Robin Pagnamenta, Healthcare Industries Correspondent
We've made some changes
to The Sunday Times
Gazprom, the Kremlin-controlled gas monopoly, wants to become a big supplier of gas to the NHS, but its plans have been attacked by health campaigners and politicians for having “potentially horrendous” implications for public health in Britain.
The Russian gas giant is trying to turn itself into a well-known name in the UK as an important supplier to households and businesses. Gazprom told The Times yesterday that it had “submitted a tender for various NHS projects” and would seek further such opportunities if they became available. A spokesman added that the contracts were mostly of fixed terms to supply local health authorities.
However, campaigners assert that the Kremlin’s track record of witholding gas supplies during political disputes with other countries, such as Ukraine and Georgia, raised serious questions about patient welfare. Health Emergency, an NHS pressure group, said that any such contracts would represent a “horrific gamble with people’s lives”.
“The NHS should avoid using Gazprom as a supplier if it is able to do so,” Richard Bacon, Conservative MP for South Norfolk and a member of the Public Accounts Committee, said. “Russia has proved it is not a reliable supplier of gas. When you have sick patients relying on its energy at their bedside, can you really trust Vladimir Putin to be their major supplier?”
Tim Yeo, another Conservative MP, said: “We should be on notice that reliability of supply and strict adherence to contract is not guaranteed in any business in which Mr Putin has an influence.”
Gazprom has already struck bulk supply deals with British department store chains, such as BHS, as well as with restaurants, such as Chez Gérard.
The NHS, which spends more than £100 million a year on gas, is one of the country’s largest single customers.
Gazprom Marketing & Trading, the group’s British subsidiary, said in December that it planned to increase its UK market share tenfold within three years.
NHS executives said yesterday that rising cost pressures meant that there was enormous pressure to find the cheapest energy supply deals available. Senior executives at one large English NHS trust with a turnover of about £300 million said that rising gas prices last year had led to an £800,000 spike over the usual annual cost.
A spokeswoman for the Department of Health could not confirm or deny whether Gazprom was in negotiations with the NHS Purchasing and Supply Agency (PASA), but said that she was not aware of any approaches by the Russian energy company.
“The NHS acquires 85 per cent of its gas centrally through PASA in an effort to get the best possible price,” she said. “At the end of 2005 the estimated cost of centrally procured gas for the NHS was £100 million a year. This is less than than 0.2 per cent of the total annual NHS budget.”
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I don't think that there is any problem for the NHS to get their Gas from Gazprom. I met the company in March and they made it clear that they are fully flexible in meeting the customer's needs. The NHS could sign a short-term deal that they could renew every x years to avoid any problems in the future. By switching to Gazprom, not only the NHS could save money but also promote energy efficiency.
Mani Yanika, Bristol Business School, UK
Gazprom Marketing & Trading is the UK-based energy trading and marketing subsidiary of Gazprom, which has the world's largest natural gas reserves. As a trading company we buy and sell energy - not just gas - and not all the gas we supply to UK customers comes from Russia.
Gazprom has been supplying gas reliably to Europe for over 30 years and has invested billions of pounds in pipelines and transportation systems around the world.
More competition in the UK gas market is good for the economy and good for consumers. We are not targeting the NHS but will respond to invitations to tender for projects.
Philip Dewhurst, Gazprom Marketing & Trading, London,
The situation has arisen over recent years whereby the gas available to those at the end of the Gazprom pipeline has been reduced as a result of primarily political action by Mosow. It would not be prudent to assume that this will not happen again. Any organisation the size of the NHS ought to have more than one supplier to avoid any repetion causing severe problems
Paul Brinklow, London, UK
The Tories might do well remembering that Russian gas has been scientifically tested to be far more efficient than UK gas. Due to the colder average temperatures that they experience, thermodynamic tests carried out on Gazprom gas shows that it burns a good 50-100 kelvin higher than the BG equivalent.
Prof. Rodney Munch, Northampton,
It is indeed a shame to see how some politicians can twist the truth to serve their own agenda. Gazprom had a perfectly good, legitimate reason to turn of the taps on the Ukranians. No company should be expected to supply free service to any customers or at a price that is not acceptable by the company providing the service. I work for a major fortune 500 company in the USA and we turn off service for non-payment every day. I do not hear any grumbling on that from any samrt politician. It is shameful for the developed country to pick on a developing country company when they display high ambition and practices market economy. A shame indeed. Past colonial skin might be difficult to shed, but at least they should be smart enough to understand that Gazprom has been a reliable provider long before they were walking on this earth. I should stop before I truly express my disgust for such naked aggression towards a Russian company. Let free market work.
Sarwar, San Luis Obispo,
Whilst I am not anti-russian I agree with the fears expressed by opposition MP's in so far as we have already seen what power the Kremlin has over it's controlled gas monopoly Gazprom by how they in effect held the Ukraine to ransom and reduced and even stopped supply. Would Gazprom adopt this stance on the NHS in the event of non payment to contratual terms or if they breached some other convenant?.
Mike , London, UK
Sir
Beats me why Mr. Blaire and Mr. Bush push the wagons of democracy and Human Rights and Equal Speech Rights for all and then when foreign companies of India or Mexico come to buy few pints of little of this and few kgs of little of that, you dont shout, but when Russia comes, KGB and CIA and FBI come in with SEC to check these with what happened to Enron not to be repeated or burning chips of Dell.. At times I think the politics and economics of UK need a complete overhaul. Leave Americans on one side Sir. You have Beetles and Sir Cliff better earners then the Bollywood
Thank you
Firozali A. Mulla MBA PhD, DAR ES SALAAM, Tanzania
If it will save the NHS money which can be redirected towards patient services I do not see the problem providing that there are firm penalties for any break in demand. I think the tories have revealed their ignorance over the workings of the deregulated gas market in the UK, it just shows how unfit for power they are, still.
Johnny, Leeds,
Stephen, how would you propose enforcing financial penalties on the Russian Government? Its not xenophobic to factor in the reliability of a supplier when considering the formation a contract. We wouldn't be having this discussion if the supplier in question was EDF or E.ON, as those companies are governed by EU law.
james, london,
Old story of supply and demand. Gazprom may have the best price but Mr. Putin has shown he cannot be trusted .
John, London, UK
There seem to be some very anti-russian views here. Providing that the contract are cast iron with major financial penalties for breaks in supply, I don't see a problem. We should be treating the russians like any other potential gas supplier not expressing outdated cold war views.
stephen charles, leeds, UK