Rusal and RusHydro to slash construction costs at Boguchany Hydro

Interfax reported that UC Russian Aluminum and RusHydro will cut expenditures on construction work and equipment at the Boguchany Hydropower Plant by 40% in 2009 to 2010 saving about RUB 8 billion. A source familiar with the progress of these companies' Boguchany Energy & Metallurgical Association project told Interfax that Rusal made the proposal to cut costs at a meeting with government officials on Monday, and this suggestion was supported by representatives of RusHydro. He said that costs must be reviewed in light of the situation brought on by the global financial crisis. Investment in the completion of the hydro plant alone has totaled 21 billion rubles since construction was resumed in 2006, and the plant is now 75% completed. RusHydro said "In the current financial conditions, a great deal of attention is being paid to fighting the costs of investors and principal contractors."The BEMO project being carried out jointly by Rusal and RusHydro calls for the construction of the 3,000-MW Boguchany HPP and the 600,000 tonnes per year Boguchany Aluminum Smelter that will be the power plant's main customer. The first phases of the hydro plant and smelter were initially scheduled to come on line in 2010, and they were supposed to achieve design capacity in 2012. But in February it was announced that the opening of the smelter would be postponed until 2012 in light of the drop in demand for aluminum on global markets. Boguchany HPP, however, is still supposed to be completed on schedule, with initial capacity expected to come on line in 2010.