Moscow 16 April 2004. Results of the tender to modernize Kostromskaya TPP were released today in Volgorechensk, Kostroma Region. OAO "Power Machines" was named the winner of the tender held by OAO "Kostromskaya TPP". "Power Machines" submitted a plan for stepwise modernization of the power plant's steam turbines.

The Contract to modernize the turbines of OAO "Kostromskaya TPP" has been signed by Director General of OAO "Kostromskaya TPP" Nikolay Baldin and Services Director of Power Machines Group Alexey Barvinok.

The tender to select an equipment supplier for the modernization of power generators at Kostromskaya TPP was announced in August 2003. Besides OAO "Power Machines", among the participants of the tender were such leaders in the world engineering like Siemens (Germany) and Alstom (Sweden-Poland).

The tender was held in two stages. At the first stage, the participants submitted organizational and engineering proposals on the modernization of the high pressure cylinders of the four steam turbines at Kostromskaya TPP. At the second stage, the bids were analysed, including the final price and technological proposals. The Tender Commission consisting of representatives from RAO "UES of Russia", Kostromskaya TPP, the Ministry of Energy, Ministry of Industry, Science, and Technology of the Russian Federation decided that the proposal submitted by OAO "Power Machines" was the best.

The need to modernize the Kostromskaya TPP was due to the high depreciation of its generating facilities. The 4-year modernization will lead to a higher coefficient of performance of the plant's power generators and an increase in the capacity of each modernized turbine by 20 MW (to 320 MW). The project will make it possible to reduce the fuel consumption for electricity generation and increase the plant's efficiency. Modernization of the first generator will be completed by June 2005.

The tender will result in considerable reduction in costs needed to modernize the Kostromskaya TPP. The price bid by the OAO "Power Machines" (RUB220 billion) is much lower than the plant's own modernization estimates. It should be noted that the proposed modernization through replacement of the inner body of high pressure cylinders will cost much less than the replacement of the turbines.

Currently, the TPPs of RAO "UES of Russia" have 53 similar steam turbines, which were put into operation in the 1960-80s. Most of these generators will have reached the end of their useful life by 2010. As a result of the tender held by OAO "Kostromskaya TPP", RAO "UES of Russia" received information about the possible engineering solutions to modernize similar power generators, which will make it possible to shape the strategy for their large-scale modernization in the next few years.

Power Machines Group is Russia's leading producer and supplier of equipment for hydroelectric, thermal, gas and nuclear power plants, electric power transmission and distribution, and transport and railway equipment. The Group comprises OAO "Leningradsky Metallichesky Zavod" (LMZ), OAO "Electrosila", "Turbine Blades Plant" (ZTL), I. I. Polzunov Scientific and Development Association on Research and Design of Power Equipment (NPO CKTI) based in St.-Petersburg, OAO "Kaluga Turbine Works" (KTZ) in Kaluga, and the sales company "Energomashexport". The equipment produced by the Group's enterprises is installed in 87 countries throughout the world. Shares of OAO "Power Machines" are traded on the RTC Stock Exchange.