Also they cut off schools and hospitals.
Cheers, Ken Hanly
The Guardian (UK)
15 September 2000
Power chief cuts off army and railway
Ian Traynor in Moscow
Elite army units are seizing power plants, new-born babies are at risk and
trains on the trans-Siberian railways are grinding to a halt as the Russian
electricity monopoly gets tough with debtors.
Unified Energy Systems, which is owed more than £5bn in unpaid bills, is
cutting power to a number of prominent customers, plunging military bases,
hospitals and companies into the dark.
The "pay up or switch off" policy is due to Anatoly Chubais, the pugnacious
Thatcherite who has run UES for the past two years.
"Chubais is quite serious about his campaign to cut off customers and the
government also is slowly accepting the fact that social facilities can be
cut off, though it is very sensitive about the military," said Hartmut
Jakob,
a power sector analyst at Renaissance Capital in Moscow.
That "slow acceptance" let a baby die shortly after birth in a hospital in
Vladivostok in the far-east last month when the electricity was cut off.
This week armed soldiers from a base of the elite strategic missile forces
in
Ivanovo, north of Moscow, seized the local power station to reconnect their
barracks.
The prime minister, Mikhail Kasyanov, said the disconnections were
inadmissible and ordered UES to keep the military connected. The defence
ministry was allocated £32m to pay electricity bills.
Mr Chubais then banned power cuts to the missile forces, but the news did
not
seem to penetrate Siberia, where a base in Aleix, near the Chinese, border
was warned that it would be cut off next week unless it paid £125,000.
A base commander said the troops were removing rocket fuel from the missiles
and any power cuts could trigger "an environmental disaster". UES suggested
that the army use its back-up diesel generators.
Two nuclear reactors were closed down, one in Sverdlovsk last week and one
in
Chelyabinsk this week, because of "faults in the regional energy system",
though plant managers and the atomic energy ministry denied that Mr Chubais
had ordered any power cuts.
"There are two reasons for Chubais's behaviour: he wants to show how
important he is and he also badly needs the money because UES has run up
enormous debts under his leadership," a Moscow expert on the electricity
industry, Moysei Gelman, said.
Gennady Zyuganov, the Communist party leader, said on Wednesday that Mr
Chubais should be jailed for his policy.
Throughout the economic collapse of the past 10 years the energy industry
has
operated on the basis of barter rather than cash. Mr Chubais, who was a
chief
draughtsman of Russia's flawed privatisation in the early 1990s, before
becoming President Boris Yeltsin's chief of staff and election campaign
manager, is determined to change that.
Last year UES collected only 30% of its receipts in cash, Mr Jakob said. So
far this year cash receipts have risen to 62% of what UES is owed.
The cash-strapped government is the biggest debtor. Central and local
government owe 28% of the unpaid £5.6bn. The ministries of defence, interior
and justice are the worst offenders.
UES owes at least as much to its creditors, and has posted losses for the
past three years, sullying Mr Chubais' reputation as an ardent free
marketeer
who will deliver profits to UES's shareholders.
"I don't agree with the term cut off," he told the St Petersburg Times last
week. "We're not cutting anyone off. We're switching on those who honestly
pay for energy, and our policy won't change."
The national railways are said to have made a deal with UES on the backlog
of
unpaid bills, but yesterday the trans-Siberian route was locked at the key
hub of Krasnoyarsk in central Siberia. Power to a 50-mile stretch of the
line
was cut on Tuesday and Wednesday pending payment of £500,000.
Mr Chubais is keen to publicise military and railway cuts, but less
forthcoming about the schools and hospitals.
If the tough tactics continue throughout the winter, the public will suffer.
"Cuts in the social sector are not a large-scale phenomenon, but they're
happening now, whereas before the authorities did not allow that to happen,"
Mr Jakob said. "They're becoming much more widespread."
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