Monopolies to be Reformed Naturally
// The London Forum
When there are talks about Russian economy, special attention is always concentrated on reforms. And where there are talks about reforms, special attention is always concentrated on natural monopolies. This combination was present in full at the Russian Economic Forum, which was ended in London yesterday.
Reforms have been taken the farthest in RAO UES of Russia. Head of the company Anatoly Chubais called the fact that “electricity and energy reforms were coming to an end” the main news. The resistance of the “communists and ultra liberals block (President’s Counsellor Andrey Illarionov – Kommersant), as well as the oligarchs (Oleg Deripaska – Kommersant) had been overcome,” the market represented by wholesale generating companies had been created and there were no more obstacles in the “competitive sector.” It is planned that RAU UES will terminate its existence by 2007. According to RAO UES member of the board Yury Udaltsov, the next year will be a key period in the energy reform – the transition to the united share of wholesale generating companies will be finished, and they will be put up for sale to potential investors.
So, there is something to compare reforms of gas industry and railroad transportation against. It is known that Gazprom taking refuge in President Vladimir Putin’s patronage, refuses the services of government reformers, preferring to lobby the freeing of their rates from government regulation. However, in London it became obvious that Viktor Vekselberg, whose position is “TNK-BP Gas Business Development Management Executive Director” is willing to take upon himself the gas reform. Vekselberg admits there is no gas business in Russia right now, not counting Gazprom, but he is not sure the situation would change, if it followed the pattern of oil industry. It will be beneficial to fashion the gas infrastructure monopoly after its oil analogue - Transneft state-owned company. However, this perspective is far away right now, because, firstly, it is not encouraged by Gazprom, and, secondly, the situation at the oil market develops more in the direction of creating an oil analogue of Gazprom, which could be controlled by the state. However, using the Forum’s platform, power men criticized Gazprom for monopolized access to the gas pipe. “There is no possibility to sign long-term contracts, and that hinders investments into Russian power industry,” Complex Energy Systems general director Mikhail Slobodin thinks.
The reform of railroad transportation was presented by Vladimir Yakunin, first vice president of Russian Railroads, RZhD. He is sure that comparison of railroad reform with that of power industry demonstrated that the former moved by faster rates: “This is the fifth year RAU UES has been undergoing reforms, and only second for RZhD.” At the same time the program of railroad reform has already been approved by the government. Its first stage of separating the functions of state management and economic activity has been concluded already. At the second stage, RZhD will segregate subsidiaries depending on their specialty of services. The transition to free price formation in the competitive sector will also take place then. At the third stage RZhD subsidiaries will be sold to private investors.
The soonest changes, which will influence all customers of Russian railroads have to do with raising the rates in 2005. The excuse – growth of average rate was planned according to the planned inflation rate of 8.5 percent, which will obviously be exceeded. RZhD insists the rates be raised by 12-13 percent. At the same time Yakunin thinks that the contribution of railroad rates into the general inflation will not be significant. To Kommersant’s question, whether or not RZhD will be self-liquidated at the end of the reforms, like RAO UES, Yakunin said it would not happen, and that it had not been decided whether or not RZhD would become exclusively an infrastructure company, and that he preferred it had continued to transport cargo. So, even though, RAO UES experience is used, it is well dosed.
Irina Rybalchenko, Nikolay Vardul
All the Article in Russian as of Apr. 13, 2005
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