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Newsline - February 17, 1999




FEDERATION COUNCIL PASSES UKRAINIAN TREATY, ADDS CONDITION

The Federation Council voted to ratify the Treaty for Friendship, Cooperation, and Partnership between Russia and Ukraine on 17 February. The vote was 106 to 25 with 17 abstentions. However, the treaty will not go into effect until Ukraine's parliament ratifies three agreements on the Black Sea fleet. Prime Minister Yevgenii Primakov suggested that condition to ensure the treaty's passage, according to ITAR-TASS. So far, the three agreements have stalled in Ukraine's Supreme Council. JAC

ZADORNOV TAKING OVER IMF PORTFOLIO?

Contradicting earlier reports that former Prime Minister Viktor Chernomyrdin is poised to be named presidential envoy to international financial institutions, "Izvestiya" reported on 17 February that Finance Minister Mikhail Zadornov is Russia's new chief negotiator for talks with the IMF and other international organizations (see "RFE/RL Newsline," 16 February 1999). Reuters reported that neither the government nor the finance ministry will confirm the report, while Interfax said its sources said Zadornov is likely to receive such an appointment. "Nezavisimaya gazeta" reported the previous day that Zadornov has prepared the most recent package of documents sent to the fund because the "careless and sometimes inappropriate words about the political motives of the negotiations" spoken by First Deputy Prime Minister Yurii Maslyukov and his press spokesman forced the government to find someone else to "prepare documents for the fund." JAC

INCOME UNDERREPORTING HIDES ONE-FIFTH OF RUSSIAN ECONOMY

About one-fifth of Russia's economy operates in the "shadows," with businesses concealing or underreporting their income in order to avoid taxes, according to the State Statistic Committee's estimates, Interfax reported on 15 February. The amount of income hidden varies by season and across sectors, with unreported agricultural income rising in the summer and the fall. The trade sector conceals 60 percent of its income, compared with 10-11 percent in industry. JAC

RUSSIA BECOMING A WORLD LEADER IN SPREAD OF AIDS

Russia is experiencing one of the world's most rapid spread of AIDS, Vadim Pokrovskii told Interfax on 16 February. The number of registered HIV carriers tripled in 1997 and doubled in 1998 to 10,483, he said. Almost one-tenth of these are living in Moscow, where only about 100 of Russia's AIDS patients receive proper treatment. According to Pokrovskii, the standard multi-drug treatment offered in the West costs from $9,000 to $22,000 a year and is therefore out of reach of most Russian patients. JAC

PRIMORSKII KRAI GOVERNOR ENGAGED IN CREATIVE CAMPAIGNING?

Primorskii Krai Governor Yevgenii Nazdratenko has declared that he won a $1 million cash prize from the Bahamas-based World Aristocratic Academy for being one of the world's outstanding leaders, the "Moscow Times" reported on 16 February. Past winners of the prize were reportedly New York Mayor Rudolf Guiliani, actors Harrison Ford and Demi Moore, King Juan Carlos of Spain, and the Russian pop group Na-na, but Guiliani's office denied ever having heard of the organization when contacted by the newspaper. Repeated attempts to contact the group in the Bahamas failed. Nazdratenko's political foes believe that the World Aristocratic Academy is a fiction concocted by Nazdratenko to boost his popularity before upcoming gubernatorial elections. They also claim that the money, which Nazdratenko said he would donate to needy people in the Krai, came from the region's budget. JAC

ST. PETERSBURG DEPUTY ARRESTED ON SUSPICION OF MURDER

Yurii Shutov, a member of the St. Petersburg city assembly, was arrested on 16 February on suspicion of leading a gang and plotting the deaths of three men, among them prominent local businessman Dmitrii Filippov, who was slain in October 1998, ITAR-TASS reported. Eleven other people were arrested and a large cache of weapons and materials for constructing bombs seized. Shutov had been an adviser to former St. Petersburg Mayor Anatolii Sobchak. JAC

NEW PAUSE IN PASKO TRIAL AFTER INDICTMENT LEAKED

The espionage trial of military journalist Grigorii Pasko has recessed for one day at the request of defense attorneys, ITAR-TASS reported on 17 February. The delay was necessary so that a new lawyer could arrive from Moscow to replace a member of Pasko's defense team who was barred from the trial. The previous day, the agency reported that the document indicting Pasko, which contained classified information, has been leaked to the Glasnost Protection Fund, which is distributing that document via e-mail. Pasko is accused of passing classified materials about the Pacific Fleet to Japanese television media. JAC

