SOURCE: The St. Petersburg Times
DATE: Issue #1267 (33), Wednesday, May 2, 2007
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TITLE: Estonia Moves WWII Statue To Cemetery
AUTHOR: By Jari Tanner
PUBLISHER: The Associated Press
TEXT: TALLINN, Estonia — A statue of a Red Army Soldier at the heart of deadly riots in Estonia was re-erected at a military cemetery in the capital Monday, overlooking dozens of Russian war graves.
The cemetery will also be the new resting place of Red Army soldiers being exhumed from a downtown memorial. Archeologists excavating the grave said they had found nine coffins by Monday, but had not yet opened them.
The Bronze soldier’s removal from the downtown memorial last week provoked sharp criticism from Moscow and rioting in Estonia — the worst since the Baltic country quit the Soviet Union in 1991. One man was stabbed to death, more than 150 people were hurt and 1,100 were detained.
Ethnic Russians consider the exhumations and the statue’s removal an insult to the Soviet Army, which pushed the Nazis from Estonia in 1944. Some ethnic Estonians, however, see the monument as a bitter reminder of Soviet occupation.
The dispute has further strained tense relations between Russia and Estonia and underscored long-standing complaints about the treatment of ethnic Russian minorities in ex-Soviet Baltic states. A group of visiting Russian lawmakers called on the Estonian government to resign.
While Russian speakers in Baltic countries enjoyed advantages under Soviet rule, many now struggle to get education, deal with government offices and get jobs amid a resurgence in native languages and inroads by English.
Estonian authorities said they were increasingly uneasy about pro-Russian protests at its embassies in Moscow and Kiev, the Ukrainian capital.
Protesters have all but blockaded the embassy in Moscow, erecting tents on an adjacent sidewalk, holding candlelit vigils, plastering cars with anti-Estonian stickers and handing out “Wanted” posters with pictures of the Estonian ambassador.
“It is our boycott so that they can’t move around Russia,” Lev Venetsky, a “Young Russia” activist told AP Television News in Moscow.
“We think there is nothing for fascists to do in Russia.”
Estonia’s Foreign Ministry sent a letter of protest to the Russian government, saying “the lives and safety of the embassy staff and family members are directly endangered.”
In Kiev, police used tear gas against some 50 Communist Party protesters after someone threw a small can of paint at the Estonian Embassy, the Interfax news agency reported. Police said no one was injured.
Russian officials called the statue’s removal “blasphemous”; Estonia accused Russian media of spreading lies about the situation.
“The Estonian government of Prime Minister Andrus Ansip, after these actions, it must resign. That is the fundamental position of our delegation,” said Leonid Slutsky, the leader of the Russian group of lawmakers visiting Tallinn.
Estonian legislator Kristiina Ojuland said she had urged the Russian group to “understand the seriousness of the situation” at the Estonian Embassy in Moscow.
Estonia’s government has said the memorial’s location near a busy intersection was not a proper place for a war grave. Ethnic Russians said the real reason was to pander to Estonian nationalists who wanted the monument removed.
The moving of the memorial drew criticism from others. The Los Angeles-based Simon Wiesenthal Center called it an insult to the victims of the Nazis.
While recognizing the crimes committed under Soviet rule, “it must never be forgotten that it was the Red Army which effectively stopped the mass murder conducted by the Nazis and their local collaborators on Estonian soil,” said Efraim Zuroff, the center’s chief Nazi hunter.
In Berlin, meanwhile, police said 17 bronze torches were stolen from a Soviet war memorial that commemorates the German capital’s capture by the Soviet army in 1945. Park employees discovered the theft Monday morning at the memorial in the Niederschoenhausen neighborhood.
The monument is one of three Russian war memorials in Berlin. Germany promised Russia it would maintain the memorials after the withdrawal of Russian troops from former East Germany.
The Tallinn cemetery where the Bronze Soldier now stands is about 2 miles from the city center.
TITLE: Party Activists Turn Out for May Day
AUTHOR: By Galina Stolyarova
PUBLISHER: Staff Writer
TEXT: The traditional May Day demonstrations are regaining their political sting.
The full array of political forces took the streets of St. Petersburg to participate in May Day demonstrations on Tuesday.
Pension raises and increases in wages were among the central demands of the Communist procession, which moved along Nevsky Prospekt and ended with a meeting on St. Isaac’s Square. The procession attracted around 3,000 demonstrators, making it the largest of the local May Day events.
The rally was dominated by a mass of red balloons, portraits of Soviet leaders and Soviet-era May Day slogans, such as “May 1 is the Day of Solidarity of the Working People.” The Communists also carried Belarussian national flags and a portrait of Belarussian President Alexander Lukashenko.
The Communists joined forces with several nationalist groups, marching alongside about 500 members of the radical Movement Against Illegal Migration (DPNI), who were dressed in black military-style overalls with their faces covered by black scarves, as well as activists of the nationalist Slavic Union and Slavic Community which celebrated what they call “Russian May Day.”
Palace Square hosted a meeting of the pro-presidential parties United Russia and A Just Russia and attracted about 2,500 supporters.
The opposition rally, which marched from the Oktyabrsky Concert Hall to Pionerskaya Ploshchad, boasted by far the most outspoken and critical speeches, though it only attracted about 500 activists.
Opposition protesters chanted “No Police State,” “Stop Corruption,” “For a Liberated Russia,” “Oligarchs to Prison, Pensioners to the Canary Islands” and “St. Petersburg Without Matviyenko.”
Mikhail Amosov, a member of the political council of the local branch of the Yabloko party, said political reform in Russia is essential to help its fledgling democracy.
“Unless Russia becomes a parliamentary republic, where the executives submit to the people’s assembly, the ‘vertical of power’ will inevitably throw the country into a totalitarian abyss,” he said.
Maxim Reznik, head of the St. Petersburg branch of Yabloko said this year’s May 1 demonstration marked a turning point in the mounting confrontation between the authorities and the opposition.
“For the first time, the opposition, fiercely hated by the authorities, has been acknowledged and allowed to hold a demonstration through the city center without police blocking our way,” Reznik said. “Until now, the authorities have made every effort to intimidate protesters and confine independent political discussion to people’s kitchens, just as it was during Soviet rule.”
The police presence was substantial at all of the May 1 rallies, though no incidents were reported by the demonstrators or the police.
The authorities had expected a much larger turnout for the demonstrations — a total of around 20,000 people had been expected — and 3,000 police officers were sent to patrol the meetings.
Sergei Gulyayev, local coordinator of the anti-Kremlin opposition coalition The Other Russia, launched a verbal attack on the police in his speech at the meeting. “According to official statistics, fifty percent of all crimes committed in Russia never get solved, but the state deploys thousands of police to resist opposition rallies,” Gulyayev said.
“Narcotics are sold easily in courtyards, prostitutes pack the historical center [of the city] at night, but the police maintain a convenient hands-off stance, preferring to persecute their critics rather than criminals.”
Members of Eduard Limonov’s outlawed National Bolshevik party attended the opposition rally on Pionerskaya Ploshchad.
They held the black, yellow and white flags of the Russian Empire which served as the Russian national flag from 1858 to 1883.
“It was under this flag that serfdom was abolished in Russia in 1861; it was under this flag that Russia adopted its first political freedoms and censorship was abolished,” said Andrei Dmitriev who chaired the regional branch of the party until it was declared extremist and banned, along with its own flag and symbols, in April.
“And in 1993 it was held by the people who defended the Russian parliament. This is a respected flag, and we are proud to be able to hold it,” Dmitriev said.
TITLE: Germany Presses U.S., Russia Dialogue
AUTHOR: By Desmond Butler
PUBLISHER: The Associated Press
TEXT: WASHINGTON — German Chancellor Angela Merkel urged U.S. President George W. Bush on Monday to step up dialogue with Russia over a planned U.S. missile defense system.
