Can you introduce
Kyrgyzgas to our readers. What is your company engaged
in? Of course, I know it is a distribution and retail
sales of natural gas, but perhaps in your words
give us a brief introduction.
The main task of Kyrgyzgas as a Joint Stock Company
is to provide the transportation and supply of
gas to consumers, including the population, to
the social sector like cafes and restaurants and
to the industrial requests.
Also we provide transportation of gas for Alma-Ati.
This gas pipeline was built at Soviet times and
it runs partially through our territory. It is
a pipe of high pressure. Also we provide the supply
of gas for the south regions of Kirgyzstan, and
for some parts of Uzbekistan. Here also the pipe
was built in such a way that it passes through
some territories of Kyrgyzstan.
Of course, after we calculate how much gas passes
through those territories, we take some gas from
Uzbekistan as payment for transportation. Our
activity also includes the provision of the equipment
and pipeline systems readiness. We fulfill the
preventive works, make emergency repair of average
or high-pressure gas pipes or of other gas technical
equipment.
What about the sale? Do you sell the equipment?
No, we repair it for ourselves and maintain
it.
Have you mentioned the fact that you provide
gas to the industrial retail sector? What is the
core of you business? Is it really an industrial
sector that is demanding your product more than
the public one?
Also I forgot to say that we transport gas for
The Thermal Heating Station in Bishkek and in
Osh. Of course, we sell to them gas through separate
contracts, which are signed with Uzbekistan.
And if we take the transportation volume of gas,
the main consumers are electro stations, which
supply gas for Thermal Stations. And we have 245
000 subscribers among the population. It is Bishkek,
Chuy Oblast, Djalal-Abad, Osh Oblast, Osh, Kara-Syy,
some regions within the Osh Oblast, Batken and
Batken Oblast and the industrials. Here in the
north the industrials that use gas are mentioned
in your book "Interglas". In Tokmak
it is a factory that makes bricks, a conservation
factory. In Kant there is a cement factory and
a milk factory. And within Bishkek our consumers
are several heating stations, which are included
into Bishkek Heating System. There are 12 small
mini heating stations within Bishkek. Also a big
consumer in Bishkek is a brick factory. It is
called Bishkekstroymaterials. In Kara-Balta there
is a spirits factory. In the South Kadamjai there
are Syrma Factory, Haidarkan Quicksilver Factory,
Malisuy Lamp Factory and others.
You sale and distribute about 1 million cubic
meters of liquid gas a year. What is this if translated
to money? What is your financial turnover?
I know you have a little problem in terms of payment
of bills and that some of your customers, for
example the industries you were mentioning delay
payment. Can you give us the idea of your final
turnover?
We can give an order to Accounting Department
and they can give you balance sheet for 6 months.
I want just a rough estimation.
There is such a thing for example that this year
we have increased substantially the amount of
gas supply. The volumes of last year supply and
current year supply are quite different. Last
year we did not have gas supply in January and
February, till the 18 of February. And this year
we have increased the volume of gas supply. Also
we are going to increase it further and provide
it to the industrial enterprises. Concerning this
year we are planning to supply about 500 million
cubic meters.
But the system of the Joint Stock Company Kyrgyzgas
was directed functionally for only transportation
and supply of gas. And, therefore, we consider
our company to be not very attractive from the
investment point. However, Kazakhstan was interested
in the possibility of using the part of the gas
pipe system that is going through Kirgyzstan as
a concession. Also we have met with the representatives
of China Republic. Actually, they are interested
in the figures of the performance. But when they
learned that Kyrgyzgas Company fulfils mainly
the transportation and supply of gas they lost
their interest. They are mainly interested in
those enterprises that are extracting gas and
oil.
But there is no oil and gas in Kirgyzstan...
There is. There is a small amount in the south.
Yes, but it is not feasible, not worth of investment?
But there are certain investors that come to the
sector. For example, in the South there is a Chinese
company "Guni", and it is an oil extracting
company. And Company Kyrgyzoilgas is extracting
about 30 million cubic meters per year; of course
it is very little.
What is the name of this Chinese extracting
company?
"Guni". They are working in Kochkor-Ata.
And what is Kochkor-Ata?
There Kyrgyzneftigas is located, Kyrgyzoilgas
Company.
But this is independent from Kyrgyz…?
Yes, it is separate from Kyrgyzneftigas.
I did not know this. Probably we will be interested
in it then.
You have said that your company is not that attractive
to investors. You never mentioned your turnover.
What is your turnover on gas? Just give us an
idea.
The accountant will come soon and say. She must
find out the exact figure. We have sold 280 million
cubic meters of gas, for the total amount of 681
million soms.
Was that paid throughout?
It is the volume of realization.
And we have got for transportation 181 millions.
In addition for the 9 months of this year we have
sold 334 million cubic meters for 820 million
soms
And for the transportation we have got 150 million
soms.
