SOURCE: The St. Petersburg Times
DATE: Issue #1382 (46), Tuesday, June 17, 2008
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TITLE: Soldiers’ Mothers Appeal 
Verdict
AUTHOR: By Galina Stolyarova
PUBLISHER: Staff Writer
TEXT: Lawyers for Soldiers’ Mothers, a Russian human rights group that campaigns against brutality and abuse in the Russian army, has given The St. Petersburg Times special access to evidence it claims shows forced prostitution in the ranks.
Soldiers’ Mothers say testimonies by former recruits point to a system in which new recruits were sent to sell sex on the streets of St. Petersburg by older recruits who then extorted the money. 
“Those who did not have money and failed to give it to the senior recruits on demand were sent to sell themselves on the street at the Catherine Garden,” reads one testimony obtained by Soldiers’ Mothers. “They could either use one of the lists of clients which were always available from the older recruits, or try and pick someone up using their own devices.”
The garden surrounding the monument of Catherine the Great overlooking Nevsky Prospekt is a notorious cruising area for those who seek the services of male prostitutes.
Soldiers’ Mothers is appealing an order handed down by the city’s Kuibyshevsky Federal Court to pay 22,000 rubles ($892) in compensation to military unit No. 3727 of the Russian Interior Ministry’s signals corps after the human rights groups publicized evidence it says it obtained that alleges forced prostitution in the unit.
The unit sued Soldiers’ Mothers for damage to its professional reputation and won the case earlier this month. The case was closed to media by the judge because of the sensitivity of the issues involved. 
Soldiers’ Mothers and their lawyers have asked for the names of the witnesses and alleged victims to be withheld to protect their privacy.
The source who described how recruits use the Catherine Garden to pick up clients claimed that as many as 30 recruits in a 70-man unit were forced out of their beds after midnight to serve a “night shift” to earn money for those who bullied them.
Each new recruit arriving at the company was given a “minder” who controlled them, regularly extorted the money and often beat and tortured newcomers, the source claimed. 
The young man who gave the testimony has recently been decommissioned from the army on medical grounds. Although he claimed to have witnessed the prostitution racket in action, he said he was himself able to find money in another way.
“I worked at night unloading trucks but I was often unable to earn enough and then the seniors would beat me,” he told Soldiers’ Mothers. “They would hit me ten or twenty times with a stool. The stools in the canteen were made of metal, and it was especially painful.”
Such stories are not new to military prosecutors.
The Leningrad Military District Prosecutor’s Office has acknowledged receiving similar letters but said it has conducted investigations into such claims and has found no evidence to support them. 
Vyacheslav Tukayev, an aide to the commander of the Northwestern troops of the Russian Interior Ministry corps, said such claims were groundless lies intended to justify the actions of deserters.
But Soldiers’ Mothers, said its evidence shows that victims are tortured and physically threatened on a daily basis in the barracks.
“The torturers would wrap exposed telephone wire around our toes and then run electricity along the wire,” the source claimed. “It was extremely difficult to stand up, I would be all shaking and it felt like a never-ending convulsion — but those who did it found it very funny and would laugh their guts out.”
Viktor Andreyev, a lawyer representing Soldiers’ Mothers said Kuibyshevsky District Court Judge Anzhelika Panova — who ruled in favor of the military unit on June 2 and had earlier closed the hearings to the media — refused to accept the testimony and take it into consideration on the grounds that it was not properly dated.
In a video testimony in the possession of Soldiers’ Mothers, another young man says he was regularly forced to prostitute himself. The video shows him taking the human rights advocates on a walking tour of some of the addresses in central St. Petersburg he said he had been sent to. He claimed his clients included high-ranking city officials and retired intelligence officers.
“At least five to ten recruits a night were sent out to sell themselves,” the man claimed. “When they returned at dawn, senior recruits demanded at least 1,000 rubles [$40] from each person.”
The lists of potential clients contained between 40 and 100 names, he added. 
“It must have been going on for quite a while: one of my clients told me that the lists get passed on to the younger recruits when the seniors finish serving. And it does not stop because many of those who had to go through such humiliation start looking for scapegoats to vent their anger on.”
“There was no way the officers knew nothing: there were simply too many empty beds staring them in the face,” he added.  
This former recruit escaped from the company and was on the run for several months until he sought refuge with the Soldiers’ Mothers. The human rights organization said it conducted its own investigation and obtained a series of testimonies from other recruits it says confirms the shameful pattern. All materials were sent to the military prosecutor’s office but the organization’s efforts failed to bring about results.
In November 2007 the recruit was sentenced to 18 months in jail for desertion. Toward the end of the trial the recruit withdrew his testimony. The young man remains behind bars. 
Ella Polyakova, head of the Soldiers’ Mothers, said the recruit has attempted suicide several times during his time in prison.
As the scandal unfolded, Vasily Panchenkov, an aide to the chief commander of the Russian Interior Ministry troops on media relations, accused the human rights advocates of being directly responsible for the young man’s imprisonment.
“It was Polyakova and Ruslan Linkov [of the political organization Democratic Russia] who persuaded the recruit to testify about being forced into prostitution,” Panchenkov told reporters earlier this month. “They tricked and manipulated him into giving false evidence. These people ruined the man’s life.”
Soldiers’ Mothers have argued that the recruit was forced to withdraw his testimony under pressure from the army authorities.
“It is a real pity that the Russian armed forces are more concerned about their image — that they want to preserve it at all costs — than about establishing the truth and protection of victims of abuse,” Polyakova said. “Those who organize the prostitution and profit from it typically escape justice because the system is corrupt and not the slightest bit transparent.”
A verdict on Soldiers’ Mothers’ appeal is expected in late July or early August.

TITLE: TNK-BP Dispute May Be Taken to Court
AUTHOR: By Tim Wall
PUBLISHER: Staff Writer
TEXT: MOSCOW — The boardroom battle at TNK-BP descended into outright mudslinging over the long holiday break, with the Russian shareholders threatening to have BP-nominated directors disbarred by a Moscow court this week and BP’s chairman accusing them of using illegal “corporate raiding” tactics. 
The chief executive of AAR, the consortium representing the Russian shareholders, insisted in an interview Saturday that the dispute centered only around mismanagement by BP officials. 
“BP is trying to paint this as political pressure or pre-sale posturing, trying to deflect attention away from the core issue,” the chief executive, Stan Polovets, said. “There should be no illusions about this: It is about mismanagement of the company, not politics or change of ownership.” 
A BP official countered that AAR was simply trying to seize control of the 50-50 joint venture. 
The dispute, seen as a litmus test of foreign investors’ rights, heated up Wednesday, when AAR said it would seek an injunction to have TNK-BP CEO Robert Dudley and four other BP-nominated directors of TNK-BP dismissed over an “illegal board meeting.” 
AAR also said it would seek to have a 2003 agreement on BP employees working inside TNK-BP as secondees annulled by the Stockholm Arbitration Court and would seek to have foreign specialists employed directly by TNK-BP instead. 
“This is just a return to the corporate raiding activities that were prevalent in Russia in the 1990s,” BP chairman Peter Sutherland told reporters in Stockholm on Thursday. “Prime Minister [Vladimir] Putin has referred to these tactics as relics of the 1990s, but unfortunately our partners continue to use them and the leaders of the country seem unable or unwilling to step in.” 
The broadside — the strongest yet by a BP official — prompted a protest from Alfa Group chairman Mikhail Fridman, who together with billionaires German Khan, Len Blavatnik and Viktor Vekselberg controls 50 percent of TNK-BP through AAR. 
Sutherland’s comments were “unhelpful and, frankly, insulting to the Russian leadership,” Fridman said in a statement, also released Thursday. 
At a press conference in Moscow on Monday Fridman said relations with BP have broken down over what he called the poor performance of their venture TNK-BP, Bloomberg reported. Shareholder returns at TNK-BP have been worse than at other Russian oil companies, he said.
AAR’s threats of legal action and complaints about BP’s role “are all red herrings,” a source close to BP said Sunday. “AAR is trying to gain control of the company.” 
The court cases, however, could strip BP of much of its managerial control of TNK-BP and make it easier for a state company to take over. 
Talks between the two sides in London broke down Wednesday after an AAR deadline expired. AAR was demanding Dudley’s ouster and equal representation on the boards of TNK-BP, which controls the company’s assets in Russia, and its Russian subsidiaries. 
Yet, in a possible way out of the dispute, AAR and BP agreed that AAR shareholders could have an option to convert some or all of their shares into BP shares, representatives of both sides said. BP is understood to be in favor of such a swap and willing to sell it on to a state company such as Gazprom or Rosneft as long as it receives a fair price for the billionaires’ stake. 
Polovets said there were “seven specific violations of Russian law in the way that the [board] meeting was called and conducted. We are calling for decisions taken at the illegal board meeting to be annulled.” 
A TNK-BP source said the June 3 meeting was called without sufficient notice. 
The BP source, who spoke on condition of anonymity citing the sensitivity of the situation, countered that the BP nominees on the TNK-BP board had not held an illegal board meeting but had properly called an annual shareholders meeting for June 26 so that dividends for 2007 could be paid. 
During a 2 1/2-hour interview in a cafe next to TNK-BP’s head office on Arbat, Polovets, a former Exxon and Ernst & Young executive, fielded several calls on his cell phone, including from Fridman and Khan, who is also TNK-BP’s influential executive director, and signed a sheaf of documents brought to the cafe by an assistant. 
Polovets explained that the Russian shareholders had expressed their concerns to BP about the way the company was being run for some time but had only decided to go public after Dudley aired their differences in an interview with Vedomosti last month. 
TNK-BP was “not realizing its true potential” under BP-appointed managers, Polovets said. 
“In 2003, TNK and LUKoil were worth about the same, $16 billion to $17 billion,” Polovets said. “Now LUKoil is worth more than $95 billion, and we’re worth $38 billion. The only major oil company that has done worse than ours [over the same period] is BP itself.” 
Polovets said an increase in TNK-BP’s production before the 2003 merger had been followed by a flattening-off of growth. 
Vladimir Buyanov, a spokesman for BP in Moscow, rejected the claim, citing a BP financial statement showing that total oil and gas production had risen by 30 percent since 2003. 
The issue of secondees has been a major battleground between BP and AAR this year, as some 150 foreign specialists were found not to have valid work visas and permits and then denied entry to TNK-BP’s offices. 
Polovets said the Russian shareholders’ position had been misrepresented as being against foreign managers per se, when in fact they just wanted to convert these positions from BP secondees — employees of BP “lent” to TNK-BP — into permanent TNK-BP jobs held by talented professionals from anywhere around the world. 
“BP has tried to portray the Russian shareholders as anti-Western and anti-expat, but this is blatantly false. Before the merger, TNK had over 20 expats in senior positions, more than any other Russian oil company then,” he said. 
The original agreement with BP on secondees, to provide technical expertise to TNK-BP where it was needed, had been subverted, Polovets said. 
“It was expected that the secondees would be based mostly in the regions where our operating subsidiaries are located. But in reality, the agreement was transformed into an instrument to create a parallel management structure inside the headquarters, with no accountability to TNK-BP.” 
Some of the BP secondees come in with an attitude of “arrogance and superiority,” Polovets said. “A number of senior Russian managers have complained to AAR that BP executives have often made them feel like aboriginals who are being taught by BP the most basic things [on] how to run an oil company. 
“From BP’s point of view, it’s rational to have secondees. ... They want to control these assets and run TNK-BP as a BP subsidiary with BP managers.” 
Other issues, such as BP rejecting an AAR proposal to hold an initial public offering in London last year and for downstream projects in the Baltics, Central and Eastern Europe also irked the Russian side, Polovets said. 
In response to Fridman’s comments Thursday, the BP spokesman said the company “plans to be in Russia for the long term. We are investing for the future and not just for quick cash returns. The government’s application of the rule of law will help BP achieve that aim.” 
The source close to BP added Sunday that Fridman and his AAR partners were “looking for short-term gain in the next six to 12 months.”

