Aleksandr Lukashenko holds session on energy sector development
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President of the republic of Belarus Aleksandr Lukashenko demanded to resolve problem issues, such as personnel and tariff matters, in the Energy Ministry within a month. The task set by the head of state at session held on 16 April to discuss the operation and development of the Belarusian power engineering system.
At the beginning of the session Aleksandr Lukashenko pointed out a special role of the energy sector for the successful development of the country’s economy. “ The energy industry is one of the key, strategically important sectors of the economy. I would say that this is a fundamental sector of the economy and is critical for other energy processes in our country. Power engineering is the blood vessels of our economy. Any disruption in its work can lead to extremely negative consequences, as it will affect all sectors of the economy and the life-support system of the country, ” Aleksandr Lukashenko said.
The head of state is convinced that it is breakthrough and dynamic development of the energy industry will give a necessary impetus to the development of the real production sector and raise living standards of people.
Aleksandr Lukashenko reminded that in 2007 the energy security concept till 2020 was approved in Belarus. It takes into account global trends of changing consumption of fuel and energy resources, determines potential and real threats in the energy sector. “Taking into consideration the long-term perspective we have defined goals, tasks and main approaches to ensuring energy independence of the country, determined necessary means to fulfil these tasks,” the President noted.
Due to the state’s active investment policy the organizations under the Energy Ministry utilized as much as $7 billion in capital investment over the past six years. “On the one hand, it is good news. On the other, it is not so good taking into account what is going on in the sector and how funds are used there,” the President said.
“I am regularly briefed by the controlling agencies that the sector fails to meet the forecast, to provide return on the invested funds. Serious drawbacks are revealed in many areas of the industry,” Aleksandr Lukashenko said.
The head of state noted the inconsistency of the energy policy, which, in turn, aggravates the contradictions between different industries and regions, exacerbates the problem of cross-subsidization. “See what happens. Industrial enterprises and housing and utilities organizations simply refuse from the services of the Energy Ministry and create their own duplicating power generating facilities. However, neither of them is willing to compromise. As a result, the energy enterprises are becoming more expensive, and try to cover their rising energy costs at the expense of the households and the budget. This is counterproductive for the state, and it will not do,” the head of state said.
However, Aleksandr Lukashenko stated that the mechanisms of formation of tariffs for heat and electricity supply services are not transparent. Coupled with the constant increase in the tariffs, this draws negative reaction among economic entities and individual consumers. “I have instructed the State Control Committee to look into the tariff formation,” the head of state said.
Aleksandr Lukashenko hailed the introduction of the caps on electricity and natural gas consumption. With this, the Belarusian leader raised the issue of inefficient use of the funds freed as a result of this measure by the Energy Ministry. “The Energy Ministry levies the charges for extra consumption and uses the money as it thinks fit, while it is expected to be spent on energy saving efforts. That will never do,” the head of state stressed.
According to the head of state, the imbalances in energy saving are obvious.“Why are energy-saving targets not so intense for the Energy Ministry as for other industries? Unlike other industries the Energy Ministry bears no liability for failure to comply with them,” said Aleksandr Lukashenko. According to the head of state, the energy industry has created their own state within the state, "an independent organization resembling a mafia or a gang."
The President also noted the poor electricity export. "The capacities are excessive. To utilize them fully we need to step up exports. But what happens in practice? The export of electricity was increased twofold last year. The export price however did not cover the country’s internal expenses. We see the same situation this year. Moreover, we are selling at lower prices today. What business does it?” Aleksandr Lukashenko wondered.
According to the head of state, investment projects in the energy industry give no results. “Ill-considered decisions, high design costs, conclusion of contracts with potential bankrupts and mediators, purchase of substandard and often counterfeit equipment, failure to meet the delivery dates, material losses,” the President listed. In his words, he is sometimes invited to attend an official opening ceremony of a facility which is closed up in some half-year over poor-quality equipment. “As a result we fail to meet the deadlines for commissioning of new facilities, miss the payback period projections,” Aleksandr Lukashenko said.
At the beginning of the session Aleksandr Lukashenko pointed out a special role of the energy sector for the successful development of the country’s economy. “ The energy industry is one of the key, strategically important sectors of the economy. I would say that this is a fundamental sector of the economy and is critical for other energy processes in our country. Power engineering is the blood vessels of our economy. Any disruption in its work can lead to extremely negative consequences, as it will affect all sectors of the economy and the life-support system of the country, ” Aleksandr Lukashenko said.
The head of state is convinced that it is breakthrough and dynamic development of the energy industry will give a necessary impetus to the development of the real production sector and raise living standards of people.
Aleksandr Lukashenko reminded that in 2007 the energy security concept till 2020 was approved in Belarus. It takes into account global trends of changing consumption of fuel and energy resources, determines potential and real threats in the energy sector. “Taking into consideration the long-term perspective we have defined goals, tasks and main approaches to ensuring energy independence of the country, determined necessary means to fulfil these tasks,” the President noted.
Due to the state’s active investment policy the organizations under the Energy Ministry utilized as much as $7 billion in capital investment over the past six years. “On the one hand, it is good news. On the other, it is not so good taking into account what is going on in the sector and how funds are used there,” the President said.
“I am regularly briefed by the controlling agencies that the sector fails to meet the forecast, to provide return on the invested funds. Serious drawbacks are revealed in many areas of the industry,” Aleksandr Lukashenko said.
The head of state noted the inconsistency of the energy policy, which, in turn, aggravates the contradictions between different industries and regions, exacerbates the problem of cross-subsidization. “See what happens. Industrial enterprises and housing and utilities organizations simply refuse from the services of the Energy Ministry and create their own duplicating power generating facilities. However, neither of them is willing to compromise. As a result, the energy enterprises are becoming more expensive, and try to cover their rising energy costs at the expense of the households and the budget. This is counterproductive for the state, and it will not do,” the head of state said.
However, Aleksandr Lukashenko stated that the mechanisms of formation of tariffs for heat and electricity supply services are not transparent. Coupled with the constant increase in the tariffs, this draws negative reaction among economic entities and individual consumers. “I have instructed the State Control Committee to look into the tariff formation,” the head of state said.
Aleksandr Lukashenko hailed the introduction of the caps on electricity and natural gas consumption. With this, the Belarusian leader raised the issue of inefficient use of the funds freed as a result of this measure by the Energy Ministry. “The Energy Ministry levies the charges for extra consumption and uses the money as it thinks fit, while it is expected to be spent on energy saving efforts. That will never do,” the head of state stressed.
According to the head of state, the imbalances in energy saving are obvious.“Why are energy-saving targets not so intense for the Energy Ministry as for other industries? Unlike other industries the Energy Ministry bears no liability for failure to comply with them,” said Aleksandr Lukashenko. According to the head of state, the energy industry has created their own state within the state, "an independent organization resembling a mafia or a gang."
The President also noted the poor electricity export. "The capacities are excessive. To utilize them fully we need to step up exports. But what happens in practice? The export of electricity was increased twofold last year. The export price however did not cover the country’s internal expenses. We see the same situation this year. Moreover, we are selling at lower prices today. What business does it?” Aleksandr Lukashenko wondered.
According to the head of state, investment projects in the energy industry give no results. “Ill-considered decisions, high design costs, conclusion of contracts with potential bankrupts and mediators, purchase of substandard and often counterfeit equipment, failure to meet the delivery dates, material losses,” the President listed. In his words, he is sometimes invited to attend an official opening ceremony of a facility which is closed up in some half-year over poor-quality equipment. “As a result we fail to meet the deadlines for commissioning of new facilities, miss the payback period projections,” Aleksandr Lukashenko said.