SOURCE: The St. Petersburg Times
DATE: Issue #1109 (75), Friday, September 30, 2005
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TITLE: Gazprom Buys Out Abramovich For $13Bln
AUTHOR: By Catherine Belton
PUBLISHER: Staff Writer
TEXT: MOSCOW — Gazprom said Wednesday it had agreed to buy control of Roman Abramovich’s Sibneft for $13.01 billion in the biggest takeover deal in Russian history.
The deal will put nearly one-third of the nation’s oil output in state hands and revive Gazprom’s bid to become a global energy giant, just months after it failed to acquire prize oil assets through a merger with state-owned Rosneft earlier this year. 
Gazprom, already the world’s No. 1 natural gas producer by volume, will gain 910,000 barrels per day in oil output, making it the nation’s No. 5 oil producer.
It will also put several more billion dollars into the pockets of Abramovich, the 38-year-old owner of Chelsea Football Club, who together with his former business partner Boris Berezovsky bought Sibneft for the bargain basement price of $100 million a decade ago.
“The acquisition of Sibneft is aimed at resolving Gazprom’s strategic task of becoming a global energy company and a world market leader,” said Gazprom chairman Dmitry Medvedev, who is also President Vladimir Putin’s chief of staff.
The deal, the second major energy acquisition by the state in less than a year, is unprecedented as the state is paying near market price to buy back a firm it sold for next to nothing in the loans-for-shares auctions a decade ago, analysts said. 
It stands in marked contrast to last December’s forced acquisition by Rosneft of Yukos’ main production unit, Yuganskneftegaz, over a $28 billion back tax bill. While Sibneft often maintained a lower effective tax rate than Yukos, Abramovich’s firm has not faced any legal action from the state. Former Yukos owner Mikhail Khodorkovsky has been convicted on fraud and tax evasion charges and sentenced to eight years in jail.
The deal values Sibneft at around $3.20 per barrel of reserves, a price that is broadly in line with valuations for other Russian oil majors and slightly less than the company’s market capitalization, said Valery Nesterov, oil and gas analyst at Troika Dialog. 
While Sibneft’s price tag appears cheap compared to valuations of Western majors, the deal looks like an expensive buy for the state. State-owned Rosneft acquired Yugansk for the equivalent of $1.25 per barrel, while BP paid $1.80 per barrel for half of Tyumen Oil, said Chris Weafer, chief strategist at Alfa Bank.
Others, however, said Gazprom had gotten a good deal.
“This is a very elegant outcome,” said Bill Browder, CEO of Hermitage Capital Management, which has $2 billion in Russian stocks under management. 
“Gazprom gets Sibneft for cheap, and Abramovich gets to walk away with $13 billion.”
“If there had been an international tender, Sibneft could have gone for twice the price,” he said.
Gazprom said in a statement that it had agreed to buy the 72.663 percent stake in Sibneft belonging to Millhouse Capital for $13.01 billion. Sibneft has never disclosed who owns Millhouse, but says the core shareholders of Sibneft include Abramovich and other members of the company’s management team.
Gazprom also revealed Wednesday that it had acquired 3.016 percent of Sibneft recently bought on the open market by its Gazprombank subsidiary. The extra shares will give Gazprom full control over Sibneft and preclude any minority shareholder from having a blocking stake of 25 percent plus one share.
“The financing has been agreed and it won’t be a problem,” said a banker involved in the consortium of Western banks financing the deal. Gazprom has won commitments for a $12 billion loan from the consortium, which includes Morgan Stanley, ABN AMRO and Dresdner Kleinwort Wasserstein.
Questions remained, however, about whether the effective re-nationalization of Sibneft would bring any benefits to the economy or make either company more efficient. Growth in national oil output has been slowing since the state acquired Yuganskneftegaz late last year.
“It would have been better to keep independent producers than for Gazprom to become larger,” said Mattias Westman, managing director of Prosperity Capital Management, which owns $1 billion in Russian stocks. “Gazprom needs to be broken up to be efficient. It has proven itself to be the least efficient operator of assets in Russia.”
Gazprom minority shareholders have long complained about the gas giant’s runaway costs and corporate inefficiencies.
“The principal issue is that Sibneft is turning into a state company,” said Troika’s Nesterov. “It will have higher social spending and political costs, and it will be harder to fight against theft and corruption. 
Sibneft’s production has been in decline for most of this year as its owners have let go of the reins ahead of the sale. Output at the company’s main production unit, Noyarbskneftegaz, slumped 8 percent over the first eight months of this year, according to Steven Dashevsky, head of research at Aton brokerage. 
For Gazprom to restore Sibneft to double-digit growth, it may have to invest hundreds of millions, or even billions, of dollars, analysts said.
Some investors said that sky-high oil prices meant it did not matter how Gazprom manages Sibneft, for now at least. 
“Even if Gazprom manages it badly for a year or two, it really doesn’t matter when oil is at $64 per barrel,” Browder said
Although production at most of Sibneft’s fields has declined, output at its Slavneft joint venture, owned equally with TNK-BP, is booming and high domestic prices have also boosted refining margins.
Bob Foresman, managing director of the Moscow office of Dresdner Kleinwort Wasserstein, which has been advising Gazprom on the deal, said the Sibneft deal would help Gazprom unlock potential at its other oil assets.
It was not immediately clear who would be appointed to run Sibneft, as Gazprom spokesman Sergei Kupriyanov declined to comment on the issue. But a source familiar with the situation said he expected most of Sibneft’s present managers to be kept on.
The Sibneft deal has yet to be put to Gazprom’s board, but most analysts expected it to be easily approved.
Other investors, however, were steeling themselves for possible upsets. “They’ve tried to sell Sibneft three times now,” Browder said. “There can always be last-minute snags.”
The bigger role of two state-owned companies in the sector could eventually put the squeeze on privately owned firms, Weafer said.
“If it gets to the point where there’s a crunch in infrastructure, then the state companies are going to be in the driving seat,” he said.

TITLE: Gay Man Fights For His Rights
AUTHOR: By Irina Titova
PUBLISHER: Staff Writer
TEXT: A St. Petersburg court has ruled that the Oktyabrskaya Railroad broke the law when it rejected a man’s application to work as a train conductor because he was gay, the plaintiff’s lawyer said.
The case is unusual because gays and lesbians usually find new jobs rather than challenge discrimination in court due to a social stigma attached to homosexuality. In addition, sexual discrimination in all forms is very difficult to prove in Russian courts.
The plaintiff, a 30-year-old man, appealed to the Frunzensky District Court after his application to take courses for train conductors with the Oktyabrskaya Railroad was rejected in 2003, the lawyer, Dmitry Bartenyev, said Wednesday.
The rejection came after doctors at the railroad’s clinic deemed him unfit due to a note on his military record that he suffered from a mental disorder. The mark was made in 1992, when homosexuality still retained its Soviet-era classification as a “perverse psychopathy.”
The court ruled on Sept. 20 that the clinic had violated the law and ordered the railroad to accept his application.
“The court ruled on two important issues,” said Bartenyev, who works for the Medical Disability Advocacy Center, an international nongovernmental organization. 
“It declared the practice of using military data to restrict human rights is unlawful. The information on it should only be used for military registration, and not to establish someone’s health status with regard to employment.”
The court also confirmed that the plaintiff’s “perverse psychopathy” diagnosis was based exclusively on his homosexuality, and that homosexuality is not a mental disorder, Bartenyev said.
Bartenyev declined to identify his client, citing the sensitivity of sexual orientation, and said he did not wish to speak with a reporter.
Valentin Morozov, head doctor of Oktyabrskaya Railroad Clinic, said Thursday that the man was denied a job because of the mental disorder note, not his sexual orientation.
“We have instructions not to allow anyone with mental problems to do work that involves certain risks, such as being a train conductor,” Morozov said.
He said it wasn’t the clinic’s responsibility to investigate the reason behind the original diagnosis.
When the 1992 diagnosis was made, the man was registered at a local psychiatric clinic and required to undergo periodic psychiatric assessments. He was classified as being incapable of serving in the army and issued a military card with the mark “7b,” which indicated a psychopathic mental disorder.
In 2003, his name was dropped from the registry at the local psychiatric clinic, but the military refused to cancel his diagnosis and confirmed it still considered him unfit for service because of his homosexuality, which it had re-classified as “other disorders of a sexual identity,” a classification in the World Health Organization’s International Classification of Diseases, Bartenyev said. 
The WHO has not classified homosexuality as a mental disorder since 1992, when it issued the 10th edition of the International Classification of Diseases, known as ICD-10.
Since 1999, the Health Ministry has obliged all medical professionals to use ICD-10 diagnoses, and homosexuality was expressly deleted from the list of conditions limiting someone’s ability to serve in the military under the 2003 Russian list of disorders.
The Hungary-based Medical Disability Advocacy Center praised the court ruling as a step toward fighting the stigma that comes with both homosexuality and mental illness in Russia.
“Unfortunately, it’s still common for the Soviet system of psychiatric diagnoses to be used to restrict everyday life,” it said in a statement. “People with former records of psychiatric disorders or ‘bad military cards’ — limiting ability to serve in the military because of a previous mental disorder — are routinely prevented from getting jobs.”
Eduard Mishin, editor of KVIR, a Russian gay magazine, said the railroad’s rejection had been “an obvious violation of human rights.”
“Unfortunately, in our country, many people are still afraid of gays and lesbians,” Mishin said.  “They associate homosexuals with mental problems, HIV and a sexual attraction to children.”
Mishin said cases in which homosexuals are fired as a result of their sexual orientation are often hard to prove. As a result, most homosexuals prefer to change their place of work and hide their orientation, he said.
In another case, a court in Yaroslavl upheld the rights of a lesbian who was fired from her job as a teacher because of “health problems,” according to gay.ru, a leading Russian web site for the gay and lesbian community. The court ruled on Dec. 28, 2004, that sexual orientation could not be considered an obstacle for working in educational institutions and gave the woman back her job.
Bartenyev said his client has not yet decided whether he wants to work as a train conductor with the railroad.