MURDOCH REPORTEDLY EYEING CHANNEL TV-6

Media magnate Rupert Murdoch has expressed an interest in purchasing shares in TV-6, "one of Russia's most politically independent central TV channels," "Kommersant-Daily" reported on 16 February. According to the newspaper, Murdoch is primarily interested in TV-6, not Russian Public Television (ORT). Earlier reports of his interest in ORT prompted one State Duma deputy to submit draft legislation stipulating that no foreigner or foreign entity be allowed own shares in ORT. According to the newspaper, the channel, which is owned by Eduard Sagalaev (37.5 percent), Boris Berezovskii (37.5 percent), LUKOIL (15 percent), and the Moscow Science and Technology Committee (10 percent), needs money urgently because of the collapse in its advertising revenues. The newspaper predicts that Moscow Science and Technology Committee head Vladimir Yevtushenko, "a protege of Moscow Mayor Yurii Luzhkov," will oppose the sale. JAC

VORONTSOV LANDS NEW JOB IN UN

Former Russian Ambassador to the U.S. Yulii Vorontsov has a new assignment as UN Secretary-General Kofi Annan's special envoy for the CIS, ITAR-TASS reported on 16 February. JAC

RUSSIA, TATARSTAN REACH COMPROMISE ON PASSPORTS

Tatarstan State Council Chairman Farid Mukhametshin told journalists in Moscow on 15 February that Tatarstan's authorities are satisfied with the new Russian passport model suggested by Moscow. "We are not going to issue our own identity document," he commented. Mukhametshin added that passports issued in the national republics will contain an extra title page that duplicates, in the language of the republic, the data given on the first page of the standard passport, including the bearer's nationality. In November 1997, Tatarstan suspended issuing the new Russian passports to protest the fact that they were in Russian only and failed to designate nationality and republican citizenship (see "RFE/RL Newsline," 21 October and 14 November 1997). According to Russian First Deputy Prime Minister Vadim Gustov, passports issued in Russian regions will differ from those issued in national republics and will not contain the supplementary page in the national language, "Segodnya" reported on 16 February. LF

CHECHEN PRESIDENT APPEALS ON BEHALF OF CONVICTED TERRORISTS

Aslan Maskhadov has asked Russian President Yeltsin to allow two Chechen women sentenced last week for a terrorist bombing in a Caucasus town to serve their sentences in Chechnya, Interfax reported on 16 February, quoting Russian Interior Minister Sergei Stepashin. Field commanders opposed to Maskhadov last week threatened reprisals against Russia for the sentencing of the two women (see "RFE/RL Newsline," 10 February 1999). The local authorities in Stavropol Krai, where the trial took place have introduced special security procedures, including passport checks for all persons entering Stavropol from Chechnya. LF

CYPRIOT DEFENSE MINISTER, ROSVOORUZHENIE DISCUSS S-300S

During talks in Moscow on 16 February, Yiannakis Chrisostomis and leading officials from the arms export company Rosvooruzhenie agreed that the S-300 air defense missile systems ordered by Cyprus in 1997 for deployment on that island will instead be deployed on Crete by mid-1999, ITAR-TASS reported. The missiles will remain the property of Cyprus but will be under Greek control. Chrisostomis is to meet with his Russian counterpart, Igor Sergeev, on 17 February to finalize the agreement. Rosvooruzhenie director Grigorii Rapota told Interfax last week that his company will not suffer any financial losses as a result of the change of deployment location. "Nezavisimaya gazeta" reported on 16 February, however, that the U.S., which pressured the Cypriot leadership to abandon its original plans to deploy the missile systems on Cyprus, is now trying to persuade Athens to withdraw its offer to station those systems on Crete. LF




ARMENIAN AUTHORITIES DENY MURDER SUSPECTS TORTURED

Interior and National Security Minister Serzh Sarkisian on 16 February explicitly denied allegations by a member of the Armenian Helsinki Association that two of Deputy Interior Minister Artsrun Markarian's bodyguards have been subjected to torture during the investigation into Markarian's death, RFE/RL's Yerevan bureau reported. The human rights monitor and the mothers of the two bodyguards told journalists earlier that day that the two men have been severely beaten. They also said no charges have yet been brought against the two, who were arrested on 10 February on suspicion of murdering Markarian. Under Armenian law, a suspect may be detained for no longer that 96 hours before being charged with a crime. LF

