Vedomosti: "Tо divide RusHydro"
Oleg Deripaska, Rusal's co-owner, in a letter to Prime Minister Vladimir Putin suggested that the RusHydro holding should be split into several companies, with the Sayano-Shushenskaya hydropower plant (HPP) operating as a separate company and United Company Rusal as its co-owner.
Oleg Deripaska wrote his letter to the Prime Minister on October 4 (see www.vedomosti.ru). Deripaska suggests returning to an idea, first proposed by the government back in 2002, of uniting all Russian hydropower plants into several companies on a regional basis. The Sayano-Shushenskaya HPP, where the August 17th accident killed 75 people and caused power shortages in Siberia, should become a separate legal entity. According to Mr Deripaska, this will make it possible to mobilise private investment to repair the hydropower plant and to ensure stricter control over the repair work being carried out. He thinks that Rusal, having a distinct interested in the HPP's operation (according to the Metropol group, Rusal used to buy from 60% to 70% of electricity from the HPP) could become a shareholder of this new company.
Oleg Deripaska explains his position in an appendix to the letter "the decision to unite all HPPs into a single holding, RusHydro, has lowered the plants' economic and technical efficiency and the Sayano-Shushenskaya hydro accident was the result of this. RusHydro is failing to be efficient in its use of allocated funds and its own profits. In actual fact, this is a monopoly dictating prices, which runs contrary to the essence of the energy reform," Mr Deripaska says. He also mentions international experiences indicating that the joint management of several hydropower plants by one company is efficient only if they are located close to each another (less than 300 km, or 186 miles, apart). In some countries, where hydropower assets are held by private companies, they are more efficient than those held by state companies. A Rusal spokesman confirmed the existence of such a letter. Yevgeny Druzyaka of RusHydro told the PRIME-TASS news agency that the division of RusHydro was not feasible and that the idea was not likely to be approved by the shareholders.
However, according to one government source, on October 7th Vladimir Putin instructed Energy Minister Sergei Shmatko to examine Mr Deripaska's proposal. A copy of his letter was also sent to Andrei Kamenetsky of the ministry's industry and infrastructure department who declined to discuss the issue with Vedomosti. Neither a spokesman of the Energy Ministry, nor Mr Putin's press secretary Dmitry Peskov, were willing to comment. "There is practically no chance of this proposal being implemented because the government is not planning to reorganise RusHydro," an official from the government's Central Office said.
According to Vladimir Milov, president of the Institute of Energy Policy, it was a mistake to unite all HPPs under RusHydro, because it did not aid competition on the market. It would make sense to revise the decision, but only together with the concentration of the power capacities in one pair of hands, for instance, those of Gazprom, the expert says. At the same time, he is certain that the Sayano-Shushenskaya HPP accident has nothing to do with RusHydro's structure and that Mr Deripaska just wants to get control over the asset he needs. It is not clear how such a transaction could be financed: Rusal has $16.8 billion of debt which has not yet been rescheduled. In order to repay a part of this debt, Rusal is preparing an IPO by year-end hoping to attract $3 billion.
Yulia Peretolchina, Anna Chechel
