SOURCE: The St. Petersburg Times
DATE: Issue #1510 (72), Friday, September 18, 2009
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TITLE: Deputies Balk Over High Cost Of Hotels
AUTHOR: By Nadia Popova
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — State Duma deputies will boycott the Sochi International Investment Forum later this week because of the “unreasonably high” prices local hotels charge, a senior deputy said in an interview Wednesday. 
The Federal Anti-Monopoly Service said it suspected that Moscow travel agencies were driving up the prices, while local agencies said many other people were refusing to book rooms when they heard they would cost a small fortune. 
“Some hotels in central Sochi have increased their prices by three to four times for the forum, and we do not want to encourage violations of Russian anti-monopoly legislation,” said Yevgeny Fyodorov, chairman of the Duma’s Economic Policy and Entrepreneurship  Committee. 
Hotels that charged 7,000 rubles ($230) per night before the forum were asking for 20,000 for the same rooms during the two-day event, which starts Friday, Fyodorov said. 
“Besides, we can’t afford spending so much money on business trips during a crisis. So our delegation of about 20 people decided not to go.” 
The Sochi forum — Russia’s second biggest business event after the St. Petersburg International Economic Forum — will be addressed by Prime Minister Vladimir Putin on Friday. 
Four deputies, including Fyodorov, were listed as participants at round tables as of late Wednesday, but none of them was among the speakers. 
“Those of us who decide to go anyway … will stay at our own expense elsewhere, outside the city center,” Fyodorov said, adding that he did not know whether he would go. “I will file a complaint to the Federal Anti-Monopoly Service after the forum.” 
The anti-monopoly service has been more active in investigating hotel collusion in recent years, particularly around the time of economic events or big sports contests. 
The cheapest room at the Marins Park Hotel, one of the closest to the venue, cost 10,500 rubles, but a booking manager said Wednesday that the hotel was only accepting stays for a minimum of six nights. 
Her colleague at the nearby Zhemchuzhina, a three-star hotel with Soviet interiors, said it charged 10,600 rubles per night but that clients had to pay for at least five nights — even if they planned to stay for a shorter period. 
Both managers refused to give the pre-forum prices. 
“Hotels have to somehow compensate the losses that they suffer because of the forum, and that is why the prices rise at least by 100 percent,” said Natalya Grion Ernandes, chief executive of the Krasnodar-based Mobile-Expo, one of the forum’s official travel agencies. “Hotels stop selling rooms to anyone but the forum participants for the whole week of the event, and there is no guarantee they will all get filled.” 
The local administration forces the hotels keep their rooms free for the forum guests, she said. 
“Only the most expensive, luxurious hotels have significantly increased their prices for the forum,” she said. 
“The deputies could well have stayed in the hotels a 10 to 15 minutes’ drive from the city center and pay as low as 300 rubles to 6,000 rubles a night. The hotels charging that low didn’t raise prices before the forum,” she said. “It seems strange that they tried to go to presidential-class hotels and then complained about how expensive it was.” 
The main profits from the forum went to Moscow — not Sochi — businesses, said a manager at Sochi-based travel agency and hotel booking office Lazurny Bereg-Sochi. She asked that her name not be given to speak more openly about the situation. 
“A lot of Moscow firms came and booked all the rooms at the hotels and sold them for at least 40 percent higher,” she said. 
Mikhail Fedorenko, deputy head of the Federal Anti-Monopoly Service’s department for control of the social sphere and trade, told The St. Petersburg Times that preliminary research had shown that Moscow travel agencies were to blame for the prices. More checks will be held, he said. 
The minimum price at a central hotel was 3,400 rubles per night before the forum, soaring to 8,700 during the event, the Lazurny Bereg-Sochi manager said. An average deluxe room costs 20,160 rubles per night later this week, up from 14,560 rubles. 
“Those who call us mainly say no because they don’t need such expensive packages for five or six days when the actual forum is just two,” the manager said. “The hotels must have introduced the packages to compensate for the smaller number of tourists coming to Sochi this year.” 
Lazurny Bereg-Sochi has seen a 30 percent fall in clients this year. 
“It was all dead until the end of July, with people mainly coming to the cheapest rooms just to go lie on the beach,” she said. “It has become a bit more active now, but we’re still seeing a huge difference from last year.” 
Regardless, the prices are lower than those charged by hotels a year ago. In June 2008 at a session of St. Petersburg forum, Mirax Group CEO Sergei Polonsky expressed outrage at what he called inflated prices at the local hotels. He stayed with a friend.

TITLE: Medvedev Will Tempt Fate in 2012
AUTHOR: By Nikolaus von Twickel
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — The 2012 presidential race is wide open. 
President Dmitry Medvedev on Tuesday followed Prime Minister Vladimir Putin’s lead in saying that he did not exclude the possibility that he would run for the job again. 
“A while ago I did not even intend to stand for president. But fate decreed otherwise, and this is why I do not make plans too early and do not exclude anything,” Medvedev told the Valdai Club, a gathering of Western experts on Russia. 
Medvedev stressed that he would discuss the issue with Putin. “As responsible people, we have to find an agreement,” he said. 
Putin on Friday gave his strongest indication yet that he might stand again for the presidency in the next election, when, during his meeting with the Valdai group, he also said that he did not exclude running but would sit down with Medvedev to discuss this. 
