Unpaid gas bill piles pressure on to Kyrgyz glass-maker

BISHKEK, April 8 (The Conway Bulletin) — A row over gas debt repayment has shown just how indebted some Kyrgyz companies have become as the entire Central Asia region battles with a deepening economic downturn.

Interglass, which had employed up to 600 people in Tomok in northern Kyrgyzstan, now owes the Kyrgyz subsidiary of Russia’s Gazprom over 1.1b som, or around $16m, for unpaid gas. This is half Gazprom Kyrgyzstan’s total outstanding debt it is owed by its Kyrgyz customers.

Four years ago, Kyrgyz President Almazbek Atambayev had toured Interglass and held it up as an example of Kyrgyz regional enterprise.

Now Interglass is struggling to stave off bankruptcy.

Gazprom Kyrgyzstan said that it has tried to negotiate with the glassmaking company so that it can pay back its debt in a structured manner but that negotiations had collapsed.

“Taking into account the social importance of the enterprise, in March Gazprom Kyrgyzstan gave Interglass every opportunity to settle the debt for the supplied gas,” it said in a statement.

It has previously called on the Kyrgyz government to step in to help Interglass pay off its debts and also threatened to turn off the gas to the whole of Kyrgyzstan if it doesn’t pay.
There has been no comment from Interglass or its parent company, the Germany-registered but Bishkek based, Steinert Industries.

For the Kyrgyz government, the row creates a potentially incendiary scenario. It sold off its gas distribution network to Gazprom for a symbolic $1 in 2014 in exchange for settling its debt and agreeing to fund much needed investment. It has just re-negotiated a cheaper price of gas for ordinary customers but businesses still complain that in the current economic climate Gazprom Kyrgyzstan is overcharging.

The government has said it will step in to help Interglass pay its bill but, so far, there has been little evidence to show that it has achieved any major inroads.

–This story was first published on April 8 2016 in issue 275 of The Conway Bulletin, a weekly independent newspaper focused on Central Asia and the South Caucasus.

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