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Tens of thousands of jobs in the Ukrainian metallurgy under the threat of reduction - A. Kalenkov

Ukraine / Digest

And not only in metallurgy, but in related and service industries. Cargoes of metallurgists and miners account for more than 40% of the cargo of Ukrzaliznytsya and more than 45% of cargo of the seaports of Ukraine.

Tens of thousands of jobs in the Ukrainian metallurgy under the threat of reduction - A. Kalenkov

An unjustified increase in the tariff for electricity transmission will lead to the loss of thousands of jobs next year, said the president of Ukrmetallurgprom, Oleksandr Kalenkov.

Below is his entire blog post on the site of Interfax-Ukraine:

This year has become one of the most difficult for Ukraine. The industry fell by more than 7%, losses in nine months - over 100 billion hryvnia. Farmers complain about crop failure. The energy market is in chaos with billions of dollars in debt. But there are objective reasons for the decline in industry and a poor harvest - the coronavirus pandemic and dry summer. But in the chaos and debts in the energy market, the negligence of specific people is to blame. Namely, the members of the National Commission for State Regulation of Energy and Utilities, instead of regulating the market, they allowed speculators to earn billions of hryvnia on it. And now they are trying to rectify the situation with another increase in the tariff for electricity transmission.

The previous increase in electricity tariffs, more than half, was only six months ago - in July. Then we honestly said: this is the maximum increase that the industry can survive. But we were not heard. And starting from December 1, the price will rise by another 30%.

From what we hear, the decision to raise the transmission tariff is associated with compensation for the costs of the tariff for "green" energy. This can be understood: the state has assumed obligations, and it must fulfill these obligations. What is not clear - why the entire market, why should the entire industry cover these obligations of the state? If the state has undertaken obligations, the state can and must cover these obligations at the expense of the state budget.

Moreover: in the summer of this year, the Verkhovna Rada adopted a law which states that debts to "green energy" will be covered by issuing government bonds. The same law says: in 2021, the budget will stipulate that at least 20% of the cost of green energy will be covered by the budget. And it is right. From the point of view of economic logic, each hryvnia that is now withdrawn from the industry in the form of increased tariffs will lead to an order of magnitude more shortfall in the budget. This is clearly seen in metallurgy, which covers about 60% of the electricity consumption of the entire industry.

In a crisis, the industry is fighting for every hryvnia of cost. The decision that NEURC is now making is additional billions of hryvnias that the Ukrainian industry will have to pay. Our products will become uncompetitive, tens of thousands of jobs will be threatened with loss. And not only in metallurgy, but in related and service industries. Cargoes of metallurgists and miners account for more than 40% of the cargo of Ukrzaliznytsya and more than 45% of cargo of the seaports of Ukraine.

The decision that NEURC is making now is economically unjustified and will lead to the fact that we will lose jobs next year.

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