At Tuesday’s meeting in the GUM department store on Red Square, a smiling Medvedev joked that he had wondered whether the question about 2012 would be asked. 
“Thank God you did. ... Carthage must be destroyed, and an answer must be given,” he quipped, in a variation of the Roman statesman Cato’s famous statement, “This corn is well grown, and Carthage must be destroyed.” 
Medvedev added that as a “more or less consistent person, I always strive to fulfill my ideas to the end.” 
Putin’s and Medvedev’s much-vaunted leadership in tandem has been under scrutiny ever since it started after the presidential election in spring 2008. 
Many analysts believe that Putin, who picked Medvedev as his successor in December 2007, will determine who will run the country after 2012. 
“He could name a third candidate today and build him up like Medvedev — and he would probably win,” said Masha Lipman, a political analyst with Carnegie Moscow Center. Medvedev, who has given his presidency strong liberal overtones, made some unusually strong remarks Tuesday when he categorically defended the 2004 abolition of gubernatorial elections, one of then-President Putin’s decisions that has been lambasted by critics as a rollback of democracy. 
“I personally participated in this decision ... and I believe it is absolutely right,” Medvedev said. “I do not see how we can change this decision, neither now nor in 100 years.”  
Medvedev served as the head of the presidential administration when Putin pushed through the abolition of the gubernatorial elections. 
Medvedev argued that, his own democratic convictions notwithstanding, popular elections for the country’s more than 80 regional leaders ran counter to national traditions. “It just does not fit Russian traditions and the development level of its federalism. ... We never had gubernatorial elections in our country before a certain time,” he said. 
Apparently sensing the controversy of his own words, he added: “This is quite tough. But this is what I believe.” 
Medvedev said the current arrangement under which Kremlin appointees are subject to approval by regional legislatures is democratic enough. He accepted the fact that United Russia dominates most regional legislatures, but said this need not last forever. 
Medvedev also said he did not exclude the possibility the next president would be a partisan one, prompting speculation from political commentators about whether the president was pushing to increase the status and clout of political parties. Medvedev does not belong to any party. Putin heads United Russia but is not a formal member. 
Medvedev has undertaken a series of political initiatives recently that analysts say point to his wish to emancipate himself from Putin’s tutelage. The series started when he said on the first anniversary of the Georgia war last month that he alone made the decision to order Russian troops into South Ossetia in August 2008. He then sent a bill to the State Duma that would widen the president’s powers to deploy troops abroad and sent a scathing message to Ukrainian President Viktor Yushchenko, accusing him of souring ties with Moscow. 
Most recently, Medvedev published an article in the Russian media last week in which he formulated his own vision of the problems hindering Russia’s modernization, primarily corrupt officials and an inactive public living in expectation of state support — the exact two sins for which the opposition most often criticizes Putin’s presidency.

TITLE: Russian Mother Charged With Kidnapping Finnish Child
AUTHOR: By Irina Titova
PUBLISHER: The St. Petersburg Times
TEXT: Rimma Salonen, the Russian mother of a child caught in an international custody battle, has been charged with kidnapping her own five-year-old son Anton from Finland in 2008. She could face up to seven years of imprisonment under Finnish law, Interfax reported this week.
Finnish prosecutor Mika Makinen on Tuesday brought the charges against Salonen, which include charges of aggravated deprivation of freedom, child abduction and embezzlement.
The prosecutor asked for seven-and-a-half years in prison for Salonen, including four years for deprivation of freedom, two years for child abduction and one-and-a-half years for embezzlement, Interfax reported.
The court hearing on the matter has been scheduled for Sept. 29 in Tampere, Finland.
Salonen will not plead guilty. She is currently under obligation to remain in Finland, said Johan Beckman, Salonen’s representative, Interfax reported. 
Finnish police detained Salonen as she arrived in Helsinki on July 31.
Police, representatives of the Finnish Embassy in Russia and Salonen’s former husband Paavo Salonen had managed to persuade her to go to Finland by promising to organize a meeting with her son, give her money for an apartment in Finland that she had sold, and allow her freedom of movement around the country, Beckman said.
Rimma Salonen was detained at Helsinki port and sent to Tampere, however.
On Aug. 3, Russia’s Foreign Affairs Ministry sent a letter to Finland protesting the detention of Salonen.
The Ministry said it would provide all necessary help to her, and added that the negative development of the situation could affect the overall tone of relations between the two countries, Fontanka.ru reported.
The court in Tampere later released Salonen on condition that she would not leave Finland in the next 45 days.
The woman is suspected of illegally taking her son, who had dual citizenship, out of Finland in 2008, after a Finnish court had awarded custody rights for Anton to his father, a Finnish citizen. 
In early May, Paavo Salonen discovered the location of his son in St. Petersburg. He asked an employee of the Consulate of Finland in St. Petersburg to help him take the child out of Russia secretly in the trunk of his diplomatic car.  
The situation caused serious tension between the diplomatic services of the two neighboring countries, with Russia declaring the Finnish diplomat a persona non grata. In response, Finland’s Foreign Affairs Ministry said it believed that the motive for the diplomat’s action was the interests of the child and the situation of his guardian.
