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Key reading of Russia power reform bill seen Feb
By Ivan Rodin

MOSCOW, Jan 14 (Reuters) - A senior Russian legislator predicted on Tuesday that a controversial bill to liberalise the country's electricity industry would get unexpected amendments before a crucial second reading in February.

She did not comment on the substance of the government amendments. Legislators from the State Duma lower house of parliament said in December that parliament and the government had already agreed all amendments.

"We have received amendments from the government which will be reviewed by the council of the Duma on January 21, so the second reading of the electricity laws will probably be in February," First Deputy Speaker Lyubov Sliska of the lower house of parliament told journalists.

After the final consultations on the bill in December, Duma leaders refused to debate the bills, raising doubts about the Kremlin's will to reform the monopoly ahead of 2003 parliamentary elections and 2004 presidential elections.

Deputies worry that voters will punish them for approving the measures, which could lead to unpredictable dips and rises in price. But business leaders consider liberalisation crucial for attracting investment and modernising.

The Kremlin is cautious about moving too quickly. The government minister in charge of the reform said in late December that President Vladimir Putin had demanded the bills be "double checked" and warned against mistakes.

A fund manager who sits on the board of state power monopoly Unified Energy System said he believed the principles of the reform had backing in parliament.

"I understand from key decision makers they got strong support for moving forward but there are going to be some big changes on the details," Halcyon Advisors managing director David Herne said by telephone.


The government has insisted it would not back down on market liberalisation and the break-up of the state power monopoly, but opposition from some leftist and centrist deputies, who in the main want permanent price caps, has been shrill.

On Tuesday, the government newspaper published a law on tariffs which requires the government to set electricity and gas rates once a year in the state budget.

Passage of that law was set as a condition for approval of the electricity reform bills, which would clear the government to break up the state electricity monopoly Unified Energy Systems and liberalise prices.

Putin signed the law on January 10 and it comes into force on publication.

Government officials have insisted that the pricing law would go out of force when electricity prices are freed in 2005 as stipulated in the controversial packet of electricity laws.

(Additional reporting by Melissa Akin)

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