{"id":448911,"date":"2020-11-04T19:53:41","date_gmt":"2020-11-04T19:53:41","guid":{"rendered":"https:\/\/www.moldova.org\/en\/?p=448911"},"modified":"2020-11-04T20:09:54","modified_gmt":"2020-11-04T20:09:54","slug":"a-watchdog-md-report-the-trap-of-consuming-russian-gas-and-accumulating-debts","status":"publish","type":"post","link":"https:\/\/www.moldova.org\/en\/a-watchdog-md-report-the-trap-of-consuming-russian-gas-and-accumulating-debts\/","title":{"rendered":"A WatchDog.MD report\/\/ The trap of consuming Russian gas and accumulating debts"},"content":{"rendered":"<span class=\"span-reading-time rt-reading-time\" style=\"display: block;\"><span class=\"rt-label rt-prefix\">Reading Time: <\/span> <span class=\"rt-time\"> 3<\/span> <span class=\"rt-label rt-postfix\">minutes<\/span><\/span><p>The dependence on Russian gas supplies, state&#8217;s deficient monopoly, and politicians&#8217; tendency to support that dependence through illegal schemes implemented since the independence of the country, have resulted in an artificially increasing debt that poses a serious threat to the national security of Moldova. This is one of the main highlights of a <a href=\"https:\/\/www.watchdog.md\/2020\/10\/28\/moldovagaz-vs-gazprom-who-actually-has-debts\/\">report<\/a> that was recently published by the <strong>WatchDog.MD Community<\/strong>.<\/p>\n<p>The research conducted by the community representatives revealed that the gas debt of the Republic of Moldova (except for the Transnistrian region) was artificially increased by at least<strong><span style=\"color: #993300;\"> $952 million <\/span><\/strong><em>&#8220;<\/em><em>through abusive actions, committed by Gazprom in conspiracy with the central authorities in Moldova.&#8221;<\/em><\/p>\n<p>The report authors claimed that the unfounded debt accumulation had several causes:<\/p>\n<ul>\n<li>violations admitted by the Moldovan authorities when founding and managing the companies in charge of supplying natural gas on the Moldovan territory since 1994;<\/li>\n<li>paying the Transnistrian region debt with exchange bills issued by the Moldovan government;<\/li>\n<li>abusive distribution of gas transit revenues;<\/li>\n<li>fraudulent administration of <strong><em>&#8220;<\/em><em>Moldovagaz&#8221;<\/em><\/strong> (a Moldovan-Russian joint venture, which is the sole gas supplier in the Republic of Moldova).<\/li>\n<\/ul>\n<blockquote><p>&#8220;We ascertain that due to the abusive decisions of Moldovan authorities in conspiracy with &#8220;Gazprom&#8221;, Moldova&#8217;s gas debt was illegally increased by about $952 million. The result of these abuses is to the benefit of &#8220;Gazprom&#8221; and to the detriment of Moldova.&#8221;<\/p><\/blockquote>\n<p>The main issue with the accumulating debts is related to a clause of the contract signed by \u201cMoldovagaz\u201d and \u201cGazprom\u201d. According to it, <span style=\"color: #993300;\"><strong>the Moldovan supplier is obliged to provide gas to the Transnistrian region without being paid<\/strong>. <\/span>Moreover, &#8220;Moldovagaz&#8221; cannot interrupt the gas supply to the Transnistrian region without the written consent of &#8220;Gazprom&#8221;.<\/p>\n<p><span style=\"color: #993300;\"><span style=\"color: #000000;\">As the report also mentioned, gas tariffs in Transnistria are much lower than the market average. All revenues from gas sales in Transnistria are actually <em>&#8220;loaned to the separatist region&#8217;s budget.&#8221;<\/em> In such a way, both the Transnistrian and Moldovan parts get indebted &#8211; a scheme used for years in order to increase the dependence on Russia.\u00a0\u00a0<\/span><\/span><\/p>\n<p>There is one more aspect to be considered: <span style=\"color: #993300;\">80% of consumed energy in Moldova is provided by a power plant (MGRES)\u00a0from the left bank of the Dniester<\/span> (strategically placed there in the Soviet Union). The power plant is controlled by another Russian company &#8211; &#8220;Inter RAO UES&#8221;. MGRES power plant is the largest gas consumer in the Transnistrian region and, consequently, contributes the most to the amounting debt of &#8220;Moldovagaz&#8221; to &#8220;Gazprom&#8221;.<\/p>\n<p>The separatist budget of Transnistria is strengthened, day by day, at the expense of the debts and dependence of the Republic of Moldova on Russian gas and political power. Moldova got itself into a vicious situation of nurturing the Transnistrian conflict through its own debts, without a real possibility to escape this trap.