| Moscow. 30 July 2004. Today, Chairman of the Management Board of RAO "UES of Russia" Anatoly Chubais met the Acting President of the Chechen Republic Sergey Abramov and Chairman of the Public Council for control of reconstruction of economy and social sphere of the Chechen Republic Alu Alkhanov.
The parties discussed the progress made in the reconstruction of the industrial facilities and power sector of the Chechen Republic*, question of tariff policy in the region, and security of energy facilities.
In particular, they discussed the problem of consumer debt for electricity in the Republic. Today, the debt owed to RAO "UES of Russia" by the entities financed by the republican and federal authorities is RUB5.31 million and RUB11.21 million, respectively.
The Agreement on Cooperation between OAO RAO "UES of Russia" and the Chechen Republic in Securing Power Supply to the Republic's Economy and Social Facilities" signed at the meeting is intended to settle the problem of non-payments as soon as possible. As provided by this document, the Government of Chechnya plans to take a series of administrative measures designed to ensure stable payment of the current power supplies by entities funded by regional and local authorities. Besides, the Republic's Government promised to include in its budget all expenses relating to the payment of electricity bills of consumers financed from the republican budget and compensation of expenses of energy providers supplying energy to low-income groups of population receiving subsidies, and to ensure control over such expenses.
On the whole, the Agreement reflects the Parties' mutual interest in developing cooperation to restore the system of power supply to industrial enterprises and households in the Republic. For these purposes, the Agreement provides for joint work of RAO "UES of Russia" and the Government of the Chechen Republic to reconstruct and develop the Republic's electricity and heat generation facilities, implement energy saving technologies and automated control and accounting system for electricity.
RAO "UES of Russia" undertakes, on a contractual basis, to ensure stable and high-quality electricity supply to consumers in Chechnya, and to finance the programmes to restore and develop the region's social infrastructure. The Parties also agreed to take joint action to bring the electricity and heat tariffs to the economically justified level.
Under the Agreement RAO "UES of Russia" will produce and agree with the Government of Chechnya the Concept for the development of the electricity industry of the Chechen Republic for the period until 2020, which involves the restoration and development of generating facilities using renewable sources of energy.
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* In 1999 to 2004, OAO RAO "UES of Russia" provided RUB4,250 million in funds for the power reconstruction projects in Chechnya. In 1999-2004, the Holding Company's energy enterprise restored 7,542 km transmission lines, 74 HV substations, over 1,800 transformer units of 6-10-0.4 kV, and some infrastructure facilities. Restoration work is near completion at Argunskaya CHPP and the main distribution substation GRP-110 in Grozny.
In H1 2004, the Company restored and put into operation 242 km of HV lines and 128 transformer substations with the total capacity of 26.2 MVA. Over 1,500 specialists and about 200 machines are currently engaged in the repairs and reconstruction at the energy facilities of the Chechen Republic.
The energy consumption in the Republic is constantly growing. In 2002, RAO UES entities supplied 917 million kW of electricity to consumers in Chechnya, whereas in 2003 the volume of electricity supply was 1,140 million kWh. In 2004, energy consumption in the area is expected to reach 1,300 million kWh. RAO "UES of Russia" ensures supply through power flows from the Unified Energy System via the restored transmission lines.
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