TITLE: Barring ‘Miracle,’ Expat Paper eXile Is ‘Dead’
AUTHOR: By Alexander Osipovich
PUBLISHER: Staff Writer
TEXT: MOSCOW — The eXile, Moscow’s notorious English-language alternative biweekly, is shutting down after its investors became frightened by a government inspection and withdrew their funding, the newspaper’s editors said. 
“The paper is dead, unless a miracle happens,” Mark Ames, The eXile’s founder and editor, said by telephone. 
The newspaper missed an issue this week after its financial backers “got scared away by the government focusing its attention on it,” and now The eXile is very likely to cease publication entirely, Ames said. 
Ames declined to give details of the newspaper’s finances, although he noted, “The situation sucks.” 
Underlining the direness of The eXile’s finances, its web site announced an online fundraiser Wednesday in order to keep its server running. 
The news of The eXile’s apparent demise comes less than one week after its offices were visited by four inspectors from the Federal Service for Mass Media, Telecommunications and the Protection of Cultural Heritage, who asked about the newspaper’s relationship with writer and opposition leader Eduard Limonov, a Kremlin critic who writes a column for The eXile and appears on its masthead. 
Although Ames described the inspectors as “civilized” and “polite,” their promise to inspect The eXile for extremist content was apparently enough to scare off the newspaper’s financial backers, Ames and co-editor Yasha Levine said. 
“News of their visit had our investors fleeing instantly,” Levine wrote in a posting on The eXile’s blog. 
The apparent shutdown comes just as the newspaper finished celebrating its 11th anniversary. 
Founded in 1997, The eXile publishes Gonzo-style journalism on topics such as drugs, prostitution and Moscow nightlife side by side with political analysis, and frequently pushes — if not crosses — the limits of decency. 
The newspaper first learned about the “unscheduled inspection” from the federal service last month, and inspectors met with Ames at The eXile’s offices on June 5. 
After asking about Limonov, the inspectors said they would check The eXile’s compliance with Article 4 of the Law on Mass Media. The article bans media outlets from promoting extremism, pornography or narcotics. 
The inspectors said someone had complained that The eXile “mocks and humiliates Russian traditions and history” and took three issues of the newspaper for analysis, Ames said. 
Inspectors were due to reach their initial conclusions Wednesday, according to a letter received by The eXile last month, a copy of which was obtained by The Moscow Times. 
Yevgeny Strelchik, a spokesman for the service, declined to comment about the inspection Wednesday. “This is an internal matter between us and the newspaper,” he said. 
One of the federal inspectors, Irina Pavlova, said Wednesday that the inspection was complete but declined to say what conclusions the inspectors had reached. 
Asked for her personal impressions of The eXile, she simply said, “It’s a normal newspaper.” 
If inspectors uncover violations, they could issue The eXile a warning. A second warning within the next year could result in the paper’s license being revoked, effectively shutting it down. 
Without the support of investors, however, it appears the newspaper has shut down already. 
“This is sad,” said Andrei Richter, head of the Moscow Media Law and Policy Institute, when told about the closure. 
Richter expressed surprise that investors had pulled funding for the paper, saying the inspection was not that serious. 
“There was nothing to be afraid of,” he said. “Inspections by [the service] do not lead to prison sentences or serious fines. The maximum they can do is to issue a warning, and then after several months, to try and shut down the media outlet in court.” 
Peter Finn, the Moscow correspondent for The Washington Post, expressed regret at the newspaper’s closure even though he had occasionally been the butt of its jokes. 
“I’m very sorry to see it go,” Finn said. “Sometimes they were on the money when they criticized us, and we paid attention to them. Sometimes it was fun to read. And sometimes it was sophomoric. But to see any newspaper shut down is a tragedy.” 
Others were less kind to the newspaper. “They never really called anyone to ask questions, and they made 90 percent of it up,” said one U.S. citizen who was the subject of critical articles in The eXile, speaking on condition of anonymity because he did not want to be quoted saying negative things about the newspaper as it was being shut down.

TITLE: HIV Infection in City Outstrips Rest of Russia
AUTHOR: By Irina Titova
PUBLISHER: Staff Writer
TEXT: The rate of HIV infection in St. Petersburg is 2.5 times higher than the Russian average, the acting head doctor at the city’s AIDS Prevention and Treatment Center said, Interfax reported on Monday.
There are 686 cases for every 100,000 people, figures released by Galina Volkova of the center show. By contrast, in Russia as a whole there are an average of 260 cases for every 100,000 people, she said.
The gloomy statistics were released last week at the first meeting of the coordination council for HIV and AIDS at City Hall. The council was founded in order to coordinate the activities of state and public organizations working in HIV/AIDS prevention, and to increase the effectiveness of measures taken against the epidemic in the city.
Meanwhile, the total number of HIV-positive people registered in St. Petersburg since 1987 now totals 37,687 people, Volkova said.
Volkova said there are twice as many men infected with HIV in the city as women. At the same time 37 percent of street children are infected.
However, the total number of HIV-positive people registered in 2007 was 15.6 percent lower than in 2006. In 2007 HIV-positive mothers gave birth to 355 children.
Almost every tenth HIV-positive person in Russia is from St. Petersburg. During the last ten years the number of HIV-infected people has grown by more than 100 times.  
In 2005, at least 250 people died from AIDS. In 2006, 501 people died, RIA Novosti reported.
Heterosexual transmission has now become the most common method, with 34 percent of transmissions caused by needle-sharing by drug users, according to Alexei Mazus, head of the Moscow City Center for AIDS Prevention.

TITLE: Ivanov Warns Kiev Over NATO
PUBLISHER: Reuters
TEXT: MOSCOW — Ukraine would lose defense industry ties with Russia and suffer reduced trade cooperation if it joined NATO, Deputy Prime Minister Sergei Ivanov said Saturday, news agencies reported. 
Ivanov said visa regulations would also be tightened should Ukraine pursue its ambition to join NATO. 
The comments, at a ceremony to mark the 225th anniversary of Sevastopol port on the Crimean Peninsula — the home of Russia’s Black Sea Fleet — came on the heels of a string of pronouncements by Russian officials on issues regarding the peninsula and relations with Kiev. 
“I couldn’t say for whom such a breakup would be more painful — Russia or Ukraine. I think it would be painful for both nations,” Ivanov said, news agencies reported. 
Russia is vehemently against bids by Ukraine and Georgia to join the military alliance, regarding NATO’s encroachment on its borders as a security threat. It has said it might take “military steps” if the former Soviet states join. 
“I am sure, or almost sure, that visas will be introduced in the event that Ukraine joins NATO,” Ivanov said. “This will affect millions, even tens of millions of people in Russia and Ukraine, whose ties will become more difficult.” 
Ukraine’s economy is export-driven, and Russia is the country’s second-largest trading partner after the European Union. 
In April, NATO leaders rejected Ukrainian and Georgian bids to receive a Membership Action Plan, but promised the two countries could join one day. NATO Secretary-General Jaap de Hoop Scheffer is due in Kiev on Monday. 
Russia’s Black Sea Fleet is based on the Crimean Peninsula under a lease that runs out in 2017, and Ukrainian President Viktor Yushchenko has said Russia should end its presence there then. 
But Dmitry Rogozin, Russia’s NATO envoy, said Thursday that he did not expect his country’s leaders to pull the Russian Navy out of the base when the lease expires. 
“I think that in Russia there are no politicians who would agree that in their lifetime, under their leadership, the Black Sea Fleet should leave Sev-astopol. That will not happen,” said Dmitry Rogozin, speaking on television. 
Rogozin did not indicate President Dmitry Medvedev or Prime Minister Vladimir Putin by name. 
“The Black Sea Fleet has no other home. So when President Yushchenko says that the Black Sea Fleet has to leave, that means the Black Sea Fleet is being thrown out of its home, put out onto the street,” Rogozin told the Vesti- 24 television station. 
The Foreign Ministry was also keep- ing the pressure on Kiev last week. 
On Friday, it demanded that Ukraine halt oil exploration in parts of the Black Sea because of a territorial dispute, Itar-Tass reported. 
Last Tuesday, the ministry said the 1659 battle of Konotop, in which a Rus- sian invasion was repelled, was being distorted to fit the political agenda of Ukraine’s leaders and foment anti-Rus- sian feeling. 
In the battle, a Russian force was de- feated when it tried to stop a Ukrainian leader from entering into an entente with Poland and Lithuania. 
Yushchenko has ordered officials to mark the Battle of Konotop’s 350th an- niversary in 2009 with a series of events starting this year.

TITLE: Spain Claims Tambov Crime Ring Bust
PUBLISHER: Combined Reports
TEXT: MOSCOW — Spanish police said they had broken up the local operations of the Tambov and Malyshev organized crime groups, arresting 20 people and seizing millions of dollars in cash and assets. 
More than 300 officers took part in simultaneous raids Friday at several locations, including Malaga, Mallorca, Valencia and Madrid, police said. 
Among those detained were suspected ringleaders Gennady Petrov and Alexander Malyshev, who lent his name to St. Petersburg-based Malyshev crime group, police said. 
Malyshev was detained along with his wife and another friend in a luxury estate in Frigiliana in the province of Malaga. 
Petrov and his wife were arrested at home in the luxury Sol de Mallorca region of the Mallorca island. Also arrested was his deputy Yury Salikov and his “veteran secretary” Yulia Smolenko, local media reported. 
The suspects are accused of criminal association, tax fraud and laundering proceeds from crimes that include contract killing, arms and drug trafficking. 
The suspects lived in luxury in Spain for the past 12 years and used bogus companies there to launder money from criminal activities in Russia and other former Soviet countries, police said. 
Police also confiscated about 200,000 euros ($307,000) and several luxury cars and froze bank accounts totaling 12 million euros, according to media reports. 
Judge Baltasar Garzon, who ordered the raids, prolonged the suspects’ detention over the weekend, Spanish media reported, citing lawyers and sources in the judiciary. 
Garzon began investigating the organized crime groups in 2006 and received information from the FBI and police in Germany, the United States, Switzerland and Russia, according to separate statements from the Interior Ministry and the Spanish prosecutor’s office. 
Vladimir Barsukov, a wealthy St. Petersburg businessman and reputed head of the Tambov group, based in St. Petersburg, was arrested at his home outside that city in August. He is being held in a Moscow detention facility as prosecutors investigate his activities. 
Another reputed Tambov leader, Mikhail Glushchenko, is suspected of masterminding the assassination of liberal State Duma Deputy Galina Starovoitova in St. Petersburg in 1998. Glushchenko remains free and is thought to be living abroad. (SPT, AP)

TITLE: Medvedev Optimistic On U.S. Ties
PUBLISHER: The Associated Press
TEXT: MOSCOW — President Dmitry Medvedev said Last Wednesday that he was “moderately optimistic” about relations with the United States, saying the Kremlin was prepared to work with whoever succeeds U.S. President George W. Bush. 
Medvedev said Moscow and Washington must cooperate to maintain global stability — even if their views on U.S. plans to install missile-defense sites in Europe and other security issues differ sharply. 
“Russia and the United States are destined to cooperate on a wide range of international issues,” Medvedev said at a media congress in Moscow. “We will work with any U.S. administration; there is no alternative to that. Our nations carry enormous responsibility for global order and maintaining peace and stability.” 
Russian-U.S. relations have been strained over Washington’s plans to deploy missile-defense sites in Poland and the Czech Republic and backing for plans to incorporate Ukraine and Georgia. 
Medvedev said Wednesday that despite their differences, Russia and the United States have worked together successfully on combating terrorism and weapons proliferation, and on other issues. 
“No matter who comes to the White House, Russia expects a constructive and friendly dialogue with a new U.S. administration,” Medvedev said. “I view our relations with moderate optimism.” 
Medvedev said in a speech last week that further NATO expansion east would ruin Russia’s relations with the West.