Rimma and Paavo Salonen married in 1995, and lived together for seven years before getting divorced. Soon after the divorce, however, Rimma Salonen discovered she was pregnant. Anton was born in 2003, and Paavo Salonen recognized the boy as his child. Anton received Finnish citizenship, and a local Finnish court recognized his father as his official guardian.
In 2008, Rimma Salonen returned to Russia, taking her son with her, despite the fact that his father had not given his permission. In Russia, she organized Russian citizenship for the boy, but in 2008 a court in Balakhna in the Nizhny Novgorod Oblast deprived the boy of his Russian citizenship because Russia and Finland do not have an agreement on dual citizenship. Furthermore, citizenship can only be granted to a child if both the parents agree, and Anton’s father had not given his permission.
On April 12 of this year, Rimma Salonen, 48, told the Balakhna police that her son Anton had been kidnapped. A criminal case was not at first opened, with the police citing the absence of a crime. The police believed that the boy had been deprived of Russian citizenship, and that Paavo Salonen, 65, had taken Anton back to Finland.
On May 15 however, the Nizhny Novgorod Oblast prosecution opened a criminal case into the matter under article 126 of the Russian Criminal Code (pre-meditated kidnapping of a person by an organized group.)

TITLE: 'Rent-a-Crowd' Attended Tower Hearings
AUTHOR: By Sergey Chernov
PUBLISHER: Staff Writer
TEXT: An ardent, eye-catching supporter of the Okhta Center (Gazprom Tower), who was gesticulating vigorously and shouting down opponents at the Sept. 1 public hearing that was marked by beatings and arrests of the tower’s opponents, has been recognized as a professional actor. 
Opponents of the Okhta Center see it as another indication of the fact that ODTs Okhta (Okhta Public and Business Center) — the Gazprom structure in charge of the construction of the RMJM-designed tower — used a “rent-a-crowd” at the hearing. 
Vladimir Zamorochinsky, who did not introduce himself while making a speech through the microphone in defense of the controversial 396-meter skyscraper planned to be built close to St. Petersburg’s historic center, has appeared in a number of television crime series such as “Menty” (Cops) and “National Security Agent.”
Some of the photos from the hearing show Zamorochinsky standing aggressively over Yelena Malysheva, an activist with the anti-tower preservationist group Okhtinskaya Duga.
“He was telling me not to prevent people from speaking in support of Gazprom and not to jump in with my questions,” Malysheva said on Thursday.
“He tried to push me away with his belly, and trod on my feet. I said to him that the microphone had been offered to me, and that he was not “the woman” [to whom the moderator had indicated the microphone should be passed] and he told me to shut up. He said we were bothering the public.”
According to Malysheva, many of the people in the packed conference room of the Karelia Hotel were members of a pro-tower rent-a-crowd. “Firstly, it was all the rows at the front, secondly, rows at the back, as well as the majority on the left and right,” she said.
Tamara Vedernikova, who was also at the hearing, said that when Zamorochinsky took hold of the microphone, he did not deliver a speech, but instead addressed Malysheva directly. 
“He didn’t introduce himself; he started a dialog with Malysheva,” she said.
“He structured his dialog in such a way that everybody else would hear it, but it was not a question, not a statement — he had simply decided to teach a ‘girl’ some sense. He was recognized there in the room, there were shouts of ‘He’s an actor,’ so he was exposed at once.” 
After verbally attacking Malysheva, Zamorochinsky left the hearing.
Vedernikova said that some members of the rent-a-crowd defected to the Okhta Center’s opponents during the course of the hearing.
“It’s difficult to calculate the volume of the rent-a-crowd, because some of those who had been pro-tower began to actively support its opponents,” she said.
“It could be seen from the reaction to the speeches; the support of the tower’s opponents was more powerful.”
While ODTs Okhta has kept silent about the use of actors, Zamorochinsky was effectively exposed in the blogs of the Okhta Center’s opponents, who provided screen shots from a television series and a pop music video in which he had taken part. On Sept. 5, several days after the hearing, the pro-Okhta Center web site Vkrizis.ru admitted that Zamorochinsky was at the hearing, but claimed that he had gone on a voluntary basis.
“I came because I am not indifferent to St. Petersburg,” the web site quoted him as saying. 
“I don’t see anything bad in the fact that a new world-class building will emerge. I wanted to find out more about the project, but [the opponents in the audience] wouldn't let the people [representing the project] on the stage speak; there were constant insults and rude remarks from seats. I asked people to behave in a decent and civilized way, and I was immediately accused of having sold out.”
The use of the rent-a-crowd at the hearing has been confirmed by many present at the hearings, including Kirill Strakhov, a Yabloko party deputy for the Finlyandsky Municipal District, whose report was published on Yabloko’s local web site.  According to Strakhov, the hearing’s administrator was confused by Strakhov’s deputy’s badge, and took him straight to the seats where Okhta Center’s hired supporters, who referred to their intentions as a “job,” were sitting.
Yabloko activists Ksenia Vakhrusheva and Alexander Shurshev alerted  the police to a man who had been handing out money to a group of people who appeared to be part of the rent-a-crowd close to Hotel Karelia, and who had attacked them when Vakhrusheva took a photograph of the situation.
