Reform of state-owned Russian utility Unified Energy Systems (UES), is unlikely to proceed in 2006 as originally planned, according to chief executive Anatoly Chubais.

The restructuring plans will see the break up the world’s largest power company into 14 wholesale power companies, six territorial generating companies and hydro company. As part of the reforms process the generating companies are to be privatised, a competitive power market introduced and the creation of a national transmission company.

However, Chubais has reportedly said that it will be ‘very difficult’ to complete the restructuring of the sector by the end of next year, leaving UES largely intact until at least 2007.

Meanwhile, Russia’s Duma passed the Gazprom reform bill at its first reading lifting a ban on foreign ownership of the gas giant’s equity. Second and third readings are set for early December allowing the reforms to be in place before the end of the year.