The comments, coming on the first day of a U.S.-European Union summit at the White House, followed the chancellor’s praise over the weekend of greater U.S. efforts to consult Russia over its plans to install a radar system and interceptors in Eastern Europe as part of the system. Defense Secretary Robert Gates recently traveled to Moscow, as well as Berlin to discuss Russia’s opposition to the plan.
Merkel on Monday proposed that Russia be invited to participate in a common threat analysis to clarify the need for the defense system. She said that talks should take place in the NATO-Russia council.
Though she said she did not expect great progress on the impasse with Russia at the summit, she said she would press her concerns.
“I want to make clear again that things need to be discussed jointly with Russia,” she said Monday ahead of talks with Bush.
Comments last week by Russian President Vladimir Putin repeating opposition to the U.S. plan and threatening to pull out of a key post-Cold War treaty that set limits on the deployment of military forces in Europe have cast a shadow on the summit.
But they have also provided an opportunity for European leaders to demonstrate unity with the U.S. at a time when the two sides have made clear they will side step disagreements over unresolved differences on issues like global trade and climate change.
European Commission President Jose Manuel Barroso, who is leading the summit’s European delegation with Merkel, said over the weekend that Russia should not have a veto over the proposed missile defense system and criticized Putin’s threat.
The EU has been increasingly critical of Russia on human rights and free speech issues, raising concerns that planned elections for Putin’s successor in March 2008 may be less than fair and open. But European criticism has been tempered by a perceived need to cultivate Russia as a giant neighbor with essential commercial and political ties.
“For us of course, Russia is also a strategic partner, an important partner,” EU External Relations Commissioner Benita Ferrero-Waldner said Monday in Washington. But she said that Putin’s comments were not welcomed in Brussels and would be discussed at the summit and at EU-Russia talks next month.
Diplomatic efforts to achieve Middle East peace and to get Iran to suspend its uranium enrichment program are also on the table at the summit.
Barroso responded strongly on Sunday to a suggestion last week by Iranian President Mahmoud Ahmadinejad that the EU needed to be more independent from the U.S.
European leaders and the U.S. have helped push through two sets of United Nations sanctions as part of international efforts to pressure Iran to make nuclear concessions. In response to Ahmadinejad, Barroso said Tehran should know that the concern about its nuclear program was coming from many parts of the world, not just Washington.
Barroso also praised a comment by Bush that he would be open to direct talks with Tehran, following a suggestion from Javier Solana, the EU’s foreign and security affairs chief, who met last week with Iran’s top nuclear negotiator.
Bush said last week that he would consider talks with Tehran if he thought they would be fruitful, but added he did not believe they would be.
Ferrero-Waldner said she also welcomed Bush’s comments and expected that further talks with Iran would be discussed at the summit.
TITLE: In Brief
TEXT: Flight Restrictions
MOSCOW (SPT) — Airplane passengers will soon be forbidden from imbibing the duty free beverages they have bought while they are flying to their destinations, Kommersant reported Friday.
The Transportation Ministry is set to issue a decree banning passengers from opening any item that contains liquids or gels while they are on board, the newspaper said.
The restrictions are similar to those implemented by U.S. and European carriers in recent years.
Passengers will be allowed to carry no more than 100 milliliters of any fluid or gel in a single container, and not more than 1 liter in total under the new decree, which will come into effect in early May, Kommersant reported.
This total does not include duty free beverages, Kommersant said.
The decree could lead to flight delays and might be ineffective because of the small fines levied for infractions, a Vnukovo Airport spokesman told Kommersant.
Mi-8 Crashes, 18 Dead
MOSCOW (SPT) — An Mi-8 military helicopter crashed in Chechnya on Friday, killing all 18 people aboard, emergency officials said. There were conflicting reports about whether the craft was shot down.
The helicopter went down while flying to southern Chechnya as part of an operation against militants, an official at the regional branch of the Emergency Situations Ministry said, speaking on condition of anonymity because he was not authorized to give his name to the media.
He said preliminary indications were that the helicopter — carrying 15 paratroopers and a crew of three — was shot down, but a ministry duty officer in the region later called the crash an accident.
TITLE: Billions Pledged For Roads
AUTHOR: By Anatoly Medetsky
PUBLISHER: Staff Writer
TEXT: MOSCOW — Sounding a populist note in his last year as president, Vladimir Putin on Thursday called on the government and private investors to spend hundreds of billions of dollars on new power stations, roads and waterways over the next 12 years.
Putin ordered the Cabinet to transfer 300 billion rubles ($11.7 billion) from the stabilization fund to three government investment agencies this year to begin funding those projects.
He also told the Cabinet to increase budget spending on federal and city roads by 100 billion rubles this year.
Combined with other spending proposals to relocate people from poor housing and improve housing maintenance, total federal spending will increase by 650 billion rubles, or 12 percent, this year.
“It is inadmissible for a country with such reserves accumulated from its oil and gas revenues to be at peace with the fact that millions of its citizens live in slums,” Putin said in his state-of-the-nation address.
Arkady Dvorkovich, Putin’s economic adviser, said afterward that the extra cash would not pose an inflationary threat because only about 40 billion rubles would actually be spent this year.
Russia next year plans to split the stabilization fund, which soaks up oil and gas export revenues and reached $108.1 billion in March, into a reserve fund and a national welfare fund, Putin said. The reserve fund will supply some of its money to the federal budget, while the welfare fund will lend money to the three investment agencies, the Development Bank, the Investment Fund and the Russian Venture Co.
The national welfare fund will also finance an increase in pensions and cover any possible deficit in the State Pension Fund, expected to run short in 2012.
TITLE: Cellist Rostropovich, Actor Lavrov Buried
AUTHOR: By Carl Schreck and Galina Stolyarova
PUBLISHER: Staff Writers
TEXT: Renowned cellist, conductor and human rights crusader Mstislav Rostropovich died Friday in Moscow, one month after celebrating his 80th birthday.
Rostropovich had been undergoing treatment in recent months at the Blokhin Russian Cancer Research Center in Moscow, the country’s leading cancer clinic.
Rostropovich checked into a Moscow hospital in early February, where he was visited by President Vladimir Putin.
National media reported that Rostropovich was in a serious condition in late February after undergoing an operation, when a tumor was removed from his liver.
Putin expressed his condolences to the families and loved ones of Rostropovich and actor Kirill Lavrov, who died Friday in St. Petersburg at the age of 81, calling the deaths “two very sad events.”
Lavrov, who served as art director of the Bolshoi Drama Theater for more than 50 years, was laid to rest Sunday in a St. Petersburg cemetery next to his wife, as the actor requested in his will, a theater official told RIA-Novosti.
“It is an enormous loss for Russian culture,” Putin said at a news conference with Czech Republic President Vaclav Klaus.
State Duma deputies observed a minute of silence in honor of Rostropovich and Lavrov during their Friday session.
Condolences and praise poured in from across the country Friday from politicians, writers, musicians, human rights activists and religious leaders.
Russian Orthodox Patriarch Alexy II also expressed his condolences to Rostropovich’s family and friends by telephone on Friday, a spokesman for the Moscow Patriarchate told Interfax.
On Feb. 26, Putin awarded Rostropovich the Order of Service to the Fatherland, First Degree, for his “outstanding contribution to the development of world music and many years of artistic activity.”
The footballers of the St. Petersburg premier soccer club Zenit played their Russian National Championship game in Tomsk on Saturday wearing black armbands to honor the memory of Lavrov, a dedicated fan of the club.
Lavrov was born in Kiev on September 15 into the family of renowned actor Yury Lavrov. He studied at the Marine College in Kiev, but during the Second World War he moved on to the Aviation Academy. When he was demobbed from the army in 1950, Lavrov joined the troupe of Ukraine’s prestigious Lesya Ukrainka Theater. In 1995 he was invited to the Bolshoi Drama Theater in St. Petersburg where he worked until his death.