TITLE: Racist Leaflets Inspire Hatred for Minority
AUTHOR: By Irina Titova
PUBLISHER: Staff Writer
TEXT: Human rights experts are worried by rising racist trends after leaflets calling for violence against Roma were circulated in the city of Pskov, 280 kilometers south of St. Petersburg, in September.
“We are calling for Russia to be cleaned up!  No To Gypsy Drug Barons!  Save Your Children!” read the leaflets posted at the city’s bus stops, the St. Petersburg branch of non-governmental human rights group Memorial reported  Wednesday.
The leaflets accused the Roma of drug trafficking and compared them to spiders.
“Pskov residents! The most terrible disease of our times — drug addiction — is spreading in our city.  Taking advantage of the authorities’ negligence, gypsy families have organized the unrestricted and widespread sale of drugs in Pskov.  Every day, more and more of our children get become captives of drugs,” one of the leaflets read.
The leaflets were signed by a movement calling itself Free Russia, which called for Pskov residents to provide lists of names and addresses of Roma living in the city.
The leaflets also stated that police statistics cite Roma as being Russia’s “most active drug traders.”
The leaflets have alarmed Pskov Roma, who are afraid to go out, fearing they could be attacked, said Olga Abramenko, coordinator of the Northwest Center For Social and Juridical Defense of Roma at St. Petersburg’s Memorial, on Wednesday.
“The leaflets were absolutely racist, nationalist and aggressive.  And it is not true that according to police statistics Roma are the main drug traders [in Russia],” Abramenko said.
The distribution of leaflets took place not long after the kidnapping and murder of a Roma man, Vladimir Berezovsky, on Aug. 30, leading to fears that the two events are linked. 
A few days after the murder, another local Roma man, Alexander Mikhailov, was beaten up after attackers questioned him about his ethnicity.
The Pskov city prosecution has opened criminal investigations into both the murder and the attack, but neither have been solved, Abramenko said.
Abramenko also said Memorial could not be sure if the nationalist group Free Russia exists in reality.
Boris Pustyntsev, co-head of St. Petersburg’s human rights Citizen Watch said that some Roma do to turn to crime as they are unable to find lawful employment due to discrimination. He stressed, however, that not only gypsies are dealing in drugs.
“When someone has no other way to make money, he often gets involved in crime.  That’s not just the case with Roma — it also happens with Russians and people of other ethnicities,” Pustyntsev said.

TITLE: Cosmic Tourist Ready to Blast Off
AUTHOR: Agence Ffrance Presse
TEXT: BAIKONUR, Kazakhstan — Another “space tourist” was set to be taken for the ride of his life as Russia prepared Thursday to shoot American millionaire Greg Olson into orbit for a 10-day, 20-million-dollar stay aboard the International Space Station. 
The TMA-7 Soyuz spacecraft, atop its launcher, was hauled from its hangar at the Baikonur space center in Kazakhstan along a four-kilometer track to the Yury Gagarin launch pad from where it is due to blast off on Saturday morning. 
The 50-meter apparatus was gently raised to a vertical position, ready for loading with 300 tons of fuel. 
Olsen, 59, is due to head into space with Russian cosmonaut Valery Tokarev and US astronaut William McArthur, arriving at the ISS on Monday, after a period adjusting to conditions. 
He is the third “space tourist,” following in the footsteps of American Dennis Tito in 2001 and South African Mark Shuttleworth in 2002, and has paid $20 million dollars for the 10-day trip. 
Despite the hefty price-tag, Olsen can expect few creature comforts aboard the Soyuz, a low-frills workhorse that has proved more reliable than the vastly more expensive fleet of U.S. space shuttles, currently grounded.

TITLE: Putin Hints He May Stay in Russian Politics After 2008
AUTHOR: By Oksana Yablokova and Francesca Mereu
PUBLISHER: Staff Writer
TEXT: MOSCOW — President Vladimir Putin on Tuesday suggested that he wanted to play an important role in government after 2008, and spent most of a three-hour call-in show talking about bread-and-butter issues, from salaries and health care to the needs of the country’s 13 million hearing-impaired people.
In the show — his fourth since becoming president — Putin focused as expected on social issues, including how a promised extra $4 billion would be spent. He also touched on the familiar themes of Russians abroad and territorial rights.
In an echo of reactions to previous call-in shows, one of Putin’s promises — that a pensioner in the Stavropol region would get her water pipes fixed, or else her governor would not be reappointed — came true before the day was out. 
Responding to a caller who urged Putin to change the Constitution via a referendum so that he would be able to stay in power after 2008, the president reiterated that he would not seek to change it to allow himself to run for a third term.
“I see my job as not staying in the Kremlin forever, so that the same face will be shown on television. ... I see my task as creating conditions for the country’s long-term development, so that young and educated managers come to govern the country,” he said. “I don’t consider it appropriate to introduce any changes in the Constitution.”
However, Putin hinted he might retain an important role after stepping down in 2008.
“As they say in the Army, ‘I will find my place in the order of things,’” he said.
After the call-in show, journalists asked Putin to clarify his remark, but he declined.
“Let’s keep the suspense,” he said, Interfax reported.
Speculation has been rife that Kremlin officials are searching for a way to keep Putin in power after 2008. Putin most recently reiterated his intention not to run again to a group of visiting foreign policy experts earlier this month, but he said at a news conference in Finland in August that he would have liked to stay if the Constitution had allowed it.
During the 2 hour, 55 minute-show on Channel One and Rossia, as well as on state-run Radio Mayak, Putin answered a total of 60 carefully screened questions, including 14 he said he had personally picked beforehand. In addition to questions that arrived at a special call center by telephone and Internet over the past five days, Putin fielded questions via live linkups with 12 Russian cities and the Latvian capital, Riga.
For the first time, Putin also addressed questions sent by SMS, many of which arrived with a smiley attached, a presenter said. 
Moscow and St. Petersburg were notably absent from the live linkups, while the Central Federal District was represented by the village of Golovchino in the Belgorod region, close to the border with Ukraine. 
According to the call center, most of the 1.3 million questions were either complaints about poor living conditions or requests to elaborate on government plans to spend an extra 115 billion rubles ($4 billion) on health care, education, housing and agriculture over the next four years. Putin announced the extra spending at a meeting in the Kremlin on Sept. 5.
The show opened with Putin in the Kremlin television studio, flanked by Channel One anchorwoman Yekaterina Andreyeva and Rossia’s Sergei Brylyov. The first question read out invited Putin to comment on the government’s economic performance and its campaign to raise living standards. 
“The population’s real wages have grown 8.5 to 10 percent annually. Pensioners’ incomes will rise 7.9 percent this year,” Putin said.
“The economy as a whole has grown about 7 percent annually over the past few years. All this together creates an absolutely stable situation in the country. People can plan their lives, expand their horizons ... in terms of the family and business, and what is very important is that all this has created the preconditions for major solutions to the social problems that have built up.”

Salary Raises
On his plans to invest billions of rubles in health care and other social initiatives, Putin confirmed that doctors and nurses working in municipal and village clinics would respectively receive salary hikes of 10,000 rubles and 5,000 rubles to encourage them to stay at their posts, pointing out that municipal clinics were operating with only 56 percent of the staff they needed, and that at rural clinics the figure was only 35 percent.
He did not say, however, what raises other medical professionals could expect.
Putin answered at least a dozen questions regarding pensions, salaries, the monetization of Soviet-style benefits and housing for military veterans.
With the exception of Russia’s territorial dispute with Japan over the Kuril Islands, foreign policy issues were noticeably absent from the show, as were questions about terrorism, which have been a near-constant theme in Putin’s public addresses in recent years.
Putin, who is scheduled to visit Japan in November, said that Russia would not accede to Tokyo’s requests to hand over control of the four islands, which became part of the Soviet Union at the end of World War II. 
“I hope that with goodwill we will find a solution to suit both sides,” Putin said, responding to a question from a caller on Sakhalin Island.

