H1 2004 Savings from Competitive Procurement in Energy Repair Business of RAO UES Total RUB1.968 billion
Moscow. 7 July 2004. The savings as a result of competitive procurement of supplies, works and services for the energy repairs business of RAO UES enterprises in H1 2004 made RUB 1.968 billion. During the period, the regional energos and AO-power plants held over 4,600 reverse procurement auctions. The initial value of lots was RUB 10.430 billion, but the auctions made it possible to cut the prices at which goods were procured and reduce repair expenses.
Competitive procurement procedures are most effectively used by OAO "Kostromskaya TPP", OAO "Novocherkasskaya TPP", OAO "Nevinnomysskaya TPP", OAO "Orenburgenergo", OAO "Permenergo", OAO "Chelyabenergo", and OAO "Krasnoyarskenergo".
The program to procure supplies, works, and services for the energy repair businesses on a competitive basis has been implemented by RAO UES Holding entities over the past four years. Today, the use of competitive procurement is one of the key mechanisms ensuring cost control, accounting for 17% of the overall cost reduction in the Holding Company.
Under the annual competitive procurement program for the energy repair businesses of RAO "UES of Russia" for the year 2004, 8,697 tenders are to be held, with the initial value of the lots totalling RUB27.6 billion. It is anticipated that almost 60% of the funds allocated for the repairs will be used for procurement through the competitive tendering system. In 2003, under the annual program of RAO UES enterprises, RUB23 billion in funds was allocated for competitive procurement, which makes 53% of the total repair expenses, whereas the savings totalled RUB3 billion. In this connection, the Ministry of Economic Development and Trade of the Russian Federation said that the procurement system of RAO "UES of Russia" was the best among those of the country's state-controlled companies.
