MOSCOW, December 3 (RIA Novosti) – The Russian government has told four state-owned natural monopolies to slash their costs in half over the next five years, in cuts the companies have complained will be extremely difficult, Russian business daily Kommersant reported Tuesday.
Gazprom, Transneft, Russian Railways and Rosseti – the state monopolies in gas, oil pipelines, railroads and electric power distribution – must set out plans to reduce their capital and operating expenditures by at least 10 percent each year over 2013-2017, Kommersant reported.
The plans, laid out in a letter sent to the companies from Deputy Economic Development Minister Sergei Belyakov, must be submitted to the ministry by December 10, according to the paper.
The cuts, based on the companies’ spending in 2012, were ordered by Russian President Vladimir Putin on November 13, Kommersant said.
Rosseti representatives, who asked to remain anonymous according to the newspaper, confirmed the order, claiming it was too ambitious and would be tough to carry out.
Transneft told Russian business daily Vedomosti that the company has already slashed spending by 10 percent over the last two years, and further cuts would halt the company’s investment and business development.
Though the Economic Development Ministry had warned state monopolies that cost-reducing measures were on the way, the proposed cuts are harsher than previous estimates.
Deputy Economic Development Minister Sergei Belyakov said in October that several large state-owned companies should be ready to cut spending by 10 percent next year.
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