Energy Crisis Sparks Growing Unrest

Police in Tbilisi went on high alert over the New Year holidays amid fears that Georgia's worsening energy crisis could spark mass protests across the capital.

Most Tbilisi apartments currently have electricity for just four hours a day whilst many are completely without central heating. Families are resorting to kerosene-fuelled stoves in a bid to combat sub-zero temperatures.

At the end of last year, residents in the Bake district of Tbilisi staged an angry demonstration on Prospect Chavchavadze, effectively blockading one of the city's main arteries.

The protesters took to the streets after David Mirtskhulava, the energy minister, announced that electricity in Tbilisi would only be available between 7am and 1am.

When pressed on the issue by community representatives, Mirtskhulava was forced to modify his statement. "I guarantee that there will be no electricity between 1am and 7am," he said.

The incident provoked a swift reaction from the interior ministry, which announced a massive security clamp-down across Tbilisi. Interior minister Kakha Targamadze warned, "We have details of all the activists responsible for this kind of incident."

Meanwhile, Tbilisi residents - forced to spend their meagre incomes on kerosene and firewood - are getting increasingly desperate.

Pensioner Izolda Nikoleishvili shares a two-room flat with seven members of her family. She buys between 80 and 90 litres of kerosene a month - at a cost of 70-80 lari ($35-$40).

And Tamar Tkemaladze, 75, who hasn't received her 12-lari pension for the past five months, claims, "It's very much in the interests of the kerosene mafia to keep this crisis going and force us to huddle around our primitive heaters."

Certainly, the electricity crisis is showing no signs of lifting. The city's most powerful generating plants - Units 9 and 10 of the Tbilisi GRES - have been dogged by technical problems since they were bought out by the American company AES Silk Road at the end of 1999.

Unit 10 was recommissioned in September after an extensive refit while Unit 9, which was damaged by fire in 1998, was finally opened on December 9 but was closed again on the following day due to technical failure. AES Silk Road has ploughed around $20 million into the refurbishment of these two units, part of its $150 million investment in the Tbilisi electricity grid.

According to some industry experts, a large portion of the GRES output never reaches the consumers. Michael Scoley, general director of AES Telasi, which controls Tbilisi's electricity supply, said that 16 million kilowatt hours of electricity mysteriously vanished in the first 11 days of December alone.

The Tbilisi government blames the American companies involved. Zurab Tskitishvili, chairman of the parliamentary committee for trade and economics, is currently urging the authorities to revise the agreement signed with the American companies, AES Telasi and AES Mtkvari, a subsidiary of Silk Road.

And energy minister David Mirtskhulava has said publicly that the use of foreign loans to reconstruct Units 9 and 10 was a mistake and that the money should have been spent on enforcing stricter controls on the distribution of electrical energy.

At the same time, the electricity providers are owed around 120 million lari (around $60 million) by industrial consumers. The company Azota alone has debts totalling 13 million lari.

On November 27 last year, a state commission set up to study the causes of the energy crisis ruled that non-payers should have their electricity supply cut off. This decision, however, has yet to be enforced.

Since 1994, $116 million has been invested in the Georgian electricity grid with a further $134 million pledged by a range of international financial institutions.

However, last year Jonathan Walters, head of the World Bank mission to Georgia, announced that any further loans would depend on the effectiveness of the government's fight against corruption within the industry.

The energy sector has been plagued by a long history of criminal activities. Two years ago, the government's energy control commission invited a team of American experts to help tackle the problem.

Several top officials have already been arrested on embezzlement charges including Emzar Chachkhiani, general director of Gruzenergo, deputy director Georgy Makashvili and Iveri Shalamberidze, director of the wholesale market.

However, most people in Tbilisi believe the arrests are evidence of a power struggle in the criminal clans which dominate the energy sector rather than a result of the government's fight against corruption.