TITLE: Institute Ups Gene Research
AUTHOR: By Irina Titova
PUBLISHER: Staff Writer
TEXT: Scientists at St. Petersburg’s Otto Institute for Obstetrics and Gynecology announced the development of the most detailed human genetic blueprint in Russia last week, allowing for a wider range of preventative measures to be prescribed. 
“Over the last ten years our scientists tested more than 60 different genes, the largest number of human genes researched anywhere in Russia,” said Oleg Glotov, one of the scientists involved in the research.
While other genetic laboratories in Russia researched around 40 genes, the Institute researched 15 new genes only last year, Glotov said.
The genetic research can help to foresee possible health problems, allowing for preventative measures to be taken. 
Humans have around 30,000 different genes, though many of the most important in terms of healthcare have already been researched, Glotov said. 
Alexander Strelnikov, medical director of Medem Medical Clinic, said that the Otto Institute’s achievements had been notable in the field. He added, however, that such genetic tests are not yet widely used in Russia, as there are few surgeons trained to make use of their results.
“It is very important that we train more doctors to deal with genetic tests so that we know what to prescribe to patients whose tests show a predisposition to one illness or another,” Strelnikov said.

TITLE: IN BRIEF
TEXT: Suspects Detained
ST. PETERSBURG (SPT) — The city prosecution brought charges against four people detained on suspicion of murdering a Congolese student, Interfax reported on Wednesday.
The city prosecution said that all four had been charged under article 105 of the Russian Criminal Code, which covers murder committed by a group.
The defendants include a teenager and two men with previous convictions for drugs, robbery and hooliganism.
The Congolese student died in hospital on Sept. 14 after being attacked in the street. His murder led to protest meetings among the city’s foreign students who saw the crime as being the result of race hatred.

Governor Inaugurated
ST. PETERSBURG (SPT) — The new governor of Kaliningrad Oblast Georgy Boos was inaugurated on Wednesday, Interfax said.
More than 600 official guests attended the ceremony, journeying from across the region, Moscow and St. Petersburg.

TITLE: Ford Workers Threaten to Strike
AUTHOR: By Anna Smolchenko
PUBLISHER: Staff Writer
TEXT: MOSCOW — Ford workers in Russia are threatening to strike if management refuses to increase wages by 30 percent and offer other concessions, the head of the plant’s trade union said Thursday.
The workers demands come at a time when the company is planning to almost double production at its St. Petersburg plant, putting additional pressure on its workforce, the union official said.
“We are ready to work for a worthy salary. The conveyor belt squeezes us dry,” Alexei Etmanov of the plant’s trade union said by phone from Vsevolozhsk. The plant’s union is affiliated to Moscow-based Trade Union of Machine Builders.
The trade union, which is also seeking year-end bonuses and equal pay for equal work, expects to receive a response from management Friday. If management refuses to budge, the union is threatening to lay down tools for one hour in a warning strike.
“Ford seeks to provide compensation and benefits that are competitive in the local areas where we operate”, said Todd Nissen, a spokesman for Ford Europe.
Back in June, U.S.-based Ford said it would sink $30 million into its plant in a move to increase annual production to 60,000 cars from next year.
While Ford plans to add to its 1,700 workforce, the production boost will nevertheless add pressure to workers who already do overtime in the hope of a bigger paycheck, the union said.
Most of the plant’s workers earn between 10,000 ($350) and 17,000 rubles ($600) a month, according to the union. 
In comparison, Ford workers in Brazil earn between 16,000 rubles ($560) and 26,000 rubles ($911) a month, Etmanov said, as well as receiving 1 percent of the profit a plant makes. 
Prices in Brazil are lower than in Russia, with a liter of vodka going for 35 rubles or the rent of a one-room apartment costing $200, Etmanov said, who recently visited Ford operations in Brazil.
Recent discontent over terms and conditions has led to a dramatic increase in union members, with membership rocketing to over 1,100 from just 112 since August.
The plant’s workers officially put forward their demands to Ford’s management on Monday.
Tensions increased a day later when management denied a top union official access to the plant.
Gennady Trudov, chairman of the Trade Union of Machine Builders, had requested a meeting with the plant’s management and the union representatives at the plant.
Ford said it had been unable to accommodate Trudov’s visit at such short notice, having received the request on Monday. It was “not a good time” as the plant was getting ready to increase production, said Nissen.
Cheap labor is a key factor to attract multinational companies to set up shop in emerging markets. The wages at Ford’s Russian plant do not greatly differ from workers’ paychecks at other car plants in Russia.
Vanessa Levy, a spokeswoman for Renault’s Moscow-based plant, said starting workers receive 11,000 rubles ($385). 
Alexei Klyukin, a shift leader at Ford’s plant, said workers have no reason to complain. “Workers count their wages but don’t count expenses which they would have had they worked at a different company.”
Svetlana Klimova, a labor expert with the Russian Academy of Science’s Institute of Sociology said one of the few successful recent examples of strikes includes a strike by St. Petersburg dockers.

TITLE: Reiman: Boom in Mobile Phones Slowing Down
AUTHOR: By Maria Levitov
PUBLISHER: Staff Writer
TEXT: MOSCOW — For the first time in five years, the number of cell phone subscribers in Russia will not double, IT and Communications Minister Leonid Reiman said Wednesday at the InfoKom 2005 annual industry fair.
As the market reaches saturation, subscribers in the regions are still fueling growth, he said, speaking at a briefing for foreign media.
“The number of cell phone subscribers will not double for the first time this year,” Reiman said. There will be 38 million new cell phone subscriptions this year, bringing the total to 110 million by year’s end. Russia’s population is 144 million.
Reiman also said fierce competition was the root of infighting among large mobile operators and of allegations of misconduct during the sector’s chaotic early years.
Reiman’s name has been drawn into a battle over a stake in No. 3 mobile operator MegaFon between Alfa Group and IPOC, a Bermuda-based investment fund. IPOC holds a 31 percent stake in MegaFon via Telekominvest, a holding company which Reiman helped found.
“I’m not a person who courts conflict, I believe there is nothing good in it,” he said. 
The privatization of Telekominvest has come up in a sweeping money laundering investigation by Frankfurt prosecutors into Germany’s Commerzbank. 
The Wall Street Journal has reported that Commerzbank was involved in a series of transactions that diluted the stakes of state-owned firms in Telekominvest.
Reiman said that during the privatization of Telekominvest, his role was limited to working for St. Petersburg Telephone, or PTS, a state-owned company that originally owned 50 percent of Telekominvest.
“I’ve never worked at Telekominvest,” Reiman said.
Had PTS participated in any wrongdoing, it would have been uncovered by the company’s auditors, he said.
The minister downplayed scandals, saying that money was still pouring into the IT and telecommunications sector. Investment could grow $1 billion this year from 2004, reaching $5.5 billion, Reiman said. 
“The successful development of the sector is first and foremost connected to its mostly being private,” Reiman said.
He said that the government had finally approved the privatization of state-controlled Svyazinvest telecoms holding. Reiman confirmed media reports that the government was discussing a separate telecoms network for the security services as the Svyazinvest sale nears.
“Formally, no such project exists,” Reiman said, adding that it was being discussed between ministries.

TITLE: Volvo Truck Ignites Expansion Plans for Russia
AUTHOR: By Yekaterina Dranitsyna
PUBLISHER: Staff Writer
TEXT: Volvo automotive corporation said Thursday it will boost its Russian operations, doubling local truck production and opening the company’s own service center.
Market insiders saw this as a step towards setting up another Russian factory by the Swedish auto-maker.
Speaking at the launch of the first Volvo service center in the country, in the Shushary district near St. Petersburg, head of Volvo Trucks in Russia, Lars Corneliusson, said the car-maker will manufacture about 440 trucks locally by the end of 2005.
The addition of Volvo’s own center in Shushary, selling trucks, components, as well as providing technical services and repair, will also boost brand familiarity and give closer customer ties, Corneliusson said.
The company invested 11 million euros ($13.2 million) into the new center, located on the E103 highway on the St. Petersburg-Moscow route.
Heidi McCormack, general director for General Motors in the CIS saw the opening of an own service center as beneficial for brand quality promotion and “a natural step when the company is interested in a market.”
“It allows higher level of control over the market, over the customers’ demands and satisfaction,” McCormack said. 
Volvo held 20 percent of Russia’s market for heavy trucks market in 2004, Corneliusson said.
In the first eight months of 2005, Volvo’s Russian sales have increased by 76 percent on the same period last year to 715 trucks, he said.
Setting up a new truck plant in the country, rumored to be around St. Petersburg, will “depend on the volume of vehicles sold,” said Staffan Jufors, president of Volvo Truck Corporation. Corneliusson added that Volvo is “looking for [new] opportunities.”
Launching production facilities “depends on the volume of vehicles sold. The factory we have today is working at full capacity,” said Staffan Jufors, president of Volvo Truck Corporation.
Gairat Salimov, auto industry analysts at Troika Dialog brokerage, said the Swedish maker could yet boost production without building new facilities.
Jean-Francois Tremblay, automotive segment leader for Russia and CIS at Ernst & Young, agreed.
“To most foreign manufacturers the Russian commercial vehicle market remains unexplored and, at best, underestimated. Volvo’s decision reflects a sound understanding of Russia’s outstanding development potential,” Tremblay said.
However, Volvo could soon be facing competition. Earlier this year Scania declared plans to build a truck factory in the Lomonosov district near St. Petersburg, with annual production capacity of 10,000 vehicles.

