Sechin asks Putin to evaluate state managers by revenue, not costs

The head of Rosneft, Igor Sechin, wrote a letter to Vladimir Putin asking him to change the system of key performance indicators for state-owned companies. Instead of reducing operating costs, which, according to Putin, should have been reduced by 2-3% per year, Sechin suggested evaluating efficiency by EBITDA growth. about this Writes "Kommersant".

Sechin explained his request by saying that cost reduction was relevant for 2014, when the effect of sanctions was superimposed on falling prices for key Russian exports.

“Focusing efforts solely on reducing operating costs can lead to a slowdown in the implementation of technological development programs and the modernization of production, as well as the development of human resources and labor protection requirements.”

Igor Sechin, head of Rosneft

The calculation of key performance indicators for EBITDA is beneficial for Rosneft: for the three quarters of 2019, this indicator increased by 1.5% in ruble terms. The implementation of the projects planned for the period up to 2024 will ensure an annual EBITDA growth of at least 3-4%, according to the company.