Aluminium industry the new power in Russia

greenspun.com : LUSENET : Grassroots Information Coordination Center (GICC) : One Thread

14:03 2001-07-26

ΐLUMINIUM HAS PROFITED BY PASSENGERS. IT BECOMES CLEAR THAT THE ALUMINIUM PRODUCERS ARE WAGING NOT ONLY ENERGY WAR BUT ALSO A BATTLE FOR PROFITS ON ALL FRONTS

It looks as if yet another force has originated in Russia, which is quite capable to influence this country's policy, home policy at least. It is the aluminium industry. Some months ago, they began to call, half jokingly and half seriously, the Russian Aluminium Company (RUSAL) the Ministry of the Aluminium Industry. It now appears that RUSAL has actually become such ministry de facto. Not de jure yet, but this is something that can be put right, is it not?

But possibly there is no need for RUSAL to become a real ministry. The company's management has got more than enough influence in the Russian provinces and the federal centre even without it. PRAVDA.Ru has already wrote about the energy war which is going on in the Krasnoyarsk region (the Krasnoyarsk Aluminium Plant is fighting with Krasnoyarskenergo for preferential rates) and which has already ended in the Irkutsk region in RUSAL's sweeping victory — the company has merely put under its control Russia's second largest power company Irkutskenergo. Aluminium is also fighting for its rights in other Russian provinces where it is present. For example, the aluminium lobby has a considerable part to play in the election campaign in the Nizhni Novgorod region.

The other day, at the sitting of the Russian government they approved a decision that is dictated solely by the interests of the aluminium magnates. As of October this year, the government will cease to adjust the prices for passenger transportation in compartment and sleeping cars. It is done solely for the purpose of covering the losses suffered by the railways as a result of transportation of non-ferrous metals at preferential tariffs. Basically, it is aluminium. The background of this question is the following: the interdepartmental tariffs commission chaired by vice-premier Victor Khristenko, and at the sitting of which they made this important decision, worked to approve unified tariffs for cargoes to be transported through ports. Presently, in Russia they apply the international tariff for this kind of cargoes, which is 2-4 times higher than the internal one. As of August 1, it will be cancelled, and the railways will be compensated for in exchange (a reduced tariff will definitely result in losses) by a general increase in the internal tariffs. For example, the tariff for the transportation of coal will not increase at all, that for petroleum products will go up by 20 per cent. They planned to increase the tariff for non-ferrous metals by 200 per cent.

If it had happened like this, nobody but the aluminium producers would have been the loser. But even they, by and large, would have retained what they had — such increase in the internal tariff does not make it much higher than the international tariff currently in effect.

However, the RUSAL chief, Oleg Deripaska, could not simply agree to the way this matter was handled. How come! Coal, petroleum and ferrous metals benefit by the unified tariffs, and aluminium is where it was before. Discrimination. It is this term that the aluminium producers used to qualify their position when addressing the government at its sittings or meeting with the ministers. And they succeeded in lobbying their point of view. The Khristenko commission has taken a surprising decision — the tariff for non-ferrous metals was increased by 100 instead of 200 per cent. In this case, the Ministry of Railways incurs the losses to the tune of 2 billion roubles a year. But the railwaymen are offered to compensate for them at the expense of the passengers — beginning with October, the government will cease to control prices for travelling in compartment and sleeping cars, reserving the right to do it only with regard to cars with reserved seats. Common people — passengers of long-distance trains — will compensate from their pockets for the shortage of 2 billion roubles (read — the net profit of the aluminium industry).

Now many analysts note that, starting already with October, the prices for tickets in compartment and sleeping cars in long-distance trains will near the price of an air ticket for the same distance. Those, who cannot afford such prices, will have to travel in cars with reserved seats or to stay at home altogether.

It should be pointed out that far from everybody is able to travel on a reserved seat from Vladivostok to Moscow (9 days). But that is nothing, the main thing is that the transportation of aluminium is cheap and RUSAL is not discriminated. And the passengers will put up with it or stay at home.

In fact, the situation is simply surprising. Quite unnoticed, far from the federal press and the national media, in Russia there has emerged a new monster, which slowly but surely puts under its control Russia's leading sectors of economy. Now RUSAL has managed to deal with the Ministry of Railways and the government. A bit earlier, in the Irkutsk region (PRAVDA.Ru closely followed that problem) the aluminium magnates managed to ignore the rulings by the courts of all levels — from the local to the federal one, not to pay attention to the Russian President's resolution "Make sure to secure the interests of the state", and to put under its control actually the entire region. Not very long ago the RUSAL Company purchased a package of Aeroflot shares — a leading air carrier in Russia.

What is next? Already now in the same Irkutsk region they are making attempts to create a power system alternative to the Russian JSC United Energy System. Already now aluminium exerts a serious influence on elections in the provinces of Russia.

Is there emerging a state in the state? And will it not happen soon that, given such a scope, the federal authority will retain only its name "Authority", whereas the cash flows and policies on the greater part of the territory of Russia will actually be controlled by one company or ministry — as you like it — RUSAL?

http://english.pravda.ru/main/2001/07/26/11062.html



-- Martin Thompson (mthom1927@aol.com), July 26, 2001


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