TITLE: Taleon to Turn ‘Big Producer’
PUBLISHER: The St. Petersburg Times
TEXT: The main shareholder of Taleon group, Alexander Yebralidze, said Wednesday that he will launch a large-scale production facility in Russia that will earn significant stakes on foreign markets.
The manufacturing venture will run independently of St. Petersburg-based Taleon group’s core real estate business, Yebralidze said at a briefing.
“[Currently] we are involved in investment projects of national importance. And one of the most urgent industries in Russia is production and raw material processing,” Yebralidze said.
Taleon did not specify the specification of the venture or plant location, saying only that it is built in a central region of Russia and is currently having equipment installed at the site. The plant will start production by fall 2006, Yebralidze said. 
Yebralidze said he expects the plant’s output to control two thirds of the European and about 10 percent of American markets. A pool of top Russian banks have provided financial assistance for the venture, he said.

TITLE: Report: Russia’s Competitiveness Slipping
AUTHOR: By Greg Walters
PUBLISHER: Staff Writer
TEXT: MOSCOW — Russia’s “woefully inadequate” government institutions are holding back economic growth and urgent reforms are needed if Russia hopes to keep pace with other emerging markets, the World Economic Forum said in a report released Wednesday.
A day after President Vladimir Putin said Russia was “among the leaders” in global economic growth, the report said Russia’s economy was not growing fast enough for average incomes to catch up with Central European levels.
Russia fell five places to 75th in the forum’s annual Growth Competitiveness Index, a judgement based on a range of economic indicators and thousands of interviews with business leaders around the world. 
Economic competitiveness is being dragged down by a “significant deterioration” in the effectiveness of public institutions, especially the judicial and legislative systems, the report said.
The Russian economy was judged less competitive than rising Asian economies China and India, as well as Latin American powers Brazil and Mexico.
Russia’s ranking was helped by factors including economic growth and budgetary restraint, as well as reforms carried out earlier in Putin’s presidency. The addition of several new countries, four of which placed higher than Russia, was also a key factor in Russia’s drop in the overall ranking.
Institutional dysfunction is the single most important factor slowing Russia’s economic growth, World Economic Forum chief economist Augusto Lopez-Claros said by telephone from London.
“If Russia doesn’t get its act together in terms of improving the quality of it’s institutions ... then the chances of catching up with transitional economies [in Central Europe] are going to evaporate,” Lopez-Claros said.
“Far from catching up, Russia is lagging behind.”
Several indicators that measure government effectiveness in Russia plunged in this year’s report compared with 2004. 
Russia fell 20 places — from 88th to 108th — in the “protection of property rights” category, making it among the worst out of 117 countries in the survey. 
Russia also fell from 84th to 102th in “judicial independence,” and from 85th to 106th in “favoritism in decisions of government officials.” 
The report singles out the smashing of oil company Yukos under billions of dollars of tax bills as one of the most important factors in the rapid deterioration of Russia’s institutions.
Russia’s oil-driven economic growth would be even higher with the proper institutional reforms, possibly reaching 8 or 9 percent annually, Lopez-Claros said. 
“Growing at 6 percent because oil prices are at $65 a barrel is not highly meritorious,” Lopez-Claros said.
In his television address on Tuesday, Putin said the country has been growing at an average of 7 percent per year, a rate Russia exceeded in both 2003 and 2004, according to International Monetary Fund figures. 
Factoring in 2002’s growth rate of 4.7 percent and this year’s anticipated 6 percent growth rate gives a four-year average of 6.3 percent.
On the positive side, the report praised the establishment of the stabilization fund as a bulwark against a potential drop in the price of oil. “This important initiative [is] arguably the most important piece of economic legislation approved in the past two years,” the report said. 
Russia’s economy remains far less competitive than that of the Czech Republic, which climbed two places to take 38th in this year’s index. Hungary held steady at 39th most competitive, while Poland jumped nine places to 51st.
The report credited Central Europe’s rising competitiveness to structural reforms undertaken in order to join the European Union. 
China and India, who both have higher GDP growth rates than Russia, ranked 49th and 50th, respectively.
Russia economy was rated slightly less competitive than Indonesia’s and one step ahead of Morocco’s.
Finland led this year’s ranking, as it has for four years out of the last five.
The United States, the world’s largest economy, was rated second most competitive, held back in part by the inability of the U.S. government to keep big business “at arm’s length.”
The most competitive former Soviet republic was Kazakhstan, which joined the ranking for the first time this year at 61st place. The least competitive CIS country was Kyrgyzstan, which at 116th place beat out only Chad in the rankings.
The report said Russia must “urgently” improve the banking sector, especially supervision of banks, and reduce the dominance of state-owned banks over private competition.
The report also called the rise of big Russian conglomerates “a worrisome development, suggesting the emergence of a South Korean-style chaebol form of capitalism.” The term chaebol refers to the enormous conglomerates that dominate the most important sectors of the South Korean economy. 
The World Economic Forum is a Geneva-based nonprofit foundation that also sponsors a major annual conference of world leaders in Davos, Switzerland.

TITLE: Minister: Pulkovo’s Split the First of Many in Aviation Industry
AUTHOR: Yevgenya Ivanova
PUBLISHER: Staff Writer
TEXT: The split of St. Petersburg’s Pulkovo Aviation Enterprise into two independent companies, an airport and an airline, will be part of the government’s nationwide strategy to compartmentalize the industry, Transport Minister Igor Levitin said Wednesday.
As Pulkovo completes its transformation this week, the government will press to separate airport management companies from air carriers in an effort to make the aviation more economically effective, Levitin said at a press briefing during a visit to St. Petersburg.
“We want to understand which enterprises will be able to exist independently in order to compete on the international market and to buy aviation equipment,” Levitin said.
The move gained approval from industry analysts. Alexander Kotikov, a transportation analyst with Troika Dialog brokerage, said such compartmentalizing of companies involved in the aviation sector would significantly improve competition.
“The business could be much more competitive … A situation when a company is not only an airline but also an airport owner potentially leads to monopolies that prevent rival [air carriers] from operating certain routes,” Kotikov said.
The inefficiency of the aviation monopolies is not due as much to competition as to the different nature of their business, said Alexander Yurchik, the acting director of the Federal Agency for Air Transport.
“The inefficiency of joint enterprises don’t lie in unskillful management. They lie in the contradiction of their business aims. The earnings of airports are the costs of airlines,” Yurchik told industry web site avia.ru.
“Joint enterprise artificially decrease the costs of its own airlines using the airport’s revenues. This situation is impossible if the businesses are separated,” Yurchik said.
The compartmentalization will be complete by the end of 2006, Levitin said.

TITLE: IN BRIEF
TEXT: Pepsi Pours In $6.5M
ST. PETERSBURG (SPT) — Pepsi Bottling Group Russia expanded its St. Petersburg operations by opening a $6.5 million storage facility, the company said Thursday, Interfax reported.
“The opening of the storage center completes the first step of our program to expand the production volumes. In 2008, we will begin the second stage, opening another production line and enlarging our warehouses,” said Alexander Sorokin, head of Pepsi Bottling Group Russia in St. Petersburg.
At present Pepsi has an annual output of 110 million bottles, producing in five cities around the country, including Moscow and St. Petersburg.

Euroset Buys Retailer
ST. PETERSBURG (SPT) — The country’s largest mobile phone retailer Euroset bought Murmansk-based rival Mobilkom store chain, Euroset said Thursday in a statement.
Euroset will take over eight stores in the Murmansk region and open a further 11 by the end of this year, the statement said, Interfax reported.
“In the near future, Euroset is also considering buying other competitors [in the region],” said Konstantin Levin, head of the company’s northwest branch. “We are interested in all decent locations in Murmansk and the region. Particular attention is given to Murmansk and Archangel as we expand north,” he said.
Euroset has over 2,250 stores nationwide and expects turnover for 2005 to rise to $2 billion.

Bukvoyed Tries Coffee
ST. PETERSBURG (SPT) — Bukvoyed, one of the city’s leading book retailers, will launch a $500,000 concept store on Nevsky Prospekt that aims to boost client numbers by setting up a cafÎ culture within the shop, head of the chain Denis Kotov said Thursday.
The 24-hour books supermarket, to open on Saturday, will incorporate an 80-square meters coffee-shop, a combination which has had a favorable effect on sale in many large book stores in Europe. It is the company’s second store of this design in St. Petersburg.
The chain expects a three year return on investment period for each of the concept shops.
Earlier, Bukvoyed’s rival Snark tried the same integrated coffee-shop idea, but was forced to close down the store due to failing profits, business daily Delovoi Petersburg reported.