<\/p>\n<hr \/>\n<p>According to the figures presented in the WatchDog.MD report, the entire gas debt of \u201cMoldovagaz\u201d to \u201cGazprom\u201d, including the Transnistrian side, exceeds <span style=\"color: #993300;\"><strong>$7.7 billion<\/strong> <\/span>or about 2\/3 of Moldova&#8217;s GDP<span style=\"color: #993300;\">.<\/span><\/p>\n<hr \/>\n<p>President Igor Dodon announced the intention to pay the debt by <span style=\"color: #993300;\">transmitting to &#8220;Gazprom&#8221; 14.6 thousand km long distribution gas pipelines<\/span> (built from the state budget and money accumulated from Moldovan consumers since 2001). However, <em>&#8220;such a decision would violate the property rights of consumers and would contradict 4 laws that establish the exclusive right of local councils to manage the local property, including local gas pipelines,&#8221;<\/em> as WatchDog.MD representatives mentioned.<\/p>\n<blockquote><p>&#8220;Unfortunately, no one has been convicted of frauds in the gas sector because the involved parties only pursue their own interest: Moldovan politicians aim to enrich themselves via corruption schemes, while \u201cGazprom&#8221; executes the Kremlin&#8217;s agenda to finance separatism and to increase Moldova&#8217;s dependence on the Russian Federation.&#8221;<\/p><\/blockquote>\n<p>As long as Moldova still depends on Russian gas, no resolution of the gas debt problem would be sought, experts said. <em>&#8220;The Russian concern may stop the supply of gas under the pretext of existing debts, as has happened in the past, and will try to impose unfavourable conditions for Moldova. In order to have equal negotiating positions with &#8220;Gazprom&#8221;, Moldova must have alternative sources of gas and electricity supply,&#8221;\u00a0<\/em>the report concluded.<\/p>\n<p><span style=\"color: #000080;\">See also: <a style=\"color: #000080;\" href=\"https:\/\/www.moldova.org\/en\/iasi-ungheni-chisinau-gas-pipeline-becoming-an-alternative-solution-for-moldova\/\">Iasi-Ungheni-Chisinau gas pipeline: becoming an alternative solution for Moldova<\/a><\/span><\/p>\n<p>As WatchDog.MD experts said, <em>&#8220;a complex audit of Moldovagaz is required in order to establish the real value of the debt and its distribution between the right bank and the Transnistrian region.&#8221; <\/em>The accumulation of the gas debt needs to be stopped by terminating the contractual scheme of gas supply &#8216;<em>on credit&#8217;<\/em> to the Transnistrian region, as well as the already accumulated debt of the Republic of Moldova must be clearly separated from that of Transnistria. <em>&#8220;It represents the financing of separatism carried out by the Moscow administration through the &#8220;Gazprom&#8221; company.&#8221;<\/em><\/p>\n<p>The full study can be found <a href=\"https:\/\/www.watchdog.md\/2020\/10\/28\/moldovagaz-vs-gazprom-who-actually-has-debts\/\">here<\/a>.<\/p>\n<p><a href=\"https:\/\/www.watchdog.md\/english\/\"><strong>WatchDog.MD<\/strong><\/a> is a community of civil society in Moldova that brings together experts in various fields to develop, analyse and evaluate sectorial public policies in Moldova. It aims at establishing a favourable environment for the democratic development of the Republic of Moldova, as well as providing accurate and comprehensive information on the true situation in critical areas in Moldova, including economics, public finance, democracy, election processes and human rights.<\/p>\n<p>Photo: <a class=\"text-include-photo__source\" target=\"_blank\" rel=\"noopener noreferrer\" data-ng-href=\"\">Vitaly Never| TASS<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p><span class=\"span-reading-time rt-reading-time\" style=\"display: block;\"><span class=\"rt-label rt-prefix\">Reading Time: <\/span> <span class=\"rt-time\"> 3<\/span> <span class=\"rt-label rt-postfix\">minutes<\/span><\/span>The dependence on Russian gas supplies, state&#8217;s deficient monopoly, and politicians&#8217; tendency to support that dependence through illegal schemes implemented since the independence of the country, have resulted in an artificially increasing debt that poses a serious threat to the national security of Moldova. This is one of the main highlights of a report that [&hellip;]<\/p>\n","protected":false},"author":31,"featured_media":448913,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6,3,10,4,56],"tags":[904,903,902,260,35,27,305,32,905,31],"class_list":["post-448911","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-important-en","category-politics","category-reintegration","category-society","category-reportaje","tag-debts","tag-energy-sector","tag-gas-supply","tag-gazprom","tag-important","tag-moldova","tag-moldovagaz","tag-russia","tag-separatism","tag-transnistria"],"content_social_share":"<span class=\"span-reading-time rt-reading-time\" style=\"display: block;\"><span class=\"rt-label rt-prefix\">Reading Time: <\/span> <span class=\"rt-time\"> 3<\/span> <span class=\"rt-label rt-postfix\">minutes<\/span><\/span><p>The dependence on Russian gas supplies, state&#8217;s deficient monopoly, and politicians&#8217; tendency to support that dependence through illegal schemes implemented since the independence of the country, have resulted in an artificially increasing debt that poses a serious threat to the national security of Moldova. This is one of the main highlights of a <a href=\"https:\/\/www.watchdog.md\/2020\/10\/28\/moldovagaz-vs-gazprom-who-actually-has-debts\/\">report<\/a> that was recently published by the <strong>WatchDog.MD Community<\/strong>.<\/p>\n<p>The research conducted by the community representatives revealed that the gas debt of the Republic of Moldova (except for the Transnistrian region) was artificially increased by at least<strong><span style=\"color: #993300;\"> $952 million <\/span><\/strong><em>&#8220;<\/em><em>through abusive actions, committed by Gazprom in conspiracy with the central authorities in Moldova.&#8221;<\/em><\/p>\n<p>The report authors claimed that the unfounded debt accumulation had several causes:<\/p>\n<ul>\n<li>violations admitted by the Moldovan authorities when founding and managing the companies in charge of supplying natural gas on the Moldovan territory since 1994;<\/li>\n<li>paying the Transnistrian region debt with exchange bills issued by the Moldovan government;<\/li>\n<li>abusive distribution of gas transit revenues;<\/li>\n<li>fraudulent administration of <strong><em>&#8220;<\/em><em>Moldovagaz&#8221;<\/em><\/strong> (a Moldovan-Russian joint venture, which is the sole gas supplier in the Republic of Moldova).<\/li>\n<\/ul>\n<blockquote><p>&#8220;We ascertain that due to the abusive decisions of Moldovan authorities in conspiracy with &#8220;Gazprom&#8221;, Moldova&#8217;s gas debt was illegally increased by about $952 million. The result of these abuses is to the benefit of &#8220;Gazprom&#8221; and to the detriment of Moldova.&#8221;<\/p><\/blockquote>\n<p>The main issue with the accumulating debts is related to a clause of the contract signed by \u201cMoldovagaz\u201d and \u201cGazprom\u201d. According to it, <span style=\"color: #993300;\"><strong>the Moldovan supplier is obliged to provide gas to the Transnistrian region without being paid<\/strong>. <\/span>Moreover, &#8220;Moldovagaz&#8221; cannot interrupt the gas supply to the Transnistrian region without the written consent of &#8220;Gazprom&#8221;.<\/p>\n<p><span style=\"color: #993300;\"><span style=\"color: #000000;\">As the report also mentioned, gas tariffs in Transnistria are much lower than the market average. All revenues from gas sales in Transnistria are actually <em>&#8220;loaned to the separatist region&#8217;s budget.&#8221;<\/em> In such a way, both the Transnistrian and Moldovan parts get indebted &#8211; a scheme used for years in order to increase the dependence on Russia.\u00a0\u00a0<\/span><\/span><\/p>\n<p>There is one more aspect to be considered: <span style=\"color: #993300;\">80% of consumed energy in Moldova is provided by a power plant (MGRES)\u00a0from the left bank of the Dniester<\/span> (strategically placed there in the Soviet Union). The power plant is controlled by another Russian company &#8211; &#8220;Inter RAO UES&#8221;. MGRES power plant is the largest gas consumer in the Transnistrian region and, consequently, contributes the most to the amounting debt of &#8220;Moldovagaz&#8221; to &#8220;Gazprom&#8221;.<\/p>\n<p>The separatist budget of Transnistria is strengthened, day by day, at the expense of the debts and dependence of the Republic of Moldova on Russian gas and political power. Moldova got itself into a vicious situation of nurturing the Transnistrian conflict through its own debts, without a real possibility to escape this trap.<\/p>\n<hr \/>\n<p>According to the figures presented in the WatchDog.MD report, the entire gas debt of \u201cMoldovagaz\u201d to \u201cGazprom\u201d, including the Transnistrian side, exceeds <span style=\"color: #993300;\"><strong>$7.7 billion<\/strong> <\/span>or about 2\/3 of Moldova&#8217;s GDP<span style=\"color: #993300;\">.