| Investment programs of natural monopolies for 2003 will be greatly reduced Natural monopolies - Gazprom, RAO UES of Russia and the Ministry of Railways - submitted drafts of their investment plans for 2003 to the government. However, they are “so raw,” says Deputy Minister of Economic Development Andrei Sharonov, that when deciding on the maximum increase in tariffs, they were not even taken into account. All monopolies have investment programs for 2003 that are one and a half to two times higher than this year's figures.
The Ministry of Economic Development, according to Mr. Sharonov, is primarily dissatisfied with the plans of the Ministry of Railways. The railway department is asking for 221 billion rubles to be allocated for investment projects, and for this year the volume of approved funds is 114 billion, of which 20 billion is raised money. The proposals of the Ministry of Railways do not indicate specific investment objects and the costs for them, Mr. Sharonov claims. “They tell us: we need money to repair the cars. We answer: present an economic justification for the need for repairs, maybe it’s better not to repair these cars, but to buy new ones or rent them from Ukraine or Belarus,” he continues.
The volume of Gazprom's investment program for the next year is about 190 billion rubles. The Ministry of Economic Development and Trade prefers not to say how large this figure is, since it is not yet clear how the 15 percent increase in gas tariffs from July will affect this year’s investment program. The concern asked for more than 34% - only in this case, according to its representatives, the Russian gas market can be unprofitable. The Ministry of Economic Development and Trade proposed increasing tariffs by 20%, which would make the market unprofitable from the second half of the year. However, Prime Minister Mikhail Kasyanov, dissatisfied with the fact that Gazprom was spending too much money on non-core assets and could not even say how much, insisted on a 15 percent increase. The head of the Ministry of Economic Development and Trade, German Gref, immediately stated that the concern would not be able to fulfill the investment program of 100 million rubles this year. (at the beginning of the year it was planned to be 140 billion, but due to tenders and outsourcing it was planned to be reduced by 11 billion).
The Ministry of Economic Development recommended that Gazprom first of all intensify its work with accounts receivable, and convert accounts payable from short-term to long-term. The Ministry of Economic Development and Trade also pointed out that the volume of bill transactions was too large. Gazprom intends to reduce the size of the issue of bills to 40 billion rubles by the end of this year. (at the end of 2001 - 90 billion rubles). In addition, the concern was recommended to slightly change the gas sales scheme. “These targeted recommendations,” says Mr. Sharonov, “will help find additional funds. But a lot depends on Gazprom’s managers and their ability to take advantage of these recommendations.” That is, the volume of investment funds for next year depends on how Alexey Miller’s team copes with the task and to what extent it fulfills the investment program for this year.
RAO UES of Russia presented a draft investment program worth 45 billion rubles. However, the Ministry of Economic Development and Trade, according to Mr. Sharonov, only plans to maintain it at the level of this year, i.e. in the amount of 20 billion. The ministry believes that in the conditions of reforming the electric power industry, RAO can attract external investors to build new facilities, and use the investment component in the tariff to complete the construction of large facilities with a high degree of readiness - for example, the Bureyskaya HPP in the Far East.
New scheme for approving monopoly budgets
In the near future, the Ministry of Economic Development plans to transfer to the government a new procedure for considering the budgets of natural monopolies, said Deputy Head of the Ministry Andrei Sharonov. He noted that this scheme will most likely already be used in preparing the 2004 budget. In particular, it is planned that in February-March the Ministry of Economic Development will determine the maximum parameters for changing tariffs when developing scenario conditions for the forecast of socio-economic development of Russia for the next year. Until June 1, natural monopolies form and submit a financial plan for operating, investment and financial activities for the current and forecast years. Next, the Ministry of Economic Development, within one or two months, analyzes these proposals of natural monopolies for compliance with the goals and objectives of economic policy for the short and medium term, evaluates their investment programs and tariff proposals. At the same time, the Federal Energy Commission analyzes the budgets, structure and volume of expenses of natural monopolies. Industry ministries check the compliance of natural monopolies' proposals with industry development strategies. Before August 1, the government agrees on the budgets of natural monopolies and the parameters for changing their tariffs for the current year. After this, the FEC decides to adjust the tariffs of natural monopolies for the current year. Nikolay GORELOV |
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