Economist in Russian? 
MOSCOW (Bloomberg) — The Economist magazine will be published in Russian “soon,” Izvestia daily reported, without saying where it got the information.
The Russian version of the magazine will be published by Moscow-based Independent Media Holding BV, Izvestia said. Economist rival Business Week put out its first Russian version last week, Izvestia said, citing Alexei Volin, president of Rodionova, which is publishing Business Week in Moscow.

U.S. Bans Caviar Import
GENEVA (Bloomberg) — The U.S., which imports three-fifths of the world’s beluga caviar, will ban shipments of the eggs from the Caspian Sea region to protect falling sturgeon stocks.
Legal trade in caviar is worth about $100 million a year, with black market trade worth as much as five times that amount, says CITES, the Geneva-based Convention on International Trade in Endangered Species, which lists caviar as threatened, rather than close to extinction. Stocks of the fish have declined as much as 30 percent since mid-2004, according to a study published by the American Association for the Advancement of Science on Sept. 16.

TITLE: Playing With Fire in Central Asia
AUTHOR: By Alexander Golts
TEXT: “Where it’s moved to is not my problem,” Defense Minister Sergei Ivanov said with evident pleasure when asked about the future of a U.S. military base in Uzbekistan, which authorities have ordered vacated within months. “It’s not like I have to move it myself,” Ivanov said. 
Ivanov is an extremely proud man, and he will not have forgotten the slight humiliation he suffered back in 2001. On the eve of U.S. military operations in Afghanistan, Ivanov declared that he could not admit even in theory the possibility of a NATO troop presence on CIS territory. Less than a week later the leaders of Uzbekistan and Kyrgyzstan gave permission for the United States to install military bases on their territory. President Vladimir Putin called Uzbek President Islam Karimov and then Kyrgyz President Askar Akayev personally to assure them that Moscow did not object to what his defense minister had ruled out even in theory.
Ivanov’s trip to Kyrgyzstan and Uzbekistan last week therefore looked like payback for his previous humiliation. Russia demonstratively re-established its presence in Central Asia. Ivanov promised small arms, 10 military trucks, spare parts for cars and armored vehicles and an Mi-8-MTV military helicopter to the Kyrgyz military for the bargain price of just $3 million, and promised a further shipment worth $2 million next year. In addition, 139 Kyrgyz officers will receive training in Russia free of charge. Most importantly, Ivanov said that Russia had a long-term commitment to its Kant air force base in Kyrgyzstan, adding that $3.5 million had been allocated this year for expansion of the base. 
Ivanov’s trip to Uzbekistan afforded even greater cause for celebration. Tashkent consistently distanced itself from Moscow in the 1990s. It left the Collective Security Treaty Organization (the CSTO includes Armenia, Belarus, Kazakhstan, Kyrgyzstan, Russia and Tajikistan) and joined GUUAM (Georgia, Ukraine, Uzbekistan, Azerbaijan, Moldova), a regional organization created in 1997 that was viewed as an alternative to the CIS. 
By contrast, Ivanov arrived in Tashkent last Wednesday to attend the first joint military exercise between Russia and Uzbekistan. During the exercise, some 200 Russian paratroopers and an elite commando unit from the General Staff’s Main Intelligence Directorate, or GRU, routed an advanced detachment of “terrorists” who had seized a mountain village. A joint Russian-Uzbek force then proceeded to destroy the enemy’s main force. Ivanov may have declared that no one intended to draw Uzbekistan into the CSTO, but it’s clear that Tashkent will soon begin to play some role in Moscow’s military activities in the region.
The reason for Karimov’s about-face is obvious: Russia, unlike many Western countries, unequivocally accepted the official Uzbek government line on the slaughter in the city of Andijan back in May. The trial of the alleged masterminds of the unrest in Andijan has begun in Tashkent. 
The accused, who have obviously been tortured, have all repeated the same nonsense about, for example, how the leader of the opposition directed the actions of a group of international terrorists from his prison cell. The Kremlin even chose to swallow the accusation that these terrorists had been trained in Ivanovo and Omsk. The Karimov regime is clearly ready to play ball with Russia, and kicking the Americans out is a step in the right direction. For Moscow is still laboring under a 20th-century concept of geopolitics, according to which success is determined by the amount of territory a country controls and the number of military alliances it forges.
Russia does have legitimate military and political interests in Central Asia, which will remain a source of instability for the foreseeable future. Efforts have just begun to create a border capable of separating Russia from Central Asia. Consequently, there is the threat that, in case of a crisis, a flood of refugees would surge into Russia from the south. The threat of terrorists and extremists penetrating into Russia across this border is also very real. 
Moscow therefore needs some way to ensure stability in the region. According to the Kremlin, the answer lies in the capacity for the rapid deployment of military units to the region. Responsibility for Central Asia has been assigned to the Volga-Urals military district. It appears that the 15th Motorized Rifle Brigade, stationed in the Volga region, the 3rd brigade of GRU special forces and troops stationed in Tajikistan would be deployed to restore stability. Ivanov believes that rapid deployment is the key: “If reinforcements are needed, we can deliver them in two hours,” he said. “The most important thing is for any plane, even the heaviest, to be able to land there. The rest is just details.”
In fact, however, the rest is much more than mere “details,” because the threats that exist in Central Asia are difficult to defend against by relying exclusively on the armed forces. Moreover, since the United States destroyed the Taliban regime in Afghanistan, there is no country in the region capable of posing a direct military threat to Russia.
At the same time, the horrific poverty in the region and the actions of authoritarian, corrupt regimes will lead sooner or later to social upheaval. If this were to happen, military bases, alliances and rapid deployment capacity would be of little use. As it happens, the Akayev regime was overthrown on the eve of major military maneuvers scheduled to be held in Kyrgyzstan and involving units from Russia, Kazakhstan and Tajikistan. Russia seemed to have every opportunity to intervene. 
Fortunately, Akayev had enough sense not to ask for military assistance and Putin had enough not to force it on him. But if another crisis similar to Andijan were to happen in Uzbekistan, Karimov might well ask Moscow for help. Wasn’t that the point of last week’s military exercise, after all? And in that case, Russian troops would be drawn into a civil war.
It is obvious that expanding its military bases and forcing out the Americans will not allow Russia to meet the security challenges it faces in Central Asia. 
Russia simply does not possess the necessary resources to bolster stability in the region by economic and political means. And without them, the military option gets you nowhere.

Alexander Golts, deputy editor of the online newspaper Yezhednevny Zhurnal, contributed this comment to The St. Petersburg Times.

TITLE: Cult Leader Takes Heat Off Kremlin
AUTHOR: By Yulia Latynina
TEXT: Izvestia and NTV television reported with evident amusement last week that at least 11 mothers of children who died in the Beslan hostage crisis last year had traveled to Moscow to meet with Grigory Grabovoi, a cult leader who promised to resurrect their children.
I think almost every journalist who has been to Beslan knew that a few unfortunate mothers, insane with grief, believed the promises and had gone to see Grabovoi. For an entire year, the government had done nothing but lie to these women. They got nothing but abuse from the prosecutors and a photo-op with President Vladimir Putin. 
None of us reported on the private meeting with Grabovoi itself, however, because the journalists’ natural desire to create a sensation gave way in this case to plain old human sympathy.
What matters for society is how the mothers of Beslan behave in court, where Deputy Prosecutor General Nikolai Shepel has accused them of providing false testimony in the trial of suspected terrorist Nurpashi Kulayev. What matters is how they handled themselves in their meeting with Putin.
What these mothers do in church, or at home, or at a meeting with Grabovoi is their own business. It should also be noted that Grabovoi made very clear to the women that he could only resurrect their children if they kept their mouths shut. If word got out, the resurrection wouldn’t work. In a situation like that, what bastard is going to assume the right to laugh first?
Yet certain media laughed. They rolled the footage. They analyzed. All with a great show of sympathy, of course, but also in such a way that everyone they talked to was moved by the news and then went off and told their friends that those Beslan mothers had lost it.
Why was it that every journalist who has been to Beslan has known about Grabovoi for ages, but the story only made waves in the media last week? Maybe it was just a coincidence — a very strange coincidence.
On Sept. 2, a group of mothers from Beslan met with Putin. Check out the transcript of that meeting — you won’t regret it. Nobody has spoken to Putin like they did, not even Mikhail Khodorkovsky. The meeting took place on Sept. 2. Last week, the transcript was released. And NTV immediately ran the Grabovoi story.
On the surface the coverage was sympathetic, but the subtext was clear. It was like saying: Why bother talking with these swarthy Caucasian women? Why are they complaining about the investigation when they’re meeting with Grabovoi? Boris Yeltsin kept an astrologer, Georgy Rogozin, on staff. Putin has his confessor, Archimandrite Tikhon Shevkunov. Julius Caesar believed his astrologers, too.
As I say, outwardly everything was done correctly. The proper sympathy was displayed. But somehow many reports failed to mention that very few mothers came to see Grabovoi, or that most Beslan residents regard them with quiet sympathy. When people are desperate, they clutch at straws, be it a visit with Grabovoi or a meeting with Putin.
It’s entirely possible that Grabovoi didn’t turn up in Beslan by accident. A number of things about the tragedy in Beslan that don’t seem to have happened entirely by chance have skillfully deflected the public’s anger away from the authorities: the constantly repeated story that former Ingush President and Beslan negotiator Ruslan Aushev only rescued “his own” and the rumor someone started that blames the school principal, Lidia Tsaliyeva, for everything that happened.
It’s very advantageous for the authorities if even a few mothers say they don’t need an investigation because their children are going to be resurrected all the same. 
Bringing grief-stricken mothers together with a cult leader is pretty cynical, of course. But no more so than firing rocket flamethrowers at their children.