EXPORT OF AZERBAIJANI OIL VIA RUSSIA AGAIN HALTED

The export of oil via the Baku-Novorossiisk pipeline was interrupted on 16 February for the third time in two weeks, Turan and Dow Jones Newswires reported. Transneft, which operates the Russian leg of that pipeline, attributed the disruption to "technical problems." Chechen officials in Baku told AFP on 12 February that an earlier stoppage was the result of arson (see "RFE/RL Newsline," 11 February 1999). They complained that Transneft was failing to pay the guards detailed to protect the pipeline. LF

MISTREATMENT OF AZERBAIJANIS WIDESPREAD IN GEORGIAN ARMED FORCES

Kamil Kireji, chairman of the Ozan society, formed in 1998 to protect the interests of Georgia's 250,000 strong ethnic Azerbaijani minority, told journalists in Baku on 16 February that hazing and gratuitous violence against ethnic Azeris serving in the Georgian armed forces have increased dramatically since 1998, Turan and ANS-Press reported. As a result, 70 Azeris serving in Tbilisi deserted from their unit earlier this month. Kireji said that repeated protests to the Georgian president and defense minister have failed to elicit any response to date. LF

GEORGIAN PRESIDENT ADDRESSES PARLIAMENT...

In his annual address to the parliament on 16 February, Eduard Shevardnadze advocated amending the Georgian Constitution to provide for the reintroduction of the post of prime minister, which was abolished in 1995, Reuters and Interfax reported. But he said this change will not affect the existing principle of "strong president-- strong parliament." Shevardnadze said that his administration's priorities are establishing "mutual respect, good neighborly relations and cooperation with Russia." He also called on the UN Security Council to undertake unspecified "decisive measures envisaged by UN rules" to resolve the conflict in Abkhazia, arguing that failure to do so will reflect adversely not only on the UN but also on Georgia's international prestige. LF

...LEAVING DEPUTIES UNIMPRESSED

Shevardnadze's remarks received a hostile reception, particularly from opposition deputies, prompting the president to comment that "I had the feeling of attending a pre-election meeting," Caucasus Press reported. Shevardnadze rejected accusations that he is autocratic, adding that "if they were true, I could change many things." Mamuka Giorgadze of the Popular faction compared Shevardnadze's address with a Soviet-era report that omitted any mention of the most serious problems. National-Democratic Party chairwoman Irina Sarishvili-Chanturia observed that the anti-corruption campaign promulgated by Shevardnadze last year has yielded no results. And Socialist Party leader Vakhtang Rcheulishvili said Shevardnadze "is either misinformed or concealing the truth" when he claims it is possible to revive dormant industrial enterprises in the towns of Chiatura and Tkibuli. LF

GEORGIAN DISPLACED PERSONS LAUNCH PROTEST

Bearing placards calling for Georgia to leave the CIS and urging a "Croatian model" in resolving the Abkhaz conflict, some 500 Georgian displaced persons blocked the bridge linking Abkhazia with the rest of Georgia on 16 February, according to Caucasus Press and "Rezonansi." They were protesting the proposal by Abkhaz leader Vladislav Ardzinba to allow the return of Georgians to Abkhazia's southernmost Gali Raion beginning 1 March. In particular, the displaced persons object to Abkhazia's insistence on compliance with the provision of the April 1994 agreement on repatriation that empowers Abkhazia to screen the applications of would-be returnees in order to exclude persons suspected of committing war crimes. LF

INVESTIGATION INTO TASHKENT BOMBING BEGINS...

Following the bombings in Tashkent on 16 February, President Islam Karimov, the ministers of defense and the interior, as well as officials from the border guards and security service met to discuss the incident, Uzbek Television reported. National Security Service chief Rustam Inoyatov said "we know who organized these incidents" and claimed that "foreign extremist and terrorist organizations and people who have relations with them" were behind the bombings. While he stopped short of naming any particular group, Interior Minister Zohirjon Almatov said that "Uzbek citizens" were responsible but that "their mentors are from elsewhere." He then mentioned in this context "the trends of Wahhabism and Hezbe Tahriri Islomiya, Islamic movements set up in Pakistan." Interfax on 16 February quoted Inoyatov as saying "the republic's borders have been sealed and the capital is surrounded by law-enforcement personnel. Police are conducting raids and searches. All investigations will be completed soon." BP

...WHILE 15 REPORTED DEAD AS SEARCH FOR VICTIMS CONTINUES

ITAR- TASS reported on 17 February that 15 people died in the bombings and 150 were injured. Workers are still trying to remove rubble in areas where the bombs were planted. Some 50 buildings were either razed or damaged by the explosions. Schools have been closed for the remainder of the week. BP

UYGHURS DEPORTED FROM KAZAKHSTAN...