Lavrov gained nationwide fame for his roles in films such as ‘The Brothers Karamazov” and “Alive and Dead,” and theater productions including “Woe From Wit,” “The Government Inspector,” “Uncle Vanya” and “The Three Sisters” at the Bolshoi Drama Theater. On Sunday Lavrov was due to go on stage in one of the company’s most recent shows, “Quartet.”
Rostropovich was born in Baku on March 27, 1927, and studied at the Moscow Conservatory from 1943 to 1948. He became a professor of cello at the conservatory in 1956.
A staunch supporter of artistic freedom and democratic values, Rostropovich emigrated from the Soviet Union with his wife, opera singer Galina Vishnevskaya, in 1974 under intense pressure from authorities, only later returning with Vishnevskaya in 1990.
Thousands of St. Petersburgers came to Lavrov’s alma mater, the BDT, on Sunday to pay their last respects to the actor.
The line spilled onto the Fontanka Embankment and into Ulitsa Rossi. The public memorial service was extended by 1.5 hours to accommodate the large numbers of people wishing to bid farewell to Lavrov.
TITLE: Mystery Swirls in Khimki Over World War Remains
AUTHOR: By Natalya Krainova
PUBLISHER: Staff Writer
TEXT: MOSCOW — The whereabouts of the remains of six Soviet war heroes are something of a mystery.
The World War II pilots’ remains were dug up at a memorial in Khimki, north of Moscow, last week for reburial at a different location on Victory Day. But they seem to have disappeared.
The Khimki administration, which authorized the reburial, said it did not know where the remains were, but thought they might be at the morgue in Skhodnya, a nearby town, Noviye Izvestia reported Friday.
Calls to the administration went unanswered on Friday.
But a spokeswoman for the morgue said by telephone Friday: “We don’t have them.”
Vyacheslav Nyrkov, director of Ritual, the Khimki agency that exhumed the remains, refused to comment on their whereabouts.
The designer of a new monument for the pilots, Alexander Mustafin, said he thought the remains had been hidden to calm tensions.
Khimki allowed the reburial after war veterans complained that prostitutes were desecrating the site along Leningradskoye Shosse. Authorities also want to widen the highway.
Dozens of Communist supporters held a protest over the reburial at the site last Sunday.
“These ashes belong to heroes who defended our motherland. They shouldn’t have been dug up just because someone doesn’t like the monument at this place,” one of the protesters, Pavel Tarasov, said by telephone Friday.
Tarasov, an aide to Communist State Duma Deputy Valery Rashkin, accused authorities of double standards, citing the current uproar over Estonia’s decision to remove a Soviet war memorial and exhume soldiers there.
“At least in Estonia this is largely covered by the media so people can come out and voice their protest, but in Russia all is done sneakily,” said Olga Ivanova, another participant in the Sunday protest.
TITLE: Atria Aims at Conveniently Packed Meat
AUTHOR: By Yekaterina Dranitsyna
PUBLISHER: Staff Writer
TEXT: Atria Russia, the largest meat producer in St. Petersburg, has announced ambitious plans for regional expansion in its attempt to become the market leader.
Atria will start regularly supplying the leading Moscow retail chains and other regions as early as this month, the company’s managers said Friday at a press conference.
Atria hopes to gain a march on its competitors by introducing a number of innovations — sliced meat and, in place of the vacuum system, packaging that can be opened and closed multiple times.
“In Finland we became a leader by launching this type of packaging five years ago. As a result, our share of sliced products increased by eight percent. Atria Group sales grew by 21 percent,” said Juha Ruohola, general director of Atria Russia.
Ruohola expects the share of sliced products in the St. Petersburg market to double over the next few years.
The company also plans to expand its meat assortment and introduce new product categories. At the moment it produces about 200 different products.
In 2005, Atria Group acquired the St. Petersburg-based meat producer Pit-Product, which, at that time, was the second largest meat company in St. Petersburg with 15 percent to 20 percent of the market. Pit-Product had two production sites — in St. Petersburg and the Leningrad Oblast.
“Last year we decided to invest 70 million euros ($100 million) into a new plant in Gorelovo, Leningrad Oblast. The project will be completed by 2008,” Ruohola said.
As a result Atria’s production capacity in Russia will increase from 80 tons to 180 tons per day. The managers expect sales in Moscow to provide 20 percent of the total turnover while other regions should account for 15 percent, said Yulia Kravchuk, Director of Marketing at Atria Russia.
Atria is in negotiations with retail chains in the regions. However at the moment the company does not plan any new acquisitions in Russia.
“We are focusing on organic growth and the new production facilities and 17 hectares of land that we have in Gorelovo give us opportunities to increase sales if required,” Ruohola said.
Last year Atria Russia turnover accounted for 74.1 million euros — a 39 percent increase on 2005 figures. According to AC Nielson data, Pit-Product products account for 25 percent of the market in St. Petersburg in money terms.
“Such turnover is impressive. But we have to take into account that other meat producers are also increasing production. Because of the recently introduced law on the meat industry we can expect that companies will merge and unify,” said Vadim Somov, executive director of the Russian Meat Union.
Atria could become a market leader, if it starts the active acquisition of regional plants, Somov said.
To attract customers Atria is rebranding itself. As well as a new design the new packaging offers other significant advantages. “Product storage life has been doubled, the package is more convenient for transportation and easier to use,” she said. 13 products will be sold using this new type of packaging.
TITLE: U.S. Galleon Surrounded By Pirates
AUTHOR: By Martin Crutsinger
PUBLISHER: The Associated Press
TEXT: WASHINGTON — China, Russia and 10 other nations were targeted by the Bush administration for failing to sufficiently protect American producers of music, movies and other copyrighted material from widespread piracy.
The Bush administration on Monday placed the 12 countries on a “priority watch list’’ which will subject them to extra scrutiny and could eventually lead to economic sanctions if the administration decides to bring trade cases before the World Trade Organization.
Another 31 countries were placed on lower level monitoring lists, indicating the concerns about copyright violations in those nations did not warrant the highest level of scrutiny.
The designations occurred in a report that the administration is required to provide Congress each year highlighting problems American companies are facing around the world with copyright piracy, which they contend is costing them billions of dollars in lost sales annually.
“We must defend ideas, inventions and creativity from rip-off artists and thieves,’’ U.S. Trade Representative Susan C. Schwab said in a statement accompanying this year’s report.
The administration earlier this month announced that it was filing two new trade cases against China before the World Trade Organization.
One of those cases charged that China was lax in enforcing its laws on American copyrights and patents.
The annual report, known as a “Special 301 Report,’’ for the section of U.S. trade law that it covers, said that China has a special stake in upgrading its protection of intellectual property rights, given that its companies will be threatened by rampant copyright piracy as they increase their own innovation.
For Russia, the report said the United States will be closely watching to see how Russia fulfills the commitments it made to upgrading copyright protection as part of a U.S.-Russia accord reached last year which was seen as a key milestone in Russia’s efforts to join the World Trade Organization.
In addition to Russia and China, the 10 countries placed on the priority watch list were Argentina, Chile, Egypt, India, Israel, Lebanon, Thailand, Turkey, Ukraine and Venezuela.
In elevating Thailand to the priority watch list, the administration said it was concerned by a range of issues including a “deteriorating protection for patents and copyrights.’’ Thailand is currently in a dispute with international drug companies including Abbott Laboratories of the United States over the cost of drugs to fight AIDS and other diseases.
The Thai government in January issued compulsory licenses allowing the use of much cheaper generic versions of two leading drugs in Thailand.