TITLE: Google’s Brin Signs Up for Space Adventure
AUTHOR: By David B. Caruso
PUBLISHER: The Associated Press
TEXT: NEW YORK — A company that sends wealthy tourists into space aboard Russian rockets has a new client, Google co-founder Sergey Brin, and a new plan for the first entirely private flight to the international space station. 
Space Adventures said Brin, a native of Moscow, had paid $5 million to reserve a seat on a future flight. 
Just where and when the 35-year-old billionaire might fly is still up in the air. Since 2001, the company has sent five tourists to the space station, but it has been dreaming about other destinations, including a swing around the far side of the moon. 
Brin did not appear at a Space Adventures news conference Wednesday, but he said in a statement that he considered his deposit an investment in the company and suggested that he had not decided whether to exercise his option to fly. 
“I am a big believer in the exploration and commercial development of the space frontier and am looking forward to the possibility of going into space,” he said. 
Google CEO Eric Schmidt declined to comment, calling it a personal matter. 
Space Adventures also announced that it had reached an agreement to preserve its partnership with Russia, which had been indicating lately that its days in the space tourism business were numbered. 
On each of its five previous missions, the Virginia-based company had tagged along aboard flights already scheduled by the Russians, who were willing to sell spare seats to raise cash. 
Senior Russian space officials, however, had expressed doubt that they could continue to offer seats, citing increased demand for trips to the space station. 
The station’s crew is expected to increase from three to six astronauts in 2009, and once NASA retires the space shuttle in 2010 it will also be relying on Russia to get U.S. astronauts into space. 
Space Adventures said it would deal with the demand crunch by chartering an entire space flight, just for itself, with space for two clients plus a Russian cosmonaut. The Federal Space Agency would still run the mission, but Space Adventures would pay for the trip and buy its own Soyuz spacecraft. 
“The Soyuz to be used for this mission shall be a specially manufactured craft, separate from the other Soyuz vehicles designated for the transportation of the ISS crews,” Alexei Krasnov, who heads Russia’s manned space program, said in a statement released by the company. 
Krasnov said the private mission would not interfere with the Russian space program or other missions to the space station. 
The arrangement still needs to be approved by other nations involved in the running of the station. 
NASA space station manager Kenny Todd said that consultation had not taken place. He said that since NASA is a primary partner in the space station, “it certainly wants to have an understanding of how that’s going to happen and what would be involved” in the private flight. 
Space Adventures president Eric Anderson would not disclose how much the mission will cost or how much a passenger might pay for a ticket. He also would not say how much Brin might pay for an eventual ride into space. 
The company’s sixth customer, computer game designer Richard Garriott, is scheduled to go up in October after paying $35 million for his seat. He is a vice chairman of Space Adventures and the son of NASA astronaut Owen Garriott, who sits on the company’s advisory board. 
As for the possibility that the company might travel as far as the moon someday, the company’s managing director and co-founder, Peter Diamandis, expressed optimism. 
Space Adventures has been planning for a trip in which one of its craft would circle — but not land on — the moon. Diamandis said he expects to have a customer take the first such flight within five years. 
The company has been advertising tickets on that flight at $100 million per seat.

TITLE: Watchdog Sees ‘Crisis’ In Elections
PUBLISHER: Reuters
TEXT: VIENNA — Illegal state interference means elections standards are in crisis in areas of Europe, the director of a European election watchdog said. 
Christian Strohal, head of the OSCE’s Office for Democratic Institutions and Human Rights, did not criticize any countries by name. Diplomats said he was alluding mainly to Russia and several other former Soviet republics regarded by the West to be backsliding from post-communist commitments to democracy and human rights. 
“What we have is a crisis of compliance with election standards in some countries,” Strohal said in a speech to the Organization for Security and Cooperation in Europe’s 56-nation parliamentary assembly at the end of five years as head of ODIHR. 
Many nations boast better legal frameworks and professional election bodies than when he took office in 2003, he said. 
“But these positive steps are too often devalued by illegal state interference — governments that prevent opposition forces from registering candidates, clamp down on independent media or even resort to blatant falsification of election results,” he said. 
ODIHR declined to monitor State Duma elections in December and the presidential vote in March because of what it called unacceptable restrictions imposed by the Kremlin. 
Russia denied the accusations and called the ODIHR a tool of Western powers trying to interfere in its affairs.

TITLE: Scientists Search for Medical Secrets in Himalayas
AUTHOR: By Ali Nassor
PUBLISHER: Special to The St. Petersburg Times
TEXT: A group of St. Petersburg scientists have returned from the Himalayan Mountains after learning the secrets of an almost-extinct form of Tibetan yoga that they hope can be used to cure diseases in the West.
The scientists have recently completed a two-month mission to find traces of Tum-Mo, a form of Tibetan Buddhist yoga that preserves body temperatures through excessive production of internal heat despite the body’s exposure to extremely cold mountain climates.
The technique could be applied in areas with extreme cold climates, such as Russia, to prevent and treat heart disease, cancer, tuberculosis, pneumonia and influenza if developed, Rinad Minvaleyev, a physiologist, mathematician and the team’s senior researcher, said.
“In fact, Tum-Mo is about the human being’s adaptation to low temperatures where thermo-dynamic functioning of a human liver is activated to further regulate the heating process,” said Minvaleyev, referring to a mathematical formula he co-established last year.
Irina Arkhipova, a yoga specialist, who was head of the mission and architect of St. Petersburg’s Search for Lost Knowledge Program, which holds annual mountaineering events aimed at promoting medical science, said that although “there were considerable breakthroughs in our mission, it would be immature to reveal the exact outcomes with accuracy, pending the ongoing laboratory examinations.”
Arkhipova, who is also a director of St. Petersburg’s Pharaoh Historical Movie Studio, led a team of 45 experts including 14 medical doctors, physicists and yoga enthusiasts to the snow-capped, 4,000-meter high Indian Himalayan province of Himachal Pradesh.
The team paid visits to Tibetan Buddhist monasteries in search of Tum-Mo’s medical secrets, currently on the verge of being lost to posterity because “the last lama who practiced Tum-Mo in that part of the Himalayan Mountains died last year,” leaving scant oral traces of the ancient tradition, Arkhipova said.
However, after visits to about 40 monasteries, monks showed Arkhipova’s team a route across the Kully Gorge, reputed for its unpredictably harsh weather, to the top of the Rotang ridge, one of the rare spots where until recently Tum-Mo was practiced. 
However the team did not reach the Rotang because of snow in the middle of the Kully Gorge, blocking the way.
“We resorted to practicing yoga on the ice surfaces beneath the waterfalls in the Rotang Valley, and everything was fantastic even for those who were on such a mission for the first time,” she said
Determined to reach the home of Tum-Mo on the top of Rotang, the adventurers have vowed to return next year.
The team said it had gathered enough material on the technique during the recent trip to warrant continued research. 
In 2002 research into the medical benefits of Tum-Mo was carried out by Herbert Benson, associate professor of medicine at the Harvard Medical School and president of the Benson-Henry Institute for Mind Body Medicine at Massachusetts General Hospital in Boston, U.S., reported the Harvard Gazette. 
Benson was quoted as saying that studying advanced forms of meditation such as Tum-mo “can uncover capacities that will help us to better treat stress-related illnesses” but that more research into the technique was required.
Benson has been researching Tum-Mo since 1979 when the Dalai Lama gave his blessing on a trip to Harvard University, reported the Harvard Gazette.

TITLE: President Praises Freedom, Chirac On Russia Day
PUBLISHER: Combined Reports
TEXT: MOSCOW — President Dmitry Medvedev stressed the importance of democracy and freedom in a speech for Russia Day on Thursday. 
Medvedev presided over an awards ceremony honoring scientists, scholars and artists held annually in the Kremlin on June 12, as part of nationwide celebrations including fireworks and a concert on Red Square. 
Russia’s first president, Boris Yeltsin, established the holiday after the Soviet breakup to mark the 1990 declaration of sovereignty by Russia’s Soviet-era parliament, and it was widely known as Independence Day. 
In the years that followed, the optimism turned to widespread regret over the Soviet collapse and consternation over the notion that Russia was dependent on outside support. Putin renamed the holiday in 2002 and used it to emphasize Russia’s resurgent global clout. 
Medvedev focused on individual freedom as a key to Russia’s future. 
“June 12 is firmly linked with the values of democracy and freedom,” he said. “And we understand well that the free development of our society and the self-realization of its citizens is the best basis for achieving Russia’s intellectual and technological leadership and its high competitiveness.” 
Among those receiving awards Thursday was former French President Jacques Chirac, who was honored for promoting Russian culture. 
Chirac was the only foreigner among nine figures to receive the State Award from Medvedev. 
Medvedev said Chirac was “capable of bringing people together from different nationalities.”
(AP, Reuters)

TITLE: Technopark Downsized, Experts Remain Positive
AUTHOR: By Yevgeny Rozhkov
PUBLISHER: Special to The St. Petersburg Times
TEXT: The board of directors of St. Petersburg Technopark, headed by deputy-governor Mikhail Oseyevsky, has approved, resized and refinanced the IT-Technopark project, which is due to be completed by 2015. 
Designed by HOK International architecture bureau in London, the IT-Technopark will be located on the premises of the Bonch-Bruevich St. Petersburg State University of Telecommunications in the Nevsky District near Dybenko metro station. It will be comprised of three buildings of 75,000 square meters each, as well as educational centers, dormitories, offices and parking lots.  The park will accommodate about 15,000 programmers and provide some of them with cheap housing.  The apartments will belong to the city, along with all of the technopark’s assets.
Non-commercial real estate construction and further expenses will be covered by the federal and state budgets, while private investors and developers will be responsible for the commercial objects. Technopolis, one of Europe’s largest technology centers and the largest company in Finland specializing in providing operating environments for hi-tech companies, is one of the project’s three developers and is prepared to invest $150 million. 
But the planned IT-Technopark is now smaller than original plans. City Hall officials — major investors and monopoly supervisors — seem to be realizing that the demand rate might be low if the rents are high, and are therefore finding ways to make the project cheap but not unattractive. “Let’s not go for expensive solutions like marble decorations and underground parking lots,” said Oseyevsky. 
The total estimated amount of investment has now been cut from $1 billion to $800 million, while the combined estimated area has shrunk from 520,000 to 380,000 square meters. 
While sizes are reducing, hopes are increasing. “The quality of creative solutions and conditions will be improved. The real estate at the IT-Technopark will be a bargain for prospective tenants,” Yevgeny Yelin, the technopark’s CEO, recently told its board of directors. 
“Downsizing is the right move to ensure that offices are occupied,” agreed Valentin Makarov, president of the Russoft Association. “They have to make the technopark attractive for at least 200-300 IT companies working in St. Petersburg. But bearing in mind that it will be a free economic zone and there will be numerous business centers, competition is proving to be stiff.” 
Dmitry Kuznetsov, director of office real estate at Colliers International in St. Petersburg, doubts whether the buildings of the IT-Technopark will see maximum occupancy. “Only one in three will have enough willing tenants. Most prospective clients already rent offices, and business center owners will be reluctant to lose them,” he said. 
Nevertheless, the board of directors remains optimistic about the future. “IT-technologies contribute to essential branches of national industry, for example the military,” said Yelin. “The combined proportion of such companies on the market will inevitably grow. Therefore we do not expect there will be any problems with the rent at the new technopark.”
This optimism is backed up by calculations. According to Becar real estate agency, renting an office in one of the city’s downtown business centers costs approximately $70 per square meter per month, while at the technopark the rent will vary from $15 to $20.

