SOURCE: The St. Petersburg Times
DATE: Issue #1053 (19), Friday, March 18, 2005
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TITLE: Piotrovsky:
Level Misfit
Buildings
PUBLISHER: Staff Writer
TEXT: As City Hall plans to introduce new restrictions on what can be built in the city center, Mikhail Piotrovsky, the director of the State Hermitage Museum has produced a list of some of St. Petersburg's newest buildings that he says should be demolished.
"They damage the architectural-historic appearance of the city," Piotrovsky said Tuesday at a briefing on construction plans organized by information agency Rosbalt with the participation of City Hall officials.
Piotrovsky's list is almost identical to one made by City Hall's committee for the state inspection and protection of historic monuments, or KGIOP. It includes buildings located at 4 Pochtamtskaya Ulitsa, 60 Shpalernaya Ulitsa, a new retail center on Kazanskaya Ulitsa near the Kazan Cathedral, the elite residential complex Silver Mirrors and a new apartment block next to the Rostral Columns.
Participants in the briefing presented draft guidelines that City Hall could offer to construction companies.
Piotrovsky said that under the guidelines any project in the city center should be the subject of a broad public discussion and permission to build should be granted only in exceptional circumstances.
"A strategy to save the cultural heritage should dampen the ambitions and aggressiveness of developers," he said.
Alexander Margolis, head of the International Charity Foundation to Protect St. Petersburg-Leningrad, said City Hall should inspect the draft guidelines carefully to allow developers to operate in the central part of St. Petersburg, which is basically falling apart.
"Ninety percent of buildings in the city center need to be renovated, including 1,500 that demand urgent measures," Margolis said at the briefing. "Every city has the developers it deserves to have."
But KGIOP head Vera Dementyeva said City Hall has little control over developers because the federal government, which does not take the opinion of the city administration into account, is approving major projects in the historic part of the city.
As an example, Dementyeva pointed at the plans to build a new stage for the Mariinsky Theater that will introduce a modern look to the central part of St. Petersburg. The city government does not have enough power to limit even local developers, she added.
"It is wrong to introduce new elements into the existing architectural environment. We can only read through the list of what we have lost and be sorry about it. We can't introduce any measures [to stop it]," Dementyeva said.
Representatives of LenSpetsSmu, one of the developers named as having built buildings that Piotrovsky said should be demolished, dismissed the Hermitage director's list as gibberish.
"These projects were all approved at all levels of the administration," Sergei Gnibeda, deputy director of LenSpetsSmu, said Wednesday in a telephone interview. "It is not possible to demolish a building just because somebody doesn't like it. I don't like traffic jams, for instance. Does that mean that it would make made sense to demolish the Kirov Plant and build nice roads on Stachek Prospekt instead?"
"The complex that we are building next to the Rostral Columns is nice and doesn't damage the city in any way. There will be an additional hotel built for the city and 400 additional parking spaces, which are direly necessary," he said.
"With all my respect for such a well-known and respectable person, his words on this matter sound like gibberish," Gnibeda added. "I would ask who approved the elite residential building behind the circus, which I think is terrible. For some reason, Piotrovsky doesn't have anything to say about this project."
Meanwhile, Piotrovsky said that construction in the central city puts more strain on an overburdened infrastructure.
"The appearance of a new residential building in the city center raises questions about the social infrastructure and communal utility systems," Piotrovsky said.
St. Petersburg should learn from the experience of Europe, where it is impossible to start any projects without getting the permission of the residents of a neighborhood.
This had to be done when a branch of the Hermitage was opened in Amsterdam. In that case, residents gave their approval to the project, Piotrovsky said.
"Look at the way museums run their construction projects," he added. "These are examples of clever and careful construction in the center of St. Petersburg."
One of the most recent examples of construction companies raising the ire of residents in central neighborhoods is a project initiated by construction company Maximus to build a hotel in a courtyard at 15 Millionnaya Ulitsa. The developer plans to incorporate Nos. 13 and 15 into the project. A teenagers' club operates from both those addresses.
"Our club on Millionnaya Ulitsa has been going for more than 30 years," residents of the neighborhood wrote in an open letter sent to City Hall, the district administration and the Legislative Assembly.
"In this time a professional team of teachers has been formed. Several generations have been coming here with their children, who find activities they can get involved in. There are about 14 different studios and sections operating in the club. More than 250 children attend the club.
"We are protesting against the practice of selling sites of social and cultural significance that are located in our area and demand that legislation be drafted that will protect them," the residents wrote.
TITLE: Russian Envoy in Spat With Vilnius Paper
PUBLISHER: Staff Writer
TEXT: Boris Tsepov, the Russian ambassador to Lithuania, is embroiled in a dispute with the foreign ministry of the Baltic State after accusing the Lithuanian media of lying as rumors spread in Vilnius last week that he might resign.
The rumors first appeared in the major local paper Lietuvos rytas as Lithuanian President Valdas Adamkus declined Moscow's invitation to visit the Russian capital for 60th anniversary celebrations of the defeat of Nazi Germany in World War II. The paper said Tsepov had failed to fulfill Kremlin orders to ensure Adamkus agreed to visit Moscow.
