German industrial group Siemens will exit its Russian power-plant joint venture Interautomatika following a scandal that saw four gas turbines it sold for use in Russia turn up in Crimea, a region subject to EU sanctions on energy technology. Scarlett Cvitanovich reports.
These tarpaulin-covered lumps may look unassuming, but they are believed to be the centre of a scandal which has now seen an international energy company retreat from Russia. Sitting at a port in the annexed Ukrainian region of Crimea, they are understood by Reuters to be gas turbines made by German industrial group Siemens. It had sold four to Russia, who then delivered them to Crimea which is subject of European Union sanctions on energy technology. Russian President Vladimir Putin has promised the area - which his country controls - a stable power supply. Siemens says the move was behind its back, and is refusing to be involved. The Munich-based company now exiting its Russian power-plant joint venture, Interautomatika. It says that while it hasn't yet uncovered any indication of violations of export-control regulations the development constitutes a blatant breach of Siemens' delivery contracts, trust and EU regulations. It's also reviewing its collaborations globally regarding deliveries to Russia. But the battle isn't over yet. Russia still needs to turn the turbines on. According to Reuters data, no Russian company has ever got a Siemens turbine working without the help of the manufacturer. And that won't be forthcoming. Siemens has filed a lawsuit against its Russian customer over the delivery. And says it will do everything in its power to block the turbines installation and commissioning.