TITLE: Markets Lose Steam After Leap
AUTHOR: By Catrina Stewart
PUBLISHER: Staff Writer
TEXT: MOSCOW — As Russia’s business and political elite wound up their weekend gathering in St. Petersburg, the local markets received a short-term lift, but wider concerns over global inflation lingered through the week. 
Russian bourses shrugged off global worries last Monday, with investors chewing on the prospect of Svyazinvest’s privatization and positive noises from the government on the protection of property rights and an improved legal system. 
Regional telecoms, the chief beneficiaries of a Svyazinvest privatization, soared last Monday, after Svyazinvest chief Alexander Kiselyov said the holding should be privatized over the next year. 
Sibirtelecom rose 7.6 percent last Monday, while Volga Telecom ticked up 6.4 percent and Uralsvyazinform increased by 5.3 percent. 
But the “decoupling,” short-lived as it was, was chiefly down to the St. Petersburg forum news flow, analysts said. 
Commodity prices and inflationary concerns swung back up to the top of investors’ minds, as the International Energy Agency forecast a slowdown in demand for oil for 2008. That, combined with a strengthening in the dollar, pushed oil down. On Friday, crude oil for July delivery closed at $134.86 per barrel in New York, 2.7 percent down on the week. Gold futures for August closed Friday at $873.10 in New York, down 2.9 percent on the week. 
The dollar had its strongest week against the euro since 2005, climbing 2.6 percent as traders speculated that the U.S. Federal Reserve would raise borrowing costs this year. 
Signs of further interest rate hikes in Europe to combat inflation, combined with the hawkish language from Federal Reserve chief Bernard Bernanke, indicate a coordinated campaign to tackle inflation rather than prop up growth, Alfa Bank strategist Erik DePoy said. 
“Rising interest rates are never good for equities,” DePoy said. “It’s just a matter of time before we could see some serious selling. This correction [we’ve been expecting] hasn’t really happened.” 
Oil stocks led the decline in Russia on Tuesday, with Rosneft dropping 1.3 percent on MICEX. 
Steel companies also fell, with foreign-listed shares of Evraz ending the week down 3.3 percent in London, and Mechel down by 7 percent in New York amid jitters over possible higher taxation in the steel sector. 
A Tuesday meeting between Industry and Trade Minister Viktor Khristenko and representatives from the steel industry on the issue of taxation reached no conclusion, giving some relief to steel stocks on Russian markets Wednesday, with NLMK leading the way. 
Both markets closed up on the short three-day week on light trading ahead of the Russia Day holiday, with the RTS nudging up 0.6 percent to 2,356.71 points, while the MICEX was up 0.8 percent to 1,826.67 points. 
But the markets remain volatile in the present macroeconomic environment, some analysts warned. 
“My instinct says, be very cautious in the current market,” DePoy said.

TITLE: OGK-1 Building Tyumen Unit
AUTHOR: By Nadia Popova
PUBLISHER: Staff Writer
TEXT: NOVY URENGOI, Yamal-Nenets Autonomous District — Unified Energy System has begun the construction of a new, 450-megawatt production unit at the Novy Urengoi power station to provide much needed electricity for the country’s largest oil- and gas-producing region, although financing for the project remains in doubt. 
The combined-cycle 450-megawatt unit will cost 22 billion rubles ($929 million) and is scheduled to come on line in 2011, but that may be delayed as its owner, OGK-1, the country’s biggest generating company, has yet to secure the necessary funding. 
“Electricity is in greater need here in Novy Urengoi than ever before,” UES CEO Anatoly Chubais said at the foundation-pouring ceremony. “We are supporting the growth of our oil and gas companies responsible for most of the production in the region, and we have to build the unit as soon as possible.” 
Chubais, who has overseen the sell-off of the production assets of the state electricity monopoly, which will officially cease to exist on July 1, poured 1 cubic meter of concrete for the unit’s foundation as part of the ceremony on Wednesday. This was followed by less formal festivities, complete with a performance of indigenous dances and boiled venison and vodka served up in yurts — tent-like dwellings traditionally used by local peoples — that had been erected for the occasion. 
The Urengoiskaya station currently has an installed capacity of just 24 megawatts. Plans in the 1980s for the construction of more than 2,400 megawatts of generating capacity were put on hold because of the state’s precarious economic position in the 1990s. 
Although construction is to be resumed, finding the necessary investment remains a problem. UES has been asking for at least $5 billion for OGK-1, one of the few assets it has yet to sell off, but there have been no takers at that price. 
As long as the company remains unsold, OGK-1 doesn’t have enough money to complete the construction of the unit, general director Vladimir Khlebnikov said Wednesday. 
“Our credit position allows us to take loans until the end of the year, and we are now negotiating a bank loan,” Khlebnikov said. “We also hope to benefit from an emission of at least 10 billion rubles’ worth of shares by UES by the end of the month.” 
The amount expected from the planned OGK-1 initial public offering was more than doubled in November 2007, from 22.8 billion rubles ($963 million) to 47.8 billion rubles, with the construction of the Urengoi unit in mind. 
Gazprom, which will be the station’s biggest customer, had been in talks to invest in the construction but broke off talks after disagreements over the degree of control it would have over the project, sources close to the deal said. 
Gazprom spokespeople were not available for comment on Sunday. 
The majority of companies in the Tyumen region, which accounts for two-thirds of all oil and more than 90 percent of all gas produced in the country, receive their electricity from two power stations in Surgut with an overall capacity of about 8,000 megawatts.

TITLE: Strabag Wins Road Tender
PUBLISHER: Bloomberg
TEXT: VIENNA — The Austrian builder Strabag has won a 1 billion-euro ($1.5 billion) share of a contract to build an eight-lane highway around St. Petersburg.
The order is part of a 5 billion-euro project awarded to Strabag and partners Bouygues of France, Hochtief Solutions of Germany and Russia’s Basic Element, the company said in a statement. Construction is due to start in the first half of 2009.
The highway is “the largest, and at this time most important, infrastructure project in Russia,” Strabag CEO Hans Peter Haselsteiner said in the statement. 
Strabag, which in April said that it plans to double its revenue to 20 billion euros by 2010, is targeting markets such as Russia where margins are higher as fewer companies are equipped to supply the services currently in demand. Strabag plans to make Russia its biggest single market by 2012.
Oleg Deripaska, who controls Basic Element, spent 1.2 billion euros on a stake in Strabag in April 2007 and currently controls 25 percent of the builder.

TITLE: In Brief
TEXT: <b>Construction Boom</b>
ST. PETERSBURG (Bloomberg) — The arrival of foreign carmakers including Volkswagen AG and PSA Peugeot Citroen in Russia’s Kaluga region has spurred a construction boom there, Vedomosti reported.
South Korea’s Shinchang Construction Co. followed Russian developers SU-155 and PIK Group in beginning construction projects in Kaluga, the newspaper said. The Korean builder’s Russian unit plans to build 300,000 square meters of housing, according to Vedomosti.
Shinchang may spend as much as $400 million on the project, Vedomosti said, citing Ilya Shershnev, the director for development at Swiss Realty Group.

<b>LSR Group Signs Deal</b>
ST. PETERSBURG (Bloomberg) — LSR Group, the property developer and maker of building materials controlled by Russian billionaire Andrei Molchanov, signed a 30 million-euro ($47 million) order with Germany’s Tecton GmbH Keramikanlagen for a ceramics production line.
Tecton will manufacture and install the line at a factory being built by LSR near St. Petersburg, St. Petersburg-based LSR said last week in a statement by the Regulatory News Service. The line will produce 25 million ceramic products a year when it becomes operational in 2010, LSR said.
``This production line is intended for house-building, which is developing rapidly in Russia,’’ Sergey Begoulev, chief executive officer of LSR’s Pobeda unit, said in the statement.

<b>Norilsk Barge Sinks</b>
16 MOSCOW (Bloomberg) — A barge owned by GMK Norilsk Nickel, the world’s largest nickel producer, sank at Dudinka port in the Arctic on Sunday, Russia’s Emergency Ministry said.
The barge broke in two while being loaded, the ministry said on its web site Monday. The vessel, which had 2,750 tons of metal on board, sank to a depth of 8 meters (26 feet), the ministry said. No injuries were reported.

<b>Seventh Continent Up</b>
MOSCOW (Bloomberg) — Seventh Continent, Russia’s fourth-largest publicly traded food retailer, said sales increased 37 percent in May, led by growth at its hypermarkets.
Revenue reached $156 million last month, the Moscow-based company said Monday in a statement on its web site. Hypermarket sales gained 71 percent, the statement shows.
Seventh Continent opened one outlet in May, raising the store count to 135, including nine hypermarkets.

<b>Kudrin on Inflation</b>
OSAKA (Bloomberg) — Russia may revise its 10.5 percent inflation-rate target for 2008 as consumer demand outpaces economic growth, Finance Minister Alexei Kudrin said on Saturday.
“In July we will have a new outlook,’’ Kudrin told reporters in Osaka, Japan, after meeting with his counterparts from the Group of Eight nations. ``For now we’re sticking to the current goal,’’ which may be maintained.

<b>Baltika in Ukraine?</b>
KIEV (Bloomberg) — Baltika Breweries, Russia’s biggest beer company and a unit of Carlsberg A/S, may build a new plant in Ukraine, Kommersant reported, citing Petro Chernyshov, chief executive officer at the company’s Ukrainian division.
The plant will be constructed in eastern Ukraine and will produce 1 million hectoliters of beer a year, said Chernyshov without giving any details, according to the newspaper.

TITLE: Call For  Cyrillic Cyberspace
PUBLISHER: Reuters
TEXT: MOSCOW — President Dmitry Medvedev called for the country to be assigned an Internet domain name in the Cyrillic script on Wednesday as part of a Kremlin drive to promote Russian as a global language. 
The Kremlin is concerned that Russian, once the main language throughout the Soviet Union, is losing ground to local languages and English. 
He said 300 million people worldwide used Russian media and that a Cyrillic domain name would be a key part of raising the importance of the language, a task he said was his personal priority as president. “We must do everything we can to make sure that we achieve in the future a Cyrillic Internet domain name — it is a pretty serious thing,” Medvedev told the International Congress of Russian Press in Moscow. 
“It is a symbol of the importance of the Russian language and Cyrillic. ... And I think we have a rather high chance of achieving such a decision.” 
Medvedev has been keen to portray himself as Internet-savvy. 
Russian Internet sites use domain names in the Latin script, as in most parts of the Internet. Addresses end either with the suffix .ru, or in some cases .su, a domain name inherited from the Soviet Union. 
Industry experts say Russia wants its domain name to be .rf — for Russian Federation — but written in Cyrillic. 
Some in the industry have raised concerns, though, that it could allow the state to control more of the content in a sphere that has remained a relatively free forum for dissent at a time when traditional media have become subject to tighter control.

