Wholesale and territorial generating companies (WGCs/TGCs) are choosing technical agents. RAO UES of Russia subsidiaries are gradually choosing technical agents that will supervise the implementation of WGC and TGC investment programmes. On Friday, OJSC First Generating Company of the Wholesale Power Market (WGC-1) approved OJSC Zarubezhenergoproekt as its technical agent. An independent technical agent is quite costly for generating companies. Its fee may reach as high as 1% of the total amount of an investment programme. On Friday, WGC-1 announced closing a public tender for the selection of a technical agent to supervise the implementation of its investment programme to 2012. OJSC Zarubezhenergoproekt became the winner. The technical agent will supervise the construction of facilities under the investment programme and make certain that funds are spent as intended by means of a special regime of the relevant bank account. The regime suggests that the bank informs the board of directors of a WGC or TGC about all transactions under the investment programme, construction funding quotas are automatically controlled, and the board of directors approves all payments in writing. Two companies took part in the tender: the second one was Intertekhelektro New Generation. The winner, Zarubezhenergoproekt, is to control the spending of $2.9 billion to 2012. The technical agent's fee will amount to nearly 294 million roubles (approximately $11.5 million). The decision that generating companies are to hire technical agents was passed by the RAO UES of Russia Strategy and Reform Committee in spring (see Kommersant of 23 March). This is another method to control the use of funds obtained by wholesale and territorial generating companies through placing shares. The control mechanism has been developed by the holding company since the beginning of the year and is now in the form of an agreement with the potential investor, as well as an agreement with the non-profit-making partnership Trading System Administrator on the delivery of new capacity to the wholesale market in accordance with the deadlines declared in the investment programme of each WGC and TGC. WGCs and TGCs began to conduct tenders for selecting technical agents in May. TGC-10, WGC-2, and TGC-7 have already selected their technical agents. WGC-4 has already announced its tender and WGC-6 will announce it within the next ten days. Design institutes and engineering companies are the most common participants in tenders for technical agents. Among them are, in particular, the E4 group and OJSC UES Power Construction Complex (a RAO UES subsidiary). Zarubezhenergoproekt is also a design company. It has designed a number of power plants for its minority shareholder OJSC Tekhnopromeksport (it owns 25% of shares and a little over 63% of shares are held on trust by Rosbank which holds them, according to unofficial information, on behalf of the Zarubezhenergoproekt management). Industry experts believe that the participation of a technical agent in the implementation of an investment programme is more effective than control over its implementation via an agreement with the potential investor. "The agreement has a dubious legal force, whereas a technical agent is a real expert in the industry whose job is to supervise the construction," thinks Sergei Pikin, director of the Energy Development Foundation. "It is also very important that the technical agent will depend neither on RAO UES nor on the generating company nor on the new shareholder." Galina Tarasova, deputy director general of Corporate Governance Technologies, agrees that a technical agent will be able to ensure independent monitoring and regular reports to shareholders. However, Sovlink Investment Company analyst Ekaterina Tripoten notes that the cost of a technical agent's services may turn out to be unreasonably high. "They managed to build without technical agents earlier and now the company will have an additional expenditure item: payment of an intermediary between the customer and the contractor," explains Ms Tripoten. Indeed, the services of a technical agent will cost WGCs and TGCs an average of 0.5-1% of the investment programme amount. WGC-2 will spend thereon 762 million roubles, TGC-1 526 million roubles, and TGC-10 150 million roubles. Overall, for the next five years RAO UES of Russia has scheduled investment programmes of generating companies for a total amount of 3 trillion roubles. Companies do not begrudge money for a technical agent's services. Thus, WGC-1 is confident that the "investment programme efficiency will depend" on the technical agent. |
