Parliament passes bill on paying for difference in heat and water tariffs with promissory notes in 2013
The Ukrainian parliament has permitted the restructuring of the actual budget debt for the difference in the tariffs for heat, water supply and sewerage services via the issue of promissory notes.
A total of 237 out of 406 lawmakers registered in the session hall on Thursday, October 24, supported the amendments to the law on the national budget for 2013 drawn up by the government.
The law proposes that the issues of the payment of the debt for the difference in the tariffs for heat, water supply and sewerage services for households, a reduction in the existing debt of heat and water supply companies for energy consumed, and the payment of suppliers of imported natural gas will be settled.
The expenses will be financed via the issue of promissory notes.
As reported, according to the government, as of January 1, 2013, the budget owed UAH 3.9 billion to local budgets for the difference in heat supply tariffs. As of September 1, 2013, the sum grew to UAH 10.6 billion. The debts of the national budget to local budgets for the difference in the water supply and sewage tariffs, which were UAH 4.4 billion as of early 2013, grew to UAH 8.2 million as of September 1, 2013.
The cabinet said that the debts of the national budget on the difference in the tariffs is the key reason why heat and water supply companies cannot pay for energy in full. The heat and energy companies owe over UAH 17.1 billion for imported gas. This creates a risk to normal operations during the 2013/14 heating season.
The law on the national budget for 2012 says that the yield from promissory notes is 5% and they can be issued for a period of up to five years.
Promissory notes are ordinary bills. They cannot be avalized. They are issued as electronic documents using electronic digital signatures. The sum for which a bill is issued is divided into five equal parts, that become due in one, two, three, four and five years. The holders of the bills can ask for them to be issued with a face value that is smaller than UAH 1 million.
A subsidiary of the clearing center, which is under control of the National Bank of Ukraine, acts as the administrator of the promissory notes electronic circulation system, and the clearing center carries out payments on the bills.
