The end of the world in Moscow: Chubais to blame, again?

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Every national newspaper in Russia has used the expression “end of the world” in articles about the May 25 blackout. (A pun on the Russian word “svet,” meaning both “world” and “light” – translator’s note)

Parlamentskaya Gazeta, with reference to RAO Unified Energy Systems of Russia (RAO UES), reports that the overall deficit of electric energy has amounted to 10%.

Other figures look frightening: 24 cities were affected in the Ryazan, Tula and Kaluga regions besides Moscow. Twenty thousand people were caught in the Moscow subway, dozens of hospitals had to switch to emergency power supplies, hundreds of intersections in the Moscow megapolis lost their traffic lights, and electric trains did not depart from the railway stations of Moscow.

Overall, according to RAO UES, about 2 million people suffered from the “electroshock” (the second most frequently used term for the events of the last Wednesday). At any rate, Vremya Novostei remarks, “By afternoon it was clear that this figure was at least seriously undervalued.”

Moskovsky Komsomolets wrote that the power failure caught Moscow “practically beheaded: it turned out that Yury Luzhkov was on vacations in Spain (nonetheless, his press secretary Sergei Tsoi reported that the Moscow Mayor was “directly supervising work of the staff” for liquidation of the disaster from abroad).

It turned out that Valery Shantsev was on a business trip in Turkey.

Petr Aksenov, head of municipal infrastructure, was out of town as well.

Kommersant immediately recalled all power failures worldwide over the last 40 years – including the largest one of August 14, 2003, when there were rotating blackouts in several states of the US and the Canadian province of Ontario, leaving 50 million people without electricity for 30 hours.

Vedomosti commented philosophically: “Unprecedented energy paralysis placed the capital of Russian on one row with other largest cities of the world. We received a bright (to be more accurate, grim) confirmation of fragility of the carrying construction of our civilization.”

Izvestia added, “Moscow is not used to technological catastrophes. Everything happened there from coups to terrorist acts but technological problems did not worry the city seriously. What has happened is a pretext to think what is wear and tear of equipment. This is the thing to which people in Russia traditionally do not pay any attention relying on notorious “Russian somehow and other.”

The press immediately recalled what RAO UES chief executive Anatoly Chubais said on August 15, 2003, the day after the North American power failure. Chubais stated that the Soviet energy system inherited by Russia is highly centralized, and this was its guarantee against such disasters. Chubais said, “In Russia there have been no such large power failures and there cannot be any. The basic principle of the reform of the electric energy sector conducted in Russia is provision of reliable failure-free work of the sector.”

On the same day General Director of Mosenergo Arkady Yevstafyev spoke with equal assurance, “In the Moscow Region large-scale blackout is impossible. Mosenergo possesses generating facilities that allow switching of electric and thermal energy to other sources in case of emergency.”

At any rate, Gazeta wrote that on May 25 neither Chubais nor Yevstafyev released such statements. Chubais eve remarked that “Humankind has not learned to live without accidents yet.” According to Chubais, our accident is much “better” than the American one: “At that time the US lost 100 stations and we lost 12-13 stations now,” and a significantly smaller number of victims.

Meanwhile, Vladimir Putin who postponed his trip to Rostov-on-Don due to the blackout, spoke much more harshly: “Clearly, the management of RAO UES hasn’t been paying due attention to the company’s current operations. While being concerned with broader political issues and corporate restructuring, you should not forget about day-to-day operations.” (Quoted in Vedomosti.)

Gazeta also reports that President Putin added that the reason for the failure could be “not only the problems related to wear of equipment” but also untimely repair and maintenance. Gazeta remarks, “These words look very much like an accusation of negligence.”

Immediately after the blackout, Chubais accepted full blame, and all national television networks showed him saying this. Chubais apologized to the victims and announced that he is prepared to take responsibility for the energy paralysis.

Gazeta also presumes that Chubais “will have to take responsibility, because it was he who in a heated dispute with Moscow authorities in 2001 achieved the appointment of his long-time ally Andrei Yevstafyev to the post of General Director of Mosenergo. Yevstafyev was known to general public due to the scandalous case of the Xerox box (In 1996, Yevstafyev and Lisovsky were detained carrying a photocopier paper box full of dollars from Yeltsin’s campaign team – translator’s note). Because the accident occurred at a facility of Mosenergo management of Mosenergo should be responsible for it first of all.

