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RusHydro successfully completes stabilization of Zagorskaya pump storage plant-2

JSC RusHydro (ticker symbol: MOEX, LSE: HYDR; OTCQX: RSHYY) announces that it successfully completed the stabilization of the Zagorskaya pump storage plant (PSP) no. 2 after the incident a year ago. The stabilization of the powerhouse lays ground to the next phase of rehabilitation – eventual restoration of the plant.

The works have begun immediately after subsiding of the basement of the powerhouse that led to its partial flooding in the autumn of 2013. In particular, an isolating earth-fill dam was erected on tailrace side of the building. By June 2014 the area adjacent to the building has been completely drained. Also, temporary support was formed beneath the basement plate in order to prevent further subsiding. This was achieved by drilling holes and injecting special fluid: more than 20 thousand cubic meters of the fluid have been pumped in. Simultaneously the turbine room was cleared of the sand drifts. Also, the condition of the equipment and damage, inflicted to it, had been assessed and list of equipment to be replaced was determined.

The roadmap for restoration of the facility, containing several options, have been developed by Hydroproject Institute (RusHydro Group) and was appraised and approved by expert community as well as by a renowned engineering firm – Lahmeyer International. The final restoration plan will be chosen by Hydroproject Institute jointly with external experts and will be presented for approval to respective government agencies.

The incident on the Zagorskaya PSP-2 took place on September 17, 2013. At 22:13 the shift on duty noticed that the turbine room is getting filled with water. At this moment 15 employees have been working on the site. All of them left the building in an organized manner and nobody got injured. In the few following hours the turbine room and the adjacent area have been partially flooded. The primary survey of the site showed that the powerhouse has subsided and water came in through the deformation joints and intakes of half-finished water pipes. Further exploration, including with the help of drilling, identified caverns, formed by washout of soil. These caverns were immediate cause of the subsiding.

Two inquiry commissions – one formed by Rostekhnadzor (the Federal Service for Ecological, Technological and Nuclear Supervision) and another by RusHydro – have studied the incident and both came to the same conclusion about its cause: the washout of soil happened due to inefficiency of anti-filtration system provided by the plant’s design and located in the tailrace and beneath the pit of the construction site. This inefficiency is explained by particularities of the system design and insufficient exploration of the soil.

The information in this press release may contain projections or other forward-looking statements regarding future events or the future financial performance of RusHydro. You can identify forward looking statements by terms such as "expect," "believe," "anticipate," "estimate," "intend," "will," "could," "may" or "might," the negative of such terms or other similar expressions. We wish to caution you that these statements are only predictions and that actual events or results may differ materially from these statements. We do not intend to update these statements to reflect events and circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events. Many factors could cause the actual results to differ materially from those contained in our projections or forward-looking statements, including, among others, general economic conditions, our competitive environment, risks associated with operating in Russia, rapid technological and market change in our industries, as well as many other risks specifically related to RusHydro and its operations.
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