Regulators Proposed for Monopolies
20 July 1994
The government is working on a plan to protect consumers from being overcharged by state monopolies for their often unsatisfactory services, officials said Tuesday.
The Anti-Trust Committee announced that it is now finalizing a draft law that would set up new, impartial federal agencies to regulate the prices set by the country's transport, energy and communications monopolies. The move signifies a long-awaited break with the old Soviet practice in which federal ministries lobby for higher centrally-imposed prices in the industries they control.
The law confers on oil and gas pipelines, railroads, telephone communications, power engineering, ports, air terminals and some other industries the status of "natural monopolies," which are to be regulated rather than left to market forces.
Vadim Belov, deputy chairman of the Anti-Trust Committee, pointed out that in the absence of impartial regulation bodies, the natural monopolies have raised their prices faster than industries where competition exists. He said in the first six months of 1994, energy prices went up 1.8 times faster and railroad prices 1.2 times faster than the national average.
"The ministries defend the interests of the enterprises that answer to them," Belov said. "They lobby for higher tariffs and the consumer has no choice but to pay them. The new agencies will be able to regulate the prices in the interests of the consumer."
Belov added that promoting competition was not the answer for the "natural monopolies." For example, he said, only an expanded network of highways could compete with the railroads, but there is no chance that such a network will ever spring up in the vast Siberian forests.
He said that the new regulating agencies will be modeled after the U.S. Federal Communications Commission, which keeps that nation's phone service in line. They will be independent bodies, with their staff appointed for a three-year term.
To ensure fairness, the new regulating agencies will take all their decisions by vote.
"Of course, there will be problems with producers bribing agency officials to bring up the prices," said Natalia Tsukanova of the Russian Privatization Center, who helped work out the draft law.
"But if all decisions are passed by a vote, there will be a chance that not all officials will have received a bribe."
Belov said that no extra funds will be allocated to set up the new agencies, therefore some ministries will have to lay off people or lose them to the new agencies.
"If we're going over from socialism to something different, the role of ministries will have to be reduced," Tsukanova said.
The Communications and Railroad Ministries will be among those affected by the new law.
"As a private citizen, I'm for it, but as a representative of my ministry I have to be against it," said an official at the Railroad Ministry, who did not want her name used.
Belov said that apart from protecting consumers, the new draft law was aimed at attracting private investment in the "natural monopolies" by protecting investors from the arbitrariness of the monopolies' management.
"Say, if a private oil company is building a pipeline from its wells to a major pipeline, the regulating body will make sure they can connect at a reasonable tariff," he said. "The more clearcut the rules are, the more chance we have to attract investment."
The Anti-Trust Committee announced that it is now finalizing a draft law that would set up new, impartial federal agencies to regulate the prices set by the country's transport, energy and communications monopolies. The move signifies a long-awaited break with the old Soviet practice in which federal ministries lobby for higher centrally-imposed prices in the industries they control.
The law confers on oil and gas pipelines, railroads, telephone communications, power engineering, ports, air terminals and some other industries the status of "natural monopolies," which are to be regulated rather than left to market forces.
Vadim Belov, deputy chairman of the Anti-Trust Committee, pointed out that in the absence of impartial regulation bodies, the natural monopolies have raised their prices faster than industries where competition exists. He said in the first six months of 1994, energy prices went up 1.8 times faster and railroad prices 1.2 times faster than the national average.
"The ministries defend the interests of the enterprises that answer to them," Belov said. "They lobby for higher tariffs and the consumer has no choice but to pay them. The new agencies will be able to regulate the prices in the interests of the consumer."
Belov added that promoting competition was not the answer for the "natural monopolies." For example, he said, only an expanded network of highways could compete with the railroads, but there is no chance that such a network will ever spring up in the vast Siberian forests.
He said that the new regulating agencies will be modeled after the U.S. Federal Communications Commission, which keeps that nation's phone service in line. They will be independent bodies, with their staff appointed for a three-year term.
To ensure fairness, the new regulating agencies will take all their decisions by vote.
"Of course, there will be problems with producers bribing agency officials to bring up the prices," said Natalia Tsukanova of the Russian Privatization Center, who helped work out the draft law.
"But if all decisions are passed by a vote, there will be a chance that not all officials will have received a bribe."
Belov said that no extra funds will be allocated to set up the new agencies, therefore some ministries will have to lay off people or lose them to the new agencies.
"If we're going over from socialism to something different, the role of ministries will have to be reduced," Tsukanova said.
The Communications and Railroad Ministries will be among those affected by the new law.
"As a private citizen, I'm for it, but as a representative of my ministry I have to be against it," said an official at the Railroad Ministry, who did not want her name used.
Belov said that apart from protecting consumers, the new draft law was aimed at attracting private investment in the "natural monopolies" by protecting investors from the arbitrariness of the monopolies' management.
"Say, if a private oil company is building a pipeline from its wells to a major pipeline, the regulating body will make sure they can connect at a reasonable tariff," he said. "The more clearcut the rules are, the more chance we have to attract investment."
|
|
Tweet |
|
This article has no comments. Be the first to leave a comment |
Discussion
Comments
To post comments you must be registered
Comments via Facebook
Most Read
1.
City Mistakenly Plants Marijuana Field Instead of Lawn
After the city spread soil containing "grass" seeds around the Brateyevo metro station, a field of marijuana plants sprouted up instead of a lawn.
2.
Putin's Foreign Policy Goes on the Road
In a symbolic gesture, President Vladimir Putin on Thursday arrived in Minsk to pay his first foreign visit as head of state to controversial Belarussian leader Alexander Lukashenko.
3.
Prominent Businessman Shot Near FSB Headquarters
A prominent business leader was shot and wounded by three masked men in the heart of Moscow on Friday — just steps away from FSB headquarters.
