
This is said in Kinakh's election manifesto. He was nominated as a
presidential candidate at the party's third congress in Kiev on Saturday [10
July].
"Ukraine vitally needs to switch from the tactics of survival to the
strategy of accelerated development, giving priority to national interests
and concentrating all resources. The improved wellbeing and raised standard
of living of Ukrainians is the most important criteria for assessing the
results of [Ukraine's] economic development and the efficiency of the
authorities," the manifesto says.
In particular, in his manifesto Kinakh promises to solve the problem of
unemployment by creating 500,000 jobs a year. "The logic of the new strategy
envisages fundamentally correcting incomes policy, with real wage growth
outstripping price rises," the manifesto says. If elected president, Kinakh
also promises to raise the average monthly wage by 150 per cent to over
1,300 hryvnyas [almost 245 dollars] within two years.
What is more, Kinakh also promises that the wages of doctors, educators
and cultural workers will be equal to the average wage in the manufacturing
sector. He also pledges to raise pensions by 100 per cent.
Kinakh also advocates the "pro-Ukrainian choice in foreign policy", with
Ukraine's EU integration aspirations not being opposed to good neighbourly
relations with Russia and other CIS states.
Kinakh also intends to create a professional army in Ukraine, facilitate the
healthy way of life and support the family as the cornerstone of human
society.
"Changing the direction of social and economic reforms is aimed at
establishing a socially oriented economy and the economy of trust and social
optimism in conditions of social consolidation around the accelerated
modernization of the economy," the manifesto says.
The Central Electoral Commission [CEC] already registered seven candidates
for president as of today. Three more candidates submitted their documents
for registration with the CEC as presidential candidates. Polling day is 31
October. (END) (ARTUIS)
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9. UKRAINIAN COMMUNIST CONTENDER STRESSES SOCIAL
SECURITY IN ELECTION MANIFESTO
Interfax-Ukraine news agency, Kiev, in Russian, 12 Jul 04
BBC Monitoring Service, UK, in English, Monday, Jul 12, 2004
KYIV - The leader of the Communist Party of Ukraine, Petro Symonenko,
has promised to raise the minimum monthly wage to 792 hryvnyas (about
148 dollars) from the current 205 hryvnyas and bring the average wage
to 1,500 hryvnyas if he is elected president, the Interfax-Ukraine news
agency reported on 12 July.
Symonenko's election manifesto called "With people and for people" said that
he would introduce a state monopoly on all foreign trade, production of
alcohol, tobacco and medicines. The state would control the prices on daily
necessities, fuel and transport.
Symonenko wants to ban the sale of farming land and lease it only to those
who actually work on it, providing subsidised loans for the purchase of
machinery and fertilizers. He also promised to provide state assistance to
the companies producing tractors, cars, locomotives and aircraft, as well as
the defence industry.
He also wants to suspend privatization of major state assets and to review
the legitimacy of previous privatization deals.
Symonenko is confident that his strategy will help him create 1,000,000 new
jobs, raise salaries and pensions while doubling the state budget,
Interfax-Ukraine said. (END) (ARTUIS)
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ACTION UKRAINE REPORT-04, No. 118: ARTICLE NUMBER TEN
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10. MEDVEDCHUK URGES SDPU(u) NOT TO ALLOW OPPOSITION
LEADERS IN UKRAINE TO GET ELECTED PRESIDENT
Andrii Derkach, Ukrainian News, Kyiv, Ukraine, Sunday, July 11, 2004
KHARKIV - The head of the Administration of the President, Viktor
Medvedchuk, who also serves as the leader of the Social Democratic
Party (united) has called on the SDPU(u) not to allow candidates from
opposition parties to win the Presidential elections.
Medvedchuk made the comment while speaking at the 18th congress of
the SDPU(u) in Kharkiv on Saturday.
Medvedchuk said that victory for an opposition candidate in the Presidential
elections might have negative consequences for the economy and the political
situation in the country.
Medvedchuk did not refer to the opposition candidates by name. He also
said that the SDPU(u) has the possibilities to prevent the opposition
candidates from emerging victorious in the Presidential elections.
"We have every possibility not to allow such unfolding of events," he said.
As Ukrainian News reported previously, the Political Bureau of the SDPU(u)
recommended to the 18th congress to support the candidature of Yanukovych
in the Presidential elections.
As of today's date, the following presidential candidates have identified
themselves as members of the opposition: Viktor Yuschenko, the leader of
the Our Ukraine coalition of political parties, Socialist Party leader
Oleksandr Moroz and Communist Party leader Petro Symonenko. (END)
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11. TURKEY ASKS UKRAINE TO GIVE UP REVERSE OF
ODESSA-BRODY OIL PIPELINE
Russian News & Information Agency, NOVOSTI, Kiev, July 16, 2004
KIEV - Turkey has asked Ukraine to give up the reverse of Odessa-Brody oil
pipeline as it will add new load over the Bosporus, according to the Turkish
side. [Brody is an ancient town on Ukrainian-Polish border].