Three ethnic Uyghurs are being returned to China by the authorities in Kazakhstan. According to a statement issued by Amnesty International on 15 February, the three fled China's western Xinjiang Province late last year and were arrested as they crossed into Kazakhstan's territory. All three are wanted by the Chinese authorities for political activities. BP

...WHILE KYRGYZSTAN KEEPS ANOTHER UYGHUR IN JAIL

Kyrgyzstan's Supreme Court on 16 February upheld a ruling by a district court whereby Jalal Kasarji was sentenced to 14 years in prison, RFE/RL correspondents in Bishkek reported. In December, Kasarji, an ethnic Uyghur and a citizen of Turkey, was found guilty of illegal possession of a weapon and resisting arrest. He and two other Uyghurs were originally charged with possession and distribution of Wahhabi literature, training terrorists, and inciting inter-ethnic hatred. However, none of those charges was made against them in court, and the other two Uyghurs were freed. BP

TURKMEN PRESIDENT COMMENTS ON FUTURE GAS EXPORTS

At a ceremony opening a new natural gas compression facility in Kaakhka on 16 February, Saparmurat Niyazov said his country will export 120 billion cubic meters of natural gas by the year 2005, ITAR-TASS and Interfax reported. Niyazov said that by then, the Trans- Caspian and Trans-Iranian pipelines are expected to be functioning, along with the Trans-Russian one. Niyazov said the new compression facility will ensure "stable operation" of the gas turbine at the Bezmenin power plant, installed by the U.S. company General Electric, and ensure "more reliable"supplies of gas to Ashgabat. The Kaakhka facility was built by the Ukrainian company Ukrgazstroi in part payment of that country's debt for Turkmen gas supplies. Niyazov noted that a deal has been struck whereby Ukraine will receive 20 billion cubic meters of gas this year. BP

RUSSIA TO REVIEW CONDITIONS FOR TURKMEN-UKRAINE GAS DEAL

The Russian State Duma has invited Minister for CIS Affairs Boris Pastukhov and chairman of Gazprom Rem Vyakhirev to attend a 5 March government session, ITAR-TASS reported on 17 February. The deputies want to find out what the conditions are for Turkmen gas transiting Russian territory en route to Ukraine. BP




UKRAINE'S HARD CURRENCY RESERVES SHRINKING

The Ukrainian National Bank said on 16 February that its hard currency reserves decreased to $685.5 million at the beginning of 1999, down from $906 million one month earlier, AP reported. The bank had said earlier that its reserves stood at $1.05 billion, but it has now revised that figure downward using a new international calculation method that excludes all precious metals except gold. Ukraine's reserves stood at $2.34 billion at the beginning of 1998, but the National Bank systematically sold U.S. dollars in the wake of the Russian financial crisis to support the hryvnya. JM

BELARUSIAN NEWSPAPERS WARNED NOT TO PUBLISH OPPOSITION ELECTION MATERIALS

The State Committee for the Press has warned six Belarusian independent newspapers not to publish materials about the opposition presidential elections scheduled for 16 May, RFE/RL's Belarusian Service reported on 16 February. The committee noted that the newspapers have published "documents of nonexistent state organizations" and appealed to their readers to take part in a "conspiracy" to seize power. A committee official told RFE/RL that the authorities may suspend publication of or even ban the newspapers if they continue to publish materials supplied by the opposition Central Electoral Commission. In a statement issued on 16 February, leaders of Belarusian NGOs say the warnings have no legal foundation and aim at muzzling the independent press in Belarus. JM

BELARUS STARTS POPULATION CENSUS...

