Siemens to terminate power equipment export deal with Russia firms

MOSCOW, Jul 21 (PRIME) -- Siemens will terminate licensing deals to sell power equipment to Russian firms after receiving “credible information” that four gas turbines that were to be installed in the south of the country were “locally modified and illegally moved to Crimea… constituting a blatant breach of Siemens' delivery contracts, trust and E.U. regulations,” it said in on Friday.

“Siemens has initiated the termination process of a license agreement with Russian companies in the area of equipment supply for combined-cycle power stations,” the statement read.

The company continues to “pursue criminal charges” against individuals at its local customer, Russia’s Technopromexport, and legal actions aimed at halting any other deliveries to Crimea “and ensure that any equipment that has already been dispatched is returned to its original destination, Taman,” Siemens said.

Siemens will also terminate its participation in Russia’s Interautomatika, in which it owns 45.7%. Reuters previously reported that Interautomatika was among the contractors installing Siemens’ turbines in Crimea.

The company also said it will temporary suspend power equipment supplies to Russian state firms under existing contracts until it implements additional control regime aimed to ensure that future movements of equipment takes place only after Siemens has confirmed that the equipment can be installed at the final and contractually-agreed destination.” “This will include Siemens controlled delivery and installation on the foundation by Siemens personnel. New business engagements in gas turbine power generation equipment in Russia will be solely executed by its majority-owned SGTT joint venture and its wholly-owned subsidiary, OOO Siemens, Moscow,” the company said.

Technopromexport said previously that it bought four turbine kits on a secondary market and Russian plants and engineering companies upgraded them. Industry and Trade Minister Denis Manturov said on July 11 that all the four turbines were produced in Russia with foreign parts.

Vadim Belik, Crimea’s minister of fuel and energy, said that the situation does not lie within the competence of the Crimean authorities and they will decline to comment.

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