Some New Buildings Lack Power

Moscow developers have scaled back requests to connect new buildings to the power grid, Russia's regional grid operator said last week, adding to evidence that the credit crunch has put construction on hold.

"Large enterprises have reconsidered their connection schedules," Alexander Chistyakov, head of MRSK-Holding, the operator of regional power grids across Russia, told a news conference, naming real estate developers in particular.

Global rating agency Fitch warned last week that developers have high levels of short-term debt and are particularly exposed to the tightness in the credit market.

Over the next few years, the government has pledged to liberalize electricity prices, letting them climb to market levels not only for every kilowatt-hour consumed but also for the transmission of power and connections to the grid.

Consumers of power have complained that the plan will spur inflation, making some power-intensive projects unfeasible.

But the Interregional Grid Companies, known by their acronym as MRSKs, have been lobbying hard for the change so they can pass their costs on to consumers.

All of the country's grid companies are majority owned by MRSK-Holding, a gigantic state-controlled corporation that debuted on the market last month with a capitalization of around $6.5 billion.