4.
Ruble Hits Lowest Rate in 3 Years
The ruble dipped to a three-year low Thursday as oil prices fell further.
5.
European Debt Crisis Driving Workers East
Despite its inconveniences, Moscow has become a magnet for foreign job-seekers, as unemployment in Europe is hitting record highs amid the debt crisis.
6.
Superjet Flight Data Recorder Found Near Volcano Crash Site
Villagers have found the flight data recorder from the Russian plane that slammed into an Indonesian volcano three weeks ago, killing 45 people.
7.
Shark Repellers Fly Off the Shelves in Vladivostok
Following a series of shark attacks last summer, retailers in Vladivostok are seeing a boom in demand for a new must-have beach accessory — shark deterrents.
8.
China-Russia Airplane Venture Planned
United Aircraft Corporation and Chinese Commercial Aircraft Corporation plan to start a joint venture to develop long-haul aircraft.
9.
Duma Deputy Robbed at Ritzy Hotel
State Duma Deputy Gennady Gudkov was robbed at the upscale Hotel National across from the street from the Kremlin after a conference, Gudkov said Wednesday evening.
10.
BP Confirms Effort to Sell its TNK-BP Stake
BP has agreed to consider quitting its Russian joint venture in a move that could strip the British company of almost a third of its output and reverse the biggest investment in the Russian oil industry.
1.
City Mistakenly Plants Marijuana Field Instead of Lawn
After the city spread soil containing "grass" seeds around the Brateyevo metro station, a field of marijuana plants sprouted up instead of a lawn.
2.
McFaul Faces Kremlin Scorn Once Again
The Foreign Ministry assailed U.S. Ambassador Michael McFaul for comments the ministry said went "far beyond the bounds of diplomatic etiquette."
3.
Sweden Wins Eurovision; Grannies Take Second
Sweden’s Loreen won the Eurovision Song Contest in Azerbaijan on Sunday before an international TV audience of 100 million, days after angering Azeri authorities by meeting rights activists critical of the host country’s human rights record.
4.
Ukraine in Uproar Over Status of Russian Language
Ukraine's ruling party has triggered violent protests with a move to upgrade the official role of Russian, a sensitive issue opponents say will split the country.
5.
Vkontakte Founder Tosses 5,000-Ruble Notes Out Window
<p>The founder of the social networking site Vkontakte celebrated St. Petersburg’s 309th anniversary over the weekend by tossing paper airplanes carrying 5,000-ruble notes out a building window.</p>
6.
150 Detained at Anti-Kremlin Rallies
About 150 people were detained Sunday as scores of people gathered for a series of anti-government demonstrations in Moscow and St. Petersburg.
7.
U.S.-Russian 3-Year Multientry Visa Bill to Go to Duma
After months of delays, the government has finalized a much-touted visa agreement with the United States and drafted the corresponding bill.
8.
Putin's Final Act
Russians are usually patient and slow to rebel, but once they have turned on their leader, they don't stop until he is out.
9.
Kennan's Insight Into the Russian Soul
George Kennan is best known as the author of the containment policy, which served as the overarching principle informing U.S. foreign policy during the Cold War.
10.
Putin's Foreign Policy Goes on the Road
In a symbolic gesture, President Vladimir Putin on Thursday arrived in Minsk to pay his first foreign visit as head of state to controversial Belarussian leader Alexander Lukashenko.
1.
Hundreds of Arrests Set Grim Backdrop for Victory Day Celebrations
As Moscow gears up to celebrate its victory in World War II, 67 years ago Wednesday, the shadow of political conflict shrouds the capital as hundreds of arrests cloud Victory Day festivities.
2.
City Mistakenly Plants Marijuana Field Instead of Lawn
After the city spread soil containing "grass" seeds around the Brateyevo metro station, a field of marijuana plants sprouted up instead of a lawn.
3.
Russian Satellite Takes Highest-Ever Resolution Picture of Earth
A stunning 121-megapixel snapshot of the Earth was taken by a Russian weather satellite in what is thought to be the highest resolution picture of the planet ever taken from space.
4.
Bodies, No Survivors Spotted at Superjet Crash
Search and rescue helicopters and volunteers struggling through thick forest and mountainous terrain spotted bodies but no survivors on the Indonesian mountainside where a Sukhoi Superjet 100 crashed by the time darkness forced an end to the search Thursday night.
5.
Tabloid: Superjet Downed by U.S. Industrial Sabotage
A tabloid claims that Russian intelligence agencies are investigating the possibility that the U.S. military may have brought down the Sukhoi Superjet that crashed in Indonesia.
6.
Mysterious Photos Reveal an Unseen WWII
After the end of World War II, Paul Sadler returned home to Chicago with three German books and a photo album from the Dachau concentration camp.
7.
Furniture Magnate Shot Dead in Mercedes in Moscow Region
A 46-year-old furniture magnate was killed with six gunshot wounds to the head and chest early Sunday as he arrived in his Mercedes at his home in the Moscow region.
8.
Vladivostok Bridge Climbers Fined 300 Rubles Each
Three thrill-seekers who climbed two Vladivostok bridges earlier this week and took photos from the top were fined 300 rubles ($10) each for trespassing.
9.
New Cabinet Has Familiar Cast of Characters
President Vladimir Putin on Monday announced the makeup of the new Cabinet answering to Putin and Prime Minister Dmitry Medvedev, with three-fourths of the members having been replaced.
10.
Superjet Missing in Indonesia With 50 on Board
A dark cloud was cast Wednesday on the revival of Russia’s aviation industry when a Sukhoi-built Superjet 100 with 50 people on board disappeared from the radar screens of Indonesian flight controllers.