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Why we want to mention
the figures, because we want to clarify one thing.
If we show it in the balance sheet it will not be
real. Because of the indebtedness of the previous
years it will not be reflected much on the balance
sheet. Therefore, we are mainly counting the figures,
which we worked exactly with.
Does the company make some profits? Is it profitable?
We have profit of 14 millions last year. But we
have created the reserve fund for 260 million soms.
According to the balance sheet we have got the profit
of 14 millions.
Is it a clear profit?
Yes. According to the balance sheet.
After you have paid off all the expenses?
Yes, salaries, taxes... and from this amount we
were paying the dividends.
So, the company is profitable, it should be attractive
to investors? Do not you think?
What do you think is needed to make the enterprise
appealing to…?
I will tell you why it is not very attractive, because
only the population has a debt before Kyrgyzgas
147 million soms. Every year we were finishing with
big debt from the population and enterprises. But
this year we are doing quite well, because the indebtedness
of the population decreased. This year it is very
low. And the total indebtedness makes up to 275
million. We are trying to collect the money through
courts, but it is not always successful. The potential
investors will be considering here the ability of
the population, as population is one of the leading
gas consumers, whether it will be able to pay for
the consumption in time.
Let's go on with the issue of investment.
How would you describe the investment climate
here in Kyrgyzstan? Do you think it really favors
an investor? Do you think it is easy for an investor
to come here, and inject the funds, put the capital
to the service of whatever enterprise?
I can describe it, but I would say it not in general.
I will refer only to the gas sector. If an investor
came here in gas sector, he would need some kind
of divisions and some kind of territory, for example,
Bishkek. He would need to have gas counters everywhere.
At present 50% of our clients have these counting
devices. The rest 50% are paying mainly on the
normative standards, which are calculated depending
on how many people live in the house, on the supply
of hot water, on the availability of heating system,
whether they have a gas oven in their house. If
you want to have my opinion I would tell that
some of the regions would be attractive. If you
for example take this very region or part of a
city or whatever and control it.
And one last question: we are always interested
in person that is running the enterprise. You
as a person running this one face some difficulties;
still, from my point of view you are doing quite
well. We would like to know a little bit about
yourself, your previous background and experience
and what you feel more satisfied with?
Well, first of all I do not have any relations
with gas; I am not specialized in the field. I
came here from the administration of the president.
Before that I worked about 25 years in the system
of the Internal Affairs. And for 5 years I was
at the head of the Tax Police, now it is called
Financial Police. That is why I am not a specialist
in the field to talk about.
But, actually, here in the company we have many
people who had been working here for about 20
years, but they worked mainly in regions, not
in the Central Office of the Bishkek Kyrgyzgas.
There are some of them in Sukuluk: for example
the Head of the Chuy Department; he is going to
retire soon. The Head of North Gasmagistral Department
Belasharkov is also working. So, they have been
working here for a long time and have a good experience.
Concerning the work we have done this year we
would say we have done a lot. We have introduced
the system of bill delivering. This year from
May till today we have installed 11 600 of counting
devices among the population. For example, to
compare with the last year we have introduced
only 4500. But the thing is that they are installed
free of charge now, but before they were installed
for some payment. This year we have put these
counting devices at our own expanses. We are changing
the pipe of Electric Distribution Station 1. 80
% of Bishkek receive gas through the pipe. This
pipe was installed some 35 years ago. The territory
through which the pipe goes is not very good.
It is humid. We have to change the pipe which
length comprised 3 kilometers 425 meters.
Now I am going to Kant where we are going to install
a pipe at our own expense. We are also changing
pipes in Osh. In Bishkek we have also changed
some parts of gas pipes, and some pipes in line
from Kadamjay to Vuagil, about 1.5 kilometers.
From Kadamjay the pipe goes to Uzbekistan. So,
there are many types of production expenditures
and all this is done at our expense. Therefore,
we are in a very difficult situation and this
year may be we will come out with a low profit
or no profit at all. I told you before about the
indebtedness. But this year we do not have the
increasment of debt. There is indebtedness from
some industrial enterprises. But with a population
we have the decreasment of debt. I have already
mentioned before that we had the indebtedness
of 147 million soms. But the current bills are
all paid. Of course, it would not be right to
say that situation became good. If we take an
Osh example the indebtedness has increased for13
millions. But in general due to the fact that
main share is provided by Bishkek, Chuy Oblast,
and Djalal-Abad it seems to be O.K. So, the growth
of the indebtedness of the Djalal-Abad and Osh
provinces is covered by payment from others and
is not seen. But, of course, the hard thing for
us is our losses. We have a lot of losses and
the picture on losses for this year and last year
is not very good. If we manage to work on the
losses and manage to decrease them, then, of course,
the situation will improve.
Thank you very much. Do you have something to
add?
No. I have already mentioned all things in general. |
Mr. Sydykov
Avtandil Chynturganvich