Ulyukayev asking Medvedev to give Econ Ministry right to veto FAS tariff decisions - source
MOSCOW. Aug 24 (Interfax) - Russian Economic Development Minister Alexei Ulyukayev has asked Russia Prime Minister Dmitry Medvedev to give representatives of the ministry in the management of the Federal Antimonopoly Service (FAS) the right to veto tariff decisions made by them.
"We think that the rejection of the principle of collegiality in the making of key decisions by the regulator is impermissible and suggest strengthening the role of the representatives of the Russian Economic Development Ministry in the management of the regulator by giving them the right to veto in situations when such decisions contradict state economic policy," such a proposal was contained in the text of letter to Prime Minister Medvedev, a source familiar with the text of the document told Interfax.
Tariff and pricing policy at the federal and regional levels, as well as the effectiveness of the work of the natural monopolies, has a substantial impact on the competitiveness of the real sector of the economy.
Beginning in 2008, tariffs have risen about 92% for rail transport, 109%-127% for power generation (depending on consumer status) and 178%-211% for gas. In individual Russian industrial sectors, spending on goods and services from the infrastructure companies accounts for over 20% of the final cost of output.
Therefore, Ulyukayev said, the guideline for the natural monopolies must be formation not only of a new growth trend but a significant improvement in the quality of this growth, namely, reining in inflation by raising the efficiency of operations and cutting costs.
In the context of merging the FAS and Federal Tariffs Service (FTS), Ulyukayev urged avoiding an overconcentration of authority that could make approving and implementing decisions less effective.
Creation of a regulator with powers to form the statutory basis and to apply and supervise the fulfillment of the decisions approved, could concentrate all natural monopoly regulatory functions into the same pair of hands without the necessary grounding in economic policy challenges and trends.
The Economic Development Ministry believes that new draft FAS provision reduces to a formality the work of the collegial body that has the authority to approve tariff decisions. The government's authority over the personnel makeup of the body has been transferred to the FAS, whose contingent has been increased to a majority providing for unilateral passage of all decisions without consideration for the positions of the other government agencies.
"In other words, as the combined service's functional tasks and authority are formed, the trend toward monopolization of the natural monopoly regulatory function arouses unease," the source said, citing Ulyukayev's letter.
Ulyukayev proposes separating the pricing and policy implementation functions. In order to synchronize the direction of natural monopoly tariff regulation and the general vector of Russia's economic development, Ulyukayev calls on transferring those regulation-creating and macroeconomic functions to his ministry.
In order to ensure objective supervision over the decisions made by the combined agency and regional regulators and their correspondence with existing law, the supervision function should be carried out by a state body that is independent of the FAS.
