RUSHYDRO named in fraud

RUSHYDRO named in fraud

According to and many other media the Russian Interior Ministry said that as much as $33.2 million in state funds were embezzled from hydropower company RusHydro. The Interior Ministry said RusHydro’s plant developer Gidrostroy hired companies that had little staff or equipment. It was also said to have signed false contracts with subsidiaries.

“The general contractor Gidrostroy signed fake subcontracting agreements with subsidiary organizations during the construction of the hydroelectric pumped storage power plant,” a ministry statement from state-run news agency RIA Novosti read. “The funds sent to their accounts were later cashed

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and embezzled.”

The preliminary damage was around $33.2 million in state funds. The ministry said it’s been examining RusHydro’s conduct for more than four years.

Russian President Vladimir Putin pressed Interior Minister Vladimir Kolokoltsev over the issue earlier this week. Putin said RusHydro’s top management “should be fighting with (their) teeth to recover these funds.”

RusHydro said it would decide on an appropriate response. It said it was preparing to file a lawsuit against Gidrostroy over the embezzlement charges. This just only one out of many financial scandals surrounding Rushydro. The most infamous one was discovery that Sayano-Shushenskaya Hydro, that blasted in 2009 with 70 people dead, was previous to the blast “serviced and repaired” by a “pocket” firm having no qualification and not actually performing the

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The Boguchanskaya Hydro under completion now, also evokes a lot of questions, with several regional officials involved in funding reservoir filling put under investigation in 2012. This giant power plant is being built without EIA and water management is done without any sensible environmental flow provisions and great damage to fish, local communities and transportation. In

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addition more than 100 historic and archeological sites were drowned at the reservoir bottom together with 3 million cubic meters of timber.

Rushydro is also producing “excess energy” exported from Russian part of Amur River basin to China for prices lower than those used domestically. Nether Zeya nor Bureya Hydro generating this energy observe any provisions for environmental flows and their operation leads to destruction of river ecosystems of Zeya, Bureya and Amur river itself. So this energy is exported at the expense of river health.

What is amusing after all, that such “respected” institutions as European Bank for Reconstruction and Development (EBRD) continue funding various Rushydro projects

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despite all these signs of deep mismanagement. Last week EBRD signed a loan for reconstruction of Sevan Hydro ( that killed Sevan Lake in Armenia in Soviet times) which belongs to one of Rushydro subsidiary firms. Previous loan given to Rushydro by EBRD in 2012 was dedicated to improving operations in the Far East, including export of electricity to China.





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