| Left and right converged in opposition to Unified
Energy Systems chief
Anatoly Chubais and a controversial legislation package to overhaul
the
national power grid Tuesday, a day ahead of the first reading
of the bills
in the State Duma.
Liberal Yabloko leader Grigory Yavlinsky joined the Communists
and Agrarian factions of parliament in condemning the bills, warning
lawmakers that approval would lead to "a politically dangerous
system that could dictate conditions to businesses and manipulate
regions and republics."
Yavlinsky said the bills would strengthen the position of UES
management and called for the "immediate dismissal" of Chubais.
No government "in its right mind" would allow such a manager
to run a state-owned company after its market capitalization lost
more than 50 percent, Yavlinsky said in an interview after announcing
Yabloko's opposition to the bills.
UES shares have lost more than half their value since January
as investors have grown more nervous that Chubais will liquidate
key assets at fire-sale prices in the course of the planned overhaul,
which includes breaking UES' sprawling network into numerous companies
and spinning off many of its assets.
"The president is fully aware of what Chubais is doing," Yavlinsky
said. "The fact that he has done nothing [to stop him] means that
he is not quite able to do so.
"The whole situation shows that government authorities and Chubais
are of the same group with the same interests," he said.
Communist Party leader Gennady Zyuganov echoed the remarks,
saying the Chubais plan would lead to "a national catastrophe."
"The whole industry will be owned by oligarchs and the team
headed by Chubais," news agencies quoted Zyuganov as saying. "The
country will be left without heat and light."
Yavlinsky compared the UES reform package to the scandalous
loans-for-shares scheme Chubais presided over in the mid-'90s
as privatization tsar in former President Boris Yeltsin's Cabinet.
That scheme, which resulted in one of the largest transfers of
state assets to private hands in history, gave birth to most of
today's tycoons.
The current UES reform bills are a "refined repeat of loans
for shares," Yavlinsky said.
The major difference between now and then, he said, was that
then the
government had no idea what was going on, and the Duma was powerless
because
it had just been created.
Now, however, the government knows exactly what it is doing
and is intent on getting its way, deputies said.
"I don't remember such pressure ever being put on deputies,
including ours," said Duma Deputy Sergei Ivanenko of Yabloko.
"It is unprecedented."
Analysts are expecting a close vote, but it looks as if the
ayes may have secured just enough support to carry the day. The
bills need the support of 226 of the 450 deputies to pass.
It looked as if the opposition had garnered enough support to
defeat the bills when Fatherland-All Russia, which controls 10.9
percent of the Duma, announced Tuesday that it would vote them
down. But Moscow Mayor Yury Luzhkov's party reversed itself after
talks with the government.
After meeting with Economic Development and Trade Minister German
Gref, Fatherland-All Russia leader Vyacheslav Volodin said the
government had amended the bills enough to win the faction's support
in the first reading.
In particular, he said, the government agreed to increase the
state's share of ownership in monopoly companies [the Federal
Grid Co. and the System Operator], and keep state control over
the maximum tariff that can be charged for electricity.
However, not all of the faction's demands have been satisfied.
Volodin said that if the government does not agree to the rest
of the changes it wants then it will vote against the bills in
the crucial second reading, in which details are basically set
in stone. Factions that have previously pledged to support the
bills are the pro-Putin Unity party, which controls 18.4 percent
of the votes, People's Deputy (12.4 percent), Chubais' Union of
Right Forces (7.1 percent) and Vladimir Zhirinovsky's LDPR block
(2.7 percent).
Russia's Regions, which has 10.4 percent of the vote, is undeclared,
announcing Tuesday that it would let its deputies vote individually
since they could not reach a consensus.
Declared opponents have just 32.6 percent, led by the Communists
with 18.9 percent, Agrarians with 9.5 percent and Yabloko's 3.8
percent.
The remaining votes belong to independent deputies (4.7 percent).
Unity leader Vladimir Pekhtin defended his party's support for
the bill, saying legislation is needed to regulate reform since
it is already de facto under way. "Reforming the electricity sector
has effectively begun, but there are still no laws regulating
the process," Pekhtin said in an interview with Gazeta newspaper
published Tuesday.
"A situation similar to that with land reforms might occur.
After we adopted a law on the sale of farmland, it turned out
that 70 percent to 90 percent of fertile farmland in the Stavropol
region has already been sold," he said.
The legislation package includes new laws on electricity and
the implementation of the law on electricity. It includes amendments
to existing laws on government regulation of electricity and heat
tariffs, energy savings and natural monopolies. There are also
amendments to the second part of the Civil Code.
The draft bills, designed to introduce competition into the
sector, define the operational rules for a competitive wholesale
market, new procedures for tariff setting, and the creation of
new entities such as standalone generation, supply and distribution
companies.
Meanwhile, Chubais is under attack from a different front.
UES minority shareholders, on the initiative of Hermitage Capital
Management, are trying to gather enough voting shares to call
an extraordinary shareholders meeting and fire Chubais. "Lawyers
are still working on the exact wording of the request for an extraordinary
shareholders meeting, but the main theme is Chubais' dismissal,"
Hermitage CEO Bill Browder said Tuesday.
Browder said that the initiative has been supported by National
Reserve Bank, Prosperity Capital Management and 12 other domestic
and foreign minority investors who collectively own 9.6 percent
of UES, 0.4 percent short of the number needed to force an extraordinary
meeting.
Browder said the group is negotiating with five other institutional
investors and expects to pass the 10 percent threshold. "We don't
believe what he says anymore," he said.
"Whenever the heat is on, Chubais says what he thinks people
want to hear, which plays well with some investors in the West
who don't have much experience with him. Unfortunately for many
of us who have dealt with Chubais over the years, his recent statements
don't give us much confidence," he said.
Prosperity Capital CEO Alexander Branis, who represents minority
shareholders on the UES board, said it became obvious long ago
that UES management has aims that contradict the interests of
minority shareholders.
"We need to make sure that all UES assets will be distributed
on a pro
rata basis," Branis said.
See also:
the original at www.themoscowtimes.com
Energy
Sector Reform
Roll-call
Voting in the State Duma
For adoption of the federal law "On the Electric Energy".
First Reading.
October 9, 2002.
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