Following the talks with EU Transport and Energy Commissioner Loyola de
Palacio, Turkish Foreign Minister Abdullah Gul expressed hope that the
Ukrainian authorities would thoroughly review the reverse problem, BBC
Ukrainian reported.
In the beginning of 2004 Turkey closed the Bosporus to shipping due to bad
weather conditions and big concentration of ships. In case of the reversed
use of Odessa-Brody pipeline the number of tankers will grow.
Ukraine completed the construction of the oil pipeline in the end of 2001.
However, the route, which is meant for annual transit of 14 million tons of
Caspian oil to Europe by-passing the Bosporus has not been used because
Kiev failed to find oil suppliers.
Russian companies interested in the increase of oil supplies to Europe
proposed Ukraine to reverse the pipeline from Brody to Odessa.
At first the Ukrainian authorities gave up this idea. However, on July 5,
2004 the Ukrainian cabinet changed its decision. Thus it can be turned into
Odessa-Brody-Odessa oil pipeline. (END) (ARTUIS)
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12. UKRAINIAN JOURNALIST WARNS OF PROBLEMS AHEAD
FOR NEW REVERSE ODESSA-BRODY DEAL
"The Odessa-Brody pipeline will operate in the reverse direction
for a theoretical three years"
COMMENTARY By Vitaliy Kysil
Invest-Gazeta, Kiev, in Russian 13 Jul 04; p 1, 2
BBC Monitoring Service, UK, in English, Jul 16, 2004
The TNK-BP company may not always be able to supply the 9m tonnes of oil it
has agreed to pump through the Odessa-Brody pipeline, writes the journalist
Vitaliy Kysil. He also warns it may increase its prices, and Ukraine may
find problems with transporting oil through the Turkish straits. The
government has been purged of supporters of the European direction for the
pipe, Kysil notes. Ukrainian Prime Minister Viktor Yanukovych has said that
the pumping in the reverse direction will start as soon as Ukraine is
satisfied with the details of the corresponding agreement.
The following is the text of the article entitled "The Odessa-Brody pipeline
will operate in the reverse direction for a theoretical three years",
published in Invest-Gazeta on 13 July; subheadings have been inserted
editorially:
Viktor Yanukovych's government has quite rightly stood back from deciding
the question "direct or reverse", which at one time was of principal
importance, and now it is up to the director-general of Ukrtransnafta,
Stanislav Vasylenko, `who has been given the appropriate authority from the
company's supervisory council, to determine which way to pump the oil and
how to fill the pipe. The public has been familiar with the contract
Ukrtransnafta was given to sign for some time - it was a proposal of the
Russian TNK-BP [Tyumen Oil Company-BP] for the transportation of nine
million tonnes in the Odessa direction for a three-year term.
Government losing support for European direction
The day before the meeting of the Ukrtransnafta Supervisory Council, another
very interesting document came to light - a Cabinet of Ministers decision
"On introducing an amendment to Para 1 of the decision 'On measures to
improve the effectiveness of the use of the system of oil trunk pipelines'
of 4 February 2004.
In April, the document which has today been amended, was viewed as a great
victory for the supporters of the European direction of the pipeline. Now,
there is no longer a majority of these people in the corridors of power.
Some were unconcerned about the efforts of the opponents, like former [fuel
and energy] minister [Serhiy] Yermolov or Ukrtransnafta president
[Oleksandr] Todiychuk, whereas others, well aware of the results of the
"fight for the reverse option", preferred to go on leave, like Deputy Prime
Minister [in charge of energy Andriy] Klyuyev.
Some, like Prime Minister [Viktor] Yanukovych, calculated that in the run-up
to the presidential elections, and also at the height of the oil crisis, it
would not be a good idea to quarrel with the Russians. The latter, in all
probability, would remember more than once to "think kindly" about
launching the pipe in the reverse regime.
Of course, the Yanukovych government can be excused on one point.
Commenting on the results of the meeting of Ukrtransnafta's supervisory
council, the prime minister noted: "The Ukrainian people should be pleased.
The oil pipeline must get going. When all the details on the economic
agreements advantageous to Ukraine are completed, the pipeline will start
working." By "agreements", Yanukovych clearly meant the documents for the
supply of the Caspian oil. Four such accords existed - with the Turkish
company SOM PetrolTigaret Anonim Shirketi, the Polish PKN Orlen,
the Kazakh KazMunayGaz, as well as a single contract between the
TransYug company and the Lotos group.
TNK-BP RAISES PROBLEMS WITH PRICE AND SUPPLIES
However, the information that is being received on the future contract with
TNK-BP, also does not give grounds for optimism. The draft of the document
provides for the transportation of the Russian Urals brand along the route
Mozyr-Brody-Pivdennyy oil terminal [near Odessa] over the course of three
years with a volume of up to 9m tonnes annually on "pump and pay" terms.