"For several months, Boris Tsepov kept assuring the Russian Foreign Ministry that Lithuanian President Valdas Adamkus would come to Moscow. When President Adamkus announced that he wasn't going, the career of the ambassador was left hanging by a thread," the paper wrote.
Attendance at the celebrations has been a source of friction between the Baltic States and Russia. The states were annexed by the Soviet Union in 1940, but the Red Army was chased out by the German army in 1941, before the Soviet Union retook the states at the end of the war. The Baltic governments consider the years 1945 to 1991 as an era of occupation, a view Moscow rejects. Latvia's president Vaira Vike-Freiberga is the only president who has accepted the Kremlin's invitation.
The rumors published in the Lithuanian media about Tsepov were based on a telephone conversation on Monday between Lithuanian Foreign Minister Antanas Valionis, and his Russian counterpart, Sergei Lavrov, about a recent decision by the Lithuanian government to ban foreign diplomats from entering the state's parliament without permission. The decision was allegedly made after officials representing the interests of other countries had been lobbying Lithuanian legislators.
"Diplomats were trying to interfere in our internal affairs, suggesting which policies should be adopted and which should be dropped," Lithuanian media quoted Valionis as saying. "It looks as if we will have to not only ban them from walking into the parliament, but also that some of them will have to go back home."
Lietuvos rytas said three employees of the Russian embassy were expelled in February last year on suspicions of spying. It suggested that Oleg Ryabchikov, the new first secretary at the embassy, who was sent to Vilnius to replace the lost staff, was seeking contacts with deputies in the Lithuanian parliament.
Arturas Paulauskas, speaker of the Lithuanian parliament, has warned deputies to be more careful in their contacts with representatives of foreign diplomatic missions operating in the country, Rosbalt reported Wednesday.
Lietuvos rytas said the speaker has informed legislators that foreign diplomats are actively collecting information on political developments, the report said.
Lavrov told Valionis that Tsepov will continue to work in Vilnius and expressed his concerns that Lithuania "is engaged in an anti-Russian campaign."
Tsepov on Monday wrote an open letter to the editor of Lietuvos rytas on the Russian Foreign Ministry web site.
"Your paper does not avoid spreading false information and lies and for this reason Lithuanian citizens are justified in treating it as a symbol of a tabloid-type media. For this reason, you have no grounds to talk about respecting the honor of citizens from other countries, including their diplomatic representatives," Tsepov wrote.
Rimvidas Valatka, the editor of Lietuvos rytas, hit back with a statement printed in the paper this week.
"I personally - and I think all the editorial staff - are proud that the Russian ambassador has lost face and lowered himself to the level of a person from a flea market, accusing Lietuvos rytas of protecting the good name of Lithuania. This confirms that Lietuvos rytas has adopted the right policy," Valatka said.
The Lithuanian Foreign Ministry backed the editor. "I think Russian diplomats should care about freedom of speech in their own country and not make a fuss over what the Lithuanian media writes," said Valionis in comments on Tsepov's letter.
TITLE: Rodina Protests at Latvian SS
PUBLISHER: The Associated Press
TEXT: RIGA, Latvia - Hundreds of Latvian and Russian-speaking demonstrators squared off in a war of words and patriotic songs Wednesday as Latvian veterans of a German Waffen SS unit that fought against the Red Army remembered their fallen comrades.
Nearly 100 Waffen SS veterans and their wives, flanked by a heavy police presence that included horse-mounted police and canine units, made their annual procession through the streets of Riga's old city to lay flowers at the Freedom Monument, a rite that is criticized in the country and abroad annually.
Many of the veterans are in their 80s, and their numbers have steadily decreased each year, but the resentment lingers.
Soviet forces occupied the Baltic states in June 1940 but were driven out by the Germans a year later. The Red Army retook the Baltics in 1944 and reincorporated them into the Soviet Union. About 250,000 Latvians ended up fighting alongside either the Germans or the Soviets - and some 150,000 Latvians died in the fighting.
A second procession led by the Latvian nationalist group Klubs 415 drew the ire of supporters of the Russian nationalist Rodina party. The procession of about 200 people was met by nearly 100 angry Rodina supporters, many of whom were sporting yellow stars of David on their coats.
TITLE: IN BRIEF
TEXT: Kant's Name Honored
KALININGRAD (SPT) - Kaliningrad State University will be named after Enlightenment philosopher Immanuel Kant, who lived in Kaliningrad when it was called Koenigsberg, Interfax reported Wednesday.
"The idea to name the Kaliningrad University after Immanuel Kant arose last year during events celebrating the 200th anniversary of Kant's death," Interfax cited Andrei Klemeshev, the university dean as saying. "Today it has been approved officially."
Kant graduated from Koenigsberg University and taught there for 40 years.
Car Entry Fee Mooted
ST. PETERSBURG (SPT) - Governor Valentina Matviyenko has decided to promote the idea of charging cars for entering the historic center of St. Petersburg, Interfax reported Wednesday.
