By World Bank Group
"In Albania, shoppers with weapons stolen from the govt. threatened to shoot the application officers who tried to disconnect defaulting customers." this case and others much less dramatic, yet each piece as corrupt, irritated the software non-payment factor and driven it into the foreground. This examine experiences the non-payment challenge within the electrical energy region in jap Europe and the previous Soviet Union in the course of 1990-1997. as well as non-payment, the assessment additionally covers the matter of low funds collections and the choice in a few nations for using money substitutes akin to barters, offsets, and promissory notes. the target of the learn is to spot which rules and measures addressing the matter of non-payment within the electrical energy region labored in perform and which failed to. as a result, it contains tales of either luck and failure. it really is aimed toward equipping financial institution employees and selection makers with a collection of functional instruments that may be of use whilst the political will exists to take on the matter.
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Extra resources for Non-Payment in the Electricity Sector in Eastern Europe and the Former Soviet Union (World Bank Technical Paper, No. 423)
Georgia and Armenia are reversing such decentralization based on negative experience. Georgia, Albania and Armenia are consolidating their distribution enterprises to achieve economies of scale and to privatize them. Sector unbundling and privatization could generally help, but only if good corporate governance could be achieved and strong mechanisms to enforce contracts2 and competent and independent regulation are in place. In the absence of these, unbundling and half-hearted privatization could actually aggravate the problem as can be seen from the experience of Russia, Armenia, Albania and Georgia.
Power supply in Armenia was reduced merely to two hours per day in 1993, since Armgas, the gas utility could not settle its debt to Turkmenistan for gas purchases. 57 million. The energy sector debts thus exceeded 10 percent of the country's GDP. In Russia, 19 energos (out of the total 72) for which data was available, had tax arrears exceeding $ 790 million towards the end of 1997. Tax dues from Gazprom and other energy sector entities in Russia have reached significant dimensions, while the government's arrears to them were believed to be even greater.
In respect of SOEs providing such services as drinking water supply, sewerage etc. adopting tariffs which generate adequate revenues at least to pay for the operation and maintenance (O&M) costs, which include the cost of power supply. Adjusting tariffs in a timely fashion to cost recovery levels (and to approach marginal supply costs) and to eliminate internal cross subsidies, enables utilities to improve quality of supply and thereby improve collections. This was illustrated by the experience of Bulgaria and Hungary.
Non-Payment in the Electricity Sector in Eastern Europe and the Former Soviet Union (World Bank Technical Paper, No. 423) by World Bank Group