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Power politics prompt investor switch-off


German Gref

Last month a collective groan went up from investors putting money into Russia. Restructuring of the utilities sector ground to a halt as the Duma decided to put off until the autumn debates on a key package of bills designed to underpin the planned wholesale electricity market.

Confidence in president Vladimir Putin's commitment to seeing through utilities restructuring has been waning over the past few months and shares in state-owned power monopoly United Energy Systems have been clobbered, falling from a 52-week high of 14 cents to just over eight cents by the middle of July.

UES CEO Anatoly Chubais was fast out of the reform gate proposing a plan as early as April 2000 but fixing up Russia's ailing power system has been plagued by delays and disagreements.

The power bill doesn't actually directly affect UES's restructuring as the company's board of directors already has the power to sell or restructure any asset the company owns.

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