According to Pravda, the fire at Chagino substation from which the blackout started occurred due to “saving of money on repair of equipment.” Pravda says severely, “Instead of a professional Mosenergo is currently managed by a gangster of Chubais who can carry only boxes with stolen dollars well. He does not waste his efforts on all kinds of trifles like repair of equipment. The main thing is to make and to steal the gain.”

With regard to Chubais, he cannot expect anything good. Izvestia says that because “the President has been the first to speak about responsibility of Chubais, further train of charges is more or less predictable.”

According to the newspaper, now “the ill-wishers of Chubais, the unofficial leader of the Union of Right Forces and one of Russia’s most successful business executives, finally have a real pretext to ‘switch him off’ from both big-time politics and the economy.”

In any case, Izvestia says that even if “certain organizational conclusion” should they take place “will not solve the problems of Russian energy industry and moreover will not eliminate the main reason for what has happened, that is excessive wear of equipment renovation of which is directly dependent on accomplishment of reforming of the electric energy sector.”

Referring to “a source close to the Presidential Administration” Vedomosti does not rule out that Chubais may lose his job as CEO of RAO UES. “Otherwise the President would not have spoken so harshly about Chubais,” explains the source.

Vedomosti says that Motherland faction has already spoken in favor of dismissal of Chubais. Motherland member Ivan Kharchenko told Interfax, “We have stated for a long time that Chubais is not appropriate in the management of such large monopoly and the emergency situation that has occurred in Moscow only proves that we are right.” Senior Deputy Speaker of the Duma from United Russia Lyubov Sliska shares this opinion.

Semen Novoprudsky says in Vremya Novostei in an article under an expressive title “Prince of Darkness” that “The power failure in Moscow may become a political attempt to murder Chubais.”

According to Novoprudsky, the President received serious grounds for dismissal of Chubais, “the last manager of a ‘state-forming’ Russian natural monopoly who is not a person from Putin’s team, unlike Gazprom CEO Alexei Miller or a non-political figure absolutely loyal to the authorities like the head of Russian Railways Gennady Fadeev.”

Vremya Novostei says that now the question is how the Kremlin will decide to react at “extremely vulnerable condition in which its political opponent has found himself.” Although after defeat of Union of Right Forces at the parliamentary elections of 2003 quit the ranks of the party leaders and he did not release any statements that could be considered anti-Putin, he definitely “remains one of the prominent shadow figures of the right-wing liberal opposition.” Vremya Novostei notes that the authorities (especially their “security” part may be tempted to replace Chubais with “their own person” at the nearest annual shareholders’ meeting of RAO UES at the end of June. The newspaper adds that the state owns controlling interest in the energy monopoly and has a legal opportunity to pass such decision.

Meanwhile, for ideological opponents of Chubais the power failure may serve as a substantial argument for dismissing him from the leadership in the party on the eve of the congress of the Union of Right Forces, scheduled for Saturday, May 28.

Kommersant added that secretary of the political council of the Union of Right Forces Ivan Starikov started an attack on the leadership of the party in April. At the press conference in April dedicated to presentation of the leader of the Perm division of the party Nikita Belykh and secretary of the political council of the Union of Right Forces, Starikov announced that Nikita Belykh was chosen only “as cover for Leonid Gozman,” with Gozman being a “cover” and the right-hand man of Chubais.

Ivan Starikov emphasized that in reality Anatoly Chubais remained the real leader and the main sponsor of the URF.

Gazeta wrote that Starikov cracked down on the incumbent leaders of the Union of Right Forces for “servile and obsequious attitude to the authorities” and proposed the allies to move to “constructive opposition” obviously remaining loyal to Vladimir Putin. Starikov said, “The Union of Right Forces should become the support for the President in his struggle against bureaucracy. I think Putin has already started understanding his past mistakes.”

It turned out that speaking about the past mistakes of Putin Starikov meant abolishment of direct gubernatorial elections, the YUKOS affair, actions of special services in Beslan and “total control over the media.” Starikov also proposed shifting of the main part of the party work to the regions and obligatory continuation with Yabloko on uniting.

