New administration of Chisinau looks for solution to cope with increased heating charges. Analysis by Info-Prim Neo

The new administration of Chisinau is decided to find new ways to overcome the problem of increased heating charges, given that the local budget cannot cover the compensations for the increased part of the tariff paid to the population. The given issue will be discussed at the City Hall’s meeting on Monday, 16 July, and will be included in the agenda of one of the next meetings of the Chisinau Municipal Council (СMC) Mihai Roscovan, director of the Business Consulting Institute, told Info-Prim Neo that the tariff of 540 lei is too high for the population and the municipal budget, so that the new administration of the capital should work out a mechanism for compensating the tariff for the people that are not able to pay it. A common tariff should be set for the rest of the population. But, initially, the supplier should justify it. [Termocom took part in election campaign using the financial resources included in the tariff] The mechanism that the communists approved in February practically obliges the City Hall to finance the thermal energy supplier Termocom, regardless of the service quality and of the enterprise’s efficiency, says the cited source. “Primarily, we should see if the activity of the supplier is efficient, because it is known that the enterprise participated actively in the election campaign through a number of activities, by using the financial resources included in the tariff as well,” Roscovan said. In this connection, Mihai Roscovan says that the local authorities should ask for an audit that will establish the accuracy of the tariff of 540 lei. If it is proved that the enterprise spent the money for other purposes than production, the respective sums should be excluded from the tariff and as a result the tariff fixed by the CMC in February will be decreased. The expert says that the audit is now more necessary given that the local authorities are to take over the administration of the enterprise from the Creditors Council, so as to see how the funds were expended. Only after this procedure is carried out, the CMC could raise the question of taking over Termocom. [Municipal councillors dissatisfied with the company’s financial situation] The municipal councillors have already expressed their dissatisfaction with the present financial situation of the heat supplier and are decided to reassume the administration of Termocom only when they clarify how the enterprise “managed” to double the accounts payable in the past six years. Councillor of the “Moldova Noastra” Alliance Party, Oleg Cernei, told Info-Prim Neo earlier that the term of reorganising Termocom set by the Economic Court expires in July, period during which the enterprise has been administered by the Creditors Council. Under the law on insolvability, from July the enterprise will be administered by the CMC, which holds 70% of the shares and which will have to deal with all the problems that have accumulated meanwhile. The only relevant general information obtained by the former opposition in the CMC was that when the Creditors Council took over Termocom, its debts totalled 750 mln lei. Now the enterprise will be again administered by the municipality and this time it has debts of 1.8 bln lei. Cernei also said that some of the property of the enterprise was sold during the past years, including by deliberately reducing the selling price. [Reason for the communists to blackmail] The municipal councillor is sure that the Party of the Communists, which is angry that it lost the elections in Chisinau, will use the enterprise for blackmailing the new administration of Chisinau, endangering thus the preparation for and the start of the heating season. The CMC on 25 January decided to increase the heating charges from 233 lei to 540 lei per gigacalorie. The decision took effect on January 1, 2007. But the Council also decided that the population will pay 233 lei for heating until the next heating season, and the difference between the tariffs will be covered from the local budget. It was then estimated that the difference will cost the budget about 220 mln lei. But there was indicated no concrete source of financing. Many councillors and representatives of the City Hall said that the local budget for 2007 does not include money for covering these expenses. The local authorities intended to ask the Government to contribute money to cover half of the difference in tariff, but the request was probably not made or the Government passed it over. The rise in the heating charges was considered imperative because the basic components that form the price of a gigacalorie have increased several times in nine years, since the tariffs had not been modified. The price of water rose 2.6-fold, of natural gas – 2.4-fold, of electric power – 1.8-fold, of pipes – fourfold etc. Recently, the new administration of the municipality ascertained that the Chisinau City Hall has debts of over 145 million lei to SA “Termocom” for paying compensations to the population, after the Municipal Council had committed itself to paying the difference in the increased and earlier tariff at the start of this year. According to the General Finance Division, the compensations that the City Hall has to pay for the thermal energy supplied to the population in January-May 2007 total 185.1 mln lei. It paid only 40 mln lei as the rest of the expenses do not have financial coverage. Termocom administrator Dionisie Antocel could not be reached by telephone despite repeated attempts over the past two weeks, as his secretary claimed he was on a sick leave. Asked to comment on the financial state of the enterprise, its chief engineer Vladimir Babici said that the City Hall is to report on the issue, but not Termocom.