President: 13 years after privatisation state continues subsiding almost every private enterprise

08/30/16 16:25

President: 13 years after privatisation state continues subsiding almost every private enterprise

Yevgeny Shevchuk noted that sooner or later Pridnestrovie's tariff policy would be switched to market economy
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Tiraspol, 30 August. /Novosti Pridnestrovya/. 13 years after mass privatisation the state continues subsiding almost every enterprise in Pridnstrovie, including private ones, President Yevgeny Shevchuk said at an annual press conference. «Since 2003 the programme of mass privatisation, which initially supposed that the burden of maintaining and modernising enterprises would be switched to new owners, had been implemented," said the president. He noted that investment agreements had been signed with the owners of many of them in the process of privatisation, but major re-equipment which would allow the majority of enterprises to become competitive without government assistance in the form of low prices for fuel had not been fulfilled.

As a result, according to Yevgeny Shevchuk, the government continues to employ its two major resources to support Pridnestrovian enterprises — reduced tax burden and gas tariffs. The president noted in the meantime that the mechanism of state support should be laid out in legislation. With no legal act so far, the government tries to regulate «fragmentarily» relations in this sphere, concluding agreements with the entities requiring assistance on condition that they avoid layoffs after receiving gas discounts. However, according to the president, this issue needs a more systemic approach, especially because debts to the external gas supplier lie with Pridnestrovie in general rather than with enterprises enjoying tariff discounts.

As an example illustrating the level of state support provided to some economic entities, the president proposed to compare the gas prices used for JSC Moldavskaya GRES and LLC Tirotex-Energo (on the official website of LLC Sheriff, Tirotex-Energo is indicated as a partner of this company along with JSC Interdnestrcom and JSC Agroprombank). «If in 2010 Tirotex-Energo paid $72 for gas, Moldavskaya GRES paid $112… In 2011 Moldavskaya GRES paid $112 and Tirotex-Energo $72… In 2012 they paid $111 and $59.5 respectively," said the president.

Yevgeny Shevchuk specially emphasised that sooner or later the state's tariff policy towards Pridnestrovian enterprises would have to be switched to market relations as the route of the transportation of Russian gas might change, and a new fuel corridor would not pass through Pridnestrovie.

The president added that one of the requirements by the EU, which enabled Pridnestrovie to export goods to its territory in a preferential customs regime, was the transition of tariff policy to market economy to create conditions for equal competition between European and Pridnestrovian enterprises.

According to the president, if Pridnestrovian enterprises fail to carry out the necessary modernisation, a rise in gas tariffs would make them nonncompetitive.

 

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