Representatives of U.S. companies applauded the new administration report but according to Oxfam America, “The report ignores important international agreements signed by the U.S. government ... which clearly state that developing countries have the right to place public health and the public interest over intellectual property rules,’’ said Rohit Malpani, a policy adviser with Oxfam.
TITLE: Russia Sticks to Inflation Goal Despite Spending Plan
AUTHOR: By Svetlana Kovalyova
PUBLISHER: Reuters
TEXT: MILAN — Russia will stick to its inflation targets despite a plan to spend hundreds of billions of dollars in the next few years, Russia’s finance minister said on Monday, brushing off market concerns of rising inflation.
Russia’s plan to pump billions from oil and gas export revenues into modernising the economy, unveiled by President Vladimir Putin last week, has triggered worries of high inflation and rouble appreciation.
“The inflation forecast for this year is stable, under 8 percent, as well as for next year — under 7 percent,” Finance Minister Alexei Kudrin told reporters in Milan, where he attended an investment conference.
Kudrin, the government’s leading fiscal hawk, said the Kremlin-blessed spending spree would be spread over a minimum of 3-5 years and would not disrupt economic growth nor inflation plans.
“Our forecast of economic growth from 2007 to 2010 is that it will be more than 6 percent a year. That means Russia will remain among the most rapidly growing economies in the world,” Kudrin said in a speech at the conference.
Russia’s economy grew 7.9 percent and industrial output by 8.4 percent in the first quarter. Kudrin also said he anticipated a rise in foreign direct investment in Russia to more than $30 billion this year from $26 billion in 2006 when it was part of a total of $164 billion of investments in Russia’s economy.
The investment program — which some commentators have compared with Soviet-era central planning — would help to diversify Russia’s economy and make it less dependent on oil and gas export revenues.
On the domestic energy market, Kudrin said the government would raise internal gas prices by about 25 percent a year in the next two years to bring them close to international prices.
The government has been studying a plan to increase taxes on the extraction of natural resources, he said, declining to give details.
TITLE: Times are Taxing for Energy Champions
AUTHOR: By Simon Shuster
PUBLISHER: Staff Writer
TEXT: MOSCOW — The three largest independent firms in the oil and gas sector came out with earnings reports this week, and all three disappointed. The industry’s future has begun to look downright grim.
TNK-BP’s net income in the first three months of 2007 fell 60 percent year on year, and 11 percent compared with the previous quarter. LUKoil also saw an 11 percent drop in revenues from the third to fourth quarters of last year, revealing weakness that was “far more serious than the market expected,” Alfa Bank wrote in a note to investors Wednesday. On Monday, Novatek revealed 2006 earnings growth that was 15 percent below consensus expectations, and 34 percent below those of Renaissance Capital, urging the bank to reassess the gas firm’s value.
“The tail end of 2006 was just not a good time for the sector,” said Alexander Burgansky, oil and gas analyst for Renaissance Capital. “The dropping global prices and growth of taxes really spoiled the market environment. The taxes are the biggest strain.”
Export duties on oil are adjusted bimonthly in Russia based on the price of Urals crude over the previous two months. This means that if oil prices are high, firms can expect higher taxes in the months ahead. Such was the case in the fourth quarter of last year, when oil giants were feeling the tax hikes from soaring prices that summer and fall.
“But because of the lag built into the system, taxes are going to drop in the second quarter [of 2007],” in reaction to the low prices during the first, Burgansky said. “This should bring some relief in the short term.”
In the longer term, officials signaled this week that the burdens would only get worse, however. Because crude prices have of late been buoyant, averaging near $61 per barrel since the beginning of March, export duties will rise by roughly $6 per barrel as of June 1, a source in the Finance Ministry told Interfax on Thursday.
The hoped-for shift of the tax burden onto the gas sector also seemed to slip farther out of sight last week. Though various top officials said Wednesday that proposals on raising gas production taxes had been drawn up, no one could say when a decision might be reached, and the Economic Development and Trade Ministry said it had not worked with the Finance or the Industry and Energy ministries to resolve the matter.
“The uncoordinated decisions by the various ministries imply that the fight over gas taxation is poised to intensify,” Troika Dialog said in a note Thursday.
Anton Tebakh, chief strategist at UralSib, concurred, adding that gas tax hikes would not be implemented until 2009. And Burgansky added that even after they were implemented, there would still be no real easing of the oil sector’s burden.
Spot prices for gas on the unregulated gas market, established by Gazprom in November, have been falling since the start of the year, with their premium over the state-regulated gas tariffs dropping from 56 percent in January to 36 percent in March and 30 percent in April, MDM Bank said in a note Monday.
The gas price reacts with a six-month lag to the price of oil, said Peter Westin, chief economist at MDM, so it is now just beginning to feel the impact of the slump in crude prices that began at the end of last year.
The Central Bank, which released its guidelines last week for the next three years of monetary policy, appears to have accepted that oil and gas will soon be unseated from the center of the country’s economy. Its guidelines said the foreign trade surplus would drop to $10.3 billion by 2010 from the $139.2 billion seen last year, meaning that the value of imports will nearly outpace the value of exports in three years’ time.
For the past eight years, the Central Bank’s main role has been to curb inflation, first by means of letting the ruble appreciate and second by soaking up excess liquidity from the oil and gas revenues that were flowing into Russia.
TITLE: Imperial Reveals Smoking Profits on Expensive Brand
AUTHOR: By Thomas Mulier
PUBLISHER: Bloomberg
TEXT: BRISTOL — Imperial Tobacco Group Plc, Europe’s second-largest publicly traded cigarette maker, said first-half profit rose 6 percent on sales of its higher-priced Davidoff brand in Asia and the Middle East.
Net income in the six months through March 31 climbed to 421 million pounds ($842 million), or 62.1 pence a share, from 397 million pounds a year earlier, or 55.9 pence per share, the Bristol, England-based company said in a statement.
Imperial Tobacco on Tuesday said it has “alternatives’’ to its 12-billion pound bid for Altadis SA, the Spanish maker of Gauloises, and has met with the company. Cigarette makers have been merging to cut costs and expand in faster-growing markets, from Russia to Taiwan. Western European consumption is declining amid higher taxes, prohibitions on advertising and smoking bans.
“Altadis would be a very attractive bolt-on acquisition because it would give them access to North African markets,’’ said James Bevan, who helps manage about $9 billion as chief investment officer at CCLA Investment Management Ltd. “Is it crucial? Absolutely not.’’
“There are lines of communication that are open,’’ Imperial Chief Executive Officer Gareth Davis said today, adding that Altadis needs to give more information on assets, taxes, and restructuring before he’d consider raising his bid.
He added that buying Altadis is “not crucial,’’ and that he expects the situation to become “somewhat clearer’’ this month. Miguel Angel Martin, a spokesman for Altadis, declined immediate comment on the talks.
Imperial Tobacco stock slipped 2 pence, or 0.1 percent, to 2,175 pence at 8:50 a.m. in London. Altadis, which has rejected two takeover bids from Imperial, fell 0.8 percent to 48.25 euros yesterday. The Spanish stock market is closed for a holiday.
Net income topped the 414 million-pound median estimate of six analysts surveyed by Bloomberg. Operating profit rose 11 percent to 658 million pounds, below the 659-million-pound estimate.
Sales excluding tax rose 1.2 percent to 1.51 billion pounds. The company said it will raise its interim dividend by 14 percent to 21 pence a share.
Imperial Tobacco, which operates in more than 130 countries, said it sold 10 percent more Davidoff cigarettes in the first half as consumers in Saudi Arabia, Russia and Greece switched to the brand.
Buying Altadis would allow Imperial Tobacco to expand in the Middle East and northern Africa. Altadis owns the monopoly cigarette distributor in Morocco. Imperial met with Altadis after the Spanish company raised its profit targets last week, Davis said.
