Average Russians to Pay the Price of Energy Reform

Foreign shareholders of RAO UES of Russia

If people really don't want something, they will definitely find a way to get rid of it. This saying is especially true for Russia. The Slavic people won’t obey, and that’s it, its in their blood. Maybe, this is what is called the “Russian soul” that foreign people never understand.

Russian people do not like the head of Russian energy giant RAO UES of Russia (United Energy System of Russia). It does not matter if he is a good or a bad manager. It does not matter how he might be able settle things with the government and with the parliament.

Private enterprises are rushing away from RAO UES of Russia now. There is money in the country, and there is a certain economic growth as well. Why not use this money to get rid of Chubais and his company? The head of Russian Aluminium, Oleg Deripaska, ventured to set up an independent energy company in East Siberia, for example.

RusEnergy news agency wrote that several Russian enterprises announced the beginning or extension of their own programs for the production of energy. RAO UES officially welcomed this. However, regional energy companies did not like the idea at all. They are very concerned about the perspective of their autonomy against the background of the coming power industry reform.

It has always been a common thing in the West to equip industrial enterprises with their own energy capacities. American chemical, petroleum, pulp, and paper companies were producing their own electric power already in the 1970s. Furthermore, the companies produced cheap electric power for themselves, and also sold excessive power on the free market. The US Congress even tried to institute certain restrictions for alternative producers of the power. However, American industrial enterprises became players on the energy market already by the beginning of the 1980s.

Russian industrialists are currently at the beginning of the same road that their American colleagues traveled for 20 years. Russians are doing their best to catch up with them now. Gazprom approved a long-term program for its own electric power plants in 1995. At present moment, the Russian gas giant provides for ten percent of its electric power needs. The Yukos oil company spent a lot of money to purchase several electric power plants as well.

Metallurgic companies are working doingthe same thing as well. The Metallurgical Factory of Magnitogorsk produces 85-90% of its needed electric power of its own, for example.

This process will continue to grow and expand. Chubais’s reforms will eventually lead to a larger monopoly of the Russian market. A certain political and economic clan will govern the monopoly, whereas the other clans will have to obey. This state of things is not good for anyone, especially for foreign the minority shareholders of RAO UES of Russia.

It just so happens that "reformer" Anatoly Chubais and his company will concentrate their efforts on agricultural producers and the population. It will be the Russian people who will pay for the success (or the failure) of the reform of the power industry. However, Russians don't have to put up with it.

Dmitry Slobodanuk PRAVDA.Ru

Translated by Dmitry Sudakov