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Ukraine: President Announces Coal Industry Shake-up

Kyiv, 30 June 1998 (RFE/RL) - Ukraine's President Leonid Kuchma last week appointed a labor union leader to head a new government coal company in an effort to arrest continuing downslide of one of the country's most troubled industries.

Viktor Derzhak, chairman of the Coal Mine Workers' Union of Ukraine (CCMWU) last Friday (June 26) was named to direct the Coal of Ukraine joint stock company. Four high-ranking Coal Ministry officials were dismissed on the same day.

A newly-created company, the Coal of Ukraine will receive property and personnel from the state coal production monopoly Ukrvuhlia. The Coal of Ukraine's most immediate task will be pay up to twelve months of wage arrears owed to coal miners. The firm will also coordinate national coal production, domestic and international distribution, shipments and payments between government firms and on commodities exchanges.

Derzhak says that 34 subdivisions of the Coal Ministry are currently doing those jobs in the Ukrainian coal market. He says that must streamlined. "There are 836 men busy selling coal," he estimated. "But 30 to 40 persons with market attitude can cope with the sale of coal in this country."

But industry critics say that Derzhak's appointment might have been politically motivated. "During the last round of mining disturbances the CCMWU remained quiet," Miners' Independent Trade Union of Ukraine Chairman Mikhailo Volynets told RFE/RL. "Derzhak got the job as a reward."

CCMWU miners remained largely on the job this month while thousands of their fellow workers downed tools, struck, and even marched on Kyiv in an effort to receive months of unpaid back wages.

Derzhak dismisses those insinuations. "We will work towards the transparency of the process of making agreements for the purchase and sale of coal products," he said.

That may not be easy. Hammered by treasury bill redemptions, mounting social payments, and chronically loss-making state-owned industries, the Ukrainian government is desperately short of cash.

Derzhak's new company represents - yet another - recent government effort to increase state receipts by ending lucrative private and pseudo-private trading of state-owned commodities.

The Coal of Ukraine "will be a frightful thing for those who trade on the coal market in the shadows or by barter," Derzhak says.

Volynets is not persuaded. "The officials are new and the name of the monopoly is different," he says. "But many of the shafts are unprofitable. That basic fact hasn't changed."