TITLE: Hewlett-Packard Chief Hails Investment
AUTHOR: By Yelena Andreyeva
PUBLISHER: Special to The St. Petersburg Times
TEXT: As Russia’s economy continues to grow, more Western companies are entering the country in search of investment opportunities, including IT firm Hewlett-Packard, which with Foxconn last month broke ground on a $50 millionnew computer plant in St. Petersburg.
Owen-Christopher Kemp, Vice President of Hewlett-Packard and Managing Director of HP in Russia, spoke to The St. Petersburg Times about the business opportunities that spurred HP to invest in Russia.
Why did you choose St. Petersburg as the site for your new plant in Russia?
The governor of St. Petersburg is a fantastic ambassador for investment in Russia. A few years ago Madame Matviyenko visited my boss, Mark Hurd — the Chairman of the Board, CEO and President of HP — in California and their meeting was very successful. So it was not just a commercial decision, but an emotional decision based on the mutual trust established between them. With her help we did a good job in helping HP to make up its mind to invest in Russia. We competed for the investment in Russia, otherwise it could have gone to India, China or other places. I’d like to highlight that we invested not just into the construction of the plant, but also into the HP labs that conduct the fundamental research in information management.
In which other regions of Russia do you plan to invest?
Besides Moscow, there are nine HP offices around Russia and we collaborate with over 30 universities in cities such as Novosibirsk, Samara, Petropavlovsk-Kamchatsky conducting joint research. We’ve invested in creating the so-called HP Russian Institute of Technology — establishing technology faculties and developing special courses at eight universities across Russia.
How competitive is the Russian IT market?
I think it’s a real melting pot of competition. Although it’s apparently very hard for many local IT companies to survive, as the leaders of the market (we consume 30 percent of the world’s [computer] memory) we could help many of them to catch up. We have over 2,000 partnerships with companies from all over Russia. 
Are your Russian customers demanding?
Yes, Russian customers are becoming increasingly demanding. If earlier it was more like an IT and hardware engagement, now our Russian clients expect us to provide them with a turn-key solution which is possibly delivered only to Russia or just to some other countries as well. Now it’s not only a deal when a client wants to get a product for the best price, it’s more like a business partnership of a higher level, the supplying of a sophisticated solution and, in general, a very interesting and challenging task for us.
Moreover, due to the tremendous economic growth in Russia that we are all enjoying, many Russian companies are going global and we can also serve our Russian companies abroad, which is really great, especially when working with our long-term clients. It’s a significant new added value that we can offer them.
Are there differences between the types of product you provide to your Western clients and their Russian counterparts?
There is an incredible competitive advantage to working with Russian companies. They don’t usually have the legacy installations that typical Western banks, for instance, have had for many years. You can immediately make a giant leap and install an unlimited new development rather than invest into an existing ancient environment.
You attended the St. Petersburg Economic Forum this year. What are your main impressions of it?
Although it was not my first time, I appreciated seeing [President Dmitry] Medvedev in action at the plenary session and the Energy Awards ceremony — he is a very charismatic person.

TITLE: Rising Fuel Costs Threaten Russia’s Smaller Airlines
AUTHOR: By Maria Antonova and Tai Adelaja
PUBLISHER: Staff Writers
TEXT: MOSCOW — The economy and state coffers may be bulging from sky-high oil prices, but the soaring cost of aviation fuel could soon drive some of the country’s smaller airlines to the wall. 
Over the last 12 months, the price of airplane kerosene in the country has shot up some 125 percent — driving up ticket prices, devouring airline profits and putting dozens of smaller airlines at risk of bankruptcy. 
In the last six months alone, 24 airlines around the world have gone bankrupt, according to the International Air Transport Association, or IATA. “After enormous efficiency gains since 2001, there is no fat left, and skyrocketing oil prices are changing everything,” IATA chief Giovanni Bisignani said in a statement last month. 
The fear is that Russian carriers could be next, particularly as many of them rely wholly or in part on fuel-inefficient Soviet-era aircraft. 
The average price of airplane kerosene is expected to rise to 37,000 rubles ($1,560) per ton in June, more than double the 16,250 rubles ($620) from a year ago, according to figures provided by Yevgeny Ostrovsky, CEO of Airport Fuel Supply Trading House, which supplies most of the airplane fuel for Moscow’s airports. 
Some other airports around the country have already passed that figure, however, with kerosene at Yekaterinburg’s Koltsovo Airport costing 37,194 rubles per ton, including taxes and service costs. 
Further price hikes could push airlines that use Soviet-era planes, which guzzle up to three times as much fuel as modern Boeing or Airbus planes, to the edge of bankruptcy, said Oleg Smirnov of AviaFond, an independent fund created to help prop up flagging airlines and develop aviation infrastructure. 
“Bigger airlines are replenishing their fleet, replacing Tu-154s and Il-96s with Boeing-737s. This gives them fuel efficiency savings of up to 200 percent,” Smirnov said. 
As there is a general shortage of airplanes in the country, however, these changes cannot take immediate effect, airline representatives said. Thirty-two of Aeroflot’s 85 planes still date from Soviet times. S7, though expecting six new Airbus planes by the end of the year, has not done away with its Tu-154s either, and are charging more on routes that use them, S7 representative Irina Kolesnikova said. 
“Fuel is one of the biggest costs for airlines, and one they have no control over,” said Marina Bukalova, director of low-cost airline Sky Express, adding that the share of fuel in total costs shot up from 24 percent to 35 percent just last month. Sky Express, which started up last year and flies Boeing-737s, was offering promotional fares of 500 ($21) rubles a year ago but has now raised its lowest ticket prices to 1,000 rubles ($42). In addition, to cope with the higher fuel prices, it has tacked on a fuel surcharge of another 1,000 rubles, bringing its minimum ticket price to 2,000 rubles ($84). 
Such fuel surcharges can even exceed the price of the ticket in some cases, travel agencies said. 
“Customers are shocked when they find out their 1,000 ruble ticket has a 2,000 ruble fuel surcharge,” said Narine Arustamova of UTE Megapolyus, a Moscow-based tour operator. 
But while airlines are under commercial pressure to pass on the extra costs to customers, increased competition on some of the country’s more popular routes is restricting ticket price hikes — for now. 
“Prices would be falling right now if it weren’t for increased fuel costs,” said Vadim Dolev, a representative of airline Vim-Avia. “Because of competition, we are keeping prices the same, and the extra cost is being borne by the airlines.” The airline, which operates many peak-season charter flights, has raised its prices for vacations booked through tour operators more steeply than for travelers they deal with directly, Dolev said. 
Business routes and popular destinations do not appear to be affected to the same extent as quieter routes where fewer airlines compete for passengers, travel agencies and analysts said. 
“Prices only went up by about 10 percent for flights within Russia,” said Yelena Semiletova of Aeroclub, a booking firm that works with large corporate clients. 
While airlines declined to give exact figures for average ticket price hikes since last year, they appear to be making up the cash on smaller regional routes where they have less or no competition. On KrasAir’s web site, the cost of a five-hour flight from Krasnoyarsk to Moscow on July 3 was as low as 5,500 rubles ($230), while a flight the same day from Kazan to Norilsk, which is under four hours, is at least 12,000 rubles ($500). S7 charges just under 8,000 rubles ($335) to fly from Moscow to Novosibirsk, but 13,000 rubles ($550) to fly a similar distance to Semipalatinsk, where it is the only carrier. 
Pavel Strokov, marketing director at Kortes Information Center, which monitors aviation, said many smaller airlines are currently in a critical state because the fuel price hikes came after they had sold most of their peak-season tickets.

TITLE: iPhone On Sale ‘By End Of Year’
AUTHOR: By Tai Adelaja
PUBLISHER: Staff Writer
TEXT: MOSCOW — When Apple CEO Steve Jobs announced last week that the company would begin selling its high-speed iPhone 3G in 70 countries this summer, Russian fans were enraged that their country was conspicuously absent from the list. 
But in a televised interview last week, Jobs offered what could be a bit of much-needed relief for iPhone lovers, saying the gadget could officially go on sale in Russia by the end of the year. 
“We just didn’t have a chance to close [a deal] with Russia. And I think you’ll see [agreements] happen later this year,” Jobs said on CNBC last week. 
He said not having a distribution agreement with local mobile operators made it impossible for the coveted handsets to go on sale officially. In the absence of a distribution network, a flourishing black market for iPhones has sprung up in Russia, where there are already an estimated 300,000 users. 
“About 20,000 iPhone handsets are brought into the country in suitcases every month,” Eldar Murtazin, editor of Moscow-based Mobile Research Group said. “The current model, which sells officially in six countries for a marked-up $399, currently sells for about $1,000 in Moscow.” 
Two of the country’s three leading mobile operators, Mobile TeleSystems and MegaFon, confirmed that they had held talks with Apple about iPhone sales but could not reach an agreement. 
The problem hinges around the “disadvantageous conditions” that Apple was proposing, including a requirement that local operators buy iPhones wholesale from the company, Vedomosti reported last week, citing an unidentified mobile operator. 
In addition, Apple wanted operators to pay 10 percent on every handset sold, as well as a monthly 10 percent of the revenue from service plans. 
Jobs signaled last week, however, that Apple would abandon that approach and no longer require operators to share part of their subscribers’ fees. 
That may open the way for a breakthrough in talks with Russian mobile operators, Murtazin said. 
Yekaterina Osadchaya, spokeswoman for VimpelCom, the country’s second-largest operator, said Sunday that Apple’s new strategy, including price reductions on handsets, would bring many Russian operators on board. 
“VimpelCom is looking at the possibility of holding talks with Apple about a distribution agreement for the iPhones,” Osadchaya said. “This is a very auspicious year for the handset in Russia because we are rolling out 3G technology in 20 cities this summer.” 
The new iPhone 3G, which will go on sale in the United States on July 11, will sell for $199 for the 8-gigabyte model and $299 for a 16-gigabyte model, Jobs said. The phone will be offered at a uniform price around the world, he said. 
The 3G will offer significantly increased data transfer speeds.

TITLE: No Place Like Home
AUTHOR: By Anna Shcherbakova
TEXT: The 12th St. Petersburg International Economic Forum that was held from June 6 - 8 attracted about 2,500 guests to the city, including high-ranking officials and businesspeople. Each VIP participant was accompanied by a retinue of associates, press people and bodyguards, bringing the total number of people who came to St. Petersburg to a minimum of 10,000. 
There are about 22,000 rooms in the city altogether. At the beginning of June they are often overbooked as crowds of tourists flock to St. Petersburg to see the White Nights. Hotels were willing to switch over from tourists to participants of the Economic Forum — but at a price. Room rates soared from 30 to 800 percent during the period of the forum. 
The manager of the St. Petersburg branch of a major Russian company said he had booked a room for his boss at the Grand Hotel Europe for 220,000 rubles ($9,290) a day. The CEO of another company paid $5,400 a day for a room at the Astoria, while the Corinthia Nevskij Palace charged 70,000 rubles ($2,960) for a room that in the high season usually costs from 25,000 rubles ($1,063), one tourist agent said. 
Hotels are reluctant to discuss their policies. Some hotel officials admit that prices were increased in advance for the week of the economic forum –— after all, it’s common practice. Neither the budgets of nations and international companies nor the pockets of millionaires will be left empty after paying over the odds for accommodation. 
Vast accounts do not appear to preclude complaints among participants of the city’s most important event. Sergei Polonsky, No. 96 in Forbes Russia list of the 100 richest people (with an estimated fortune of $1.2 billion) complained during one of the forum sessions that he had paid over 500,000 rubles ($21,070) to stay in a regular room at the Grand Hotel Europe for a couple of days.  St. Petersburg Governor Valentina Matviyenko said at the final forum press conference that hotels had raised prices to extreme levels, and the incident should be investigated. The next day the Federal Antimonopoly Service reported it was beginning an investigation. 
There are however other accommodation options in the city aside from expensive hotels. Many people, especially those who live on Vasilyevsky Island where the forum took place, made the most of the event by going to their dachas outside the city and renting out their apartments to less-demanding guests such as journalists. 
The smartest Russian businessman, Roman Abramovich, (no. 3 on Forbes Russia list with $24.3 billion), stayed on his yacht, the Pelorus — conveniently moored at Angliiskaya Naberezhnaya. 

