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. Last Updated: 07/27/2016

Railways, UES May Vie for Investment

Itar-TassYakunin speaking at a railways conference Wednesday, as Putin, Sergei Ivanov and other state officials listen.
President Vladimir Putin on Wednesday welcomed the idea of competition for investment between Russian Railways and national utility Unified Energy System.

"Constructive competition [is necessary], only we should not forget about the interests of the state," Putin told a railways conference.

Speaking at the conference, UES chief executive Anatoly Chubais invited Vladimir Yakunin, the head of Russian Railways, or RZD, to compete in attracting investment.

"I want to propose an idea to the head of Russian Railways," Chubais said. "UES has received 482 billion rubles [$19 billion] in private investments. ... I suggest to you that that we take part in a capitalist competition to see who can attract the most private investment."

Yakunin endorsed the idea but emphasized the need for equal partnership over competition. "I support this call for brotherly monopolies and accept this proposal," Yakunin said, Prime-Tass news agency reported.

But at a news conference later, Yakunin was more circumspect about the proposal. "The object of the competition has not been established. The outcome of the electricity reforms is that UES will cease to exist," he said, Interfax reported. "Who will I have to compete with?"

Yakunin also stressed the need to deploy investment effectively.

"You probably heard that Putin said attracting investment is a good thing," Yakunin told reporters. "But the question is what it will be used for."

Yakunin reiterated that RZD could float shares in its subsidiaries after 2010 as a way of raising funds for new railway lines, RIA-Novosti reported.

VTB chief Andrei Kostin said RZD could raise up to 300 billion rubles ($12 billion) if it floated a 20 percent stake.