Statement by the candidate for Moscow Mayor Sergei Mitrokhin
August 12, 2013
On August 13, 89. 94 per cent stoke of the Moscow United Energy Company, or MOEK, will be sold by the auction. Gazprom and Sberbank (Russia’s largest state-controlled bank) bid to buy MOEK.
I think that the privatisation of such a big life-sustaining monopolies as MOEK can’t take place until the necessary structural reforms of the housing and public utilities sector are conducted.
At present the monopoly sphere of resource-providing organisations is absolutely non-transparent. These organisations must provide a complete revelation of their financial and economic operations. An independent audit and an inspection of housing and public utilities payments should also be provided, as well as the regional energy commission must be obliged to publish expert examinations on the utility payments increase.
Non-specific grants to the monopolists, which don’t stimulate the energy efficiency at all, should be replaced with the targeted expenses connected with the energy conservation and creation of competitive mechanisms when converting thermal energy.
All these measures can be taken a lot easier if they city has the direct control over the monopolies and a lot harder when the monopolies are privatised.
Privatisation of the housing and public utilities monopolise can take place only after bringing this sector in order.
This auction won’t lead to the declared goal “to create a more effective management system of the heat and energy company” because the issue concerns the conveyance of the state property on the federal level. Gazprom, which is likely to buy MOEK, didn’t display itself as an effective manager. Passing a critical to the city enterprise to the federal property is useless and dangerous.
Finally, there are serious doubts about the fairness of the initial price.
In March 2012 an independent estimation of the market price of the stoke was apprised. A stock par value 100 roubles (2.27 euro) was then estimated at 705 roubles (16.02 euro). According to this information, the stoke should cost 154 million roubles (about 3.5 billion euro).
In April 2013 Deputy of the Moscow Mayor Natalya Sergunina announced that the market price was supposed to be within 100 billion roubles (2.27 billion euro). The value of the shareholding really made 91.7 billion roubles.
Such a significant difference between the market price according to the 2 expert estimations which took place at one year interval can hardly have economic grounds.
Even if such a big change in the price has reasons they should be announced to the society before the auction.
I demand from Sergei Sobyanin to abolish the auction which will complicate the carrying of ripe reform of the housing and public utilities sector for the new mayor.
Sergei Mitrokhin