| A handful of young Yabloko supporters, wearing
red wigs in a nod to Chubais and carrying boxes reading "Alms
for reform," protesting the UES bills at the Duma on Wednesday.
 After
months of fierce debate and horse-trading, lawmakers on Wednesday
passed a new electricity bill that allows for the carve-up of
Unified Energy Systems, the world's largest power producer.
By a vote of 261 to 152 with one abstention, State Duma deputies
passed in first reading the bill that frees the government to
overhaul the
monopoly and liberalize electricity prices if, as expected, it
passes two
more readings and is approved by the Federation Council and the
president.
The government's pointman on the project, Deputy Economic Development
and Trade Minister Andrei Sharonov, called the bill as crucial
to the future
of the economy as the law passed earlier this year that legalized
the sale
of agricultural land for the first time since 1917.
"[The bill] proposes the liberalization of the electricity
sector but
leaves the most important regulative levers in government hands,"
Sharonov
was quoted by news agencies as saying.
Opponents of the bill, including the Communist, Agrarian and
Yabloko
parties, say it and four other bills in a reform package passed
Wednesday
will create a politically dangerous system that gives UES management
the
power to manipulate regions and republics and essentially blackmail
businesses.
The bills were the only items on the Duma's debate docket Wednesday
and they all passed by similar margins. They include the bill
on
electricity, a bill on implementing the law on electricity, amendments
to
existing laws on regulating electricity and heat tariffs, energy
savings and
natural monopolies, as well as changes to the second part of the
Civil Code.
The package is 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.
Sharonov said that if the bills don't become law, UES would
have too
much latitude to impose its own conditions on the market.
"If the package of draft bills had not been passed today
in the first
reading then the reform of UES, taking into account the pre-election
political situation, would have been delayed at least two or three
years,
and maybe five," said Vladimir Pekhtin, the parliamentary
leader of the
pro-Kremlin Unity party.
The government submitted the package of bills, which are based
on
proposals by UES chief Anatoly Chubais, to the Duma in June. Hesitant
lawmakers, however, delayed voting on the legislation in part
because
Chubais was behind it and because the complicated nature of the
reform
itself made reaching a consensus taxing and lengthy.
A trilateral conciliation commission made up of members of the
Cabinet
and both houses of parliament had to be formed to strike a compromise
over
the 300 changes to the government's version demanded by various
factions.
The breaking up of 51 percent state-owned UES ahead of its further
privatization is anxiously awaited by the country's major financial
industrial groups, many of whom are busy buying up blocking stakes
in
regional utilities controlled by UES in an effort to influence
and gain from
the process.
Opposition leaders held out hope as late as Tuesday that they
would
have enough votes to block the plan, which they likened 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, created the so-called oligarchy.
But last-minute concessions by the Cabinet encouraged the
Fatherland-All Russia faction to reverse its opposition and back
the bills,
putting the government over the 226-vote threshold.
Before Tuesday, the faction, which counts among its leaders
Moscow
Mayor Yury Luzhkov, a longtime critic of Chubais, was against
the bills. But
a consensus was reached after last-minute negotiations between
Luzhkov,
Chubais, Economic Development and Trade Minister German Gref and
deputy
presidential administration chief Vladislav Surkov that lasted
until 3 a.m.
Luzhkov had demanded that City Hall get a controlling stake
in local
monopoly Mosenergo in exchange for Fatherland-All Russia's support.
But he
agreed to support the bills in exchange for a promise for greater
control
over the distribution and supply companies that will be created
from
Mosenergo's current assets, Vedomosti reported.
Luzhkov spokesman Sergei Tsoi trumpeted the victory, saying
thanks to
Luzhkov and Fatherland-All Russia "UES reform will not be
a la Chubais
anymore."
But what may be good for City Hall may not be good for Mosenergo
shareholders.
"In our view, this is negative news for Mosenergo's current
minority
shareholders, as it is likely that the increase in the Moscow
city
government's stake in the distribution and supply companies is
likely to be
achieved by way of an additional share issue by Mosenergo, which
will
inevitably result in a dilution of the stakes of Mosenergo's minority
shareholders," Renaissance Capital wrote.
Both the government and UES said they were confident the bills
would
pass all three readings, with Deputy Prime Minister Viktor Khristenko
saying
he expected them to be ready for President Vladimir Putin's signature
by the
end of the year.
"The outcome was better than we had expected," Gref
told reporters,
Reuters reported. "This is because emotions are no longer
running so high.
We have managed to get some of our ideas through to deputies."
But the bills must now pass the crucial second reading, scheduled
for
next month, in which specifics will be nailed down.
One major obstacle, according to UES spokesman Leonid Gozman,
is how
often tariffs will be set. Lawmakers want them set no more than
once a year
so businesses can better plan, while the government and UES want
more
flexibility.
See also:
the original at www.themoscowtimes.com
Energy
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