When detained, the man, Alexander Kaganovich, admitted he was handing out money. “It’s not illegal to give away money in the street,” he said. The statement they gave to the police has not yet yielded any result, Shurshev said by phone on Thursday.
During a previous Okhta Center hearing in June 2008, there was also a controversy involving the rent-a-crowd, many of whom turned out to be extras (or would-be extras) hired at Lenfilm. A taped briefing of their task and the sum of payment they were given (400 rubles, or $17) were leaked to the press. Public admissions were later made by several members of the rent-a-crowd.
Despite the reported violations, ODTs Okhta and the Krasnogvardeisky District Administration declared officially that the hearings had been held as required, both in 2008 and 2009. The opponents’ demands for the results of the hearings to be cancelled were rejected.

TITLE: U.S. Shelves Plans For Missile Defense
AUTHOR: By Nabi Abdullaev
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — Czech Prime Minister Jan Fischer said Thursday that President Barack Obama had told him that the United States will not deploy a missile defense system in the Czech Republic and Poland, Rossia state television reported.
Obama talked by telephone with Fischer on Wednesday night, Czech officials said.
U.S. and Polish officials held talks Thursday on the missile defense system, Polish Deputy Foreign Minister Andrzei Kremer told Reuters. He declined to comment after the meeting, but he said earlier in the day that there was a strong possibility that the United States would shelve the system.
Russia had vigorously opposed plans by former President George W. Bush to deploy elements of a missile shield in the two countries, seeing them as a threat to its nuclear potential.
Konstantin Kosachyov, head of the State Duma’s International Affairs Committee, praised the U.S. decision, saying in televised remarks that it showed Obama understood Russia’s security concerns.
The Foreign Ministry declined immediate comment, saying it was waiting for an official announcement by U.S. officials.
Under the plan developed by the previous U.S. administration, a radar station was to be installed in the Czech Republic and a base for interceptor missiles was to be built in Poland. The Bush administration argued that the sites were needed to intercept possible missile attacks by Iran and other “rogue” nations against the United States and its allies in Europe.
Moscow argued that the bases set up near Russian borders would diminish its capacity for a retaliatory strike in case of a nuclear attack against Russia.
From the early days of his presidency, Obama had made it clear that he would only pursue the missile defense project in Europe if it proved technically feasible.
The decision to shelve the project is linked to Iran’s slower than expected progress in developing long-range missiles, The Wall Street Journal reported Thursday, citing sources in the U.S. administration.
The diplomatic dispute over missile defense was one of the biggest sore points in Moscow’s relations with Washington in recent years and the main obstacle in ongoing negotiations on a new U.S.-Russian nuclear arms agreement to replace the Cold War-era Strategic Arms Reduction Treaty, which expires in less than three months.

TITLE: Ignatyev Sees Economy Emerging From the Crisis
AUTHOR: By Alex Anishyuk
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — The economy has emerged from crisis, and financial markets have become healthy enough to withdraw some support measures, the Central Bank and the government said Wednesday in a report to the State Duma that touted the effectiveness of their anti-crisis policies.
First Deputy Prime Minister Igor Shuvalov predicted that the economy could return to its precrisis level by 2012. “The sharp phase of the crisis and the most shocking situation is behind us, and we are now saying that the crisis is over. We are saying that we are moving on to the recovery phase,” he said.
Now that the financial markets have recovered, the Central Bank will begin to withdraw its collateral-free loan auctions that it instituted in October after liquidity dried up on debt markets, Central Bank Chairman Sergei Ignatyev said. “In order to exit the crisis, collateral-free lending must be wound up and replaced with other instruments and credit resources,” Ignatyev said.
The amount of collateral-free loans given by the Central Bank reached 1.92 trillion rubles ($62.4 billion) in February before dropping to its current level of 437 billion rubles. Seventy-five banks currently have debt outstanding using this instrument.
“The Central Bank took a large credit risk with the collateral-free loans, but we believe the cost was justified as this measure has helped the Central Bank provide liquidity support to medium-sized banks,” said Elina Ribakova, chief economist at Citibank.
“Now that the systemic liquidity in the banking system appears to have stabilized, we believe it is important to withdraw the extraordinary liquidity support measures such as collateral-free loans,” she said.
If a bank needs emergency liquidity for more than a few months it is likely that it is an issue of insolvency, in which case the bank requires recapitalization rather than liquidity, she said.
“Russian firms are considerably less dependent on short-term loans now than during the recession,” said Mark Rubinstein, an analyst at Metropol IFC. “The figures cited by Ignatyev on collateral-free loans are direct proof of that.”
The Central Bank has also been spurring lending by cutting the rates it charges banks for its credit facilities as well as its target rate for which banks lend to each other. It began lowering its main interest rates in April, bringing the refinancing rate down to 10.5 percent this week from a high of 13 percent.
The bank has also positioned itself as the main source of liquidity for the financial system, supplying loans through a range of credit facilities, including collateral-free loans.
“This has represented the Central Bank’s quantitative easing effort, and, in our view, allowed the authorities to avoid the full-scaled collapse of the financial system last autumn,” Renaissance Capital said in a research note.
One of the next steps in reviving the country’s banking sector, however, is increasing banks’ access to long-term debt, Ignatyev said.
In a bid to increase liquidity in long-term debt markets, Ignatyev proposed ending the limitations on bond issues. The amount of debt a company can issue is currently limited to the size of its equity.