"Talks about paid entrance to the historical center of the city have been going on for quite a while now," Interfax quoted her saying. "It is necessary to get busy with this in a more active way, by starting to develop a system of parking lots on the edge of the city center. It is necessary to build multi-story and underground parking."
Massive Road Repairs
ST. PETERSBURG (SPT) - More than 4 million square meters of roads were repaired in St. Petersburg in 2004, Interfax reported Wednesday, quoting City Hall officials.
A total of 48,800 square meters of roads were renovated completely and 3.9 million square meters were patched, saidVladimir Antonov, head of City Hall's road committee.
A total of 2.6 billion rubles ($945 million) was spent last year on city roads, including 1.7 billion rubles from the federal road fund, 370.7 million rubles from city budget and 543.4 million from the federal budget, Antonov said.
Spain Plugs Eased Visas
MADRID (SPT) - Spain supports Russia's bid for a simplified visa regime with European Union countries and has asked the European Commission to conduct urgent talks with Russia on introducing more flexible rules, Interfax reported Thursday.
"Spain attracts 250,000 tourists from Russia every year, more than from any other country [of the European Union]. However, the Spanish visa regime is worse and more strict than ... those of France, Germany or Italy," Interfax cited Alberto Navarro, the Spanish state secretary for European affairs, as saying.
"These countries have negotiated separately on this matter without waiting until the European Union works out a unified policy on this point," he said.
No Transit Insurance
MOSCOW (SPT) - Russian citizens traveling transit through Lithuania do not need medical insurance under new visa regulations recently introduced by Lithuanian authorities, Interfax reported Wednesday.
At the same time Lithuania has delayed the introduction of mandatory medical insurance for Russian employees of the Kaliningrad railway from March 16, as it was originally planned, to April 1, according to the Lithuanian Consulate in Kaliningrad.
TITLE: St. Petersburg Ranks 175th in Safety Poll
PUBLISHER: Staff Writer
TEXT: Luxemburg is the world's safest city, while St. Petersburg ranks 175th in a list of the comparative safety of 215 cities, according to a survey published this month by Mercer Human Resource Consulting of London.
The researchers evaluated crime rates, the general level of stability in a country, and several aspects of external-relation policies, including visa regimes. Baghdad is listed as the most dangerous city, with Lagos (Nigeria), Abidjan (Ivory Coast) and Bangi (Central African Republic) close behind.
Moscow, which witnessed a chilling wave of terrorist attacks last year, does not rate much higher. In 198th place, the Russian capital is 23 points below St. Petersburg.
The country's two capitals, and Novosibirsk (177) and Kazan (179) were the only Russian cities evaluated in the survey.
Mercer's analysts set New York at 100 points, and the Big Apple served as the standard against which the other cities were measured. New York ranked 39 over all.
Helsinki was placed second, followed by Switzerland's Bern, Geneva and Zurich. Located just 300 kilometers from St. Petersburg, the capital of Finland is streets ahead of St. Petersburg in terms of safety. Tallinn, the capital of Estonia, came 73rd.
Kari Halonen, marketing manager of Helsinki City Tourist and Convention Bureau, said he was happy about the rating.
Commenting on the yawning gulf between Helsinki and St. Petersburg in the survey, Halonen mentioned the modest size of the Finnish capital compared to its Russian neighbor, which has about 4.5 million inhabitants.
"Helsinki, with a population of 500,000 is what we call a megapolis with human dimension," he said in a telephone interview from the Finnish capital. "Naturally, safety issues are more controlled."
Finland has strict, strong and transparent legislation that is efficient at preventing and punishing crime, he added.
"I suggest the Russians work on creating more consistent legislation, especially concerning corruption, and look for more efficient instruments to make people observe the laws," he said. "Also, things like traffic control must be tackled without delay."
Rashid Velemeyev, general director of St. Petersburg's Sindbad Travel International, disagreed with the city's low ranking.
"I wouldn't describe our safety levels as the highest, but I think we deserve to be somewhere around New York," he said.
Velemeyev said the British researchers may have reacted to cultural differences between Russia and the West.
"It is quite possible that owing to different traditions and styles of socializing, our guests don't feel as comfortable as they do in other parts of Europe," he said.
Velemeyev's opinion was echoed in Helsinki, although in a more critical way.
Halonen said the Finnish mentality is one of the key reasons behind the country's impeccable safety environment.
"The people of Finland have greater respect for others' privacy [than Russians do]," he said. "Human life is valued very highly. We also have a much calmer and more organized lifestyle. Our drivers, for example, show better courtesy on the road and respect pedestrians."
Sergei Korneyev, head of the Northwest branch of the Russian Union of Travel Industry, or RST, said St. Petersburg is one of the country's safest cities.
"This plays an important role in the city's attractiveness for tourists, and St. Petersburg deservedly has more tourists than any other place in Russia," Korneyev said. "The city is devoting more and more attention to security issues. Last year RST, the police and the local administration joined forces to organize a group that aims to improve security for the city's visitors."