The company said Tuesday that it expects the U.K. market to decline in the second half after being “stable’’ in the first half. Wales and Northern Ireland began public smoking bans last month, while England’s ban will start in July.
Imperial also said the German cigarette market shrank 7 percent in the first half.
The company said March 21 it expects to save about 30 million pounds a year by closing factories.
TITLE: LSR to Light Up Banished Brown Field
AUTHOR: By Yekaterina Dranitsyna
PUBLISHER: Staff Writer
TEXT: The former site of industrial enterprise Zavod Electric is to undergo redevelopment. The LSR Group is to spend $600 million to turn the Petrogradsky district plant into a commercial complex, the group said April 24 in a statement.
“We expect over 60 percent of the complex to be occupied by A-class offices, and the rest will be shopping and entertainment areas — stores, restaurants and a fitness center,” said Georgy Bogachev, deputy director of LSR Group.
LSR Group is to develop 200,000 square meters of commercial space. The total construction area is 7.2 hectares. About 90 percent of the plant’s premises will be demolished, Bogachev said. LSR plans to construct buildings of seven and eight stories and a 75-meter high tower. One historical building — a monument of industrial architecture — will be restored.
The complex is due to be completed in 2013. It will be financed using bank loans and LSR’s own resources. Earlier this month LSR announced that it had received five billion rubles ($196 million) from Deutsche Bank, the largest bank loan ever granted to a Russian construction company.
Last year, LSR Group acquired a controlling stake in the Zavod Electric open joint-stock company. By that time the plant had already started its move out of the city to Kikerevo in the Leningrad Oblast, and the process has only been advanced as a result of the investment from the new shareholder.
“It’s a natural and positive trend in the development of a megapolis when production facilities are located out of the city while new residential buildings and office centers decorate St. Petersburg and do not harm the environment,” Bogachev said.
Nikolai Kazansky, director for investment consulting at Colliers International, said that expenses on A-class office centers normally amount to $1,500 per square meter, while annual rental varies between $500 and $600 per square meter.
“In the last several years we saw a steady increase of rents and a lack of high-quality A-class office space,” he said.
The profitability of high-class office projects is about 20 percent, Kazansky said. However LSR Group is developing a large territory and the construction period is rather long, which could affect profitability, Kazansky said. He also indicated the volume of construction could change.
In general experts expect such redevelopments to flourish.
“The redevelopment of industrial areas in the Petrogradsky district has been going on for several years. For developers it’s a chance to acquire a land plot in the center of the city with engineering communications. Most of the plants do not operate at full capacity or are closed, and developers as a rule are not exposed to any additional expenses,” Kazansky said.
He cited the shopping and office center “River House,” which was also created on the base of buildings formerly owned by Zavod Electric. Chaika Plaza Petersburg company lets offices in the premises of the Krasnogvardeyets plant. The Senator chain of office centers is continuing redevelopment of the former Rossiyanka plant, Kazansky said.
“The demolition of industrial premises and then construction from scratch is rational both in terms of projection and expenses,” said Yelena Afinogenova, head of office department at Praktis CB. She estimated construction costs at $1,400 per square meter.
“Considering the value of the land and the premises that are being demolished, the cost could increase to $2,000 to $2,500, which is already critical in terms of profitability,” Afinogenova said. She indicated that the owners of industrial areas in the city center often overvalue them. “However, more and more office areas are appearing, and developers are starting projects outside the ring-road, which will force landowners to adjust their expectations,” she said. LRS Group is a holding company that runs a number of projects in different industries. The group consists of enterprises for the mining and processing of rock products as well as the production and transportation of construction materials and construction — from standard blocks to elite residential buildings.
TITLE: Duma Moves Toward Pawnshop Proposal
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — A new bill aimed at tightening regulation of the pawnbroking industry and improving the image of pawnshops as legitimate lending institutions passed in a first reading in the State Duma on Friday.
“The proposed law is intended to protect the rights of people who pawn their valuables,” Konstantin Shipunov, one of the sponsors of the bill, said while presenting it Friday.
Pawnshops are currently regulated by the Civil Code, which details rights on lending money in exchange for collateral.
As a guard against money laundering, pawnshops are no longer permitted to accept shares and bonds as security.
The new bill also makes it illegal for pawnbrokers to engage in other types of business apart from pawnbroking.
But restricting the scope of business activities will complicate the duties of pawnbrokers, said Yelena Popova, deputy director of MosgorLombard.
“Services such as cleaning or repairing jewelry or mothballing fur coats proscribed by the new law are an indispensable aspect of our business,” Popova said.
The bill also envisions a limit of 180 days on pawnbrokers’ loans and requires them to notify defaulting clients in writing before putting pledges up for sale.
TITLE: Israelis Center In On Russia
PUBLISHER: Reuters
TEXT: JERUSALEM — Israeli real estate company Danya Cebus Ltd. said on Sunday it had won a $60 million project in Russia to build a commercial center.
Danya Cebus and a unit of the company traded in Russia were chosen by Mirland Development Corp. to build a commercial center in Saratov, on the shores of the Volga river, some 860 kilometers (538 miles) south of Moscow.
It is the first project Danya Cebus will pursue in Russia without the partnership of parent company Africa Israel Investments Ltd. , the company said in a statement to the Tel Aviv Stock Exchange.
Africa Israel owns 73.4 percent of Danya Cebus.
The commercial center is expected to be finished within 21 months following closure of the deal. The project is subject to regulatory approval.
Africa Israel Investments is controlled by billionaire Lev Leviev and has interests in real estate, energy, hotels, fashion, and infrastructure.
Africa Israel’s shares were up 2.2 percent and Danya Cebus’ shares were up 1.2 percent in morning trade in Tel Aviv, compared with losses of 0.7 percent in the broader bourse.
TITLE: CapitaLand in Russia
PUBLISHER: Bloomberg
TEXT: SINGAPORE — CapitaLand, Southeast Asia’s largest developer, said it would take a 10 percent stake in Russia’s Eurasia Logistics, a builder of logistics properties, and that the venture might set up a property trust.
Eurasia Logistics has a five-year plan to invest $3 billion to develop 16 logistics properties in countries such as Russia, Kazakhstan and Ukraine, CapitaLand said in a statement last Thursday.
TITLE: The Yeltsin Inheritance
AUTHOR: By Alexei Bayer
TEXT: It is a measure of his legacy that Boris Yeltsin, a Communist Party apparatchik until the age of 60, was buried with full Christian rites last week. During the eight years of his presidency, Russia had neither prisoners of conscience nor political emigres. You’d have to scour Russian history pretty thoroughly to find another such time. It hasn’t happened since.
Coming to power on the crest of a popular revolution, Yeltsin gave the country a breath of freedom, but not true democracy. As a lifelong insider, he didn’t understand that democracy, liberalism and even glasnost couldn’t really work in Russia as long as it was ruled by the army of entrenched Soviet-era bureaucrats. After 75 years of communism, there was no one to turn to with hands-on experience working in the real world.
Worse, reformers he inherited from Gorbachev’s perestroika were ambitious young men who had cynically joined the Young Communist League in Brezhnev’s last sclerotic years in order to advance. When the opportunity arose, they did what all Soviet citizens were conditioned to do: Steal everything quickly, before you get caught.
Instead of smashing the power of the old bureaucratic party apparatus, reformers and new entrepreneurs began working hand-in-glove with the system to pillage its assets.
Ironically, former-Yukos CEO Mikhail Khodorkovsky could have become the true heir to Yeltsin. Although he acquired his wealth like everybody else, by bribing and suborning the bureaucracy, in the early years of this decade he developed an alternative vision of Russia. Harboring strong political ambitions, he began working toward an Open Russia, as the name of his foundation implied — one in which the bureaucratic stranglehold on Russian society would be loosened.