Anna Shcherbakova is the St. Petersburg bureau head of business daily Vedomosti.

TITLE: Debunking the Energy Myths
AUTHOR: By Tony Hayward
TEXT: When I became BP chief executive just over a year ago, I warned that the supply and demand balance for energy was very tight. But, like most people, I never expected to see the oil price go quite as high quite as rapidly as it has in the past few months.
Unsurprisingly, with consumers and businesses everywhere facing much higher fuel costs, emotions are running high. I understand those feelings. Governments and the energy industry are urgently looking for solutions. But if we are to act sensibly, we must start with the facts. We must accept the world as it is, not as we hope for it to be.
Last week, BP launched the latest edition of the BP Statistical Review of World Energy, which exposes some myths that need to be put to rest if we are to find the right solutions to big global problems, such as energy security and climate change.
Myth No. 1 is that high prices are caused by technical factors, such as speculation. While these factors may have an impact on the margins, the data clearly show that high prices are really caused by economic fundamentals.
Global energy demand growth in 2007 was above average for the fifth year in a row, driven by the fastest period of economic growth since the early 1970s. Demand growth is concentrated in those emerging nations that also subsidize fuel prices, such as China, India and – increasingly – the oil-producing nations themselves. 
Yet energy supply has struggled to respond. Production by OPEC countries fell by 350,000 barrels a day last year. The production situation is even more challenging in the market-oriented nations of the Organization for Economic Cooperation and Development, where many existing basins are maturing fast. In Britain, for instance, North Sea gas production recorded the world’s largest decline for the second year in a row, falling by 10 percent in 2007. Britain’s oil output rose very slightly, but this is a one-off, based on a single big new field. Production remains on a downward trend.
The last time oil prices surged to this kind of level, 30 years ago, new production from the North Sea helped bring prices down. This time, new OECD production will have to come from frontier provinces such as the Canadian oil sands, the Arctic and the deep waters of the Gulf of Mexico. 
Another big impact on supply is Russia, where production has begun to decline. It is a little known fact that, until now, the growing demand for oil from China and India in recent years has been met almost barrel for barrel by rising supply from Russia.
Access to resources for international oil companies such as BP remains very restricted. Resource nationalism is on the rise. That is important because it is the oil majors that have some of the best technology for bringing difficult resources onstream.
Myth No. 2 is that the world is running out of hydrocarbons. Not so. The world has ample resources, with more than 40 years of proven oil reserves, 60 years of natural gas and 130 years of coal. The problems in bringing on new production are not so much below ground as above it, and not geological but political.
Myth No. 3 is that we can switch quickly to a low-carbon economy. While biofuels, wind and solar energy are growing rapidly, they comprise a tiny share – less than 2 percent – of global energy production. Humankind remains dependent on fossil fuels, and coal is the fastest-growing of all the main fuel types. Carbon emissions continue to rise. We clearly all need to work harder if we are to tackle the threat of climate change.
So how are we to secure the energy needs of the world in the 21st century? The evidence is that markets work where they are allowed to operate. That is what the data in the BP review show, and that is the real source of hope for the future. Consumers in Europe and North America are already responding to high prices by moderating demand. They are also beginning to embrace energy efficiency. Where investment is allowed to take place, energy production responds positively. Last year, U.S. oil and natural gas production increased – in the case of oil, for the first time since 1991. 
The conclusion is therefore simple. Producers and consumers should be encouraged to respond to the market’s signals. High prices are saying that we need more investment – in energy efficiency, new production, new technology and new energy sources such as wind, solar and nuclear.
In order for that to happen, businesses and governments must act together. Companies know that they need to invest more, which is why BP and other energy companies have been raising capital expenditure substantially. But governments must do their bit too, by removing the barriers to that investment, improving access to resources and modernizing the tax structures we work in.

Tony Hayward is chief executive of BP. This comment appeared in the Financial Times.

TITLE: Immunity From the Oil Curse
AUTHOR: By Martin Gilman
TEXT: Oil is so central to the existence and development of modern economic life that it has inevitably become the focus of global concerns as prices have doubled since 2006. Oil complicates economic decisions, macroeconomic policy, domestic politics and the foreign policy of virtually every country. Russia is no exception. 
For most other countries — especially in the West — the oil shock of 2008 has been an unexpected surprise, and it could not have come at a worse time in cyclical terms. Prices have spiked — reaching almost $140 per barrel on Friday — even though the U.S. economy is recessionary, with Europe and Japan not doing much better. This development is utterly different from the past, when commodity price cycles tended to follow the ebb and flow of aggregate demand in the largest industrialized economies. The oil shocks of 1974 and 1979 were exceptions related to major political events in the Middle East. This time there has been no obvious external supply-side shock. 
Prices are rising as the demand in China and in other emerging economies surges, while at the same time we are seeing short-term supply constraints. There is no doubt that U.S. negative real interest rates, which came about as a consequence of a dramatic loosening of monetary policy since last fall, have also played a role in fueling the 40 percent increase in oil prices since the beginning of the year. 
So now the burden of adjusting to drastically higher oil prices comes just as battered consumers in Western countries have cut back on consumption in the face of some of the weakest readings of confidence indices in 20 years. Paying for dearer oil will necessarily require even less consumption of other goods and services. 
Western governments and other oil-consuming nations are hard-pressed to address the challenge of high oil prices. In desperation, some countries like India, by refusing to allow a significant pass-through of higher prices, are subsidizing oil consumption. Recent proposals to reduce oil taxes in France and the United States on a temporary basis during the summer are a clear sign of political recklessness. In any case, the transfer of resources to oil producers from the consuming nations is having a profound deflationary impact. Yet any attempts to compensate with a loosening of macroeconomic policy just seems to feed inflation and inflationary expectations, which are at the highest levels in over 20 years in a large number of oil-importing countries. 
As a result, we are seeing serious political strains. Fortunately, no price riots have been reported in Western countries, but it is clear that politicians are groping defensively to cope with the impact. With election season in full swing in the United States, a lame-duck Congress is flirting with ideas such as accelerating biofuel development; opening exploration of off-shore regions and in northern Alaska by setting aside ecological concerns and restrictions; and further subsidizing non-traditional energy sources, such as solar and wind power. U.S. politicians are also searching for scapegoats by investigating the role that speculators have played in driving up oil prices. Nothing is likely to happen until a new U.S. president is sworn in next January, but the mood of the electorate is getting ugly. 
On the foreign policy side, the mood is no better. U.S. Treasury Secretary Henry Paulson traveled around the Middle East early last week warning that soaring oil prices are putting a burden on the global economy and asking countries to maintain their peg to the dollar. In addition, OPEC has been the center of controversy in its refusal to consider an immediate rise in output, while many analysts doubt that it really has any spare capacity. Iran and Venezuela have also been fanning international tensions. After an Israeli deputy prime minister threatened last week to attack Iran’s nuclear facilities if Tehran continues with its program for developing nuclear weapons, it certainly did not help calm concerns about future oil supply. 
For Russia, the stakes are different. As the world’s second-largest oil producer, it is almost the mirror image of many Western countries. Higher oil prices are fueling a boom in domestic aggregate demand, with real gross domestic product expanding by more than 8 percent for the year through May. Government revenues are rising so much that, even with the supplementary budget, the fiscal surplus is expected to decline only slightly to 5 percent in 2008. Foreign-exchange reserves have hit almost $550 billion as the country attracts foreign investment on a net basis on top of the current account surplus. 
This oil boom comes at a price, however. The continuing rise in private spending, along with the acceleration in government spending since the second half of last year and a loose monetary policy, have fueled a doubling in the rate of inflation in just a little over a year. Hopefully, recent steps to tighten monetary conditions and the deceleration of fiscal expansion should help to prevent Russia from following Ukraine’s path toward inflation rates exceeding 30 percent. 
Furthermore, the current level of oil prices is a mixed blessing in another sense. There is considerable uncertainty about the direction and magnitude of future oil prices. Experts predict prices in 2009 ranging from $60 to $200 per barrel. This is a headache for consumers and producers alike. For producers, given the long lead times for exploration and development, investment decisions become a stab in the dark. Furthermore, medium-term budget planning, longer-term export contracts and issues of wealth management become much more complicated. The cost of being wrong has never been higher. 
For Russia, the stakes are especially high as critical decisions about future oil output are overdue. The country already produced 0.8 percent less oil in May than in the same month last year, bringing the country closer to the first annual decline in oil output in a decade. Total exports also fell by 4.6 percent less than in May last year. 
The government plans to offer a 100 billion ruble ($4.2 billion) package of tax breaks and incentives to stimulate production growth, including a cut in the mineral extraction tax, incentives for production of high-quality and environmentally cleaner fuels, tax holidays for offshore exploration and changes to the excise duties on high-quality oil products. But with higher costs of development, it is unclear if the proposals, which will go into force in 2009, will go far enough to boost production. 
Russia’s leaders are well aware of the poor track record of oil and other commodity producers in squandering their natural wealth inheritance on wasteful spending, white-elephant projects and corruption. Good examples of this phenomenon include Gabon, Iraq, Libya, Nigeria, Venezuela and Zambia. These countries have all gambled their future on the hope that high commodity prices would continue for the foreseeable future. The problem is that they rarely do. 
Russia has done well so far in avoiding this infamous “resource curse.” The budget surpluses, the reserve fund, a three-year rolling budget for planning purposes, the analytical use of a non-oil budget and its high external reserves underscore its commitment to maintaining a prudent stance. Moreover, with a booming economy, medium-term prospects are favorable. Relative to most other countries, Russia is in an enviable position. 
For Russia, oil is not a curse. But it does certainly complicate life. 

Martin Gilman, a former senior representative of the IMF in Russia, is a professor at the Higher School of Economics in Moscow.

