Russian govt optimizing monopolies' investment programs, setting priorities, abandoning other projects - economic development minister

MOSCOW. Nov 19 (Interfax) - The government has reached agreement with the Central Bank of Russia to optimize the investment programs of state-owned companies and natural monopolies, prioritize certain projects and possibly abandon others, Economic Development Minister Maxim Reshetnikov said at the State Duma.

High levels of lending in the monopoly sector have led to an imbalance in the distribution of loans within the economy, he said.

"Part of the work we are currently focusing on is the loans of state-owned companies and natural monopolies," he said.

"We have a distorted allocation of loans in the economy. Right now, we can see a significant expansion of loans among state-owned companies and natural monopolies," he said.

There are many infrastructure tasks for the country's long-term development, but companies that announced very ambitious plans for a different time continue to execute them, resulting in a sharp increase in this sector's share in the economy, he said.

"What does this mean? First, the share for the rest of the economy in the limited amount of loans has significantly decreased. These are the industries that generate the supply-side economy - food production, agriculture, engineering, tourism and so on. Secondly, we understand that the return on infrastructure investments comes much later than for these industries. Therefore, we are investing now, but the expansion of supply may come later than we would like," Reshetnikov said.

"From this perspective, we have agreed with the Central Bank to analyze and carefully work on optimizing the investment programs of our natural monopolists, trimming and prioritizing projects within these programs as much as possible, and possibly abandoning some of them," he said.