Those who wonder why under President Vladimir Putin and his KGB entourage corruption not only has not been stamped out, but flourishes like never before simply do not understand the nature of the system. The KGB Putin joined in the 1970s was a different organization from the one of the 1930s. Back then, the secret police were an instrument of Stalin’s personal reign of terror. It slaughtered millions of Russians, but it was also used to put the fear of God into the Soviet bureaucracy, layer after layer of which was systematically fed into the gulag.
When Stalin died, the first thing his successors did was to change the nature of this monster, turning it into the protector of Party rule and the bureaucratic apparatus.
This, in essence, is what the Putin government is doing now. It has become the natural order of things, which is why the team the president has assembled haphazardly from classmates, former colleagues and dacha neighbors has been able to gain full control over Russia and to function so smoothly. The stakes are now much higher than during the Soviet era, when top bureaucrats were rewarded with shoddy apartments, dachas and imported VCRs. Now, bureaucrats crowd the world’s costliest tourist destinations while their wives drive up prices at top boutiques.
Over the past week, Yeltsin has been praised, especially by foreigners, for what he did in the final decade and a half of his life — for providing freedom and laying the foundations for prosperity in Russia and parts of the former Soviet Union. Unfortunately, what Yeltsin bequeathed to the country he founded was shaped by his first six decades. Symbolically, his funeral interrupted the long six-day workweek, extended so that post-communist Russia could mark the Day of Workers’ Solidarity on May 1.
Alexei Bayer, a native Muscovite, is a New York-based economist.
TITLE: New Thinking Needed
AUTHOR: By Fyodor Lukyanov
TEXT: In recent years, speculation has swirled ahead of President Vladimir Putin’s annual state-of-the-nation addresses that the main thrust of the speech would be about foreign affairs. Each year there appeared to be special circumstances that called for the president to lay out his vision of the situation in the world.
In 2005, the buzz was about Russia’s role in the 60th anniversary of the victory over Nazi Germany. Last year, with Russia chairing the Group of Eight, the word was that Putin would deal in more depth with global problems. Prior to Thursday’s speech, everyone thought Putin would sum up the results of his two terms in office.
Every prediction was wrong. This is Putin’s style; he dislikes doing what others expect him to do. However, each of the last three state-of-the-nation addresses did contain remarks about foreign policy that became the subject of much discussion.
In 2005, it was Putin’s sensational statement calling the breakup of the Soviet Union “the greatest geopolitical catastrophe of the 20th century.” In 2006, it was his thinly veiled reference to the United States, whom he called a “Comrade Wolf” ready to devour whatever it wanted. In his speech this week, Putin announced the suspension of Russia’s participation in the Treaty on Conventional Armed Forces in Europe.
The evolution of these statements is telling. Two years ago the Kremlin simply stated that it had its own perception of the world. The West did not fully understand what Putin meant with his reference to the Soviet collapse. He was not grieving over the loss of the superpower, as his words were interpreted. He meant that the disappearance of such a gigantic empire prompted changes we are not yet fully able to measure. But we must adapt to those changes.
A year later, Putin offered an evaluation of Russia’s main political partner. He sarcastically expressed his disappointment with the United States’ inability to understand Russia’s position. He voiced these same thoughts more aggressively during his speech in Munich in February of this year.
In his final state-of-the-nation address, the president has progressed to concrete actions, threatening to reconsider Russia’s treaty obligations in Europe. In Munich, Putin expressed doubts about the treaty limiting short- and medium-range ballistic missiles. In Moscow, he questioned the CFE Treaty.
Of course, the recasting of the Russian position should be considered in the context of the Kremlin’s mood swings. With an unflagging stream of petrodollars pouring in, and with Western countries mired down in various problems, Russia is experiencing an exaggerated feeling of self-confidence. But the wisdom of rejecting international obligations as a foreign policy tactic remains to be seen. With a little intellectual exertion, one could find more graceful ways of expressing dissatisfaction with the current state of affairs.
Discussions of Moscow’s growing swagger should not overshadow the main cause behind the increasing number of clashes between Russia and the West, which is the fact that the international security system is based on Cold War conditions. Even under changed circumstances, there is a tendency to revert to the old way.
The CFE Treaty established a balance of power between the Soviets and Europeans based on conditions in 1990. Since then, Europe has changed beyond recognition, and the failure to update the treaty has created an absurd situation. Past attempts to change the treaty have run up against problems that were unforeseeable 17 years ago — namely, the existence of unauthorized territorial-ethnic conflicts that touch upon questions like the right to national self-determination and the principle of territorial integrity. These problems lead to increasing conflicts.
NATO has changed but has yet to formulate a new mission to match current circumstances. And as NATO expansion proceeds, Moscow’s fears only cause irritation in Western capitals. They seem unable to understand why Russia would feel threatened.
It is unclear what is happening with today’s strategic agenda. The Cold War approach is inadequate now. Since serious strategic games are starting up in Europe, it is necessary to treat them with the same gravity that marked the mutual restraint of the past epoch. Otherwise, both sides will only provoke each other rather than seek agreement on common rules governing behavior. From this point of view, Putin’s attempt to reform the Organization for Security and Cooperation in Europe, or OSCE, seems sensible. However, the West has shown little interest in the proposal and is content to keep the OSCE on the back burner.
The current world order differs radically from that of 20 years ago, and even from the situation 10 years ago. Attempts to adapt former institutions to meet today’s challenges only lead to new misunderstandings. The West is becoming increasingly convinced that Russia is returning to its old unconstructive superpower politics. And Russian discontent stems from a paranoid “besieged fortress” mentality that sees foreign money flowing in to destabilize the regime. Twenty years ago, Soviet President Mikhail Gorbachev proclaimed his “new thinking for our country and the world.” On the anniversary of that declaration, it would be worthwhile to make another attempt at formulating a new vision of the world and a fundamentally new approach to solving its problems.
Fyodor Lukyanov is editor of Russia in Global Affairs.
TITLE: Obsolescence Of The Treaties
TEXT: President Vladimir Putin’s announcement on Thursday that Russia would suspend its obligations under the Treaty on Conventional Armed Forces in Europe and might actually withdraw from the agreement should have come as no surprise. But it seems to have startled the signatories of the treaty who have turned a deaf ear to the Kremlin’s repeated warnings that it will not tolerate a situation in which Russia fulfills its obligations under the treaty and others do not.
For several years, senior Kremlin officials have voiced frustration that no NATO members have ratified an adapted 1999 version of the CFE Treaty.
Still, the United States and other powerful NATO members have preferred to ignore the grievances or counter them with calls for Russia to fulfill a declaration that it signed along with the adapted treaty at an Istanbul summit in 1999. The declaration calls on Russia to withdraw all troops from Georgia and Moldova.
There is no direct legal link, however, between the ratification of the updated treaty and the military pullout, so the U.S. argument is flawed.
The United States has not only failed to ratify the adapted treaty but it also hasn’t joined a number of key international treaties, including the Vienna Convention on the Law of Treaties. This 1969 convention requires that signatories fulfill treaties they have signed, regardless of whether other countries have signed as well. Russia has signed this convention, obliging it to fulfill the adapted CFE Treaty, while the United States has not, even though it is a signatory of the adapted treaty.
This leaves Russia with no choice but to pass legislation to abrogate either the Vienna convention or the CFE Treaty if it wants to end its obligations under the CFE. There is no clause in the treaty that allows a signatory to suspend its obligations.
Or NATO signatories could finally heed Russia’s grievances and ratify the treaty, a cornerstone of European security architecture.
Otherwise, Russia may indeed walk out of the CFE Treaty. Such a withdrawal — coming at a time when the START-I treaty is expiring and Russia is threatening to withdraw from the Intermediate-Range Nuclear Forces Treaty — would send the remaining European security architecture tumbling down. This would not lead to a new Cold War but would make geopolitics on the European continent far less stable and predictable.