Also last year, City Hall opened a center for the safety of foreign tourists at 14 Sadovaya Ulitsa.
"Qualified translators received and documented all complaints, which were subsequently handed over to the police," Korneyev said.
Sindbad's Velemeyev offered at least one practical step that he feels would improve the safety of foreigners. He referred to international programs such as one called LifeLine.
Under the program a traveler can call an emergency telephone number at any time of day or night and are guaranteed to get help.
"LifeLine cards aren't very common in Russia, and are mainly used by foreigners coming to work here," Velemeyev said. "But one could create an inexpensive package of services for ordinary tourists using the same system."
TITLE: 28 Killed In
Air Disaster
PUBLISHER: The Associated Press
TEXT: MOSCOW - Investigators said an airliner that crashed on Russia's Arctic coast, killing 28 of the 52 people on board, slammed into the tundra after banking too sharply before landing, but authorities couldn't immediately pinpoint the reason Thursday.
The An-24 two-engine turboprop aircraft crashed Wednesday near the oil port of Varandei on the Pechora Sea in the Nenets autonomous region .
Citing witnesses, officials said the 23-year-old plane's tail section was falling apart as the aircraft went down. It was Russia's deadliest civilian air disaster since suicide bombers brought down two passenger planes almost simultaneously in August, killing 90 people.
The Nenets region's deputy chief prosecutor, Alexander Sablin said the crash could have resulted from a pilot error or a technical malfunction. "It's impossible to name the exact reason yet," he said.
Another local prosecutor, Andrei Mukhin, said crew members who survived said the plane crashed because of a steep bank, but added that it wasn't immediately clear why it happened. According to the crew, the tragedy was caused by the plane's roll during approach to landing - the plane grazed the ground with its wing, crashed, broke apart and burst in flames," Mukhin said, according to the ITAR-Tass news agency.
The airliner was approaching Varandei airport in what the Transport Ministry said was clear weather when it banked and slammed into the ground about 5 kilometers short of the runway.
TITLE: Venediktov: Kremlin Plans Rival to Ekho
PUBLISHER: Staff Writer
TEXT: MOSCOW - The Kremlin hopes to dent the popularity of Ekho Moskvy radio, the country's last national independent broadcaster, through a new news radio station that could offer pro-government coverage, Ekho Moskvy chief editor Alexei Venediktov said.
The station in question is Russkoye Radio 2, which is owned by privately held Russian Media Group, a leading domestic radio corporation. Russian Media Group, or RMG, announced Wednesday that it plans to boost news coverage at the station to 12 hours per day, a change that would make it a direct competitor of Ekho Moskvy. Until February, Russkoye Radio 2 had a music-only format, playing Soviet-era hits.
"I know that the project to transfer Russkoye Radio 2 to a news format was discussed in the Kremlin administration," Venediktov said by telephone.
He said the radio could support the Kremlin during parliamentary elections in 2007 and the presidential vote in 2008.
RMG president and co-owner Sergei Arkhipov denied that the station's news would have a pro-Kremlin slant. "I do have friends in the Kremlin, but they are not involved in any affairs that relate to my business," Arkhipov said by telephone.
"And the Kremlin doesn't bother much about what I do," he said. "The project is purely commercial." Arkhipov acknowledged that Russkoye Radio 2 might dedicate a lot of airtime to coverage of the elections in 2007 and 2008 but said it would try to avoid bias. "We would never try to impose our opinion on anyone," he said.
The Kremlin press service referred calls to a deputy press secretary, and he was not available for comment Thursday.
Anna Kachkayeva, a media analyst, said it would be premature to speculate that Russkoye Radio 2 might emerge as a pro-Kremlin mouthpiece.
RMG has acted as a Kremlin ally in the past. Last year, it offered free concert tickets to young people who voted in the March presidential election - a gesture that came as the Kremlin was trying to increase voter turnout. President Vladimir Putin faced no serious rival in the election, and the Kremlin feared that the predictability of the election's outcome would discourage people from voting, potentially damaging the legitimacy of Putin's victory.
Russkoye Radio 2, which broadcasts on 107 FM, began increasing its news content in February and had brought it up to 35 percent of its airtime by mid-March, Arkhipov said. The target is 50 percent, he said.
Arkhipov said the decision to repackage the radio's content came after RMG conducted market research last year.
Ekho Moskvy is owned by state-controlled Gazprom but is the only national broadcaster that enjoys editorial independence in its news coverage and talk shows.
TITLE: IN BRIEF
TEXT: Scientist Goes to Court
ST. PETERSBURG (SPT) - Court hearings on a lawsuit filed by St. Petersburg-based sociologist Olga Tsepilova against Komsomolskaya Pravda started Monday, Interfax reported this week.
The sociologist complained about an article that suggested her research plans were probably linked to espionage when she had attempted last year to conduct a survey in a radiation-contaminated area near the Mayak storage facility for plutonium and weapons-grade uranium in the Chelyabinsk region.
