Moscow, 22 May 2007. In 2006, the number of public tenders as a percentage of competitive procurement by RAO UES entities grew more than twofold to 92 percent. Over the year, RAO UES entities held over 15,700 public tenders, up from 7,118 tenders in 2005. The total amount of fuel, equipment, services and technologies procured also more than doubled to RUB619.5 billion in terms of value.

Expenses on the construction, overhaul and modernization of energy facilities and cost of fuel for the power plants usually account for the greater part of the companies' spending, 40 percent and 37 percent of the total value of procurements, respectively. Expenses for the repair campaign amounted to 13 percent, the respective percentages of procurement through tenders were 43%, 11%, and 49%, respectively.

The relatively small share of competitive procurements of fuel is explained by the fact that tenders to procure gas under the contract limits cannot be held using the competitive process. Besides that, a significant number of coal power plants were designed to burn specific types of coal extracted from specific deposits, which also makes the use of competitive procurement impossible.

The procurement system created in RAO UES Holding Company is regulated by common rules set forth in the corporate Standards. These documents describe not only rules for conducting competitive procurement, but also other procurement procedures, which helps minimize the possible rise in costs of supplies.

Approaches to procurement process aimed at ensuring greater openness and transparency have become a basis for the Market for Goods, Services and Technologies for the Electricity Industry. This market is serviced by the B2B-energo, the energy industry procurement system.

Currently, the ?2?-Energo system is the principal e-trading floor used by the RAO UES entities in their procurement activities. In 2006, more than 26 percent of all tenders were held via the system, up from 11 percent in 2005. In 2007, electronic competitive procurement is anticipated to account for at least 60 percent of the total procurement by RAO "UES of Russia".

The savings achieved through the competitive procurement based on the unified transparent regulations in 2006 amounted to RUB18.4 billion, including RUB5.7 billion through the ?2?-Energo system.

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