Some 33,000 census-takers have begun a population census that will continue until 23 February, Belarusian media reported on 16 February. The census questionnaire includes 17 questions about, among other things, the age, sex, ethnicity, occupation, financial situation, and housing conditions of the interviewed. According to Belarusian Television, the final results of the census will be made public by the end of this year. The last census in Belarus was taken in 1989. JM

...WHILE OPPOSITION ISSUES CENSUS RECOMMENDATIONS

The Belarusian Popular Front (BNF) believes that the authorities' major objectives in conducting the census are to play down the importance of the Belarusian language in Belarus and to validate integration with Russia, Belapan reported on 16 February. The BNF recommends that people ask for Belarusian-language census questionnaires and warns against any pressure or "hints" from census-takers while providing answers. The BNF also advises that citizens refuse to answer questions about personal income because the "census in not a tax inspection." JM

IMF MISSION LEAVES BELARUS WITHOUT COMMENT

An IMF mission has left Belarus without making "public assessments of its negotiation process with Belarus's authorities," RFE/RL Belarusian Service reported on 16 February. The mission was in the Belarusian capital from 2-13 February. It was the fourth time IMF experts have traveled to Minsk to discuss a $100 million credit to Belarus. Meanwhile, the Belarusian National Bank issued a statement saying that Belarus has reached mutual understanding with the IMF over a "wide range of issues concerning mainly credit and financial policies." The statement added that another IMF mission is expected to visit Belarus in mid-March. JM

ESTONIAN CABINET APPROVES TWO MORE FREE ECONOMIC ZONES

The government on 16 February approved the setting up of free economic zones at Valga and Varu, in southeastern Estonia, ETA reported. Unemployment figures for Valga and Varu are among the highest in the country, and the two regions also have the oldest population, with an average age of 38. Estonia already has two economic zones, at the Tallinn-Muuga port and in Sillamae, in the northeastern part of the country (see "RFE/RL Newsline," 13 January 1999). JC

GERMANY WANTS LATVIA TO RECEIVE EU TALKS INVITATION THIS YEAR

Speaking at a press conference in Riga on 16 February, German State Minister at the Foreign Ministry Guenter Verheugen said Bonn wants Latvia to be invited to begin EU entry talks later this year, during the presidency of Finland, "Diena" reported. Verheugen stressed that the EU's eastward expansion is one of Germany's "strategic goals." He also expressed confidence that the EU's internal problems will be resolved soon, adding that this process must not have a negative influence on expansion. Germany holds the EU rotating presidency in the first half of this year. Verheugen also commented that Germany supports Latvia's goal of joining NATO and backs the "open-doors" policy of the alliance. Earlier this month, German Chancellor Gerhard Schroeder said he doubts a decision on new members will be taken at NATO's April summit (see "RFE/RL Newsline," 9 February 1999). JC

ONE IN SIX LITHUANIANS REPORTED ON VERGE OF POVERTY

A Vilnius seminar entitled "Poverty and Social Policy" revealed that one in six Lithuanians are living on the verge of poverty, while every fourth Lithuanian considers himself "impoverished," ELTA reported on 16 February. Last month, President Valdas Adamkus established a committee to oversee implementation of the Copenhagen declaration aimed at combating poverty, which Lithuania signed in 1995. An official from the Social Protection and Labor Ministry, however, told "Lietuvos Rytas" that living standards are better than statistics suggest, adding that "Lithuanians strive to prove that they live far worse than they do in reality." JC

POLAND WELCOMES GERMAN FUND TO COMPENSATE NAZI SLAVE LABORERS

Wieslaw Walendziak, chief of the prime minister's office, has welcomed a plan by 12 leading German industrial companies to set up a fund to compensate those forced to perform slave labor in Nazi Germany during World War II, Reuters reported on 16 February. "Central Europe has so far received only about 1 percent of war reparations. Now it seems that our rights have been taken into account," Walendziak told a news conference. Walendziak said German Chancellor Gerhard Schroeder has confirmed that the fund--reportedly totaling 3 billion German marks ($1.7 billion)--will not differentiate between victims in terms of their ethnicity, citizenship, or place of residence. According to Polish media, some 300,000 former slave laborers currently live in Poland. A total of 2 million Poles were deported to work in Nazi Germany. JM

HAVEL TO SIGN NATO ACCESSION DOCUMENTS THIS MONTH

President Vaclav Havel has "tentatively" set 26 February as the date for signing the ratification of Czech membership in NATO, the presidential office announced on 16 February. The ceremony marking the accession of the Czech Republic, Hungary, and Poland to NATO is scheduled to take place on 12 March in Independence, Missouri, and will be hosted by Czech-born U.S. Secretary of State Madeleine Albright. MS

FORMER SLOVAK INTERIOR MINISTER TO LOSE PARLIAMENTARY IMMUNITY?