In her lawsuit, Tsepilova demanded that her view on the matter, including her allegations that the Federal Security Service was behind problems in visiting the restricted area in May last year, be published in the daily.
She is also considering whether to continue other research projects that are likely to be blocked after the conflict with the FSB.
Dead Deputy Replaced
MOSCOW (SPT) - The mandate of the State Duma Deputy Kirill Ragozin, of St. Petersburg, who was drowned on a snowmobile in the Gulf of Finland this winter, will be handed over to another member of United Russia party, Interfax reported Tuesday, quoting party officials.
The mandate will be passed to Eduard Khamitov, who was also on the United Russia party list on the State Duma elections in 2003 and represented a regional group, Bashkortostanskaya at position No. 6.
Khamitov is a dean of Bashkortostan State Teachers' University.
115 Year Old in Oblast
ST. PETERSBURG (SPT) - Leningrad Oblast authorities are convinced that the world's oldest person lives in the oblast, Interfax reported Tuesday, quoting regional officials.
Governor Valery Serdyukov congratulated Maria Strelnikova, a resident of Vyborg, on her 115th birthday on Tuesday.
"We are proud of the fact that you live in Leningrad Oblast and the secret of your longevity lies in your love for people, your work and your ability to give praise at any moment," Serdyukov said in a letter to Strelnikova.
"We had been saying happy birthday to Maria Petrovna [Strelnikova] every year, but at the beginning of this year we have found out that she's the oldest person on the planet," Interfax quoted Sergei Chernyshev, head of Vyborg district administration, as saying.
Bear Remains Nameless
ST. PETERSBURG (SPT) - The management of the city's Leningrad Zoo has not been able to determine the sex of a polar bear cub and therefore name it because its mother has kept it out of sight in a lair, Interfax reported Tuesday.
"Our technical staff suggest that the cub is a male," Interfax cited Boris Topolyansky, the zoo's spokesman, as saying Tuesday.
But this was by no means certain because "the careful mother is constantly looking after the cub, not letting it get into adventures of any kind," he added.
Ropsha Renovation
ST. PETERSBURG (SPT) - The Ropsha palace located in the Leningrad Oblast, which has been a ruin since World War II, is to be renovated and used by the federal government, Interfax reported Tuesday quoting oblast officials.
A concept for the reconstruction is to be prepared for the oblast's committee for architecture and construction planning and is being prepared by the firm Raritet.
The palace, located 49 kilometers southwest of St. Petersburg, was built in 18th century.
TITLE: Gref Says Gazprom Will Get Rosneft
PUBLISHER: Staff Writer
TEXT: MOSCOW - The Kremlin's plan to merge Gazprom and Rosneft has been agreed on in principle and Yuganskneftegaz will remain a separate state-controlled company, Economic Development and Trade Minister German Gref said Wednesday.
"In the first half of the year the task is to conclude the merger and the scheme is worked out in principle," Gref told journalists late Wednesday on the sidelines of a Moscow business conference.
"Rosneft will go to Gazprom and Yugansk will be a separate state company," Gref said, adding that he did not know what the new company would be called.
Rosneft and Gazprom have clashed publicly over the terms of the merger, while officials have made a host of contradictory statements, leading many investors to conclude that a split exists at the highest levels within the Kremlin over the merger, which has been complicated by Rosneft's purchase of Yukos' former main production unit.
The merger - initially supposed to be concluded last year - is part of the Kremlin's plan to build Gazprom into an even bigger player on world energy markets, while gaining formal control over the gas giant, the first step to liberalizing ownership of its shares.
Gref's remarks came hours after Sergei Oganesyan, head of the Federal Energy Agency, was quoted by news agencies as saying that the outline of the merger had been agreed on and that the model supported by Gazprom CEO Alexei Miller would be the plan used.
"In all likelihood, it will be the one outlined by ... Miller," the agencies quoted Oganesyan, a former Rosneft vice president, as saying. "Much depends on the Economic Development and Trade Ministry, and if [Gref] confirms that the structure of the deal will be approved in the course of a week, then he knows what he is talking about."
Igor Shuvalov, a senior economic aide to Putin, told reporters in Moscow late Wednesday that the Kremlin wanted the merger to be completed in the first half of the year.
In a wide-ranging speech to the Association of European Business on Wednesday, Gref sought to reassure investors that the government was committed to liberal reforms and that foreigners would not be excluded from the natural resources sector.
Gref's comments came after he brought up investors' concerns about corruption at a meeting with Putin last Thursday at his Novo-Ogaryovo residence.
"We often hear that we need to adjust economic policy in the country because supposedly the liberal reforms have not given the results we expected, but the statistics show exactly the opposite," Gref said. "The more liberal the economic policy, the better the results we have received; the more radical we have been, the better the results; and the economy has thanked us with accelerated growth."
He said there was no ban on foreign companies investing and developing the country's oil fields.
Gref's speech appeared to be at odds with comments made last month by Natural Resources Minister Yury Trutnev, who said only companies with at least 51 percent Russian ownership would be allowed to bid for exploration and development licenses. The Cabinet is set to discuss the draft subsoil law Thursday.
