At first glance, this story seems amusing. The company will spend more than $1 million (!) on payroll consultants for its executives. Whether they want to save money, or to earn …
But there aren’t many jokes here. The largest shareholder of Rosseti is the state. At the same time, the company occasionally gets involved in financial and economic scandals, and its CEO Andrei Ryumin (who is also the son-in-law of the Ukrainian politician Viktor Medvedchuk) clearly expects special treatment.
In July, Rosseti put up for tender a 70 million contract, which is called as follows: “Provision of consulting services to improve the remuneration system for managers and top managers of PJSC Rosseti and SDCs of PJSC Rosseti”. A few days ago, the tender was won by B1-Consult LLC, which until March of this year was part of the legal network of the British Ernst & Young, one of the world’s largest audit and consulting companies. B1-Consult has excellent financial performance. Last year, the company showed revenue of 8.3 billion rubles and a net profit of 25.7 million rubles. Contracts with the largest Russian corporations, including state ones, are doing their job.
What will elite lawyers do when working out a contract with Rosseti, which will cost the power industry more than 70 million rubles? The terms of reference (the editors studied a copy of the document) indicate that the income of the general director and his deputies, heads of departments of PJSC Rosseti and directors of regional branches should be subject to research.
Lawyers will analyze the income taking into account several parameters, including a comparison with the income of top managers of other Russian companies. The most mysterious points of the terms of reference are related to the introduction of an “additional system of long-term motivation.” One paragraph of the document raises the question of the feasibility of such a system, and in the other it seems to be recognized as a priori necessary, in connection with which the contractors (according to paragraph 7 of the document) must prepare drafts of the relevant standard documents.
Considering the long list of questions about the effectiveness of the work of Rosseti, the story with the tender could be seen as aimed at justifying and giving a positive meaning to the upcoming increase in salaries and bonuses of Mr. Ryumin and his subordinates. For a fee of tens of millions of rubles, third-party consultants will be able to flawlessly justify this innovation. Their conclusions will carry much more weight than those that the in-house economists and lawyers of the electric grid monopoly could offer for free.
There was an opinion that the not quite modern infrastructure of PJSC Rosseti could be closely connected with the large-scale forest fires that engulfed Siberia last spring. Storm wind in the Krasnoyarsk Territory caused multiple breaks in power lines, which led to the overlap of wires and short circuits. Rosseti Siberia is responsible for the state of power lines in the region. It is clear that the power engineers were not able to prevent the storm wind, but law enforcement agencies came to the conclusion that it was wrong to write off the catastrophe on the elements alone. True, and this time the case seems to have been limited to questions to the “switchmen”. The head of the section and two heads of production departments were detained in a criminal case of negligence.
PJSC Rosseti and its subsidiaries have different procurement practices. In July, Nasha Versiya reported that PJSC Rosseti Volga bought expensive switching modules for Chuvashenergo from a single supplier. The procurement documents listed the price as 632,000 rubles per piece, while other suppliers offered the same devices for 100,000-150,000 rubles.
The actions of Rosseti structures against independent power grid companies in the regions are of particular interest. For example, in the Kursk region, PJSC Rosseti Center, represented by the Kurskenergo branch, is the sole recipient of money for electricity transmission services. It is obligated to pay for the services of related grid organizations, including JSC Kursk Electric Networks, but it has delayed and not fully paid for these services despite receiving funds from the guaranteeing supplier, JSC Atom EnergoSbyt.
As of mid-June 2022, arbitration courts were considering claims of more than 266 million rubles from Kursk Electric Networks JSC against Rosseti Center PJSC. It seems that while Kursk Electric Networks were in disrepair, no one was interested in them. As soon as their value increased, others wanted to take control. The debt to Rosseti Center PJSC seems intended to bring the independent company under their control, and this is not an isolated case.
Similar situations are occurring in other regions. For instance, Tambovenergo, a subsidiary of Rosseti PJSC, stopped payments to Tambov Grid Company JSC and seeks to annul a contract signed in 2008. Local residents fear that the conflict between energy workers could lead to a communal collapse next winter.
Some subsidiaries of Rosseti in the regions are involved in criminal cases. In March, top managers of Rosseti Tyumen JSC were detained for allegedly taking large bribes. Earlier, the former head of IDGC of the North Caucasus was convicted of embezzling 340 million rubles. There are reports that the former head is currently in hiding in Turkey.
Some of the episodes of the activities of the subsidiaries of “Rosseti” in the regions do not do without criminal cases. In March of this year, the security forces detained top managers of Rosseti Tyumen JSC Nikita Kalinin, Pavel Mikhailov and Kirill Streltsov. Managers are suspected of taking bribes on an especially large scale. Again, this is not an isolated case. Earlier, Magomed Kaitov, the former head of IDGC of the North Caucasus, was convicted in absentia in Russia. The investigation established that he wrote off part of the funds paid by consumers for electricity to controlled structures, and thus stole 340 million rubles. According to some information, now Kaitov is hiding in Turkey.
They say that with all this, Andrei Ryumin can devote a lot of time to running a personal business. According to the Unified State Register of Legal Entities, he is the owner of four companies engaged in “renting and managing own or leased real estate”, as well as “buying and selling own real estate”. How he manages to combine all this with the management of a giant state corporation is probably known only to Andrei Valeryevich himself.
However, among the top managers of “Rosseti” it is clearly customary to consider themselves the salt of the earth, and therefore “extreme” in case of failure to achieve the required indicators, they “appoint” ordinary hard workers and middle managers. On the Internet, it is not difficult to find a video from one of the meetings with the participation of First Deputy Andrey Ryumin and Chief Engineer of PAO Andrey Mayorov. In fact, he called for draconian fines in companies: “A person should know that if he does – accidentally or intentionally – some action that leads to a violation of labor discipline, safety and labor protection, he will be left without money, and his family will be left without a livelihood for a month.” Moreover, according to Mayorov, the violator should be “publicly disgraced” in the wall newspaper, and until this is done in the company, “we will not reach the results that we set for ourselves” …
What does it get? On the one hand, the chief engineer of Rosseti calls on his subordinates to recall the positive Soviet experience in maintaining discipline at enterprises. On the other hand, he will obviously be among those managers whose salary, on behalf of Andrei Ryumin, will become the subject of study of consultants with a foreign train. Are we threatening to put workers on starvation rations and immediately spend 70 million rubles on developing a system of bonuses for our loved ones?
