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----- Original Message -----
From: Miroslav Antic <[EMAIL PROTECTED]>
To: NATO <[EMAIL PROTECTED]>; Du-Watch <[EMAIL PROTECTED]>; BALKAN
<[EMAIL PROTECTED]>; SNN <[EMAIL PROTECTED]>
Sent: Sunday, May 20, 2001 4:19 PM
Subject: Russian communist party chief calls electricity reform plan "criminal"
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Russian communist party chief calls electricity reform plan "criminal"

MOSCOW, May 20 (AFP) -

The leader of Russia's Communist Party, Gennady Zhuganov, on Sunday attacked
as "criminal" a government plan to overhaul the country's giant electricity
monopoly UES, a key plank in overall economic reform.

"The government has chosen the path of destruction and is under the
influence
of people who have humiliated and ruined the country," Zhuganov told
Interfax
news agency, referring in particular to UES boss Anatoly Chubais.

Zhuganov said "reform plans would come to nothing" while Chubais was at the
helm of UES and would only serve to worsen the critical state of Russian's
power sector.

Reform of the power sector, namely the introduction of competition, is seen
as an urgent task because of recurring energy crises over recent years.

The Russian government's decision on Saturday to gradually prise open the
UES
monopoly should unlock a 100-million-euro (88-million-dollar) loan from the
European Bank for Reconstruction and Development (EBRD) for restructuring
the
crumbling power sector.

The reform of the UES monopoly and its 80 regional subsidiaries, one of the
government's major economic reform tasks this year, has provoked sharp
conflict at the centre of power for the past six months.

A first, liberal plan to overhaul the sector, proposed by Chubais and the
economy ministry, was approved several months ago but was shelved after it
provoked violent criticism.

Under the revised, watered-down plan approved by the government on Saturday,
reform of the power giant is to take place more slowly, in three stages
spread over a period of eight to 10 years.

Liberalisation of the energy market will only start in 2004 "and not
before",
Trade and Economic Development Minister German Gref said at the end of
Saturday's cabinet meeting.

He said power prices could double at that point, without giving details of
the newly-adopted programme, which is to be finalised in the coming weeks.

Though less radical, the new text still includes much of the original reform
plan, according to analysts.

On Saturday, President Vladimir Putin's economic advisor Andrei Illarionov
attacked the revised plan, saying it "only reflects the interests of a small
minority, that of the UES management, (and) scarcely reflects the proposals
and opinions of the president".

"The government took the decision which it deemed necessary and must assume
total responsibility for its actions," he added.

For his part, Chubais said the plan could have been "better, more dynamic
and
more radical".

But he added it was important that a decision had finally been reached and
that reform could begin to get off the ground.

The EBRD bank said a few days ago it would not release its promised loan for
overhauling the Russian power sector until the Moscow government chose a
definitive plan.

The UES electricity monopoly is a vast structure inherited from the Soviet
Union, with ageing infrastructure. It is owned 52.8 percent by the state and
nearly 30 percent by foreign investors.

Miroslav Antic,
http://www.antic.org/


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