Utilities

Ukraine has sufficient power generating capacities, most of which need substantial rehabilitation. What is more, the stalemate over structural reforms in Ukraine’s energy sector jeopardizes hopes for a sustainable growth of the Ukrainian economy as chronic non-payments have provoked widespread shortage of energy even for paying customers. Although power companies operate as joint-stock companies, and are officially independed from the Government there is still significant political interference. There has been some attempt to harden budget constraints, but management incentives for efficient performance are weak. Some degree of subsidy and cross-subsidy exists. There is no monolithic structure any more as separation of different parts of the business (generation, transmission and distribution) occurred back in 1995. Besides, noticeable private sector involvement has occurred on the back of hesitant privatisation attempts in 1998.

Water and wastewater services are operated as a vertically integrated natural monopoly by a State Committee for Communal Services through national or regional subsidiaries or by municipal departments. There is a minimal degree of decentralization, and no commercialization has taken place in the sector. There is no, or little, financial autonomy and /or management capacity at municipal level. Heavily subsidized tariffs still exist, along with a high degree of cross-subsidization. There is a low level of cash collection. Central or regional government control tariffs and investment levels. No explicit rules exist in public documents regarding tariffs or quality of service. There is no, or insignificant, private sector participation.

Table: Infrastructure: Utilities

GDP $ per kg oil equiv of energy
Power transm/
Distr losses %
Power consump, KWh per capita
Electricity
% Nuclear
sources
% Hydro
Czech R.
1.3
8.1
4,875
20.1
3.1
Hungary
1.8
13.3
2,814
40.4
0.6
Poland
1.2
12.8
2,420
0.0
1.4
Romania
0.7
11.7
1,757
2.3
25.7
Russia
0.5
8.5
4,165
12.9
18.2
Slovakia
1.1
6.5
4,450
45.0
17.2
Ukraine
0.5
9.7
2,640
43.8
4.9

Source: World Development Indicators 1999.
Note: 1996 data, if not otherwise stated.