<\/span><\/p>\n<hr \/>\n<p>President Igor Dodon announced the intention to pay the debt by <span style=\"color: #993300;\">transmitting to &#8220;Gazprom&#8221; 14.6 thousand km long distribution gas pipelines<\/span> (built from the state budget and money accumulated from Moldovan consumers since 2001). However, <em>&#8220;such a decision would violate the property rights of consumers and would contradict 4 laws that establish the exclusive right of local councils to manage the local property, including local gas pipelines,&#8221;<\/em> as WatchDog.MD representatives mentioned.<\/p>\n<blockquote><p>&#8220;Unfortunately, no one has been convicted of frauds in the gas sector because the involved parties only pursue their own interest: Moldovan politicians aim to enrich themselves via corruption schemes, while \u201cGazprom&#8221; executes the Kremlin&#8217;s agenda to finance separatism and to increase Moldova&#8217;s dependence on the Russian Federation.&#8221;<\/p><\/blockquote>\n<p>As long as Moldova still depends on Russian gas, no resolution of the gas debt problem would be sought, experts said. <em>&#8220;The Russian concern may stop the supply of gas under the pretext of existing debts, as has happened in the past, and will try to impose unfavourable conditions for Moldova. In order to have equal negotiating positions with &#8220;Gazprom&#8221;, Moldova must have alternative sources of gas and electricity supply,&#8221;\u00a0<\/em>the report concluded.<\/p>\n<p><span style=\"color: #000080;\">See also: <a style=\"color: #000080;\" href=\"https:\/\/www.moldova.org\/en\/iasi-ungheni-chisinau-gas-pipeline-becoming-an-alternative-solution-for-moldova\/\">Iasi-Ungheni-Chisinau gas pipeline: becoming an alternative solution for Moldova<\/a><\/span><\/p>\n<p>As WatchDog.MD experts said, <em>&#8220;a complex audit of Moldovagaz is required in order to establish the real value of the debt and its distribution between the right bank and the Transnistrian region.&#8221; <\/em>The accumulation of the gas debt needs to be stopped by terminating the contractual scheme of gas supply &#8216;<em>on credit&#8217;<\/em> to the Transnistrian region, as well as the already accumulated debt of the Republic of Moldova must be clearly separated from that of Transnistria. <em>&#8220;It represents the financing of separatism carried out by the Moscow administration through the &#8220;Gazprom&#8221; company.&#8221;<\/em><\/p>\n<p>The full study can be found <a href=\"https:\/\/www.watchdog.md\/2020\/10\/28\/moldovagaz-vs-gazprom-who-actually-has-debts\/\">here<\/a>.<\/p>\n<p><a href=\"https:\/\/www.watchdog.md\/english\/\"><strong>WatchDog.MD<\/strong><\/a> is a community of civil society in Moldova that brings together experts in various fields to develop, analyse and evaluate sectorial public policies in Moldova. It aims at establishing a favourable environment for the democratic development of the Republic of Moldova, as well as providing accurate and comprehensive information on the true situation in critical areas in Moldova, including economics, public finance, democracy, election processes and human rights.<\/p>\n<p>Photo: <a class=\"text-include-photo__source\" target=\"_blank\" rel=\"noopener noreferrer\" data-ng-href=\"\">Vitaly Never| TASS<\/a><\/p>\n<div class='heateorSssClear'><\/div><div  class='heateor_sss_sharing_container heateor_sss_horizontal_sharing' data-heateor-sss-href='https:\/\/www.moldova.org\/en\/a-watchdog-md-report-the-trap-of-consuming-russian-gas-and-accumulating-debts\/' data-heateor-sss-no-counts=\"1\"><div class='heateor_sss_sharing_title' style=\"font-weight:bold\" ><\/div><div class=\"heateor_sss_sharing_ul\"><a aria-label=\"Facebook\" class=\"heateor_sss_facebook\" 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class='heateorSssClear'><\/div>","yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.5 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>A WatchDog.MD report\/\/ The trap of consuming Russian gas and accumulating debts - Moldova.org<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.moldova.org\/en\/a-watchdog-md-report-the-trap-of-consuming-russian-gas-and-accumulating-debts\/\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Maria Dulgher\" \/>\n\t<meta name=\"twitter:label2\" content=\"Estimated reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"4 minutes\" \/>\n<script type=\"application\/ld+json\" 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