In his speech Wednesday, Gref said the development of the country's natural resources "demand a colossal amount of investment - hundreds of billions of dollars - and if we bring in limits on foreigners then we are automatically creating a limit on growth rates. This is completely contradictory.
"There is a provision in the bill about the possibility of deciding to limit foreign participation in strategic deposits, but that is in no way a ban on foreigners wishing to participate in working on natural resource deposits."
Gref said interpretation of the bill turned on what were classed as "strategic deposits," and said he thought it was a "narrow" band of deposits, such as uranium deposits or deposits in certain geographical areas. He said the Sakhalin-3 oil project could not be a strategic deposit, as foreigners had already been allowed to work on Sakhalin-1 and Sakhalin-2.
Fielding questions from major European investors and small businesses, Gref also hammered official corruption and said the government would work to make Russia a better place for foreign investors. He said Putin had asked his ministry to analyze the implementation of laws affecting small businesses, and said Putin had promised that the Prosecutor General's Office would see if there were grounds to go after officials who abuse the law.
TITLE: IN BRIEF
TEXT: Siemens Gets Arctic Gas
MOSCOW (Bloomberg) - Gazprom and Siemens, Germany's biggest engineering company, will expand their cooperation to work on developing an Arctic gas field and a pipeline across the Baltic Sea to expand Russia's gas exports to Europe.
The agreement was signed by Gazprom CEO Alexei Miller and Siemens CEO Klaus Kleinfeld in Munich, Gazprom said Wednesday.
The companies will work on the North Europe pipeline, a $5.7 billion link between Russia and Germany to carry gas along the floor of the Baltic Sea, and other unspecified pipelines outside Russia.
The pipeline is likely to start operating in 2010, Miller said last month, three years later than first planned.
State Losses in Tax
MOSCOW (Bloomberg) - The Russian government lost 75 billion rubles ($2.7 billion) from corporate and personal income tax evasion in 2004, Interfax news agency reported, citing estimates by Ilya Kucherov, head of the legal department at Russia's Interior Affairs Ministry.
Last December, Russia confiscated and sold Yuganskneftegaz, formerly the biggest oil producing unit at Yukos, to compensate in part for $28 billion in back taxes that the government said Yukos didn't pay in full.
The company has repeatedly denied the charges.
Oil Firms May Pay Fee
MOSCOW (Bloomberg) - Russia, the world's biggest supplier of oil and gas, may charge companies a monthly fee determined by auction to extract minerals on its territory, instead of the mineral extraction tax.
Russia had been talking about setting a differentiated mineral resource tax based on how difficult it is too extract the minerals and other factors that are "too subjective," said Natural Resources Minister Yuri Trutnev at a press conference Thursday in Moscow.
"It is possible that, instead of having the government determine the payment, companies will decide" when they bid for fields, Trutnev said. Trutnev did not say when the tax may be changed.
The differentiated resource tax was proposed to attract investment in deposits that are too expensive to develop under the current tax regime.
CB Reserves Hit Record
MOSCOW (Bloomberg) - Russia's foreign currency and gold reserves rose to a record $136.4 billion in the week to March 11, as export revenue is boosted by high prices for oil, natural gas and metals.
The reserves rose from $134.4 billion in the previous seven-day period, gaining for the fourth straight week, the central bank said in an e-mailed statement Thursday.
Russneft Buys Stations
MOSCOW (Bloomberg) - Russneft, an oil producer, will buy the Grand chain of filling stations, which is worth at least $100 million, the newspaper Vedomosti reported, citing people close to the transaction.
Grand operates about 90 filling stations, about two-thirds of them in Moscow and the rest near the Black Sea resort of Sochi, Russia, the newspaper reported Thursday.
Grand, which is not affiliated with any Russian oil producer, used to buy most of its gasoline from Slavneft, an oil producer and refiner, once headed by millionaire Mikhail Gutseriev, who now owns Russneft, Vedomosti said.
TITLE: Vodka Maker Veda Plans IPO
PUBLISHER: Staff Writer
TEXT: St. Petersburg vodka company Veda plans to launch an initial public offering (IPO) on the Russian stock market as soon as it fulfils the necessary transparency requirements, the company said Tuesday.
The transformation of the country's second-largest vodka producer is part of a number of structural changes it announced at a news conference two months after the tragic death of Veda's founder and State Duma deputy Kirill Ragozin.
"Our aim is to become a public company. We are ready to go through all the necessary procedures to prepare for an IPO," Veda's main shareholder Alexander Matt said.
Until now Veda, the country's No.2 vodka producer as well as real-estate developer and packaging manufacturer, belonged to only two shareholders.
Matt said he owned between 33 percent and 51 percent in different business divisions of the company, with the rest being Ragozin's stake.
Since his death, Ragozin's share package has been inherited by a group of beneficiaries represented by Ragozin's father Yosif Shapiro. The spreading of the shares among several people will not lead to the holding being divided, Shapiro assured.
"The beneficiaries are united in their belief that the holding must exist, grow and develop," Shapiro said Tuesday.