Yulia Latynina hosts a political talk show on Ekho Moskvy radio.

TITLE: Culture shock
AUTHOR: By Matt Brown
PUBLISHER: Staff Writer
TEXT: Four years on from 9/11, this year’s New British Cinema Festival starting Friday at Dom Kino features a crop of left-field responses to the changing relationship between Islam and the West wrought by the terrorist attacks.
The opening film, Ken Loach’s “Ae Fond Kiss” is a multicultural love story between a Pakistani man and an Irish woman set in Glasgow, while “Yasmin” follows the life of a Muslim woman in northern England as she struggles with her identity in the West, before and after Sept. 11, 2001.
More directly, the motives of the terrorists that crashed four airplanes in the U.S. that day, killing more than 3,000 people and changing the world, are examined in TV docudrama “Hamburg Cell.”
“Based on a wide range of documentary evidence, from court transcriptions to video footage, this simmering yet understated little movie focuses on Lebanese student Ziad Jarrah (played by Karim Saleh) as he’s transformed from rich-boy student at the University of Applied Science in Hamburg to jihadist hijacker of United Airlines flight 93 (which crashed en route to the White House shortly after simultaneous attacks struck the Twin Towers and the Pentagon),” explain the organizers of the festival on its web site.
Saleh, the actor portraying the terrorist at the center of events, is a guest of the festival and will take part in publicity events in St. Petersburg on Saturday.
A second thematic strand underlying the selection of complex thrillers for this year’s festival, reveals perhaps a more existential reaction to the post 9/11 world.
“Layer Cake,” a hard-boiled urban crime thriller directed by the producer of two of Guy Ritchie’s popular but dubious films, and “Enduring Love,” a psychological thriller based on an Ian McEwen novel (both starring up-and-coming British star Daniel Craig), show that Britain can be an insecure place with shifting, conflicted characters living there.
Roger Michell, the director of “Enduring Love” is also appearing in St. Petersburg as a guest of the festival on Friday.
All ten films in the program are showing in English with translation into Russian provided by headphones if desired.

TITLE: Art invasion
AUTHOR: By Andrei Vorobei
PUBLISHER: Special to The St. Petersburg Times
TEXT: The fifth “Contemporary Art in the Traditional Museum” event got underway last Saturday with modern artists invited by the Pro Arte Institute to liven up eight of St. Petersburg’s more frowsy museums with specific new works.
The festival attempts to broaden the appeal of generally small and rarely visited museums by means of contemporary art, at least for the  month of its duration, and put their often narrowly focused permanent expositions into a new, stimulating context. 
This year participating institutions range from the Botanical Museum to the Museum of Defense and Blockade of Leningrad to the Narvskiye Triumfalnye Vorota Memorial Museum. Apart from two Muscovites and one Frenchwoman, all the artists taking part are St. Petersburg residents.
Despite expectations to the contrary among art watchers, the current festival has produced some fruitful art works and displays some interesting artistic decisions on the part of the artists involved, and two of the works are of exceptional interest. 
Perhaps the most intelligent is that displayed in the Museum of the History of Religion. 
The museum’s permanent exhibition details archaic rites, paganism, ancient cults, and the controversial history of Christianity, Judaism and other world religions. Now, complementing these quite predictable museum exhibits, prominent local artists Olga and Alexander Florensky have displayed a three-dimensional project called “Spritual Structures.” The works consists of hand-made models of different temples, towers, synagogues, churches, mosques and pagodas. The intrigue is that, to quote the artists, “the structures are made of different combinations of ‘found objects’ with a prevalence of antique details — wood, bronze, brass and others  — thus presenting... a collage from the debris of heterogeneous material cultures.”
Interestingly, through recognizable and familiar domestic objects — everyday stuff like pails, plates, dishes, door-handles and so on — the viewer is drawn into a very intimate, personal relationship with the artifacts of sometimes very different cultures, with the invitation of reaching a certain level of understanding and acceptance of them. Clearly the work is an appeal for religious tolerance — something one might expect to be one of the museum’s principles. 
Another unmissable venue is the Museum of the Arctic and Antarctic. Here, artist Andrei Rudyev, instead of working with the frigid content of the museum, preoccupied with polar exploration and natural history, has instead occupied its facade. Or, to be precise, the facade is occupied with 37 penguins, who make up, according to the artist, an “Antarctic Mission.” Fortunately, unlike in the Hollywood movie “Batman Returns,” this penguin mission has only a diplomatic purpose. The artist was fortunate in that the museum’s facade is under reconstruction and completely covered in plastic sheeting, rendering it a faceless monolith. Rudyev reasonably interpreted this as resembling as big iceberg on which to place his model penguins like soldiers on guard. Whatever the interpretation, this lucky coincidence amplifies the whole experience of the exciting installation and gives it a very totalitarian feeling. 

“Contemporary Art in a Traditional Museum” runs through Oct. 23 at eight city museums. See listings, page xi.
 www.proarte.ru

TITLE: Chernov’s choice
AUTHOR: By Sergey Chernov
TEXT: Western European music is assuming an ever higher profile in St. Petersburg. Dutch bands were showcased at Window on the Netherlands and the Dutch Punch festivals earlier this month, and now Sweden’s music scene will be celebrated with Swedish Cultural Days opening on Friday.
The event’s music program will include three live bands, an electronic duo and a DJ who will appear at several local venues. The punk band Alarmrock will perform at Moloko on Friday. 
It will be followed by Stereo Starboy and Alice in Videoland at Red Club on Saturday. Alice in Videoland will also perform at Moloko on Sunday.
Hailing from Sundsvall, the all-women sextet Stereo Starboy have performed a kind of power-pop/rock since 1998 even though their debut album did not appear until March 2005. It is called “We’re Not the Ones You Should Rely on.”
Formed in Stockholm in 2002, the pop/electronica band Alice in Videoland performs a blend of punk, synth and 1980s rock.
Forrs vs. Borg perform a live electronic set at the recently opened jazz club Street Life on Saturday.
The Zurich, Switzerland-based Greek guitarist Marino Pliakas joins Swiss drummer Michael Wertmuller and Japanese guitarist and  keyboard player K.K. Null for a local improv/avant-rock/noise performance. K.K. Null won international fame for his “progressive hardcore trio,” Zeni Geva, which  worked with Steve Albini, and released more than 10 albums, recording two John Peel Sessions for the BBC. 
Pliakas, Wertmuller and K.K. Null will perform at GEZ-21 on Friday.
Local band The St. Petersburg Ska-Jazz Review will finally premiere its long-awaited second album with a concert at Platforma on Friday. 
Called “Too Good to Be True,” for a while it seemed it was since the record was recorded last year but wasn’t available at the time of  concert meant to launch it in December due to copyright problems. 
According to singer Jennifer Davis, the release date was postponed because of a conflict with copyright holders over two tracks, a Soviet film song and a Depeche Mode cover. By a Russian law, copyright holders have the right to prevent covers they do not like from being released. 
The album is finally being released without the two tracks in question.
Davis said that recording with the band, which also includes members of Leningrad, Spitfire and Markscheider Kunst, was her first studio experience.
“I have improved a lot as a singer since then, but I am not ashamed of my performance,”  said Davis who has appeared as a jazz singer and now also fronts the soul/jazz band J.D. and the Blenders.
The Moscow premiere of “Too Good to Be True” took place at the 16 Tons club last Friday. 
The week’s other highlights include Dobranotch (Platforma, Saturday), Tequilajazzz (Red Club, Sunday) and Iva Nova (Griboyedov, Wednesday).