This limit “is clearly unnecessary. I don’t know a single person who would disagree with this, but the issue keeps on being discussed and discussed,” Ignatyev said.
The corporate bond market saw a revival this summer, and Gazprom led the way with an issue of $2.4 billion in eurobonds in July. In August alone, the value of corporate bonds traded on the MICEX rose 32 percent to 1.1 trillion rubles ($35.7 billion).
Besides the collateral-free loans, the other measures outlined by Ignatyev and Shuvalov as key to the economy’s recovery included putting money from the National Welfare Fund on deposit with Vneshekonombank, which the government then used as a bailout vehicle; recapitalizing VEB; placing federal budget funds on bank deposit accounts; and recapitalizing the Deposit Insurance Agency.
These measures have allowed the government to funnel funds directly to the real economy and provide much needed funding for the banking sector.
While the usefulness of some of the tools has come to an end, the Central Bank is asking for an extension on other instruments that it says it needs to continue to prop up the economy.
Ignatyev asked Duma deputies to allow the bank to continue compensating banks for losses sustained from deals with failed banks — an emergency power that he was given last fall.
He also asked for the authority to continue putting caps on the amount of interest that banks are allowed to pay for deposits, in an effort to discourage consumers from investing their money in risky banks.
The report met with a mixed response from deputies. While United Russia members praised the government’s response to the crisis, other parties were not so generous. A Just Russia said the measures were inadequate because the country’s GDP witnessed a steeper fall than any other oil-producing economy. The Communists pointed to low wages throughout the country and the drop-off in manufacturing as evidence that the government was pursuing the wrong policies.

TITLE: Medvedev Puts Spotlight on Blogger
PUBLISHER: The St. Petersburg Times
TEXT: President Dmitry Medvedev on Wednesday urged the government to study a blogger’s ideas for speeding the development of the country’s innovative economy, even though the LiveJournal post was heavily critical of state policy.
“I won’t conceal the fact that I have already received thousands of similar ideas,” Medvedev said during a meeting with Deputy Prime Minister Sergei Sobyanin. “I’ve turned my attention to one of them, because all of Yandex is buzzing about it. A certain citizen by the name of Maxim Kalashnikov addressed citizen Medvedev.”
The comments are in keeping with Medvedev’s brand of populism, using technology to open lines of communication with the people.
In January, he opened his video blog on the Kremlin web site up for comments. 
Kalashnikov’s post, an open letter to “Citizen D. Medvedev,” paints a dire picture of the country’s situation.
“It has long been obvious to intelligent people that the country is headed toward a systemic catastrophe, and only a breakthrough innovational path of development can save it,” he wrote, using the handle M_Kalashnikov.
Among other things, he called for the president to form an “innovation council” to better control the pace of development in the sector and to put reform in the hands of scientists and innovators rather than “idiot bureaucrats.”
Medvedev seemed to have an open mind towards Kalashnikov’s comments.
“He writes all kinds of unflattering things concerning the authorities and doesn’t shy from giving his opinion,” but the matter at hand demands that we stand above unpleasantness, Medvedev said.

TITLE: Novatek CEO Snaps Up Land Along Gulf
AUTHOR: By Nadezhda Zaitseva
PUBLISHER: Vedomosti
TEXT: Leonid Mikhelson, the billionaire co-owner of gas giant Novatek, appears to be taking up property development in St. Petersburg after one of his companies purchased 144 hectares along the coast of the Gulf of Finland.
Severo-Zapad Invest on Wednesday bought at auction 15 plots with a total area of 144.2 hectares in the Kurortny and Primorye districts, the press service for the city's property fund said. The plots were sold as one lot for 36 million rubles ($1.2 million), with a starting price of 33 million rubles and bidding in increments of 1 million rubles. 
City officials declined to identify the auction's second participant.  
According to the SPARK database, Severo-Zapad was 70 percent owned by Levit at the end of June; 25 percent beloned to Cyprus-registered Eubaea Enterprises and 5 percent to a company called Dialog. Novatek's second-quarter earnings report said 78.29 percent of Levit was owned by Mikhelson, who is also Novatek CEO.
A spokesperson for Mikhelson confirmed those figures but declined to discuss the development project or its possible cost.
The plots are located along the Gulf of Finland, not far from the city's ring road, the property fund said. Under St. Petersburg zoning rules, the land could be used to build low-rise houses, said Vyacheslav Semenenko, a spokesman for the city's building committee. 
The terms of the auction say the winner must build and hand over to the city the necessary utilities infrastructure no later than 57 months after the auction. Construction on the property must be done within eight years.
Semenenko said the land was swampy and covered with trash heaps, with few plots ready for immediate development. Just restoring 77 hectares, or about half of the land, will require investments of 4 billion rubles ($132 million), said an official at Severo-Zapad Invest. 
Including the expenses for readying the property, the land will cost 280,000 rubles per hundred square meters, making it by no means cheap, said Olga Trosheva, deputy director of consulting firm Petersburg Real Estate. It is, however, a good location, close to the city and with good transportation links, she said.
Oleg Yeremin, a first vice president of Baltros, warned that the investment in utilities infrastructure could also be costly. His company spent more than 2 billion rubles for water and power lines at the 260-hectare Slavyanka development.
