UES Hires Top Banker To Reform

A Nizhny Novgorod banker with close ties to First Deputy Prime Minister Boris Nemtsov was named Tuesday first vice president of utility giant Unified Energy Systems. Boris Brevnov, chairman of Nizhegorodsky Bankirsky Dom, one of the largest banks in central Russia, will oversee the company's financial stabilization, reform and privatization, the UES press service told Interfax.

"He's got a good reputation in the city," said Vladimir Bulanov, a small-business lobbyist in Nizhny Novgorod, adding that Brevnov and Nemtsov were friends who worked and lived close to each other.

Nemtsov, governor of Nizhny Novgorod region until his appointment to the Cabinet last month, has been given the daunting task of restructuring Russia's bloated and inefficient so-called natural monopolies.

On Tuesday, the Federal Energy Commission ordered local power generators to start the process of realigning tariffs, which would quadruple charges to individuals while cutting industrial rates by 30 percent, Itar-Tass reported. The changes still must be approved by regional bodies.

Alexander Kazbegi, an energy analyst at Salomon Brothers in London, said the appointment may indicate that Nemtsov is serious about restructuring UES, but added: "We need to see what this guy's program is and what he's going to do there."

Another first vice president will be appointed soon to UES, but no other changes in the company's management structure are expected, Interfax said.

Under Bulanov, NBD has worked closely with the European Bank of Reconstruction and Development, which is planning to take a 15 percent equity stake in the Nizhny bank next month, NBD officials said.

Separately, the Russian government said Tuesday that it would offer 1 percent of UES for sale later this year to raise 220 billion rubles ($38.4 million).