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Dvorkovich-Sechin Rift Documented

Deputy Prime Minister Arkady Dvorkovich has publicized a letter he sent to President Vladimir Putin in which he openly disagrees with the electric power industry’s restructuring program as put forth by Putin’s protégé and Rosneft chief Igor Sechin.

In Sechin’s view, state company Rosneftegaz — which he is the chairman of and which holds stakes in Gazprom and Rosneft — should acquire shares in electric grid companies FSK and MRSK Holding to create a unified national grid company controlled by Rosneftegaz.

Dvorkovich stated in June that participation by Rosneftegaz in combining the grid companies was not approved, and that other companies besides Rosneftegaz — like VEB or RDIF—are interested in investing in the sector. The deputy prime minister said that the Sechin model goes against the interests of the country. “A combined national grid company as proposed by Rosneftegaz is essentially a privatization of state companies by means of extracting stakes from the pool of property belonging to the Russian Federation,” Dvorkovich said. This would require a change in legislation and reduce oversight and the ability to control issues relating to providing reliable power supplies, he added.

The deputy prime minister proposes merging FSK and MRSK Holding without Rosneftegaz’s participation and using the dividends Rosneftegaz owes the state to fund the government’s purchase of a share issue of hydropower monopoly RusHydro.

Vedomosti obtained a copy of Dvorkovich’s letter from his office, which said that its publication was necessary in order to avoid “incorrect interpretations and alterations of the meaning” since the matter was already being discussed in the media.

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