This comment first appeared in The Moscow Times.
TITLE: Arizona Claims Sixth Straight Win
PUBLISHER: Reuters
TEXT: LOS ANGELES — Chris Young homered twice and the Arizona Diamondbacks pounded out 17 hits in winning their sixth straight game, a 9-1 rout of the Los Angeles Dodgers on Monday.
Young hit solo homers in the first and seventh innings and the Diamondbacks had a seven-run lead before the Dodgers scored. The Arizona center fielder went 3-for-5 for the game and drove in three runs.
“These last few games, last five or six games, we’ve been swinging the bats well and it’s been paying off for us big time,” Young told reporters.
Orlando Hudson also had three hits for the Diamondbacks.
Pitcher Brandon Webb allowed just four hits while striking out two and walking three in seven innings.
“You could tell early on that he had that shot-put sinker going, and I’ll tell you when he’s throwing it at the bottom of the zone, there’s very little you can do with it lefty or righty,” Diamondbacks manager Bob Melvin told reporters.
“He’s gotten much better over the last couple of years with his secondary stuff, but when he’s got his sinker working it’s a tough night.”
The loss was the sixth in eight games for the Dodgers.
n Pedro Feliz’s three-run homer in a five-run first inning helped the San Francisco Giants snap a three-game losing streak with a 9-5 home win over the Colorado Rockies. Barry Bonds was 0-for-1 with three walks. He scored two runs.
n Jeff Suppan pitched a complete game as the Milwaukee Brewers scored a 7-1 home win over the visiting St. Louis Cardinals, who were playing for the first time since the death of relief pitcher Josh Hancock in a traffic accident on Sunday. Suppan allowed eight hits while striking out five and walking one.
n Andruw Jones’s three-run homer in the ninth inning lifted the Atlanta Braves to a 5-2 home win over the Philadelphia Phillies.Braves’s pitcher Tim Hudson wore the letters “JH” on the left shoulder of his jersey in tribute to former university team mate Hancock. Hudson allowed four hits and two runs in eight innings.
The Florida Marlins jumped on fill-in pitcher Park Chan-ho for seven runs in four innings for a 9-6 road win over the New York Mets. Park was called on to pitch after the Mets’s Orlando Hernandez was placed on the 15-day disabled list with bursitis in his right shoulder.
TITLE: Sharks Rallies to Edge Detroit
PUBLISHER: Reuters
TEXT: NEW YORK — Jonathan Cheechoo’s third-period powerplay goal lifted the San Jose Sharks to a come-from-behind 2-1 home victory over the Detroit Red Wings in their Western Conference semi-final series on Monday.
The win gave the Sharks a 2-1 edge in the best-of-seven series. Game Four is San Jose on Wednesday.
Detroit took a 1-0 on Nicklas Lidstrom’s powerplay score 11:13 into the game, and Sharks fans were quick to show their frustration, even booing the team after the first period.
“I don’t think they know how hard this is,” San Jose coach Ron Wilson told reporters. “They’re the best team in the Western Conference for a reason.”
San Jose got back on level terms in the second period through Ryane Clowe before Cheechoo got the game-winner off a rebound from Kyle McLaren’s shot from the point. The Sharks winger pulled the puck to his backhand, moved around Detroit netminder Dominik Hasek and jabbed the puck into the open side of the net 13:19 into the final period. Sharks netminder Yevgeni Nabokov made 29 saves.
TITLE: Waugh Lines Up for Finale
PUBLISHER: Reuters
TEXT: SYDNEY — Wallabies flanker Phil Waugh returns to the Waratahs side for the final Super 14 match of the season against the Hurricanes in Wellington, New South Wales said on their web site on Tuesday.
Waugh, out of action with an ankle injury for 10 weeks, will line up against former New Zealand captain Tana Unaga who is playing his final game for the Hurricanes on Saturday.
TITLE: Chinese Upsets BMW Oracle Racing in Spain
PUBLISHER: The Associated Press
TEXT: VALENCIA, Spain — China Team upset Louis Vuitton Cup leader BMW Oracle Racing on Monday for its first win in America’s Cup challengers series racing.
BMW Oracle Racing was in control at the start and pinned the Chinese yacht out to the right behind its heel to build a 200-meter lead.
But the Americans lost their headsail halfway on the first upwind lap and the CHN-95 yacht sailed past the USA-98 boat before the headsail blew out again, forcing BMW Oracle Racing to finish the upwind legs with a single sail as the Chinese won with ease by 3 minutes, 5 seconds.
“Coming back to earth with two points from BMW Oracle Racing is not a miracle because I know these things can happen in sailing,” China Team skipper Pierre Mas said. “But it rewards all of the efforts of the team.”
The Americans’ second loss in round-robin match racing means they are tied with Italian syndicate Luna Rossa at the top of the standings with 23 points. The Italians beat Victory Challenge of Sweden by 23 seconds, also on the northern “Romeo” course.
The Americans could only use the mainsail on the first windward leg, so the headstay foil will be repaired overnight to be ready for the third-flight race against Shosholoza of South Africa on Tuesday.
“A small piece didn’t do its job today, which meant bad luck for us and bad luck for the team because we didn’t get the points,” said BMW Oracle Racing helmsman Sten Mohr, who replaced skipper Chris Dickson for the race.
“It was difficult to read the wind direction. It was quite shifty, with winds changing to 45-50 degrees, and that usually isn’t too much for these boats to handle.”
Emirates Team New Zealand, which had a bye in the second flight, stayed third with 20 points after beating Mascalzone Latino in a rescheduled first-flight race on the southern “Juliet” course.
The Kiwis, who lost to Mascalzone Latino in the first round-robin stage, were in control from the start and crossed the finish line 0:25 ahead.
The Italians’ hopes of winning the fourth Louis Vuitton Cup semifinal place were placed in further jeopardy by losing to French syndicate Areva Challenge in the second flight.
Both boats tacked closely over the course and the Italians earned a penalty for failing to keep clear of the French FRA-93 yacht at one point. Mascalzone Latino crossed the finish slightly ahead but Areva Challenge was the winner by 2:16 since the Italians still needed to perform the penalty turn.
TITLE: Cavaliers Sweeps Wizards 4-0 in Playoffs
AUTHOR: By Erik Matuszewski
PUBLISHER: Bloomberg
TEXT: NEW YORK — The Cleveland Cavaliers beat the Washington Wizards 97-90 to complete a four-game sweep of its National Basketball Association first-round playoff series. The Houston Rockets and San Antonio Spurs also won Monday.
LeBron James scored 31 points and Zydrunas Ilgauskas added 20 points and 19 rebounds for the Cavaliers, who closed the game at Washington’s Verizon Center with an 8-2 run. Cleveland is the third Eastern Conference team to sweep its way to the second round, joining the Detroit Pistons and Chicago Bulls.
“It’s going to be a long and stressful postseason for us, so the more rest we can get, it’s going to add to us being able to recover and mentally let us focus,’’ James said in a postgame news conference.
In Monday’s other playoff games, the Rockets beat the Utah Jazz 96-92 to take a three-games-to-two lead in its opening round series, and San Antonio beat the Denver Nuggets 96- 89 for a 3-1 series lead.
The Golden State Warriors will tonight try to become the first eighth-seeded NBA team to eliminate a No. 1 seed in a best-of-seven series when they visit the Dallas Mavericks. The Warriors holds a 3-1 series lead.
Also Tuesday, the New Jersey Nets visits the Toronto Raptors with a 3-1 lead in its Eastern Conference semifinal. The winner of that series will play Cleveland.
In Washington, the Cavaliers won consecutive road playoff games for the first time in franchise history to end the Wizards’ postseason run for the second straight year. Cleveland won its first-round series 4-2 last season.
