Russia power firm regains control after armed attack
By Gleb Bryanski
MOSCOW, March 8 (Reuters) - A grid operator in Russia's volatile Caucasus region said on Saturday that police had helped it regain control over sub-stations that had been seized by armed men after the firm cut power supplies over non-payments.
The firm said up to 300 men, many armed with rifles, broke into five sub-stations this week in the southern region of Dagestan, before beating staff and switching the power back on for parts of the local capital Makhachkala.
The incident, which took place in the southern region of Dagestan, highlighted the risks of public discontent that some investors face in the course of an ambitious reform of Russia's power sector.
The operator, MRSK North Caucasus, said it had resumed electricity supply after the incident but vowed to cut power again soon if the debt was not paid. Several members of staff were badly injured and treated in hospital, it said.
The firm said the city of Makhachkala, with a population of about 700,000, owes it 600 million roubles ($25.07 million) and blamed the local administration for stirring up trouble.
"These criminal actions were provoked by the irresponsible position of the municipal authorities," the operator said in a statement.
The mayor of Makhachkala, Said Amirov, slammed the cut offs and said power monopoly Unified Energy System (UES) EESR.MM, the owner of MRSK North Caucasus, was manoeuvring to try to seize the city's electricity distribution network.
"Only barbarians and foreign invaders are capable of such actions," Amirov said in a statement published on the local administration's Web site about the cut-offs.
Under a Kremlin-approved reform of the power sector, wholesale electricity prices are to be fully liberalised in 2011 in an attempt to introduce competition into the sector.
MRSK North Caucasus, which unites local grid operators and distributors, will be spun off from power monopoly UES as part of the reform, which will see the UES broken up into generation, grid and distribution firms.
Investors are queuing up to invest in the sector, betting on gradually rising electricity prices.
"We would like to find an investor too but in order to do that we need to solve this non-payments issue first," spokesman for MRSK North Caucasus Gennady Vykhristyuk said. UES says 11 local grid operators have a market value of over $1 billion. Russia fought two wars in the neighbouring Chechnya and a number of smaller-scale insurgencies in the ethnically diverse and impoverished North Caucasus. Criminal attacks and killings are common in the region. (Reporting by Gleb Bryanski, editing by Mike Peacock)