TITLE: Departing gesture
AUTHOR: By Sergey Chernov
PUBLISHER: Staff Writer
TEXT: Just as CBGB’s, a New York club that was the cradle of punk and new wave in the 1970s, has recently been deprived of its lease and struggles for survival, no less a drama has been taking place in St. Petersburg in which long-standing underground club Moloko is being kicked out of its current location in October after a three-year legal battle with city authorities. 
The club’s management wants to make the club’s final weeks memorable with concerts by some Moloko veterans including the groups Tequilajazzz and Markscheider Kunst. 
Last week punk band PTVP opened Moloko’s month-long farewell program with a two-hour concert, packing the place with an estimated 270 paying clubbers as well as around 100 friends and fellow musicians who were snuck in for free.
Moloko was launched nine years ago just a few months after TaMtAm, the pioneering alternative rock club managed by musician Seva Gakkel, had been shut down. In its first stages its repertoire revolved around bands that either made their debut at TaMtAm or performed at the venue frequently. 
The opening concert, on Nov. 29 1996, was by TaMtAm regulars Markscheider Kunst, with African singer Seraphim Selenge Makangila. According to director Yury Ugryumov, that first concert (the poster still can be seen on the walls of Moloko) drew only 38 fans. The bands Khimera, Dostoevsky Idiot and the Rainbow Army Band soon followed.
Moloko was then using the premises of the now-defunct Theater na Perekupnom, a small independent drama venue in a basement on a Nevsky side street, which staged performances only sporadically. The early concerts went under the banner “Concerts at the Theater na Perekupnom,” since the club’s current name came a little later, from a discarded, iron milk-shop sign that was hung over the stage. Regulars began affectionately calling the club “Moloko” (milk).
Moloko’s memorable publicity designs and posters have been the responsibility of artist Igor Sergeyev. In the late 1980s, Sergeyev worked as a staff painter for the Znaniye film theater, and according to Ugryumov, some art lovers would come to the theater just to see his original and provocative collage film posters. Now decorating Moloko’s interiors, some were on display at Sergeyev’s recent exhibition at the Nabokov Museum.
“We decided to launch a music club in autumn 1996 because the theater was dying and the director was spending more and more time abroad before he finally moved to Germany,” said Ugryumov, who was the theater’s deputy manager at the time.
“We were friends with TaMtAm’s management and because it closed in spring 1996, the idea of a club which would take on TaMtAm’s ideas, and would be a continuation of it in a sense, was in the air.”
However, Ugryumov said Moloko eveloved its own, distinctive identity. 
“I wouldn’t say it was just a continuation of TaMtAm, of course, it was not. I think Moloko is one of the clubs of the post-TaMtAm generation, because TaMtAm was in the beginning of everything.”
Hundreds of highly diverse bands, with styles ranging from punk to experimental electronica, have performed at Moloko.
“What we and the other clubs have managed to achieve is a fully fledged club scene,” said Ugryumov. “Of course, it’s may be not like in London or New York but it exists and it works. The places are different, and someone who wants to hear live music might find where to go.
“Also, we hosted some concerts of heavy alternative music, and we showed that they can be held in a good atmosphere, that they can be energetic, but not aggressive. We managed to create an anti-conflict atmosphere; people could slam in front of the stage, but nothing horrible would happen. The musicians and fans learned the rules of the game; have fun but don’t disturb others.”
However, after 2003 Moloko struggled with KUGI (State Property Committee) which was determined to kick the club out due to complaints from the people who lived above it. The three-year legal battle ended in a compromise. Moloko is leaving its current location but KUGI offered an alternative place for it to move in to. 
Ugryumov said that Moloko’s new location would be also in a basement and be about the same size, but a little closer to Ploshchad Vosstaniya than Moloko is now. An advantage of the new location is that that nobody lives in the building. However, the new rooms require serious renovation, so the club will not open until February or March.
The club’s current incarnation will close after a concert by Markscheider Kunst on Oct. 22. 
“The choice of Markscheider Kunst is not coincidental; they opened the club and they will close it at this location, which is just natural,” Ugryumov said. 
Every worthwhile local band has played at Moloko as well as touring acts from the rest of Russia and abroad.  Ugryumov mentions U.S. punk band Outcold and Estonia’s all-girl goth-rock band Shabash alongside local favorites Tequilajazzz, Kirpichi and Markscheider Kunst as some of highlights during Moloko’s history.
Popular local alternative-rock band Tequilajazzz first performed at Moloko in spring 1997, and have put on around 20 shows since then, establishing the tradition of its “summer” and “winter” concerts at the club. Tequilajazzz’s first summer concert at the venue in July 1999 was documented on the band’s live album, called “Moloko.” Tequilajazzz will perform on Oct. 21.
Yevgeny Fyodorov, the singer and bass player of Tequilajazzz, said Moloko helped the local indie music scene to survive when so many venues went commercial.
“This is probably the only place now that has an identity and its own, distinctive musical policy, and they are the successors of TaMtAm, at least as we see them,” he said.
“Young bands whose reputations are not compromised by MTV appearances and things like that can play there.
“[Moloko] supported the local scene a lot, especially in the years of total commercialization when everything collapsed, they managed to stand up and create a place where young people could manifest themselves rather loudly, with the greatest possible number of decibels.”
Alexei Nikonov, the singer with PTVP, said Moloko has managed to create and keep its own, positive atmosphere.
“There are a few clubs but Moloko had its own atmosphere, something that the Red Club has never been able to achieve,” he said.
“You could come there and hear a good band every second time,” he said.
“They also had a very versatile repertoire policy; they let in everything from foreign goth-metal bands to Russian ethno acts such as Babslei. And there was friendly atmosphere there, so it’s a great pity that it is being closed. The best concerts that we played were at Moloko. Everybody knows it. The crowd was always good.”
TaMtAm’s founder Seva Gakkel said even if Moloko was influenced by TaMtAm in its beginnings, it developed its own ways as time passed.
“Unfortunately I rarely visit it in the last few years, but I treat what they’re doing with a lot of warmth,” he said.
“I like this club and its concept, there’s a certain continuity with TaMtAm, but of course they do things their own way and gone forward a long ago.
“I am glad that the club remained as it was, because I am depressed with clubs, especially the ones in Moscow, which are totally bourgeois. 
“If I were young, I would go to Moloko.”

Concerts at Moloko through Oct. 22. www.molokoclub.ru

TITLE: Texans Suffer In Wake Of Hurricane Rita
PUBLISHER: The St. Petersburg Times
TEXT: WOODVILLE, Texas — Five days after Hurricane Rita came ashore, conditions remained primitive in parts of Texas, where some residents were taking baths and brushing their teeth using water from the Neches River and others were sleeping in tents. 
The plywood sign outside the home in East Texas where eight Beaumont families had sought refuge from Hurricane Rita carried a simple message: “Help Needed. Ice and Water. 43 People.”
The evacuees had no electricity and little water or food after the storm. As temperatures neared triple-digits, adults used paper towels dampened with bottled water to keep children from overheating. A campfire was built to keep mosquitoes away.
“The only thing we could think of to survive was to put out that sign,” said Tiffany Moten, 24, who was staying at the home near Livingston. “Luckily, we were blessed, and we have a lot of friendly people who came up and brought us water and ice and things like that. We are trying to make it.”
The Federal Emergency Management Agency delivered ice, water and packaged meals Wednesday to residents who rode out the storm, but some officials in hard-hit areas criticized the agency’s response, with one calling for a commission to examine the emergency response.
In Houston, FEMA closed a disaster relief center just hours after its doors opened when some of the hundreds of hurricane victims in line began fainting in the heat. FEMA officials said they were caught off-guard by the roughly 1,500 people who showed up, but said it would reopen the center Thursday morning.
Local officials, including Port Arthur Mayor Oscar Ortiz and Jefferson County Judge Carl Griffith, said FEMA’s response has been inadequate.

TITLE: Sunni Officials Targeted By U.S. Military
PUBLISHER: The Associated Press
TEXT: BAGHDAD, Iraq — U.S. forces raided the homes of two officials from a prominent Sunni Arab organization Thursday, arresting bodyguards and confiscating weapons, Sunni officials said. 
Adnan al-Dulaimi, secretary-general of the Conference for Iraq’s People, said soldiers in tanks and Humvees, with two helicopters circling overhead, broke into his home in western Baghdad at 2:30 a.m., put him and his family in one room, and searched the house.
“It was as if they were attacking a castle, not the home of a normal person who advises Iraq’s interim government and has called for reconciliation and renounced sectarianism,” al-Dulaimi told a news conference after the raid.
The other raid took place at the Baghdad home of Harith al-Obeidi, another senior official in the organization, said Iraq’s largest Sunni political party, the Iraqi Islamic Party.
The U.S. military said it had conducted several raids in those areas Thursday, but could not immediately identify the homes or Iraqis involved.
Also on Thursday, 12 Iraqis were killed in a number of shootings and other attacks in the capital, raising to 94 the number of people who have died in violence in Iraq this week, including seven U.S. troops.