The names of the beneficiaries will not be made public until the end of a six-month legal procedure, he said.
During the four to six years needed to prepare for an IPO, Veda's shareholders have signed an agreement to abstain from selling shares or changing the structure of the company.
Some structural changes, however, have already been made to compensate for the involvement and energy Ragozin was said to invest in his management.
Shapiro and Matt said they appointed three business division heads to oversee each market sector that the holding is involved in, and to maintain aggressive market activity.
PROGRESS IN DIVISIONS
The newly appointed head of alcohol manufacturing Zhanna Bulavchik, who was previously the commercial director of the division, said she aimed to boost sales by 15 percent this year.
The growth is expected in both the strong alcohol segment, where Veda owns brands such as Russky Standard and Vals Boston and also among low-alcohol drinks, represented by the Alpix cocktails brand.
"We have six percent of the alcohol market, and this year we aim to increase our share to ten percent," Bulavchik said, naming market legalization, globalization and the consumer tendency to pick national over local brands as the top growth factors.
In 2004 the company's turnover included 5.5 billion rubles ($200 million) in vodka sales and 184 million rubles ($6.6 million) in low-alcohol drinks sales.
In the real estate sector Veda's major project is the $310 million development of a pit near Moskovsky Vokzal rail station into a retail and entertainment center.
"We have met with vice-governor [Yury] Molchanov and our plans to develop the center [in place of the pit] have not changed," said Sergei Pashigorov, the new head of the real estate division.
Veda management said financing is expected to come from state-owned Sberbank, a long-term partner of the company.
Among long-time planned projects was the construction of two alcoholic drinks factories, one in Novgorod and one in Mordovia. After Ragozin's death the plans had been stalled at the stage of negotiations with local authorities. Veda's shareholders maintain that the delay is part of standard business routine.
"There are paperwork and logistics procedures that need to be observed," Matt said.
Some industry onlookers cite the reason for delays as the loss of Ragozin's personal influence with regional and city officials and business connections.
"At the very least, Veda's business partners may 'lose the habit' of working with the company," head of Becar real estate group Andrei Tetish said Wednesday in an interview with business daily Vedomosti.
TITLE: Finns Blame Customs
PUBLISHER: The St. Petersburg Times
TEXT: Finnish construction materials firm Maxit Oy Ab said it cannot trust Russian customs to estimate the correct duties efficiently and honestly, Interfax reported Wednesday.
The company stated that since February 24 customs have begun to "correct" the value of goods being exported to Russia, at times changing the valuation price by as much as 44 cents per kilogram, which altered the duties by as much as 300 percent.
"After all our complaints to the St. Petersburg customs service, all we have heard is a reference to 'rules from above,'" the Finnish company said in a statement, Interfax reported.
The company said that goods marked at discount prices were raised to their full market value by the customs. Discounted prices are certified and agreed with by the Finnish Chamber of Trade, Maxit said.
"The lifting of the discounted price to its market value has put off many Russian dealers too," the statement said.
TITLE: IN BRIEF
TEXT: Transneft Ups Capacity
LONDON -Transneft, Russia's oil pipeline monopoly, may expand the capacity of its Baltic oil pipeline to the port of Primorsk near St. Petersburg to the planned maximum of 60 million tons a year (1.2 million barrels a day) by April 2006.
"Transneft plans to somewhat speed up completion of the project," Chief Executive Semyon Vainshtock said Wednesday in an interview posted on Transneft's web site.
The company's board of directors had earlier decided the third stage of expansion should be completed by July 2006, Vainshtock said in the interview.
The country's oil output has surged about 50 percent since 1999, straining the capacity of pipelines. Russia, the world's second-largest oil supplier after Saudi Arabia, more than doubled crude loading last year at Primorsk port, its largest port for oil exports, after expanding pipelines that pump Siberian oil to the terminal.
Hunting for Investors
ST. PETERSBURG (SPT) - The state plans to raise 30 percent of the financing for the $7.5 billion toll highway linking Moscow and St. Petersburg from private investors, the government said Wednesday.
Speaking at a news conference in Moscow, Oleg Shakhov, head of the Transportation Ministry's investment department, said investors will be given contracts for building roadside services such as restaurants, gas stations and motels, Bloomberg reported.
"We've been talking about toll roads for a long time," Shakhov said.
"Today's state financing is not enough to reach our goals in developing transport infrastructure. State-private partnership is one of the ways" to complete projects, Bloomberg reported.
TITLE: Unimilk Bets on High Sales in Drinking Yogurts
PUBLISHER: Special to The St. Petersburg Times
TEXT: Unimilk, the country's second largest dairy producer, launched Tuesday a new premium class drinking yogurt line in St. Petersburg as part of the company's $15 million investment program.
The production, under new brand Liasson, started at Unimilk's St. Petersburg factory, Petmol, on Tuesday and should reach 12,000 packs an hour capacity, Andrei Beskhmelnitsky, general director of Unimilk, said at the launch briefing.