The plots could have more than 1 million square meters of low-rise housing, with investments reaching 1 billion euros ($1.5 billion) based on a production cost of 35,000 rubles ($1,150) per square meter, Trosheva said.
Yeremin said finding that kind of money in this environment was very difficult.
Mikhelson — whose fortune Forbes estimated at $2.4 billion earlier this year — probably does have the money, at least for the initial work on the land. His Levit has received almost 2.3 billion rubles in Novatek dividends over the past three years, and he has personally received 92 million rubles.

TITLE: Alfa Bank and Mirax Come To Compromise Over Debt
PUBLISHER: Vedomosti
TEXT: MOSCOW — Alfa Bank and Mirax Group have agreed on a debt restructuring, under which the lender will forgive $80 million of the developer’s obligations and still manage to come out earning an annual 120 percent on the deal.
The sides signed a comprehensive agreement that will see Mirax’s debt of about $250 million restructured for up to 18 months, Alfa Bank said in a statement Tuesday. The developer’s press service confirmed the information. Neither Alfa nor Mirax released additional terms of the agreement.
Mirax’s debt to Alfa had been slightly more than $330 million, meaning the bank wrote off about $80 million. A source at the bank confirmed those figures.
The developer should repay two loans — for $50 million and $40 million — in December 2009 and July 2010, respectively. Additionally, Alfa bought the rights to another two loans (due in February and October 2009) at a 75 percent discount from Credit Suisse in July. A source in Mirax said the developer owed $241.6 million on those loans, including interest and penalties.
Alfa Bank went to court immediately, suing the developer for $241.59 million on Aug. 4. Ten days later, the property of two Mirax Group subsidiaries — Mezhdunarodny Tsentr and Mirax City, which own the Mirax Plaza business center and the Federation Tower — was arrested.
The Mirax Group source told Vedomosti that the bank would receive half the debt in cash, while the rest will be repaid with space in the Federation Tower. Alfa Bank declined to comment on the matter, but a source close to the bank said the deal included a condition that the property be repurchased.
The deal will be exceptionally lucrative for Alfa Bank. Yegor Fyodorov, an analyst at Bank of Moscow, calculated that without taking into account interest on the restructured loan, the deal would earn Alfa an annual rate of 120 percent. Even if the property from Mirax were to become worthless, the bank would be getting an annual 28 percent, he said.
“In the next few days the arrest will be lifted from our properties,” a Mirax spokesman said. “That will allow us to resume sales.”
Nonetheless, the deal with Alfa isn’t likely to solve all of Mirax’s problems, said Mikhail Urinson, managing director of developer Alur. “[Companies] aren’t just demanding an extension of old obligations, they want new ones to finish projects they’ve started,” he said.
Lenders will have to finance the completion of construction at these sites or attract funds from elsewhere, agreed Mikhail Solovyev, director of Trust’s construction and property department.
“Alfa Bank is considering the possibility of financing the completion of one of Mirax Group’s most important projects — the high-rise Federation business center,” Vladimir Tatarchuk, an Alfa Bank deputy chief executive, said in the statement.

TITLE: Three Wrongs Don’t Make a Right
AUTHOR: By Robert R. Amsterdam
TEXT: The recent visits to Moscow and Tehran by Hugo Chavez raise a number of concerns about the deepening relations between Russia, Iran and Venezuela.
The motivation behind the Russia-Iran-Venezuela alliance is often misunderstood. On the one hand, there is the narrative that these governments are pursuing national interests, seeking to deepen their security against ever-present external threats and accrue regional power. Others argue that the alliance is driven by an attempt to build an “alternative architecture” of global relations, one that is conveniently unconcerned with democracy and human rights and bound solely by the common value of anti-Americanism.
Both these assumptions are dangerously misleading. In reality, the foreign policies of these three states are driven by the personal interests of clans that control the highest offices of their governments.
In addition to sharing a national leader-for-life mentality, the leaders of these three countries regularly employ the powers of the state in support of clan-controlled businesses, especially in the energy and arms sectors. When Deputy Prime Minister Igor Sechin travels to Venezuela (he visits Caracas with extraordinary frequency), there is little to no separation between his diplomatic duties and personal financial interests in inking deals between Rosneft and PDVSA. When the Iranians travel to Caracas, they are given a red carpet welcome to jointly operated factories and the assistance of elaborate money-laundering networks.
Chavez’s family and close-knit clan of loyal military officers have become multibillionaires under his rule. Known as the boligarchs, they benefit directly from the alliance of Russia and Iran since it lends much-needed credibility and legitimacy to their plunder of the country. In exchange, Chavez last week visited Moscow and announced that Venezuela would recognize the independence of the Georgian breakaway regions, South Ossetia and Abkhazia. On the way, he stopped in Turkmenistan to invite the president to join the Russian-inspired gas cartel — despite the fact that Venezuela is a net importer of natural gas from Colombia.
It is important to recognize that reciprocally reinforcing mechanisms of corruption hide behind the facade of state institutions in all three countries. These systems are inherently duplicitous, using laws and instruments of state authority to enhance rather than control corruption. It is corruption cloaked in nationalism, religion and self-defense. All three countries — with Venezuela far in the lead — have unstable civil-military relations that are fraught with the tensions of unlimited power and limited ability to control some key interest groups. Ironically, Iran is the most pluralist of the three.