The parliamentary Constitutional and Legal Committee on 16 February recommended that lawmakers strip former Interior Minister Gustav Krajci of his parliamentary immunity for having hindered the referendum on NATO accession and direct presidential elections in May 1997. The Prosecutor-General's Office is investing Krajci also on suspicion of fraud. The opposition Movement for a Democratic Slovakia (HZDS), to which Krajci belongs, boycotted the committee meeting, calling it a "farce." HZDS spokeswoman Olga Keltosova said her party will also boycott a committee meeting dealing with lifting the parliamentary immunity of former Counter-Intelligence Service chief Ivan Lexa. MS




MILOSEVIC RULES OUT NATO TROOPS IN KOSOVA

Yugoslav President Slobodan Milosevic told U.S. envoy Christopher Hill in Belgrade on 16 February that he opposes the stationing of NATO peacekeepers in Kosova (see "RFE/RL Newsline," 16 February 1999). The state-run news agency Tanjug said in a statement that "people from the left and right of the political spectrum" agree with Milosevic's position, adding that "our negative stand on the presence of foreign troops is not only the attitude of the leadership but also of all citizens of our country." The statement noted that the Belgrade authorities have "demonstrated through their behavior their firm commitment to a peaceful solution [in the province]." Tanjug concluded that the international community must choose between "a multi-ethnic, multi-cultural, and multi-religious approach" (which is how Belgrade describes its position) and the "nationalist approach of the separatist movement," by which it means the Kosova Liberation Army (UCK). PM

ALBRIGHT WARNS MILOSEVIC

Secretary of State Madeleine Albright told Milosevic in a telephone conversation before Hill's arrival on 16 February that Milosevic must agree to NATO deployment or face air strikes. She described any Serbian ban on the stationing of peacekeepers as a "deal breaker," adding that the Kosovar delegation is ready to sign an agreement. In Washington, Defense Department spokesman Ken Bacon said that some 400 aircraft, including 260 from the U.S., are ready to strike at targets in Serbia on 48 hours' notice. PM

UCK WARY OF DISARMAMENT

UCK commanders in the Llap region told William Walker, who heads the OSCE monitoring mission in Kosova, that they are not willing to commit themselves to give up their weapons, even if the Rambouillet agreement requires them to do so. UCK spokesman Albin Kurti said on 16 February that "the UCK is an army with a developed military structure. The UCK is going to exist. The UCK is going to liberate Kosova. Other possibilities are out of the question." Kurti stressed NATO should concentrate on "demolishing the Serbian military complex," AP reported. Elsewhere, an unnamed British military expert told Reuters that the UCK is "very disciplined and very obedient." He added the top command will be able to order local units to disarm if it truly wants to. Problems would lie only with some rogue units that wear UCK uniforms but are not part of its command structure, he noted. PM

SLOVENIAN MINISTER LOSES VOTE OF CONFIDENCE

Liberal Democratic Interior Minister Mirko Bandelj lost a vote of confidence in the parliament on 16 February. The vote was 49 to 41. Critics accused him of trying to take away unspecified powers from several parliamentary committees. PM

POPE TO VISIT SLOVENIA

Pope John Paul II will visit Slovenia in September to beatify Bishop Anton Martin Slomsek (1800-1862), the "Frankfurter Allgemeine Zeitung" reported on 16 February. The pontiff last visited the Alpine republic in 1996, which was also his first trip there. Relations between Ljubljana and the Vatican are overshadowed by a dispute over the return of Church property confiscated by the Communists, which is the main issue preventing the conclusion of a Church-state agreement. Many Slovenes suspect that the Church's ultimate goal is to regain the predominant role in politics that it enjoyed in pre-communist times. PM

DID ALBANIAN-ITALIAN COMPANY BUILD BOATS FOR SMUGGLERS?

The Italian owner of the Rogolo boat-building company in Shkozet, near Durres, has denied press reports that his company produces high-powered speedboats for smugglers. Graziano Padini told "Gazeta Shqiptare" of 16 February that his company has been producing a wide range of vessels, including yachts and fishing boats, for six years. He did not rule out, however, that some of the boats produced by Rogolo end up in the hands of smugglers. Unnamed officials from the Durres tax collection office and the Chamber of Commerce told the daily that the company is legally registered, pays its taxes, and has "always respected the law." FS

ALBANIAN POLICE ARREST MORE ISLAMISTS

Interior Minister Petro Koci told Reuters on 16 February that police have arrested two suspected Islamic terrorists. Koci said "we suspect they set up a network of extremists [in Albania] a long time ago," but he declined further comment. "Koha Jone" reported that police found "bombs, grenades, and Kalashnikov [assault rifles]...during a raid" on the suspects' homes. It added that the two are suspected of having spied on the U.S. embassy in Tirana and may be accomplices of Maksim Ciciku, an Albanian who is charged with spying on U.S. Ambassador to Albania Marisa Lino and is suspected of having links with Saudi dissident Osama bin Laden. Ciciku is in detention awaiting trial, following his arrest last month (see "RFE/RL Newsline," 11 January 1999). FS

ROMANIAN MINERS' LEADER ARRESTED AFTER RENEWED CLASHES...