Moreover, TNK-BP will grant Ukrtransnafta credit against goods in the form
of technological oil at 8 per cent APR. The volumes remained at the previous
level - 450,000t.
And then comes the most interesting bit - the price of this consignment. In
the past such volumes of TNK-BP technological oil were valued at 90m
dollars. Now the figure is 108m dollars. Thus, one tonne of technological
oil will cost Ukrtransnafta 240 dollars. At the height of the recently
subsiding oil crisis, Russian oil companies were saying that they were each
delivering 220-225 dollar tonnes of oil to Ukraine. Ukrtransnafta is not
quibbling about paying a little too much, but then they are confident that
oil in Europe will soon get more expensive anyway, therefore within a year
or two technological oil may be re-sold at a good price.
There is one other thing in the treaty with the Russians which causes
apprehension, and that is the wording of the volume of oil circulation. "Up
to" 9m tonnes, evidently, means that TNK-BP will not always be able to find
the necessary volume for the Odessa-Brody pipeline. There is not all that
space at the moment in the Mozyr-Brody sector of the Druzhba pipeline,
through which the Russians will pump oil to the Pivdennyy terminal. And it
will be very difficult to find spare capacities for the 9m tonnes, which are
due to be pumped every year through the Odessa-Brody pipeline.
In the near future this problem is due to be tackled by using technological
additives, enabling a greater quantity of oil to be pumped through. In the
future opportunities for extending certain sectors from Mozyr to Brody will
be achieved through so-called (?loopings) - parallel sectors, although it
does not come cheap.
BOTTLENECKS IN BORPHORUS STRAIT
The second problem which will arise at the stage of transporting the oil to
the markets of southern Europe is the throughput capacity of the Bosphorus.
During this year's crisis, when bottlenecks of dozens of tankers were
forming in the strait, the Russian oil companies said straightaway that they
will be able to solve the question of the throughput capacity of the
Bosphorus with the Turkish authorities. At the moment this problem has not
gone away, and the appearance in the strait of an additional 9m tonnes of
oil, pumped through the Odessa-Brody pipeline, will not please everyone by
any means. The only alternative to supplying the oil to Europe, therefore,
will be oil pipelines through the Balkans, which are now in the sphere of
interest of Russia's oil companies. However, these projects have still not
been completed.
Taking into account all these factors, time will tell if the reverse option
for the ill-fated pipeline will prevail. In a word, Ukraine, for the moment,
has at least officially not yet discounted the idea of the Euro-Asian Oil
Transport Corridor (EAOTC). According to information at hand, an
Ukrtransnafta delegation was due to set off for Poland on Monday (yesterday)
[12 July]. It has been instructed to hold talks with the Polish company PERN
Przyjazn on the setting up of a joint enterprise to complete the
construction of the Ukrainian pipe as far as Plotsk.
The new enterprise, with the melodic name of Sarmatiya Limited Liability
company, will be given a Warsaw registration, and the Ukrainians and the
Poles will share its charter capital equally. There is no mention as yet
about investments in the Brody-Plotsk project (first estimates suggest about
500m euros), but in its format and tasks (working out its feasibility study,
searching for strategic investors, and so on) Sarmatiya will be more like a
limited liability company, which we have with the Russians within the
framework of a gas-transportation consortium project.
In any event, Warsaw is not losing hope that Kazakh oil will reach Plotsk by
2006, when Ukrtransnafta's contract with TNK-BP runs out. Our officials are
more sceptical: three years of the reverse option is a rather theoretical
concept, and it will probably not be until 2008 that the pipeline will reach
Plotsk. (END) (ARTUIS)
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13. WORLD WILDLIFE FUND CALLS FOR COUNTRIES
TO PRESSURE UKRAINE TO HALT DANUBE CANAL PLAN
REUTERS, Bucharest, Hungary, Tuesday, July 13, 2004
BUCHAREST --The Worldwide Fund for Nature (WWF) on
Tuesday urged countries straddling the River Danube to pressure
Ukraine to stop construction of a canal that the Fund says
could threaten the river's environmentally sensitive delta.
Last month, Romania also protested to international bodies over
Ukraine's Bastroe canal project, saying it could damage the delta,
declared a world heritage site by UNESCO in 1991 as a unique
ecosystem.
"WWF urges all the participants in the Danube Cooperation Process
to demand that Ukraine's government immediately halt construction
activity until a proper and responsible environmental impact
assessment has been carried out," WWF said in a statement.
The statement was addressed to a meeting in Bucharest of foreign
ministry officials from Danube basin countries to discuss the
management and protection of the river.
WWF said the canal threatened the delta's most important wetland,
the core of a strictly protected area and home to more than 280 bird
species including 70 percent of the world's white pelicans and 50
percent of the world's pygmy cormorants.
"This action by the Ukrainian government is an action against the
entire Danube -- a European and global treasure," WWF official
Michael Baltzer said.
Romanian Foreign Ministry officials said they expected to hold talks
on the issue with their Ukrainian counterparts in Kiev next week. (END)
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