Semyon Dragulsky, director general of Russian Energy Efficiency Union

– Atomenergoprom has begun to actively influence price policy in machine building sector

I think that the key challenge for Atomenergoprom’s program to develop Russia’s nuclear power industry is the inflation-induced growth in the prices of equipment for nuclear power plants. The last contracts have shown what we are doing to reduce our costs and how effective our actions are.

The last and the biggest contract — for supply of equipment for Leningrad NPP-2 and Novovoronezh NPP-2 — was signed between Atomenergoprom OJSC and Power Machines OJSC. The cost of the contract is 40bln RUR. I think that this contract will help us to ensure optimal financial performance for the time being. In May 2008 we purchased equipment at almost the same price as in late 2007 even though the market price of the equipment has significantly grown. One more advantage is that the prices specified in the contract are not subject to revision. This is a big stimulus for the producers to do their work as quickly as possible.

The contract (a total of 14 turbine sets) is beneficial for both Atomenergoprom and Power Machines. This is the biggest contract Power Machines has ever had. This is a good stimulus for that company to enlarge and modernize its production (from 1–2 to 3–4 turbine sets a year), to enhance its efficiency and to reduce its expenses. This will certainly prevent growth in prices.

There is one more circumstance we cannot neglect. Atomenergoprom is beginning to create competitive environment on the home market with a view to make equipment prices more controllable.

Atomenergoprom is planning to buy equipment for new nuclear power plants on the basis of big tenders. As a result of the fair of nuclear equipment in Nizhniy Novgorod we have bought 4bln RUR worth of equipment for the 4th unit of Kalinin Nuclear Power Plant (here we saved over 1bln RUR). Under some other contracts we have managed to attain 50% discount. Such fairs are a good way to reduce costs and to make purchase procedures more transparent. Any company producing high-quality equipment may offer its services and get a good contract.