TITLE: The Perfect Orthodox Wahhabi
AUTHOR: By Yulia Latynina
TEXT: On June 5, a Moscow City Court jury acquitted Vladimir Kvachkov, a retired military intelligence colonel, of charges that he attempted to kill Anatoly Chubais, the architect of privatizations in the 1990s and head of Unified Energy System. After being freed from custody and asked what he would do next, Kvachkov replied, “Now I have a chance to finish what I started.” 
The circumstances surrounding the attack on Chubais and Kvachkov’s subsequent swift arrest were very strange, and this sheds doubt on the former intelligence officer’s guilt from the very beginning of the investigation. Kvachkov was arrested because his wife’s green Saab was found on a busy highway in the Moscow region near the scene of the ambush. But it seemed unbelievable that an experienced intelligence officer would drive to the crime scene in his family car. 
Second, and even more unbelievable, was the evidence presented by investigators. They recovered floor mats from the assailants’ car very close to the spot where the attack took place. Investigators said they took the mats as evidence and showed them to vendors selling mats at a nearby roadside marketplace. There, according to an investigator’s testimony, they found a Tajik vendor who not only recognized the evidence, but also remembered who he had sold the mats to and, moreover, the exact license plate number of the assailants’ car. 
Who is Kvachkov after all? He is a Russian Orthodox version of a Wahhabi extremist. Kvachkov claims that Prime Minister Vladimir Putin is a “Gauleiter” leading an “occupational force” of Western sympathizers who have seized control of the country. Kvachkov, the argument goes, is not guilty of a crime because attempting to kill Chubais — one of the country’s worst traitors — is not a crime. 
The jury members spoke not with the voice of the law, but with the voice of the people, and Kvachkov was cleared of all charges. 
Even after Kvachkov’s acquittal, the problem is that the case remains just as unbelievable as ever. What about the amazing Tajik car mat salesman who had a photographic memory of license plate numbers? This is all very hard to believe, but one explanation is that a Federal Security Service agent had come to the market with his colleagues and bought the mats as part of a setup. 
Why would Kvachkov, an old hand in espionage matters, drive to the crime scene along a busy street in his wife’s Saab? Only because he is a truly honest and selfless idealist — qualities that befit a Russian Orthodox Wahhabi. He didn’t even have enough money to buy another car for the hit. 
Why is it that everybody who opposes the siloviki runs into trouble? Former Deputy Finance Minister Sergei Storchak and General Alexander Bulbov, a senior officer with the Federal Drug Control Service, are both in jail, and Chubais was nearly gunned down. 
If Chubais had been killed, the siloviki would have taken control of Unified Energy System. Kvachkov would have succeeded in obtaining a multi-billion dollar prize for delivering a serious blow to the occupational forces of Western jackals and Gauleiters. But Chubais survived the attack and is attempting to prove to the intelligentsia that Putin is the lesser evil compared with the ultranationalist siloviki patriots. 
And where does Kvachkov figure into all of this? He was manipulated as an Orthodox Wahhabi pawn, but this is nothing new. In Dagestan, for example, the highest-ranking officials often use their Wahhabi militants as cheap hired killers to settle scores with rivals. 
We hear all the time that Russians ardently and unanimously support Putin. But this doesn’t jibe with the Kvachkov acquittal. How could the majority of jurors dismiss charges against someone who so blasphemously called Putin a Gauleiter and his regime an occupational force? 

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

TITLE: EU Fights for Treaty Despite Irish No Vote
AUTHOR: By Ingrid Melander and David Brunnstrom
PUBLISHER: Reuters
TEXT: LUXEMBOURG — European Union foreign ministers insisted on Monday that the EU reform treaty was alive despite Ireland’s “No” vote but conceded they had no quick fixes for rescuing it.
Their monthly meeting in Luxembourg was a first opportunity for EU officials to start picking up the pieces after Thursday’s Irish referendum cast doubt over the survival of a pact meant to bolster the EU’s economic and political weight in the world.
EU leaders will want to hear from Prime Minister Brian Cowen at a summit in Brussels later this week whether he sees any hope of winning a new referendum, a step Irish officials have not ruled out but which they believe is a high-risk strategy.
“The people’s decision has to be respected and we have to chart a way through ... It is far too early for proffering any solutions or proposals,” Irish Foreign Minister Micheal Martin said on arrival. “There are no quick fix solutions.”
But for the moment, Dublin’s 26 partners in the bloc are not taking “No” for an answer and most insist that ratification of the project should continue elsewhere in the bloc.
“The treaty is not dead. The EU is in constant crisis management — we go from one crisis to another and finally we find a solution,” Finnish Foreign Minister Alexander Stubb told reporters, noting the bloc had always pushed ahead with integration despite past rebuffs from voters.
“I believe the European spirit is strong ... and we’ll see more ratifications,” said Slovenian Foreign Minister Dimitrij Rupel, whose country holds the rotating EU presidency.
He stressed it was up to Ireland to propose ways out of the impasse: “I don’t have any solutions.”
“Life has to continue,” said EU foreign policy chief Javier Solana, whose role was to have been beefed up with a real foreign service under the Lisbon Treaty, which will not now come into force as planned next Jan. 1.
EU Enlargement Commissioner Olli Rehn said he did not see any direct impact on the bloc’s expansion plans into southeastern Europe from the Irish vote. Croatia hopes to conclude accession talks next year to be the 28th EU member.
EU officials say the hope is that if all other countries back the treaty by December, the Irish can be persuaded to try again in exchange for assurances on issues such as preserving a member of the European Commission for each member country and retaining national vetoes over tax legislation indefinitely.
Cowen said Dublin’s EU partners must help otherwise the treaty cannot come into force, depriving the bloc of a long-term president, revamped decision-making structures in Brussels and more effective foreign policy and defense arrangements.
A senior EU official said if Cowen tells EU leaders he cannot win a new referendum, the “plan C” alternative could be to put limited reforms into the accession treaty of Croatia, likely to join in 2010 or 2011.
That might modify the voting system and the distribution of European parliament seats, but it could not include the whole range of reforms defeated in last Thursday’s Irish vote.
Opposition to the treaty among Irish voters focused on suspicion of Brussels and of Ireland’s political elite.
Meanwhile, a potentially damaging “who lost Ireland” row threatens to erupt after French ministers accused the executive European Commission of insensitivity to fishermen, truckers and cattle breeders hit by soaring fuel and food prices.
French Agriculture Minister Michel Barnier told Europe 1 radio that Brussels should have been more responsive to their problems rather than rejecting out of hand President Nicolas Sarkozy’s call to use extra tax receipts on petrol to cushion the cost to the worst affected sectors.
Commission President Jose Manuel Barroso said on Friday there should be no hunt for a scapegoat, in what some saw as a pre-emptive strike against such criticism from France, which takes on the EU presidency in two weeks’ time.

TITLE: Nadal Readies for Federer at Wimbledon
PUBLISHER: Reuters
TEXT: LONDON — Just in case he had not rattled Roger Federer enough, Rafael Nadal showed on Sunday that he would continue to stalk the five-times Wimbledon champion for the next three weeks.
Seven days after handing Federer a brutal 6-1 6-3 6-0 mauling in the French Open final, the four-times Roland Garros champion effortlessly adapted his claycourt skills to win his first title on grass.
Nadal’s 7-6 7-5 win over Novak Djokovic made him the first player in 35 years to pull off back-to-back victories in Paris and at the Queen’s Club and also the first Spanish man to win on turf since Andres Gimeno in 1972.
After finishing runner-up to the Swiss at the All England Club in 2006 and 2007, the 22-year-old will no doubt fancy his chances of ending Federer’s reign come final’s day on July 6.
Should he succeed, he would become the first man to win at Roland Garros and Wimbledon in the same season since Sweden’s Bjorn Borg in 1980.
“I now have titles on all surfaces, so I am now a more complete player than I was a week ago,” grinned Nadal after picking up the 28th title of his career.
“I think I am playing well and if I continue to play like this, I am going to have chances to have a good result at Wimbledon.
Asked if he believed he could win Wimbledon, he added: “I can for sure. I’ve played two finals. Why can’t I?
“Wimbledon is always very, very special for me. For me, having played two finals there is a dream. For sure my dream is always going to be to have a title there.”
In case Federer had not taken note of the improvements Nadal had made to his game since the pair last met on grass 49 weeks ago, the Spaniard was happy to explain.
“For grass, I’ve improved some things,” said the world number two, who extended his winning streak to 17 matches.
“The serve is important. But I’m also playing more slices, changing the way of the point with some slices. That’s important because you can play with different rhythms. So for the opponent, that’s more difficult.
“I’m feeling more comfortable with the volley too. When I go to the net, I have some good volleys. I’ve worked very hard to improve these things.”
Before turning his attention to Wimbledon, Nadal planned to go home to Mallorca until Wednesday or Thursday to recharge his batteries.
“I am a little bit [tired.] I’m going [to spend] some days at home,” said Nadal.
“[I’ll play] golf tomorrow morning. I don’t know [what I’m going to do] in the afternoon yet.
“But I think within a few days I’m going to be ready. And if not, doesn’t matter, because Wimbledon is a very, very important tournament, and the motivation is a hundred percent.
“Doesn’t matter if I’m tired mentally. Physically I’m fine.”
Despite being on the receiving end of another Nadal masterclass, Djokovic felt he had nothing to be ashamed of.
“It’s been a terrific week. I’ve only been playing on grass for three years so it’s quite an improvement for me to get to the final,” said the world number three, who has now lost nine of his 12 meetings with the Spaniard.
“I’ve had an intense couple of months, it’s been great for me, I’ve achieved a lot. I just hope to keep on going.”

TITLE: U.S. Open Goes Down To Playoff
PUBLISHER: Agence France Presse
TEXT: SAN DIEGO, California — Tiger Woods drained a birdie putt at the final hole Sunday to set up a David and Goliath 18-hole playoff with unheralded American Rocco Mediate at the 108th US Open golf championship.
Woods completed a two-over 73 to force the Monday showdown with Mediate, who fired an even-par 71 on the Torrey Pines South course for a one-under total of 283.
“The green wasn’t very smooth,” Woods said. “I kept telling myself make a pure stroke. If it bounces in or out, so be it, at least I can hold my head up high and hit a pure stroke. I hit it exactly where I wanted to, and it went in.”
Mediate was watching from a scoring booth as Woods’ putt curled around the lip of the cup before dropping.
Mediate, a 45-year-old who has won five times on the U.S. PGA Tour but is seeking his first major title, said he was certain it would go in.
“Unbelievable, I knew he would make it,” Mediate said. “How much better can this get?”
England’s Lee Westwood had a chance to join the playoff with a birdie at the last, but his 20 footer trickled away from the cup and left him with a 73 for even-par 284.
Woods started the day with a one-shot lead over Westwood, with Mediate a further shot back.
The world No.1 owns a perfect 13-0 record in major championships in which he has held or shared the lead going into the final round, but he couldn’t get any momentum going as he posted his worst score of the week.
But he had a chance to take his total of major triumphs to 14 on Monday in his pursuit of Jack Nicklaus’s record of 18.
Woods, still showing some signs of pain in his surgically repaired left knee, was leading Mediate by one shot through 12 holes before a bogey at the par-five 13th, a hole he had eagled in the past two rounds.
Woods was on the left edge of the fairway off the tee, and hit his second shot left into the hazard. Westwood bogeyed 13 in similar fashion, while at the same time Mediate birdied 14 from a greenside bunker to seize the advantage.
Westwood, who had seen his nine-hole lead evaporate when he bogeyed three of the first four holes after the turn, also birdied 14 to stay in the chase, but his last birdie of the day proved to be too little, even after Woods and Mediate both bogeyed 15.
“It’s sickening not to be in the playoff,” Westwood said. 
“I could have played my way out of it completely after 10, 12, 13, but a lot of strange things happen the last few holes of major championships, as they did today. Made a good birdie at 14, and just failed to make birdie at the last. It’s a bit disappointing.”
Mediate missed a 10-footer for birdie at 17, and two-putted from 35 feet at 18.
“I was trying to beat him on my putt, my 35-footer,” said Mediate, who tapped in for par. “I just didn’t quite get it out there. But anyway, I made good putts on 16 and 17 just to be here.”
Two of Woods’ major triumphs have come in playoffs. He won the 2000 US PGA Championship with a three-hole playoff victory over Bob May.