TITLE: Family of Man Shot in Error Seeks Truth
AUTHOR: By Beth Gardiner
PUBLISHER: The Associated Press
TEXT: LONDON — The mother of an innocent Brazilian man killed by London police who mistook him for a terrorist retraced his last steps Wednesday and said her son had been treated “like a mad dog.” 
The family of Jean Charles de Menezes also called for the arrest of the officers responsible for his death.
Menezes, 27, was shot and killed by undercover police aboard a subway train on July 22, a day after four failed attempts to bomb the subway system and a bus. Two weeks earlier, four suspected suicide bombers had killed 52 commuters in similar attacks.
The dead man’s parents, Matuzinhos Otone Da Silva and Maria Otone de Menezes, and his brother, Giovani Da Silva, and other relatives, are in London to meet investigators and lawyers.
“I don’t want any mother to feel how I am feeling,” his mother said at a news conference, speaking through a translator. “I want justice to be done so that no mother feels the pain that I am going through. In this case, Jean was treated like a mad dog, and no human being should be treated that way.”
Police shot de Menezes seven times in the head and once in the shoulder after following him onto a subway train.
The family called for the arrest of the officers responsible.
“They expect those who committed crimes or may have committed crimes to be properly investigated and prosecuted and tried if appropriate,” said the family’s lawyer, Gareth Peirce.
The relatives also said they thought police might be withholding information. They said they were particularly skeptical of the police contention that some of the closed circuit television cameras in the station where de Menezes was shot had not been working, so that not all of the police chase was caught on tape.
Police have repeatedly apologized for the killing but deny covering up what happened. Metropolitan Police Commissioner Sir Ian Blair says his officers must have the right to shoot to kill in some cases.
De Menezes’ family, who arrived Tuesday from Brazil, visited the flat where he had lived, then walked along the route he took to board a bus the morning he died.
Along the way, they met shopkeepers who had known him.
“He was a hardworking boy,” said his mother, who was often in tears. “They destroyed his life, and at the same time, destroyed mine.”
The relatives spent more than half an hour inside Stockwell Underground station, where they walked back and forth along the platform de Menezes ran across just before he died. Then they stopped to stand silently.
The family meets Thursday with officials from the Independent Police Complaints Commission, which is investigating the shooting.
Three senior Brazilian officials visited London last month on a fact-finding mission about the case.

TITLE: CSKA Without Striker Love for Three Weeks
PUBLISHER: Combined Reports
TEXT: UEFA Cup holder CSKA Moscow, already without Croatia forward Ivica Olic for the rest of the year with a serious knee injury, has suffered a double blow to its strike force, with Vagner Love now sidelined. 
The Brazilian will be out for three weeks after pulling a hamstring late in the first half of Saturday’s Moscow derby against Spartak. 
Love missed Thursday’s UEFA Cup first round, second-leg trip to Denmark to face FC Midtjylland, along with Serbian winger Milos Krasic, who has a bruised leg. Russia midfielder Yury Zhirkov is nursing a thigh injury. 
Brazilian striker Daniel Carvalho, who scored twice in a 3-1 win over Midtjylland in the first leg two weeks ago, should be ready to play after limping off the pitch midway through the first half of Saturday’s match. 
Carvalho’s sixth-minute strike was enough to give the Army club a 1-0 victory over its bitter city rival Spartak and moved it within two points of league leader Lokomotiv Moscow. 
“We haven’t had so many injuries in a long time, but the guys have pulled together during these tough times,” CSKA coach Valery Gazzayev told Russian media. “We have so many key games coming up and it’s really important for the team to stay strong and focused.”
With 80 teams still competing in the crowded UEFA Cup, contenders for the winner of Europe’s No. 2 club competition have not yet emerged. 
Three Italian teams are among the favorites and Roma — the overall tournament favorite of British bookmakers — is coming off a 5-1 victory in the first leg going into Thursday’s second-leg match at Greek side Aris Thessaloniki. 
Roma is off to an average start in the Italian league, but defender Christian Chivu believes the team can win a big trophy this season. 
“The season is long and we have to play with the thought that we can win something. It can be the league, the UEFA Cup or the Italian Cup,” Chivu said. 
The two other Italian favorites are also in good shape. Sampdoria is home against Setubal after a 1-1 draw in Portugal two weeks ago. Palermo goes to Greek club Anorthisis with a 2-1 lead. 
Sevilla may be one of the favorites with the most problems. Its match against German team Mainz 05 two weeks ago in Spain ended 0-0 despite Sevilla’s total dominance. 
Hertha Berlin, Hamburg, Stuttgart and Leverkusen head Germany’s challenge. 
Hertha Berlin comes home with a 1-0 lead over Apoel of Cyprus, and Stuttgart goes to Slovenian side Domzale up 2-0. Hamburg, however, has problems after blowing a 1-0 lead at home to draw 1-1 with Copenhagen. The second leg in Denmark could be tough. 
Leverkusen lost its first-leg match 1-0 at home to CSKA Sofia. Caretaker manager Rudi Voeller is hoping for a revival in the second leg in Bulgaria. 
Middlesbrough is the English favorite and is ahead 2-0 against Xanthi entering Thursday’s game in Greece. Another English club, Bolton, leads Lokomotiv Plovdiv 2-1 going into the second leg in Bulgaria. Bolton will play without defender Ivan Campo, who has a broken foot. Everton lost 5-1 at Dynamo Bucharest in the first leg, and has a long way back. 
(Reuters, AP)

TITLE: Real Madrid Gets Its European Act Together
AUTHOR: By Simon Baskett
PUBLISHER: Reuters
TEXT: MADRID — A record 50th goal in the European Cup from captain Raul and a late strike from substitute Roberto Soldado earned Real Madrid a 2-1 victory over Olympiakos Piraeus in a Group F match at the Bernabeu on Wednesday. 
Real, thrashed 3-0 by Olympique Lyon in their opening game, appeared on course for an easy win after Raul scored his record-breaking goal by heading home a beautifully flighted cross from David Beckham in the ninth minute. 
But Olympiakos grabbed a shock equaliser against the run of play through midfielder Pantelis Kafes’s scorching 25-metre drive three minutes after the break. 
Real remained on top throughout with Beckham turning in a memorable performance, constantly menacing the Olympiakos defence with his teasing crosses and pin-point passes. 
It was not until Soldado arrived late in the second half that Real converted their domination into another goal, the former youth team player heading home another great cross from Beckham at the second attempt. 
Real center-back Sergio Ramos was sent off in injury time for retaliating against a foul by Ioannis Okkas, the second time in three games the 19-year-old has received his marching orders. 
Real are equal on points with Rosenborg Trondheim who were beaten 1-0 by Lyon on Wednesday. 
The nine times European champions took charge from the first whistle. 
Julio Baptista enjoyed the first chance of the game when Guti wrong-footed the Olympiakos defence with a sharp back-heel but the Brazilian forward lashed the ball over the bar from 10 metres. Five minutes later the home side were in front. 
This time it was Beckham who provided the assist with a superb curling cross from the right and Raul directed the ball inside the near post with a sharp header. 
The goal took the Spanish international one clear of the great Alfredo Di Stefano, a Real hero of yesteryear, as the all-time top scorer in Europe’s premier club competition. 
Beckham was denied a goal when keeper Antonis Nikopolidis pulled off a full stretch save to turn a venomous free kick past the post.

TITLE: Federer, Murray Advance In Thailand
AUTHOR: By Barry Wood
PUBLISHER: Reuters
TEXT: BANGKOK — Roger Federer recovered his poise on Thursday, beating Germany’s Denis Gremelmayr 6-3 6-2 to ease through to the quarter-finals of the Thailand Open. 
The Swiss world number one has now won 74 matches this year, matching Spaniard Rafael Nadal, and looked far more comfortable than in his opening match. 
Federer’s frustration boiled over on Wednesday as he struggled to overcome Brazilian Marcos Daniel and he threw an uncharacteristic temper tantrum by slamming his racket to the ground. 
“A different day, a different opponent. It changes everything,” said the Wimbledon and U.S. Open champion, who next faces Andy Roddick’s U.S. Open conqueror Gilles Muller. 
The fluid strokes and aggressive shot-making were back in abundance against Gremelmayr, after Federer held off three break points in the opening game and then broke the left-hander for 2-0. 
But although he was never seriously threatened, Federer faced some tense moments as Gremelmayr settled and held a point to break back at 4-2. 
Federer escaped when Gremelmayr netted a forehand, and after sealing the first set he broke to love to start the second. 
Gremelmayr continued to challenge, hitting some blistering shots from the baseline, and Federer had to fight off three break points in the second game before breaking again to lead 4-1. 
“I was in control and didn’t have to push 100 percent all the time,” said Federer. “But he didn’t play too bad you know. I really had to play good tennis to come through.” 
Briton Andy Murray, meanwhile, realised his ambition of a place in the world top 100 by beating Swedish fifth seed Robin Soderling 7-6 7-6. 
The 18-year-old Scot, who was ranked 411th at the end of last season, demonstrated impressive speed around the court to reach his first ATP quarter-final. 
“It’s a pretty big deal for me, getting to the top 100 when I’m 18,” he said. “I said at the start of the year that’s my goal. After the first couple of months a lot of people told me I should have kept quiet, but I’m pretty happy with myself now.” 
Murray dropped just three points in the first set tiebreak but Soderling broke to lead 4-3 in the second. 
Murray reacted positively, forcing an error at the net to level at 4-4 before going on to take the second tiebreak 7-5. 
“I wasn’t feeling that great towards the end of the first set,” said Murray. “But I took a timeout and got some medication from the doctor. I had a really sore head. I don’t know why. 
“I thought I played a pretty clever match. I used my slice pretty well and I didn’t give him so much pace which I think he likes.” 
Murray’s next opponent is third seed and U.S. Open semi-finalist Robby Ginepri.