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Russia: Gazprom Reaches Compromise With Government

  • Floriana Fossato

Moscow, 16 April 1997 (RFE/RL) - Russian Government officials appear to be retreating from previous plans to restructure cardinally Russia�s giant monopoly Gazprom, in order to obtain the payment of the company�s huge tax debt. Reports say Gazprom, the world�s largest natural-gas producer, owes Russia�s Federal Government more than $2.5 billion in back taxes.

Gazprom chairman Rem Vyakhirev told a news conference in Moscow yesterday that he had reached an agreement on the issue with Russia?s First Deputy Prime Minister Boris Nemtsov. Vyakhirev said that, under the agreement, Gazprom would continue to manage 35 percent of the state�s shares held "in trust" by the company.

Nemtsov�s press-secretary, Andrei Pershin confirmed Vyakhirev�s announcement in a telephone interview with RFE/RL.

Russia�s Oil Information Agency (part of the Interfax news agency) said that, according to the deal, Gazprom will pay more than $1.2 billion of its tax debt by June 10. In exchange, the Government has agreed to allow the company to maintain control over 35 percent of the company�s shares -- or almost all of the Government�s 40 percent stake in the monopoly. Vyakhirev said that other unspecified changes to the agreement are to be worked out.

Associated Press news agency reports the agreement calls for full payment of the tax debt -- but does not mention a deadline.

Government officials have said the tax debts of the country�s gas, electricity and transportation monopolies, including Gazprom, are the main sources of the huge wage-and-pension-arrears crisis.

The International Monetary Fund (IMF) has urged Moscow to reform the monopolies, in order to promote economic growth. Moreover, the persisting pension-and-wages debt risks weakening public confidence in the new Government, and to strengthening the Communist opposition to President Boris Yeltsin. Following a major cabinet reshuffle last month, Yeltsin repeatedly told Prime Minister Viktor Chernomyrdin that he expected a prompt solution to the crisis. Yeltsin has also issued a decree, under which the Government�s debt to the country�s Pension Fund should be paid by July 1.

The conclusion of the compromise agreement between the Government and Gazprom may represent the key to the crisis� solution. Vyakhirev said the payment of part of Gazprom�s debt would allow the Government to pay off pension arrears by July 1.

Last week, First Deputy Prime Ministers Anatoly Chubais and Boris Nemtsov appeared resolved to take dramatic action, in order to increase Government control over the politically powerful monopoly. Gazprom has close links with the Government�s "old guard," and primarily with Prime Minister Chernomyrdin, who chaired the company before Vyakhirev.

First deputy Prime Minister Chubais had ordered the Cabinet to review the trust agreement under which Vyakhirev had been given control over the Government-owed stock, which is also the company�s majority stock. Nemtsov, who has been put in charge of structural reforms, called the trust agreement "inexpedient." Sunday, Nemtsov even said that the Cabinet "did not have a copy of the trust agreement," which was signed in 1993 by then-First Deputy Prime Minister Oleg Soskovets.