Miron Cozma, the leader of the Jiu Valley miners, was arrested in the town of Caracal, some 150 kilometers southwest of Bucharest, on 17 February, Romanian Radio reported. Two of his deputies were also detained, as were some 300 of his supporters. Two days earlier, Cozma was sentenced to 18 years in prison for his role in the September 1991 riots (see "RFE/RL Newsline," 16 February 1999). He may now face an additional sentence of 15 years in prison, having been declared a fugitive on 16 February. His arrest follows clashes between police forces and the miners early on 17 February in the village of Stoenesti, not far from Caracal. Police used force to disperse the miners. One miner died as a result of injuries sustained during the police action and scores of people have been hospitalized, including 35 police officers. Several thousand miners had been on their way to Bucharest. MS

...AS HIS LAWYER DEMANDS PRESIDENTIAL PARDON

The attorney representing Cozma on 16 February said he will appeal to President Emil Constantinescu to grant his client a presidential pardon. He said he will also ask for the postponement of Cozma's sentence because the presence of the miners' leader is necessary to ensure implementation of the agreements reached last month by Cozma and Premier Radu Vasile, RFE/RL's Bucharest bureau reported. MS

ROMANIAN PARLIAMENT APPROVES 1999 BUDGET

The parliament on 16 February approved the 1999 austerity budget, which provides for a deficit of 2 percent of GDP, RFE/RL's Bucharest bureau reported. The vote was 200 to seven with six abstentions. The votes against were cast by the opposition Romanian Alternative Party, while all other opposition parties boycotted the vote to protest the legislature's rejection of their proposed amendments. The same day, Finance Minister Decebal Train Remes met with the new chief IMF negotiator for Romania, Emmanuel Zervoudakis, to discuss the pending memorandum with the IMF on a new stand-by agreement. If the fund does not agree to such an arrangement, Romania risks defaulting on its foreign debt. MS

MOLDOVAN COALITION TALKS STILL STALLED

Iurie Rosca, leader of the Christian Democratic Popular Front (FPCD), said after another round of multi-party negotiations with Premier-designate Serafim Urecheanu on 16 February that "under no circumstances" will his party vote for a cabinet headed by Urecheanu, RFE/RL's Chisinau bureau reported. Without the support of the FPCD, a member of the outgoing coalition, the cabinet will be short of a majority in the legislature. Rosca said Urecheanu is not fit to be premier. Party of Democratic Forces leader Valeriu Matei said after the talks that President Petru Lucinschi, after consulting with the parliamentary majority, must propose another candidate for the premiership. MS

MOLDOVAN PRESIDENT 'CONCERNED' ABOUT COALITION NEGOTIATIONS

Presidential spokesman Anatol Golea on 15 February said President Lucinschi is "concerned" that the negotiations on the new cabinet are progressing "with much difficulty" and are focused on the cabinet's lineup rather than its program, RFE/RL's Chisinau bureau reported. Golea denied that Urecheanu was "the president's man," noting that Lucinschi had been promoting only Moldova's interests when he proposed Urecheanu's candidacy. Golea also said the president hopes the parliament will "seriously discuss" Lucinschi's legislative initiative to increase the government's prerogatives. MS

BULGARIA READY TO SUPPORT NATO GROUND TROOPS IN KOSOVA

Deputy Defense Minister Velizar Shalamanov told participants at an international seminar in Sofia on 16 February that Bulgaria is ready to place its military infrastructure at NATO's disposal to support any ground operation in Kosova, if the organization decides to launch such action, AP reported. In October 1998, the parliament voted to allow NATO planes to use Bulgarian airspace if the alliance launches air strikes against neighboring Yugoslavia. MS




EBRD PLANS TO FUND CONTROVERSIAL REACTORS IN UKRAINE


By Tony Wesolowsky

The European Bank for Reconstruction and Development is moving ahead with controversial plans to fund completion of two nuclear reactors in Ukraine.

