Cost management program
The Cost Management Program contains a breakdown of the measures of the Strategy/Long-Term Development Program for reducing operating costs in the medium/short term. The Board of Directors approved the Cost Management Program for 2018-2022.
The Program includes a set of production and economic measures that aim to optimize/reduce costs spent on raw materials and other materials, repair and operating services, payroll, administrative, management, and general business costs (lease, consulting, and information services, IT and communication, utilities, buildings and premises maintenance costs, etc.) as well as fuel costs and the internal needs of power plants. Particular attention was also paid to maintaining a high level of reliability and the fail-safe operation of assets.
Based on the performance results of the Inter RAO Group’s companies for 2018, the economic effect from implementing the Program’s activities amounted to RUB 3.1 billion, and the target benchmarks established for 2018 were reached.
The list of measures to be implemented in the Program’s focus areas is updated on an annual basis. The Board of Directors has now approved the Cost Management Program for 2019-2023. The economic effect from implementing the operating cost optimization measures meets the requirements of Directives No. 3p-P13 of the Russian Government dated April 16, 2015 and No. OD-11/16866 of the Federal Agency for State Property Management dated April 28, 2015 (reducing costs by at least 2-3 d is projected to reach RUB 15.6 billion by 2023.