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. Last Updated: 07/27/2016

Mosenergo Gets Tough With Debtors

Mosenergo, the main electrical power provider for the Moscow region, said Tuesday that it is cutting off power to the Moskvich car plant and pledged to take similar measures against all of its debtors next year.

"The core issue is that Moskvich is simply lying to us," said Mosenergo's director, Alexander Remezov, at a press conference. "We have signed three versions of an agreement [with Moskvich] and they have not followed through on any of them."

Remezov said Mosenergo and Moskvich shook hands on a debt restructuring deal and a schedule of payments a few months ago, but Moskvich management has failed to keep its word.

He said Moskvich's debt has swelled to 54 million rubles ($1.95 million).

Moskvich, however, said it has been making a good-faith effort to repay its debt.

"We handed Mosenergo a payment of 7 million rubles on Dec. 15," Mos-kvich's spokeswoman Valentina Parashenko said in a telephone interview. "Some power has been switched off and it has affected some lines making car parts. But our main assembly line is running, and we still have heat," she said.

Remezov conceded that cutting off all of Moskvich's power would not be easy since one of its power lines is connected to the Moscow sewer system. A blackout could lead to sewage backups.

Mosenergo engineers are attempting to split that line and then shut off the part connected to Moskvich, said power company spokeswoman Vera Vinogradova.

Remezov said Mosenergo was taking drastic measures against Moskvich and other chronic debtors as part of a plan to lower its debt exposure by 5.8 billion rubles in 2001.

The plan also calls for Mosenergo to repay all of its own debt of 12 billion rubles.

Remezov said the successful execution of the plan largely depends on getting timely payments from Mosenergo's main debtors.

In addition to Moskvich, Mosenergo has threatened to pull the plug on Moscow metal plants Serp i Molot and Vils. Both plants have gotten reprieves by making timely payments on their debts, according to Mosenergo.

Mosenergo also lashed out Tuesday at several districts of the Moscow region that are on its blacklist.

"The Serpukhovsky district, for example, refused to sign a repayment agreement," said Remezov, adding that Mosenergo will proceed with plans to sever the area's power.

It was unclear how those measures might affect residents.

However, only a handful of the districts still owe Mosenergo money. Amid its yearlong drive to clear debts from its books, Mosenergo has sealed repayment deals with 52 of the Moscow region's 60 districts. Debts from clients have shrunk from about 17 billion rubles in May to 13.4 billion rubles in December.

While acknowledging that a blackout could lead to the closure of regional industries, Remezov said Mosenergo has no intention of easing pressure on delinquent clients.

"We realize energy plays a major role in the economic development of Moscow and its regions," he said.

But "one of our main goals is to lower our exposure to debtors," he said.