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President Putin links power crisis with management problems

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MOSCOW, June 4 (RIA Novosti) - Russian President Vladimir Putin said that the management of Mosenergo (Moscow's electricity utility), which was responsible for the recent power crisis, lacked professionalism. Putin spoke about the problems Russia had faced after the power crisis at the Security Council session in the Kremlin on Saturday, the presidential press service said. The power crisis hit Moscow, the Moscow region and some neighboring regions on May 24-25. The head of state spoke about coordinated work of technical services and federal authorities, including the Armed Forces, who had prevented government failures, although Moscow's center had suffered from the power outage.

Putin thanked everyone who had displayed courage and responsibility and helped prevent possible serious consequences.

The president pointed to frequent failures in electricity systems throughout Russia. "This is an evidence of systematic management problems," he said.

According to Putin, no one prevented RAO Unified Energy Systems (the Russian electricity monopoly) from appointing new people to key posts. "It is not enough to be a good economist, to be able to properly manage financial flows, shares, corporate procedures and real state for successful and effective management of this huge and vital sphere," Putin said. "One should be a professional, first of all."

The president said he would not listen to complaints of insufficient financing anymore. The RAO UES net profits totaled 55 million rubles (some $2 billion) in 2004, he added.

As the Industry and Energy Ministry did not establish proper control of the company's activities, we should check what the money was being spent on, Putin said.

The head of state also spoke about structure reforms in the energy sphere. Such reforms are reasonable if they improve the work, he said.

Putin was surprised with Mosenergo proposals to abruptly raise electricity tariffs. According to him, this is blackmail aimed at achieving group and corporate interests at society and consumers' expense.

Putin drew Prime Minister Mikhail Fradkov's attention to cynicism and obvious non-professionalism of the Mosenergo management.

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