State officials’ crude actions create problems for the country’s energy security in the coming winter
In recent months, the public has almost got used to the idea of a tough winter. The reasons for this are largely political: independence and sovereignty require sacrifice, as the top officials tell us from the screens.
Moreover, in a recent TV interview, Maia Sandu reacted with irritation to questions about corruption in the tenders arranged by the authorities for the purchase of alternative fuel sources (in case the supply from Russia is cut off). They arise whenever it is difficult to blindly trust the authorities when analyzing the progress and results of the purchases.
This time the question referred to alleged abuses during the July purchase of fuel oil for Termoelectrica in the amount of 216 thousand tons. According to Andrei Spinu, this is one of the necessary measures to provide Chisinau residents with heat and electricity in winter. However, the Deputy Prime Minister preferred not to mention the technical difficulties in the transition from natural gas to fuel oil and the environmental consequences of using the latter in the capital.
In July, Spinu assured that the purchase of fuel oil from Romania had already begun and would cost the country much less than Russian gas. However, he refused to provide information about the cost and volume, citing trade secrets. But, interestingly enough, a while later the supervising officials were accused of buying the fuel (to be delivered in two months) at a fixed price of $ 1072 per ton from the company Viomar Impex, which exceeded the market price of petroleum products. The buyer of about 15,000 tons worth $16 million was the State Reserve Agency under the jurisdiction of the Ministry of the Interior. A month later, according to reports, the same company imported fuel oil at a price of $730 per ton (including VAT and excise tax – $896). As a result, that amount was bought up by sugar refineries in the north of the country.
The scandal surrounding the deal controlled by two government members, Andrei Spinu and Ana Revenсo, saw an attempt to be extinguished by announcing that the Security Service and prosecutors would closely monitor tenders and transactions for fuel oil purchases by Termoelectrica. The decision of the National Emergencies Commission of August 8 obliged the company to continue making direct purchases of fuel oil in the future.
On August 26, the company announced a tender for the purchase of 20,000 tons of fuel oil. Apparently, not having waited for proposals from suppliers, who would have been under the scrutiny of the special services and supervisory authorities, the procurement was announced again four days later. Nothing is yet known of its fate. All this raises doubts as to whether the authorities will be able to accumulate fuel oil reserves at such a pace and with such scandals within the required 216-320 thousand tons by the autumn-winter period.
At a government meeting on September 1, Andrei Spinu said that in order to ensure energy security, three thousand tons of coal will also be purchased from the reserve fund at a price of about 590 dollars per ton. Although, if we look at the cost of steam coal on the EU exchanges, it is now within the range of 380-400 euros per ton, which instantly raises serious suspicions of corruption.
In general, the ruling team has had a problem with preparing for the autumn-winter season since the spring. In early April, the government scandalously terminated the contract between Termoelectrica and Horus Energy. The latter, together with the Russian Power Machines had to overhaul the third power unit of the Chishinau CHPP. Despite the contract having been signed under the direct supervision of the World Bank, three days later, Natalia Gavrilita publicly stated that she would not allow its implementation due to Russia’s aggression against Ukraine and the need to comply with the sanctions regime against Russian companies.
Both Maia Sandu and Andrei Spinu commented on this matter. The latter said that they tried to bribe him to win the tender: “The sniffers tried to find a solution in different ways. I did not allow this to happen and I believe, as well as the new government, that corruption is one our society’s key problems”.
Such a political demarche was probably intended to show Western partners that Moldova is determined to apply anti-Russian sanctions. At the same time, in this particular case, objective factors and the real situation were obviously not taken into account. For instance, it was the tandem of Horus Energy and Power Machines that repaired the first power unit of CHPP-2, i.e., it had the necessary experience, documentation, and agreed supply of spare parts. Therefore, Horus Development Director Mihai Godea was frankly bewildered by the government’s short-sightedness in jeopardizing the operation of the Chisinau CHPP during the winter.
Other bidders actively lobbied for the cancellation of the contract with Horus Energy: the consortium General Electric, Turboenergy Power and Harkovenergoremont. All of them used political reasons and accusations that cooperation with Russian participation was allegedly unscrupulous.
A month after the contract was cancelled, it became known that Termoelectrica was going to repair two power units of CHPP-2 using its own resources. A month later, on June 28, it was announced that Horus, which offered a lower price than Turboenergy Power, would repair some units (the turbine of Unit 3). The latter, however, did not remain without its “share” and obtained a contract to supply equipment for the Chisinau cogeneration plant as early as June 6. Thus, the management of the state enterprise apparently tried to get out of the extremely difficult situation it found itself in due to the authorities’ (geo)political decisions.
In the summer, an information campaign to discredit Horus and Power Machines was launched, which also affected Termoelectrica. The Prosecutor General’s Office opened an investigation because of the abuse of office by its management, and its offices were even searched. The company had to defend itself to the media and assure that it was cooperating with all investigative authorities in order to demonstrate transparency in its work because of the contract with the Russian company. However, Termoelectrica’s problems did not end there. When Turboenergy Power brought the ordered “Mains Water Heater” equipment to Moldova on August 15, with a two-month delay, it turned out to be unsuitable for installation.
There is not much time left before the cold weather begins. And with each passing day we are becoming more and more distrustful of the authorities’ statements that we are properly prepared for it. On the contrary, instead of adequate and pragmatic steps, we see officials’ active interference in technical issues under geopolitical pretexts and tenders for the purchase of alternative energy sources at clearly inflated prices. Whether, under such conditions, it will really be possible to do everything to ensure the country’s energy security in autumn and winter is a big question.