RAO UES of Russia is the owner of shares in 192 joint stock companies in the electric power engineering complex, including 73 AO energos, 26 AO power stations, six power stations currently under construction, the company CDU UES Russia (Central Dispatch Unit of the Unified Energy System of Russia) and 86 other subsidiaries and affilietes. Information on the holdings of RAO UES of Russia in the authorised capital and voting shares of joint stock companies in the electric power engineering complex as of 01.01.2000 is provided in Appendix to this report.
RAO UES of Russia’s percentage holding of voting shares in joint stock companies (taking into account the acquisition of voting rights by shareholders owning type «A» preferred shares at a general shareholders’ meeting after previous annual meetings had decided not to pay dividends on preferred shares) are distributed as follows:
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6 companies; 52 companies; 40 companies; 5 companies; 89 companies. |
In addition, RAO UES of Russia is the legal owner of the following property, which was contributed to authorised capital of RAO UES of Russia by the Company’s founder, the State Property Commission of Russia:
The property of seven electricity generating stations (the Kashir fossil fuel power station, the Shatur fossil fuel power station, the Kirish fossil fuel power station, the Novosibirsk hydro power station, the Reftinks fossil fuel power station, the Mid-Urals fossil fuel power station and the Verkhne-Tagil fossil fuel power station) was transferred to AO energo under the terms of contractual leases. Three electricity generating stations (the Nizhny Novgorod hydro power station, the Saratov hydro power station and the Kharanorsk fossil fuel power station) manage their own industrial and economic activity with the status of affiliates of RAO UES of Russia.
In 1999, the following changes occurred in the blocks of shares owned by RAO UES of Russia. The Volgaenergoproekt OAO, Samaragidroproekt OAO, and Giproenergoremont OAO institutes were reorganised by merging them together to form Voklgaenergoproekt-Samara OAO. The Mobile Equipped Fleet (PMK) of OAO Teribersk Hydro power Stations was reorganised by the addition to it of OAO Kolenergo. A block of shares in Sibenergosnabsbyt was sold in accordance with a procedure and conditions of sale agreed with the Government of the Russian Federation.
Improving the management of property. The most important strategic
goal for RAO UES of Russia is to transform itself into an efficient company capable of
answering in full for its own obligations and providing high returns to its shareholders.
The top priority is the introduction a modern organisational structure with an efficient
subsystem for the management of the Company’s property while realization of the project
in 1999 UES continues to form the property managing structures.The Corporate Policy
Commission founded in late December 1998 and the Property Commission founded in February
2000 are active in the following areas:
Creating vertically integrated coal and power companies. One of the
first steps in this area was the creation in 1998 of companies combining coal mines with
generating facilities. The creation of the vertically integrated coal and power company
LuTEK demonstrated the real possibility of significant cost economies and an increase in
the levels of payment for energy by the largest consumers.
In 1999, work continued on the creation of vertically integrated companies. In fulfilment of Decree ą. 829 of the Government of the Russian Federation on structural transformations in RAO UES of Russia, several independent generating companies are being created: the Urals Fuel and Power Complex OAO (UralTEK), the Burat Fuel and Power Complex OAO (BurTEK) and the Power and Metallurgy Association (EMO).
UralTEK is being created on the basis of the property of the Severny and
Bogatyr open-cast coal mines and the Troitsk, Verkhne-Tagil and Reftinsk fossil fuel power
stations. At the first stage in the creation of UralTEK, it is intended to establish total
control of production and create a unified system of management for the coal mines. This
will provide the basis for an improvement in the economic efficiency of the new structure
as a result of reduced production costs for coal. The Severny mine, which is the property
of RAO UES of Russia, is being transferred for a period of one year to the trustee
management of the American-Kazakh partnership Bogatyr Access Komir, which owns the Bogatyr
mine and is a subsidiary of the company Access Industries Inc.
The project for the creation of BurTEK was initiated by the Government of the Republic of Buryatia, which is offering a privileged tax regime for the proposed coal and power company. Tax privileges and an accelerated turnover of the combined capital will allow the costs of producing electricity to be substantially reduced. At the first stage, is proposed to merge the Kholboldjinsky open-cast mine (a subsidiary company of Vostsibugol OAO) and the Gusinoozersk fossil fuel power station (a subsidiary company of RAO UES of Russia), and distribute the shares in BurTEK OAO equally. At the second stage of the project, it is intended to use a supplementary closed subscription issue of shares in BurTEK, divided between the Republic of Buryatia and a corporate external investor, in order to complete the reconstruction of the Kholboldjinsk mine.
In 1999 the Board of Directors decided to establish an Energy and Metallurgy
Association («EMO») by merging the Sayano-Shushensk hydro power station and
Siberian Aluminium OAO. The EMO project was designed to increase aggregate revenue,
taxable profits and payments to state budgets at all levels. The planned outcomes of this
project included directing additional resources to repair work, the completion of
construction projects and the industrial commissioning of the Sayano-Shushensk hydro power
station. However, due to the fact that Siberian Aluminium OAO has joined the Russian
Aluminium Group, the ownership structure of which is not known, the implementation of the
EMO project has been suspended.
As a result of the payments default crisis in 1998, companies representing OAO Gazprom initiated bankruptcy proceedings against several regional power systems and gas-powered generating stations. In order to settle this matter, the management of RAO UES of Russia and OAO Gazprom have decided to sell 72 per cent of the shares in the OAO Pskov fossil fuel power station to one of Gazprom’s authorised companies. RAO UES of Russia will hand over the property of a second power unit at a later date, while acquiring a 22 per cent holding in the station’s shares. This deal will increase RAO UES of Russia’s holding in the share capital of the station to 50 per cent.
In 1999, the management of RAO UES of Russia drafted and approved initial measures for the restructuring of subsidiaries research and design institutes. The ultimate goal of the restructuring process is to create «in-house» a modern, compact, technically well-equipped research complex with a peripheral system of technical service centres for the engineering support of operations.
In 1999, RAO UES of Russia used a loan from the International Bank for Reconstruction and Development to start work on improving corporate management through the implementation of information technology. Bids were invited from leading international firms in a tender designed to determine the best possible balance between price and quality for the services to be provided. The tender was won by the firms Ankei and Anderson Consulting. This work is proceeding with the extensive involvement of specialists from RAO UES of Russia and the AO State Power Engineering Computing Centre.
The full-scale introduction of a system of this kind will not only make it possible to organise the management of the Company and the activities of its subsidiaries in a more efficient manner, but also to reduce the costs borne by power engineering joint stock companies in transferring information to the Company. Duplicate information flows will be eliminated, the number of workers will be reduced, employees will be released from routine work, while analytical functions will be strengthened, and it will be possible to react more promptly to any deviations from the norm in a company’s management process.
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