TITLE: Marriage For Gays Now Legal In California
AUTHOR: By Lisa Leff
PUBLISHER: The Associated Press
TEXT: SAN FRANCISCO — Phyllis Lyon and Del Martin fell in love at a time when lesbians risked being arrested, fired from their jobs and sent to electroshock treatment.
On Monday, more than a half-century after they became a couple, Lyon and Martin plan to become one of the first same-sex couples to legally exchange marriage vows in California.
“It was something you wanted to know, ‘Is it really going to happen?’ And now it’s happened, and maybe it can continue to happen,” Lyon says.
San Francisco Mayor Gavin Newsom plans to officiate at the private ceremony in his City Hall office before 50 invited guests. He picked Martin, 87, and Lyon, 84, for the front of the line in recognition of their long relationship and their status as pioneers of the gay rights movement.
Along with six other women, they founded a San Francisco social club for lesbians in 1955 called the Daughters of Bilitis. Under their leadership, it evolved into the nation’s first lesbian advocacy organization. They have the FBI files to prove it.
Their ceremony Monday will, in fact, be a marriage do-over.
In February 2004, San Francisco’s new mayor decided to challenge California’s marriage laws by issuing marriage licenses to same-sex couples. His advisers and gay rights activists knew right away which couple would put the most compelling human face on the issue: Martin and Lyon.
Back then, the couple planned to celebrate their 51st anniversary as live-in lovers on Valentine’s Day. Because of their work with the Daughters, they also were icons in the gay community.
“Four years ago, when they agreed to be married, it was in equal parts to support the mayor and to support the idea that lesbians and gay people formed committed relationships and should have those relationships respected,” says Kate Kendell, a close friend and executive director of the National Center for Lesbian Rights.
Lyon and Martin vividly recall the excitement of being secretly swept into the clerk’s office, saying “I do” in front of a tiny group of city staff members and friends, and then being rushed out of the building. There were no corsages, no bottles of champagne. Afterward they went to lunch, just the two of them, at a restaurant run as a job training program for participants in a substance abuse program.
“Of course, nobody down there knew, so we were left to be by ourselves like we wanted to be,” said Martin, the less gregarious of the two. “Then we came home.”
The privacy was short-lived. Their wedding portrait, showing the couple cradling each other in pastel-colored pantsuits with their foreheads tenderly touching, drew worldwide attention.
Same-sex marriage would become legal in Massachusetts in another three months, but San Francisco’s calculated act of civil disobedience drove the debate.
In the month that followed, more than 4,000 other couples followed Martin and Lyon down the aisle before a judge acting on petitions brought by gay marriage opponents halted the city’s spree.
The state Supreme Court ultimately voided the unions, but the women were among the two dozen couples who served as plaintiffs in the lawsuits that led the same court last month to overturn California’s ban on gay marriage.

TITLE: Czechs Shell-Shocked by Turkish Win
PUBLISHER: Reuters
TEXT: INNSBRUCK — Czech Republic leave Euro 2008 feeling shell-shocked and bemused at how they let a quarter-final place slip through their fingers in a final few minutes of madness.
Leading 2-0 with 15 minutes to go, they had a last-eight place firmly within their grasp on Sunday before Turkey stunned them with three quick goals that left their dreams in tatters and their coach lost for an explanation.
“The third goal marked a total collapse, which I cannot explain. I will not forget this for a very long time,” Karel Brueckner told a news conference after what was his last match in charge before retiring.
The absence of injured playmaker Tomas Rosicky had already knocked the team before the championship had even started but the Czechs refused to dwell on it and took comfort from the fact that in Petr Cech they had one of the world’s best goalkeepers.
All the more shocking, then, that the man who had saved them on so many other occasions should make a rare blunder that handed Turkey an equalizer three minutes from time and gave them the momentum to score another to send the Czechs home.
“I am going to be upset about this for a long time, especially because it was my mistake that decided the match,” newspaper Blesk quoted Cech as saying after he inexplicably dropped the ball at Nihat Kahveci’s feet.
Living up to the pulsating performances that took them to the semi-finals of Euro 2004 was always going to be hard when the core of the magical midfield — Pavel Nedved, Karel Poborsky and Vladimir Smicer — had all retired.
Some fans, and several newspaper columnists, would argue the writing was already on the wall for a disappointing showing this time round after an up-and-down qualifying campaign.
The fact that Milan Baros, winner of the golden boot four years ago, had forgotten how to locate the back of the net left Brueckner relying on 35-year-old Jan Koller as the lone striker.
The tall Koller was ineffective in the lucky 1-0 win over co-hosts Switzerland in the first Group A match.

TITLE: China Suffers Floods After Quake
AUTHOR: By Chris Buckley
PUBLISHER: Reuters
TEXT: BEIJING — Thousands of victims of China’s earthquake are moving to escape a new threat from rain-triggered landslides, officials said on Monday, while floods battered the nation’s southern trade powerhouse.
The May 12 quake centered in the southwest province of Sichuan killed at least 70,000 people and shattered slopes in the mountainous region, parts of which have seen heavy rainfall.
With continued tremors jolting hillsides, officials have decided to relocate 50,000 residents at risk of landslides in Wenchuan County, the epicenter of the quake.
“Continued tremors and multiple strong tremors have constantly caused shore collapses and mudslides on fragile slopes in Wenchuan County, and damaged houses have constantly collapsed in the tremors,” the Xinhua news agency reported.
Last week, county officials told threatened residents to move to safer areas, and troops had relocated 3,000 by Monday, Xinhua reported. All at risk must be moved by the end of June, before the rainy season starts in earnest.
An earlier state television report said 70,000 quake victims would be moved to avoid the landslide threat. The Xinhua report did not explain the discrepancy.
Already reeling from the quake, China has also suffered floods across its south that have killed 57 people and forced 1.27 million to move to safer ground in recent days, according to the Ministry of Civil Affairs.
The national meteorological service warned that the 5,500-kilometer Yellow River flowing through the north might also see “quite large” floods this year, Xinhua reported late on Sunday.
Heavy rain likely in the next few days would “increase the destructiveness of flood hazards and make the flood prevention and relief situation nationwide even more serious,” Xinhua cited the authority as warning.
The Yellow River, China’s second longest after the Yangtze, has experienced devastating floods in the past, but in recent decades has been more prone to water scarcity.
This year’s floods have been especially heavy in Guangdong, the far southern province that is home to many of the country’s export businesses.
By Sunday, 20 people in Guangdong had died in the floods, eight were missing, and more than 4,800 houses had collapsed, provincial flood officials told Xinhua.
Close to 240,000 Guangdong residents were shifted to safer ground, including 60,000 in Shenzhen, the trade hub next to Hong Kong, the provincial water resources office said, according to the official Southern Daily.
Officials estimated that economic damage from the floods across Guangdong amounted to 3.8 billion yuan ($540 million), much of it to farms and fisheries.
Forecasters warned that fresh storms could also lash parts of the Yangtze River delta region, a major manufacturing centre near Shanghai, and parts of provinces across the east, south and southwest.

TITLE: In Brief
TEXT: <b>10 Die in Japan Quake</b>
TOKYO (Reuters) — The death toll in a powerful earthquake that hit northern Japan at the weekend rose to 10 on Monday as troops and rescue workers searched for survivors in the remote, mountainous area worst hit by the tremor.
A fourth body was pulled from the ruins of an inn in the northern prefecture of Miyagi, a local official said. The building was crushed in a massive mudslide triggered by the 7.2 magnitude quake, which struck on Saturday morning.
Twelve people remain missing, including three at the inn, and at least 231 people have been injured, according to Tokyo’s fire and disaster agency.

<b>TV Host Mourned</b>
WASHINGTON (AP) — Tim Russert, a political lifer who made a TV career of his passion for unrelenting questioning of the powerful and influential, died of a heart attack Friday in the midst of a presidential campaign he’d covered with trademark intensity. Praise poured in from the biggest names in politics, some recalling their own meltdown moments on his hot seat.
Russert, 58, was a political operative before he was a journalist. He joined NBC a quarter century ago and ended up as the longest-tenured host of the Sunday talk show “Meet the Press.”
He was an election-night fixture, with his whiteboard and scribbled figures, and was moderator for numerous political debates. He wrote two best-selling books, including the much-loved “Big Russ and Me” about his relationship with his father.
He was NBC’s Washington bureau chief.

<b>Ex-King’s Hitler Car </b>
KATHMANDU (Reuters) — A car gifted by Adolf Hitler to a Nepali king is likely to be displayed in a palace museum after the Himalayan nation abolished the 239-year-old monarchy and the ousted King Gyanendra quit the palace.
Officials said a 1939 Mercedes Benz presented by the Nazi leader to King Tribhuvan, Gyanendra’s grandfather, is now rusting at Nepal’s main Narayanhiti palace grounds.
It has lain there for more than three years after an engineering college in Kathmandu, which was using it to train mechanics, said it did not have enough money and spare parts to restore the antique car.
But now efforts are being made to display the car in the palace, which the government is turning into a museum.
A special assembly elected in April overwhelmingly voted to abolish the monarchy last month and gave Gyanendra 15 days to vacate the pink pagoda-roofed palace, which he did in early June.

<b>Shuttle Lands Safely</b>
CAPE CANAVERAL, Florida (Reuters) — The U.S. space shuttle Discovery landed at its home port on Saturday, wrapping up a mission that gave Japan a permanent toehold in space and setting NASA up for its next flight.
Descending seven times steeper than a commercial jet, shuttle commander Mark Kelly arced Discovery through a sweeping circle to burn off speed after a two-week, 9.2-million-kilometer trip.

TITLE: Concerns Raised About Live TV From Beijing
PUBLISHER: Reuters
TEXT: BEIJING — Broadcasters still do not know if they will be allowed to transmit live from outside venues or iconic sites like Tiananmen Square during the August Olympics, according to a satellite service provider in Beijing.
China has consistently promised media the same freedom to report in August as they have enjoyed at previous Games, in line with the requirements of the International Olympic Committee (IOC).
But just seven weeks before the opening ceremony, broadcasters have yet to learn whether they have been successful in their applications for licenses to transmit live from major landmarks, an integral part of coverage in the past.
“The line we’re getting from various authorities is that policies on live transmissions from outside Olympic venues and iconic sites have not been decided yet,” Kevin Fleck of Global Vision, which provides services to Olympic sponsors, rights holders and non-rights holders, told Reuters.
“Broadcasters needed the decision to be made months ago because they have to commit budgets and allocate air-time for Olympic slots.
“We’re very worried about this, our line to our clients has been to hold on and to wait. They say ‘we can’t wait, do something about it’.”
A spokesman for the Beijing organizers said he was unaware of the problem.
“As far as I know, Tiananmen Square and other public places will be open to the media, but I’m not sure about all the details,” said Sun Weide.
Broadcasters invest huge sums in purchasing the rights to the Games. NBC paid $3.5 billion for the exclusive U.S. rights to broadcast the Olympics from 2000 to 2008.
At a heated meeting in Athens earlier this month, the IOC played down the concerns of rights holders.

TITLE: Russia To Face Rated Sweden
PUBLISHER: Reuters
TEXT: SALZBURG — Russia coach Guus Hiddink has told his players they will need to step up another gear when they face Sweden for a place in the Euro 2008 quarterfinals.
By beating Greece 1-0 in their Group D match on Saturday, Russia both eliminated the holders and put themselves firmly in the mix for a place in the last eight alongside Spain who have already qualified from the group.
Hiddink said the victory had proved his players had reacted well to some harsh training sessions after their 4-1 drubbing by Spain in their opening game and now needed to build on what they had learnt by challenging each other to perform better.
“To win against Sweden is two steps more,” the Dutchman told a news conference.
“I have passed on in the last days that players — all the players — should talk. It can be even better, we have to learn as Russian players the fact that we demand 100 percent from each other and then they can do a lot.”
Russia must win on Wednesday to go through while Sweden will qualify with a draw.
Hiddink said Russia needed to be more consistent and also take their chances more, having wasted several clear-cut goal-scoring opportunities against the Greeks, and they would definitely be the underdogs against Sweden.
“I hope the irregularity can go out of the team,” he said.