Izvestia: "Energy grids go offshore"
On Monday Prime Minister Vladimir Putin visited the Sayano-Shushenskaya hydro electric power station. Having read out the results of the Energy Ministry's tentative audit at the meeting of the government commission on electricity generation, he made nervous many of its participants. It appeared that the heads of the majority of regional companies were involved in corruption. The names of top managers of the biggest electric and grid companies – FSK, RusHydro and IDGC – were put on the black list.
Traditional visits to the school, the sports complex and the ritual commissioning of yet another unit of the hydro power station took place in such a peaceful atmosphere that nobody expected the prime minister to flow into rage. Visiting the lyceum that was repaired and equipped on RusHydro money alone, Putin paid attention practically to all students. Some were particularly lucky – a kid from the first form for whom Putin adjusted a tie, a girl who presented him with a clay toy and received a kiss in return, and the class that was training in the gym on that day – Putin signed a T-shirt for everyone. Another boy, Lyonya, won't have to worry about his sports career – he had the privilege of accepting two volleyball serves by Putin.
This was the end of the pleasant pastime. Putin said at the meeting that 67% of energy sales companies are absolutely non-transparent and run the money of their customers offshore. In some cases contracts were given to the companies of relatives whereas the debts had to be shouldered by rank-and-file customers.
"We must put things in elementary order and enforce payment discipline, in which case cash withdrawal of money to offshore zones will come to an end. Nobody wants to pay debts now or pays very little," the prime minister said. "Those wishing to keep their profits abroad are free to do so because the law does not ban this. But it is impermissible to remove financial resources from circulation to offshore zones."
In some regions, the electric energy sector appeared to be controlled by family clans. Thus, the relatives of Magomed Kaitov are in charge of the North Caucasus energy grid, of which he is general director. Things are pretty much the same in Western Siberia and the Nizhny Novgorod Region.
Deputy Minister of Economic Development Stanislav Voskresensky explained the pattern in simple terms: "As con artists these guaranteed suppliers have split the country into bits and are getting as much as they can."
Owing to such practices, in 2008-2010 the growth of profits from power sales reached 279%, while the debts of such companies amounted to 56%; the public debts were a mere 18% and of state-funded organisations 3.4%.
"The government is paying for you, while the suppliers are responsible for 56% of the debt. These companies do nothing but collect energy revenues from consumers and direct them offshore. Then they cut part of the funds for themselves. What kind of work is this?" Putin asked with generous indignation. He mentioned many names and companies involved in this scheming.
Thus, the relatives of Alexei Sannikov, a top executive of the IDGC Holding, established several dozen companies overseeing installation of electrical equipment and power transmission. These companies were affiliated with offshore firms.
The host of the meeting, RosHydro head Yevgeny Dod, also had his share of criticism. The audit revealed the company's shady trans-border operations whereby it issued multi-billion loans for several years and bought interest-free promissory notes from an offshore company.
"What made it so fascinated with this company? Its promissory notes must have been very reliable," Putin said sarcastically.
After such statements RosHydro shares fell by 4%.
However, official spokesmen for RusHydro told Izvestia that the shares had fallen because of another statement made at the meeting – on the company's recapitalisation. RosHydro considers absolutely legal its transactions with promissory notes of the said offshore company,
Boris Zverev, official spokesman for RusHydro, explained to Izvestia: "The government has endorsed this scheme in 2006 and we are using it in our work with Rusal. This is the best way of funding the construction of the Boguchanaskaya hydro power station. We are jointly funding its construction through these promissory notes. The main company involved in construction is registered on the Virgin Islands. This is a term of our agreement with Rusal."
Putin instructed law-enforcement bodies to investigate all facts mentioned in the report of the Energy Ministry. If no crime has been committed but a conflict of interests is established, the heads of the companies involved will be dismissed. In addition, Putin instructed all top managers of energy companies to submit to the Energy Ministry annual reports on their incomes and those of their families and close relatives.
Anastasia Novikova, Sayanogorsk
