Tajik power plant threatens winter shutdown

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Questions raised as to why Tajik power company is not paying for electricity taken from Russian-owned dam scheme.

By Olga Kochneva in Dushanbe (RCA No. 598, 19-Dec-09)

Tajiks are used to power shortages but along with the first cold spell of winter, they are facing a fresh crisis as a major power station cuts supplies.

Managers at the giant Sangtuda-1 hydroelectric scheme switched off two of the four turbine units on December 2, saying the company was owed millions of US dollars by the national distribution company Barqi Tojik. In a letter to Tajik prime minister Akil Akilov on November 13, they warned of the partial shutdown and said the plant might stop generating altogether by the end of the year unless the debt was cleared.

The effect of the reduced output was felt most in Khatlon, the province that covers southern Tajikistan, where Sangtuda is located.

Bahrigul Abdullaeva, a resident of Bokhtar district, thinks herself lucky if the electricity is on from 6.00 till 8.30 in the morning, and for another two and a half hours in the evening.

"It's a good thing, because in previous years we did not have electricity for several months each winter," she said. "Of course, we have got used to living without electricity in winter, and we prepare stoves, firewood and coal. In winter we live like as in the middle ages ... we can't watch TV or even charge our mobile phones. I hope this winter is a mild one, so that the fuel will last us till spring."

Hailed as a showcase investment project, the Sangtuda-1 plant began operating last January, after the Russian firm United Energy Systems, UES, invested in work to complete the plant which had been under construction for many years. Russian president Dmitry Medvedev travelled to Tajikistan for the formal opening ceremony in May.

The Russian government owns 66 per cent of the shares in the company running the plant, UES and an affiliate company own about 17 per cent while the Tajik government holds the remaining 17 per cent.

Tajikistan suffers frequent power shortages and blackouts over the winter, and building new power stations with the help of foreign investors is seen as essential to making the country self-sufficient in electricity, and even allowing it to export to neighbouring states.

Sangtuda-1 alone should substantially reduce the winter shortfall, while another plant, Sangtuda-2, is currently under construction with Iranian funding. Upstream on the same river, the Vakhsh, lies the still incomplete Roghun plant, which will have one of the world's highest dams.

The Sangtuda-1 dispute centres on Barqi Tojik's non-payment of 41 million somoni, about 9.5 million US dollars, for electricity supplied to it over the course of the year.

In early December, the power station's director Vladimir Belov said Barqi Tojik had started paying the debt, but the ten million somoni transferred so far - around a quarter of the total sum - was not enough to cover the hydroelectric plant's routine maintenance, ongoing construction work, wages and payments to suppliers and the taxman .

"People have started leaving. Now we're 30 per cent down on the number of construction workers we need. We don't have enough money," said Belov. "We owe millions [of somonis] to the tax inspectorate, as well as to our suppliers and builders."

Barqi Tojik spokesman Nozirjon Yodgori confirmed to IWPR that the company was trying to clear its debts to Sangtuda plan according to a phased schedule. It was going to pay three million dollars a month, meaning that past and current payments would be up to date by the end of March.

Yodgori said Barqi Tojik had been unable to pay its supplier because in turn, it was having difficulty collecting payment from its consumers, above all government agencies and large industrial enterprises. The giant aluminium plant at Tursunzade, which consumes huge amounts of electricity, owed Barqi Tojik one-third of the total debt.

"They owe us millions," said Yodgori. "One of the major defaulters is the aluminium plant. It owes us 129 million somoni [30 million dollars]. The water management ministry owes us 151 million somoni, the water utility company 13 million, the agriculture ministry 27 million, and domestic consumers 65 million somoni.

"These are debts accumulated over the first 11 months of 2009."

Despite this explanation, analysts interviewed by IWPR questioned why Barqi Tojik was withholding funds to the Russian-led generating company, especially given the importance of relations with Moscow.

Georgy Petrov, a leading expert who heads the hydroelectricity unit at the national Institute for Water Problems, Hydroenergy and Ecology at the Tajik Academy, said it was implausible for Barqi Tojik to plead poverty.

Petrov calculates that Barqi Tojik should be earning 240 dollars a year, based on the amount generated and its cost.

"Barqi Tojik owes Sangtuda about nine million dollars, and is to pay three million a month. Is that a large amount of money?" he asked. "How can we risk an international confrontation if the company cannot pay three million out of its 240 million?"

Parviz Mullojonov, a prominent political analyst, agreed that failure to treat Sangtuda's investors well would reflect badly on Tajikistan as a whole.

"This is the first large construction project we've had where the assets belong mainly to a foreign investor," he explained. "This project needs to be kept apart from the economic payments system that typically operates in this country - people here think it's normal for one enterprise to owe money to another. Tajik enterprises might put up with being owed money by their business partners, but a foreign investor will not stand for it. We need to remember that."

The dispute comes at a time when Tajikistan is even more vulnerable to power shortages than usual. Last month, Uzbekistan announced it was withdrawing from the common electricity grid shared by the Central Asian republics. The decision will make it harder for the Tajiks to import electricity from Uzbekistan itself or in transit from other supplies like Turkmenistan; and to export its own electricity when it has a surplus over the warmer seasons.

In response, Tajikistan has said it will have to increase its hydroelectric generating capacity at the Kayrakkum reservoir on the river Syr Darya and Nurek on the Vakhsh, a tributary of the Amu Darya. However, the more water that goes through the turbines over the winter, the less will be available for release during the spring and summer, when Uzbekistan and Kazakstan need it for irrigation. Neither of those two countries will be happy about that.

"When Uzbekistan left the common energy grid, it broke off water and energy relations," the deputy head of Barqi Tojik's distribution department, Sergei Tkachenko, told IWPR. "Consequently, for the benefit of Tajikistan's people and economy, our energy system will have to use its power stations to produce the maximum possible amount of electricity to provide for our. That will be our primary concern - but we are not [doing this] to take revenge against Uzbekistan."

Even with power stations operating at full capacity, Tajikistan is likely to run short over the winter, especially if Sangtuda-1's managers cut production further.

"In a situation where Tajikistan is not receiving a single kilowatt from its neighbours, the stoppage of Sangtuda-1 can only aggravate the situation," Barqi Tojik head Sanat Rahimov said at a press conference.

Yodgori said tight rationing of electricity would be needed.

"We must save every kilowatt. If Sangtuda stops, we will have to find these kilowatts ourselves. We will have to make up the shortfall by rationing electricity and completely cutting off non-payers," he said.

Meanwhile, the best the average consumer can do is hope this winter will prove milder than it was two years ago, when Tajiks endured exceptionally cold temperatures and power blackouts.

"God forbid it should be so cold again," said Mavjuda, a resident of Darvoz district in the south. "At that time, we burned all the coal and firewood we had stored for the whole winter within the space of one month. We are hoping God will grant us a mild winter."

Olga Kochneva is the pseudonym of a journalist in Tajikistan.