"Liasson is one more brand we have launched in St. Petersburg," Beskhmeknitsky said, adding that the company plans to nearly double its distribution points to promote the new product.
The introduction of a new line in drinking yogurts looks timely, say industry players, as a notable drop in traditional dairy products has run in contrast to success in new segments.
At the end of last year, Aksel Hartmann, general director of dairy producer Ehrmann Russia, said his company was planning to invest 5 million euros ($6.7 million) into drinking yogurt production in Russia.
"Consumption of regular yogurts in Russia is on the decline, evidently due to the habit of Russians to drink milk, kefir and other milk drinks. The consumption of drinking yogurts, however, is growing quickly," Hartmann told Kuranty newspaper.
An analyst from dairy distribution company Milkom added that Unimilk's launch was a significant move and their planned production could compete for a handsome market share.
"The line capacity [volume] is a fair one that may provide serious competition to imported and non-locally produced products," the analyst said Wednesday, asking not to be identified.
Unimilk's main competitor, the country's largest dairy and juice manufacturer Wimm Bill Dann, was less impressed. Although the company's spokesperson Yeleonora Chernetskaya would not comment, a manager at the company's analytical department who asked not to be identified estimated Unimilk's production volume as only "average."
The dairy market has seen an energetic resurgence in recent years, with widespread advertising from all major industry players, especially Wimm Bill Dann and Danone.
Emerging dairy products such as milk and juice mixers and drinking yogurts have gained in popularity as people look for more health-conscious products.
"Natural ingredients, live bifido culture and similar components attract health-conscious customers," said Pavel Galant, commercial director of Classic, an importer and distributor of dairy products. "Heat-treated regular yogurts usually lack those properties."
Unimilk's new brand Liasson will offer drinking yogurts in four flavors, with berries and fruit pieces, yogurt-juice mixes and in the future, cottage cheese desserts.
St. Petersburg's Petmol is the largest of 12 dairy factories owned by Unimilk in Russia and the Ukraine.
The company's turnover is estimated at about $360 million a year. Unimilk also operated other dairy brands L'Actual, Prostokvashino and Tyoma.
TITLE: Democrats' Divided Path to Unity
TEXT: Many see the problem of uniting Russia's democrats as one of future party lists. Ideological issues are either completely ignored or dismissed as obvious. This is dangerous: If democrats do not agree on their ideology beforehand, they risk splintering later, perhaps permanently. So what kind of ideology do we need?
In the brief period from 1989 to 1991, the democratic movement in Russia was a unified political force battling the communist regime under the auspices of Democratic Russia. It then split into two parts represented on one hand by Democratic Choice of Russia and the Union of Right Forces, or SPS, and on the other by Yabloko.
The main issue in creating a unified democratic party is not how fast it should happen, but what party should serve as its basis. Yabloko is the only democratic organization today that meets the requirements of the law on parties. It criticized the shady privatizations of the 1990s instead of apologizing for them. It is not responsible for creating the oligarch system or for promoting the regime of President Vladimir Putin born of that system.
We have to understand that a third democratic way does not exist in Russia. Nothing of the sort has emerged in the last 15 years. This means democrats will have to pick from what is already there. It doesn't really matter who will lead them. The first thing we need to agree on is where the ship is headed, not who is at the helm.
Of course, we could just cast aside the differences between the two parties' positions. This is what independent State Duma Deputy Vladimir Ryzhkov has suggested, that we unite exclusively in protest against the Putin regime on a general democratic platform. The approach means starting from scratch and using a small party with the proper documents as a basis. But a union of this kind would be doomed to an even shorter life span than Democratic Russia.
The appearance of former Prime Minister Mikhail Kasyanov on the scene signaled the opening of a new political front. Backing him are exiled oligarchs hungry for revenge and those suffering from the Putin regime at home. They have great political potential, as they have an undeniably powerful resource - money. Yet their negative reputations due to the questionable history of their capital makes them vulnerable. Thus, their political goal of getting six or seven superwealthy people in power has to be even more carefully packaged as a democratic movement. They desperately need a front man from an established party, ideally from a united democratic party.
Though they are united against the Kremlin, democrats are not of one mind about the oligarchs, which is why they failed in the 2003 Duma elections. Parties gave various replies to the question troubling those Russians offended by the redistribution of huge amounts of property to a handful of individuals: "What do we do about the oligarchs?" The party of power threw Mikhail Khodorkovsky in jail, Rodina wanted them to pay, and the Communists stuck to the same line as in 1917. SPS refused to even ask the question, while Yabloko could not explain its idea to voters of compensating the public for losses related to privatization. If democrats can't make their relationship to oligarchs clear, they risk falling into the same trap again.
The temptation to take money from oligarchs is similar to the desire to get support from the Kremlin. Both kinds of "help" lead to a loss of political independence. They discredit both the party and democracy itself. Democrats' true resource is not political might or wads of cash, but civil society, including honest businesspeople. Though not as powerful, it won't disgrace those using it.
Sergei Mitrokhin, deputy chair of Yabloko, contributed this comment to Vedomosti, where it appeared in longer form.