What are the symptoms of clan rule?
• The horizontal of incompetence. Rather than a vertical of power, there is a horizontal of incompetence, characterized by a systemic inability to delegate power because of the lack of trust and poorly defined institutional responsibility.
• Short-termism. The ongoing internal fights over property in all three countries leave elites focused more on internal than external battles. Policy flip-flops are the rule rather than the exception. The only constant is the need for crisis. From the Georgian war to the FARC to the virulent anti-Semitism of Chavez and Iranian President Mahmoud Ahmadinejad, the fire of the invective is inversely proportional to the need to mobilize security forces and keep internal opposition off-balance. The speed of opposition crackdowns is the one constant.
• Definitional anti-Americanism. The image of the Great Satan is another constant that needs to be continually kept alive. For leaders who speak of multivector diplomacy, there is a compulsive need to be obsessed with U.S. power and to foster anti-American attitudes as a tool to unite their societies. Yet in the face of the Obama administration, readiness for this is becoming harder to sustain.
Russia’s legislation to ring-fence the “strategic sectors” of the economy provides a compelling example of clan-based interests at work. It is more accurate to call this the siloviki retirement plan because it protects businesses controlled by key individuals around the prime minister. But even better, it allows them to enrich their friends through tied sales between military, energy, and civilian nuclear technology. And now, if you are Chavez, throwing in recognition of Abkhazia and South Ossetia will give you a cheap credit to buy 100 Russian tanks.
The crackdowns on civil liberties recently in evidence in Tehran, Caracas and Moscow reflect the insecurity of three juntas that lack internal legitimacy and are fighting to maintain the private property they have amassed. Whether it is the Venezuelan boligarchs, the Revolutionary Guard or the siloviki, the torture and cruelty of the jails and show trials are directly related to their interest in safeguarding assets rather than ideology. All three leaderships are engaged in a quest for impunity and the possession of nuclear weapons sought by Iran and Venezuela is part of that process. The success of North Korea is not lost on these leaders. It is small wonder that Russia has so little interest in resolving the nuclear impasse over Iran.
The real danger, however, is that we too often confuse cause and symptom and fail to recognize how false fronts operate in these countries. Nearly all analyses, whether internal or external, see their systems through a prism that hides the power of clans and cabals. In order to formulate effective policies to respond to the new alliance of Russia, Venezuela and Iran, our first step should be to better understand what is motivating such odd bedfellows.

Robert R. Amsterdam is an international lawyer who represents political prisoners in several countries, including Eligio Cede?o in Venezuela and Mikhail Khodorkovsky in Russia. The views expressed in this comment are his alone.

TITLE: Chavez Dreams of Being Putin
AUTHOR: By Yulia Latynina
TEXT: Last week, Moscow blocked a United Nations Security Council resolution against Iran and gave Venezuelan dictator Hugo Chavez $2 billion in arms on credit. Chavez claims he needs them for defense, but the bill of sale includes 100 T-90 and T-72M1M tanks.
By supplying Chavez with a small army of tanks, Moscow has lit a fuse that could ignite a war between Venezuela and Columbia — a war that Chavez needs to distract his people from the country’s problems and that Prime Minister Vladimir Putin needs to raise the price of oil.
Chavez has dreams of becoming a leader who is for South America what Putin is for the former Soviet republics. Three years ago, Chavez put enormous effort into promoting a pro-Venezuelan candidate for the Peruvian presidency. The result was that his man, Ollanto Humala, lost the Peruvian elections in the same way that Putin’s hand-picked candidate for the Ukrainian presidency, Viktor Yanukovych, lost the elections there in 2004.
Since the current crisis began, Chavez has extended $100 million in credit to Honduran President Manuel Zelaya. The Honduran leader could have received aid from the United States, but in return he would have to account for how it was used. For the money from Chavez, that wasn’t necessary. Zelaya became very unpopular in his own country, and after attempts to change the country’s constitution, he was exiled.
Cuba has no toilet paper, citizens receive rations of 110 grams of chicken meat per person, and President Raul Castro announced that farmers would no longer plow their fields with tractors but with a more progressive earth mover — bulls. In the Cuban province of Santa Clara, 6,000 bulls are already being trained to pull a plow. The Cuban regime could not survive without financial support from Chavez.
With money from Chavez, Bolivian President Evo Morales pays his country’s pensioners and teenagers 200 bolivianos ($28) per month, and the average monthly salary is just 500 bolivianos ($70) per month. In Bolivia, there are no sources of money other than Chavez and cocaine.
Like Putin, Chavez brands his political enemies as criminals. Like Putin, he evicts nongovernmental organizations from his country, claiming they are agents of foreign intelligence. He claims that terrorists from the Revolutionary Armed Forces of Columbia are “rebel forces.” And the crimes he boisterously accuses the United States of committing — financing terrorism, subversive activity abroad, fascism and militarism — is a laundry list of his own misdeeds.
In short, Chavez, like Putin, sees himself as a world-class politician, and the reasons for his own lack of success are the same as the Kremlin’s: a disproportionate self-love and lightheadedness caused by the inebriating effect of too many petrodollars.
