Tuvan Budget will Pay out the Debts of the Sheep Hides Processing Factory

   Dina Oyun
28 June 2005

permanent link: https://en.tuvaonline.ru/2005/06/28/tuvan-budget-will-pay-out-the-debts-of-the-sheep-hides-processing-factory.html

The construction of the big factory in Tuva to process sheep hides was started in the beginning of the 90-ties and was perceived as a base for the future self-financement of the republic at that time 80 per cent donated from Moscow. Over 10 years the 'salvation' project swallowed billions of the budget money, but the 'light in the end of the tunnel' was never seen. After the factory walls were erected another task arose to equip the giant with the modern technique and technologies. For this purpose under the guarantee of the Tuvan Government with the Federal Ministry of Finances acting as an intermediary in its contacts with the German 'Hermes' bank a credit of 15,4 million euros was taken in 1996 by the directorship of the factory. But the new equipment was detained on the border by the Russian Customs as the republic could not pay the customs fee. When the problem was settled and the modern equipment was installed, the factory was visited by the members of the Tuvan Government, their inspection of the factory and their enthusiastic interviews were shown on the local TV.

After all these years and all the money spent the factory nevetheless went bankrupt. Throughout these years in the republic of cattle-breeders it could not find enough raw to put factory potential to work to the full. It did not create a net of hide-buyers in the far-off localities preferring to buy the raw only in Kyzyl and always offering less money to cattle-breeders than the Mongolian merchants who besides offering good prices travel all over Tuva and reach the most remote places of the republic.

In June this year the German bank claimed the credit back. Tuva has no money to pay the debt. The Russian Ministry of Finances decided to cut the federal donations to the republic (now 85 per cent donated) by the correponding amount – 582 million roubles.


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