James, who hit only 8-of-22 shots, made 14-of-17 free throws to lead the Cavaliers to their first playoff sweep. He added 11 rebounds and seven assists for Cleveland, the second seed in the Eastern Conference, while Larry Hughes scored 19 points.
Antawn Jamison scored 31 points to lead the Wizards, who played without injured All-Stars Gilbert Arenas and Caron Butler.
In Houston, Tracy McGrady had 26 points and 16 assists, and Yao Ming added 21 points and 15 rebounds as the Rockets rebounded from back-to-back losses in Utah. The Rockets, the fifth seed in the Western Conference, can advance to the second round of the playoffs with a win in Game 6 on May 3 in Salt Lake City. Utah won Games 3 and 4 at home by an average of 13.5 points.
“We know how hard it is to win in Utah,’’ McGrady said in a televised interview. “We have to match their intensity. Their building is crazy, their fans are going to be pumped up, but we have to come to play.’’
Carlos Boozer scored 26 points to lead fourth-seeded Utah, who used a late 8-2 run to pull within 93-92 with 27 seconds remaining. After Matt Harpring missed a 16-foot jumper that would have given the Jazz the lead, Rafer Alston made a free throw for Houston and Yao added two more foul shots.
In Denver, Tim Duncan had 22 points and 11 rebounds, and Robert Horry hit a key 3-pointer with 30 seconds left to lift the Spurs to the road win.
San Antonio, the third seed in the Western Conference, rallied from a six-point deficit by outscoring the Nuggets 29-16 in the final quarter. Horry scored all six of his points in the final 12 minutes, including a 3-pointer from the corner that put the Spurs up 93-89.
“The play wasn’t designed for me, it was designed for Tony (Parker) to penetrate,’’ said Horry, whose 248 career 3-pointers in the playoffs are second only to Reggie Miller. “He found me in the corner and I was able to get the shot off.’’
Manu Ginobili scored 18 points off the bench and Parker added 15 for the Spurs, who will host Game 5 Wednesday.
TITLE: Positive Milan Aims For Mental Toughness
AUTHOR: By James Eve
PUBLISHER: Reuters
TEXT: ROME — Carlo Ancelotti has urged AC Milan to produce a repeat of its quarter-final victory against Bayern Munich when it hosts Manchester United in the return leg of their Champions League semi-final on Wednesday.
Trailing 3-2 after the first leg of the tie, Milan needs to beat the Premier League leaders at the San Siro stadium to reach the 10th European Cup final of its history.
Milan showed an ability to overturn an unpromising first-leg result in the last eight, when it followed up a 2-2 draw at home with an impressive 2-0 win in Munich.
“It’s all about our mentality. When we were in Munich I was thinking about the semi-final, and now I’m thinking about the final because that’s what we are aiming for,” Milan coach Ancelotti was quoted as saying in La Gazzetta dello Sport.
“You always have to raise the barrier a little. If you’re playing a semi-final the best way to go forward is to think about the next objective.
“As far as United are concerned, I’m not thinking about the errors we need to avoid, but about the things we need to do. I see the match in a positive light.”
The match is likely to see the return of Filippo Inzaghi to the starting line-up. The 33-year-old striker missed the first leg due to injury, but has a knack of scoring in crucial games as he showed by getting Milan’s second goal in Munich.
Inzaghi’s return strengthens a team that is enjoying its best run of form this season and rose to third in Serie A at the weekend by beating Torino 1-0.
Midfielder Gennaro Gattuso, who limped off with a sore foot early in the second half at Old Trafford, is also expected to start, and Ancelotti has not given up hope that team captain Paolo Maldini — aiming to reach the eighth European Cup final of his career — can play through the pain of a swollen knee.
“It will take a great Milan performance to beat United, but we’re ready,” said Inzaghi.
United received a huge boost at the weekend when it moved closer to wresting the Premier League title away from Chelsea after it came from 2-0 down to win 4-2 at Everton.
Manager Alex Ferguson said his side would need to produce its best away performance in Europe this season to thwart Milan.
“We have to step up a gear,” he told the club’s web site (www.manutd.com).
“There’s a chance that we will concede over there, so we have to score. And we will be going over there with an attitude to score.”
Brazilian Kaka gave United’s patched-up defence a torrid time at Old Trafford but the Premier League leader is set to welcome back England central defender Rio Ferdinand.
TITLE: Bullimore in World Record Attempt
PUBLISHER: Reuters
TEXT: SYDNEY — British yachtsman Tony Bullimore, who survived four days trapped in his capsized yacht in the Southern Ocean in 1996, set sail from Australia on Tuesday hoping to break the record for sailing solo non-stop around the world.
After waiting four months for the right weather conditions, Bullimore steered his 102 foot (31 meter) catamaran Doha out to sea from Hobart on Australia’s island state Tasmania and headed east to begin his journey.
Bullimore hopes to sail 27,000 nautical miles around the world and return to Tasmania in 70 days. The current record of 71 days and under 15 hours was set by fellow Briton Dame Ellen MacArthur in 2005.
The former Royal Marine hit the headlines in 1996 after he was plucked to safety from the icy Southern Ocean after surviving five days in his capsized yacht.
Bullimore had hoped to start his record attempt last December, but unfavorable weather forced him to remain in Hobart for four months.
“I think it (breaking the record) will be one of the greatest things that’s ever happened to me in my racing career and life, it would be wonderful,” Bullimore said before setting off.
Bullimore dismissed talk of his near-death experience in 1996, saying he was confident there would be no such high-seas drama on this voyage, adding he had sailed 120,000 nautical miles and set two Atlantic world records since the famous rescue.
“It’s got to a situation with me that people say ‘Oh you’re going to do it again’, but I’ve been doing this for 35 years,” Bullimore said.
“I have got no reason to believe what happened then will happen all over again.”
TITLE: Woolmer Poisoned Then Strangled - BBC
PUBLISHER: Reuters
TEXT: LONDON — Pakistan cricket coach Bob Woolmer, who was murdered in Jamaica during the World Cup more than a month ago, was poisoned before being strangled, a BBC documentary said on Monday.
Woolmer was found dead on March 18, a day after Pakistan were eliminated from the World Cup following a shock defeat by Ireland. He was found unconscious in his hotel room and pronounced dead at hospital. Police said he was strangled in a crime still shrouded in mystery.
The BBC’s Panorama program, in an investigation screened on Monday night, said preliminary toxicology tests showed that Woolmer, who was 6ft 2in (1.88 metres) tall and heavily built, was subdued by a drug that left him helpless to fight back against his assailants. The drug had not yet been identified.
He was then both strangled and smothered. “A lot of force would be needed to do that. Bob Woolmer was a large man and that’s why one could argue that it was an extremely strong person or maybe more than one person,” police officer Mark Shields, who is investigating the case, said. “But equally the lack of external injuries suggests that there might be some other factors,” Shields told Panorama.
TITLE: Exile Thaksin In the Swing
PUBLISHER: Reuters
TEXT: BANGKOK — Thaksin Shinawatra, the exiled former prime minister of Thailand ousted in a military coup last year, has been elected president of the country’s professional golf association, local media reported on Tuesday.
The billionaire telecoms baron, who has not retuned to Thailand since the bloodless putsch on Sept. 19, won a unanimous vote to take over the TPGA presidency from former cabinet minister Pongsak Raktapongpisal.
Pongsak said Thaksin, a keen golfer, had no plans to return to politics and his exile would not prevent him from doing the job properly.
“Although he is not in Thailand, work will proceed effectively,” the Nation newspaper quoted Pongsak as saying.
Thaksin, whom coup leaders accuse of corruption and cronyism during his five years in office, has been told he can return home to fight legal cases if summonsed by courts.
He has been living in London since his ouster and has spent much of his time in Asia traveling and playing golf, which he insists is for relaxation and not political purposes.