Thus, Gazeta concluded that Starikov “repeated the election theses of his main competitor Nikita Belykh practically word for word.” There is only one difference between the opponents, that is the attitude to the CEO of RAO UES and his leadership in the rightist party.

Starikov frequently said in the press (for example, in his extensive interview with Nezavisimaya Gazeta) that “interests of the party and Chubais have diverged” and Chubais should “either leave RAO UES and become the leader of the Union of Right Forces officially, or leave the party.”

Moreover, Starikov stated that he found a substitute for Chubais as the main sponsor of the party, “I have held talks with some businessmen. They are ready to provide support to the Union of Right Forces if Chubais leaves.”

Starikov refused to name the businessmen who expressed their wish to finance the Union of Right Forces.

The initiative of Starikov did not cause any special enthusiasm in the Union of Right Forces. Executive Director of the Rightist forces Union Oleg Permyakov told Gazeta frankly that “there are businessmen in Russia who are prepared to support a liberal party, but I do not think that any of them will dare to give money so simply for the sake of Starikov’s name.”

Leonid Gozman also expressed his doubt that Starikov has “serious support of business.” Secretary of the political council Leonid Gozman also stressed that “the role of Chubais is not confined only to financing of the party.”

Vremya Novostei presumes that even for the authorities resignation of Chubais from the post of the CEO of RAO UES is not very beneficial.

First of all, his dismissal will not solve the real problems of the electric energy sector, which are serious enough. In this case there will simply be no one to lay the blame upon for each new failure (and “they are very likely”).

The Kremlin is quite content with the situation when Chubais as the top manager of the largest state-run company cannot afford being an active political: it is obvious that after dismissal Chubais will receive such possibility.

Vedomosti quotes former Chief Engineer of Mosenergo Victor Kudryavy as saying that the blackout in Moscow demonstrated “the weakness of the entire grid structure.”

Kudryavy tells Vedomosti that energy consumption in the Moscow region is growing by at least 4% a year. Victor Kudryavy explained, “A shortage of capacity emerged in Moscow three years ago. It is possible to cover it with electricity from other regions, but it passes through old transformers. That is why accidents are inevitable.” The former Chief Engineer of Mosenergo explained that the largest blackout in the US in 2003 occurred for the same reason.

Kudryavy also assumes that one of the reasons for the power failure could be continuing reform of the electricity sector, in the process of which Mosenergo has been split into 14 companies, “Vertical integration has been disrupted. This may lead to emergency situations.”

Along with this, answering the question of Kommersant if Anatoly Chubais would be fired, or one of his subordinates, General Director of Lenenergo Andrei Likhachev said, “It is necessary not to fire Chubais, but to enable him to accomplish the energy reforms, because the failure has occurred at a substation built in the 1960s.”

Nikolai Tonkov, member of the Federation Council and Vice President of the Russian Union of Industrialists and Entrepreneurs, remarked that “nobody is protected from failures of the energy system.” Tonkov recalled how two years ago representatives of American energy industry visited Russia and “said that our energy system is an example for them, as the best in the world.” Nobody recalled Chubais then. “And now people are ready to use any technical failure for political battles.”

Valentin Zavadnikov, chairman of the Federation Council industrial policy committee, spoke in the same manner. According to him, “What has happened is an evidence of good work of the energy system and its protection, otherwise consequences would have been worse.” Zavadnikov remarks that to have guarantees against further shocks “it is necessary to accomplish the reform to make certain owner responsible for every specific facility with specific money.” However, Zavadnikov predicts that most likely “it will be politicians who are interested not the essence of the matter but in their own political ambitions who use the situation.”

Duma deputy from United Russia faction Alexander Lebedev spoke more decisively, “It is difficult for me to imagine how it is possible to use the card of the power failure now because everything has already been cleaned up in our country: there are no parties, there are no gubernatorial elections and TV is under control too. Probably news programs will be prohibited as well, so as not to provoke panic?”

Semyon Novoprudsky says in Vremya Novostei that “the main political lesson of the accident in Moscow is that stability of any government may be shaken without any “conspiracies of the opposition” or barbaric actions of terrorists. It is sufficient to have essential services infrastructure in a state of disrepair.” In Russia these systems are so dilapidated that the country is existing in “latent disaster mode.”

Vremya Novostei says that “all we can do is wait and see where the next breakdown will happen.”

Is Chubais to blame for this?

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