The bank has given provisional approval to a loan worth up to $190 million to complete construction of the Khmelnitsky 2 and Rivne 4 nuclear reactors in southern Ukraine. William Franks, the EBRD official overseeing the loan project, told RFE/RL that the bank's Board of Directors will likely reach a decision on the loan by the end of April.

In 1995, Ukraine said it would close Chornobyl only if the two reactors at Khmelnitsky and Rivne, known as K2/R4, were completed to replace the lost capacity at Chornobyl, which in 1986 became the site of the worst-ever civilian nuclear accident. The two reactors are about 80 percent finished, according to Ukraine's Energoatom. Additional funding from the EU's Nuclear Energy Agency to cover up to 50 percent of the project's cost hinges on approval of the EBRD loan.

A study commissioned and later rejected by the EBRD questioned whether Ukraine needs to add to its already operating 11 nuclear power plants. Environmentalists and others, including the Austrian government, have asked the same question. They note that Ukraine's economic collapse since the 1991 breakup of the Soviet Union has meant a sharp drop in energy demand. Critics of the project contend that demand will not exceed earlier peak levels until 2010.

For loan approval, the EBRD requires that a project meet four conditions: be financially viable, meet environmental requirements and be subject to public debate, satisfy Western nuclear safety principles, and be part of a least-cost option. But some experts question whether the project satisfies these conditions.

Steve Thomas, a professor at Sussex University in England, took part in a 1996 study commissioned by the EBRD to determine whether financing K2/R4 met the bank's "least-cost" criteria. "It became very clear that the case for completing the reactors was much weaker than had been suspected," he told RFE/RL. "One very strong element was that there didn't seem any reason to replace Chornobyl. Electricity demand had fallen so steeply after the fall of the Soviet Union that Ukraine had twice the generating capacity to meet peak demand. A big problem that Ukraine electricity had was that it had no money, basically because most consumers in Ukraine do not pay their bills in cash."

Having rejected the findings of the Sussex University group, the EBRD hired the U.S. firm Stone and Webster to collect what Franks called "better data." He told RFE/RL that "if you used the assumptions in the Sussex report in the model Stone and Webster developed you came to the same conclusions that the Sussex report did. If you used the better data, you came to a different set of conclusions."

But Thomas says that the so-called better data are suspect. He explains that "the problem with the Stone and Webster report was that the assumptions going into the model were all determined either by the EBRD or by the Ukrainian company Energoatom, which wants to build the nuclear power plants. So the report was far from independent."

As regards whether it makes banking sense to loan to a business that receives an estimated 90 percent of its payments through barter, Franks says "the loans to K2/R4 will be conditioned on very concrete programs on the part of the Ukrainians to improve the performance of the power sector, and in fact, there are several initiatives, the most recently initiated by the bank, to address that issue."

Ukraine may face other problems with spiraling costs. In the Czech Republic, for example, Westinghouse has run into huge cost overruns and delays retrofitting the nuclear power reactors at Temelin. Both Temelin and K2/R4 are equipped with the same Soviet-type VVER-1000 reactors. But as International Atomic Energy Agency spokesman David Kyd explains, the Czech Republic, unlike Ukraine, is spending hefty sums to completely refit Temelin in what is a unique graft of Western technology onto the body of an Soviet-type reactor.

"In the case of the Ukrainian reactors, they are not looking to do something that ambitious at all," Kyd comments. "What they are looking to do is to stick with the Russian designers, largely with Ukrainian and Russian companies, to complete the standard VVER-1000 megawatt design, as basically put together from the start. They are not looking to revamp the entire reactor along Western lines and still such an effort will cost more than a billion dollars."

Kyd said such reactors would never be licensed in the West. Germany concluded that the upgrade costs were so exorbitant that it scrapped plans to retrofit two VVER 1000 reactors at Stendal, eastern Germany after the German nuclear safety agency estimated the project would cost between $2.3 billion and $2.9 billion.

So why would Ukraine pursue a project that Germany found too costly, especially given the legacy of Chornobyl? Thomas explains that in 1995 Ukraine proposed building a gas-power plant to replace Chornobyl, but the West reportedly rejected that plan, fearing Kyiv would become dependent on Russian gas. He also notes that Western powers with a strong nuclear industry, especially Germany, France, and the U.S., have all backed the project to complete K2/R4. Ukraine, moreover, also has a strong nuclear lobby--one that retains strong ties with its Russian counterpart. The author is an RFE/RL editor based in Prague.


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