Under crisis conditions, it has turned out that Venezuela’s nationalized economy is in no condition to simultaneously support Colombian terrorists, Bolivia’s poor and Venezuelan voters. The only option open to Chavez is to conduct a new nationalization (the first took place in May) and to follow that with a war against Columbia — a country that Chavez is purposefully provoking by supporting FARC drug terrorists while branding U.S. attempts to curb drug trafficking as preparatory to initiating aggression against Venezuela.
There is much less discussion about a possible war between Venezuela and Columbia than between Iran and Israel, but judging by the Arctic Sea ship incident and the delivery of tanks to Chavez, provoking both conflicts seems to be a foreign policy priority for the Kremlin.

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

TITLE: Mighty Novgorod
AUTHOR: By Galina Stolyarova
PUBLISHER: Staff Writer
TEXT: Veliky Novgorod, one of Russia’s most ancient cities that once served as the country’s leading international trade hub and reigned as its second most politically influential city, is celebrating a venerable 1,150 years in existence this weekend with a host of modern and medieval-style festivities.
Novgorod was first mentioned in the Russian chronicles in 859. Originally part of Kievan Rus — the first Russian state — the city acquired independence in 1014, soon gained substantial political power and established a state of its own. At one stage, the territory of the Novgorod state equaled the size of modern Sweden. 
In 1136, the citizens of Novgorod turned the state into a republic. The supreme authority became the Novgorod Veche — an assembly summoned by the ringing of a bell. During elections, the candidates were supported by shouting. The louder the supporters, the better the candidate’s chances were.
In 1240, Prince Alexander, who had been recruited by the Novgorod republic to defend it from Swedish invaders, defeated the enemy in a famous battle by the Neva River. Two years later, Alexander Nevsky saved his city once more, winning another historic battle on the shore of Chudskoye Lake against the Knights of the Teutonic Order. The republic of Novgorod finally fell in 1478 when it was absorbed by the state of Moscow, which was going from strength to strength, and Novgorod’s political power and importance subsequently began to weaken.
Today Novgorod is a charming provincial town that attracts masses of tourists with its fine examples of Medieval Russian architecture, beautifully preserved Kremlin, abundance of churches, and its serene, contemplative atmosphere.
The city is expecting large numbers of visitors this weekend, from President Dmitry Medvedev and official delegations from just about every Russian city to crowds of Russian and foreign tourists. To get Moscow guests in the festive mood, Russian Railways has arranged for films about the history of Novgorod to be shown on board trains travelling between Moscow and Novgorod. Similar videos are being played on public transport in Novgorod itself.
Each of the three days of the festivities has a special title and theme to it. The city will be transformed into a vast, diverse performance venue, with singers, dancers, actors, musicians, brass bands, symphony orchestras, jazz groups and theater companies performing in historic locations, city squares, entertainment venues and impromptu stages. 
The celebrations begin on Saturday with the introduction of Novgorod as the “Birthplace of Russia” and highlighting the city’s impressive evolution, which spans more than a millenium. The central events of Saturday’s festivities will be inspired by the theme of the founding of the Russian state.
The formal opening will be held beside Novgorod’s renowned Monument to the Millenium of Russia. Medvedev will attend the ceremony and make a welcome speech that will be broadcast by Russian television.
As a gift for the anniversary, the city’s spectacular Medieval Kremlin, which dates back to the 11th to 17th centuries and is listed as a UNESCO World Heritage Site, has received a dazzling new lighting system that will be turned on in the evenings. The lights will illuminate the Kremlin walls from the outside, along with four of its nine towers, the St. Sophia cathedral and belfry, Prechistenskaya and Voskresenskaya arches and the Monument to the Millenium of Russia.
In addition, the Kremlin will host a special exhibition titled “Origins of the Russian state,” which will showcase historic objects related to the formation and development of the Russian state. The evening will be crowned by theatrical performances, fireworks and a laser show near the Kremlin and the pedestrian bridge across the Volkhov River.
Sunday’s festivities run under the slogan “Treasury of Russia,” with events focusing on the fame of Novgorod as a key center for international trade and craftsmanship. In ancient times, Novgorod was an important port and center of trade on the fabled route that connected Scandinavia, Kievan Rus and the Byzantine Empire, and in later years was part of the Hanseatic League, an assembly of the most important Baltic ports. On Sunday, Novgorod’s ancient marketplace, or Torg, will host an opulent display — a virtual exhibition of Novgorod’s partner cities and guest cities attending the festivities. 
A festival of Russian cuisine looks set to be one of the most popular features, along with a fair of folk handicraft and festival of traditional Russian open-air games, some of which date from the Middle Ages, in the Yaroslavovo Dvorishche. The beach in front of the Kremlin will be the setting for a sand sculpture festival, and even the sky will host a special event: A spectacular aviation show will be performed over the Volkhov River. In the evening, dedicated socialites will attend a festival of ballroom dancing entitled “Catherine Balls” at the Putevoi Palace originally built for Catherine the Great.
Sunday will also see the first open car rally in the history of Veliky Novgorod. The route covers a 40-kilometer circle with ten speed zones. The rally’s participants — both male and female — will compete in Russian and foreign cars measuring no more than 4.5 meters in length. The contest’s organizers have not set limits on the driving experience of the participants, so the rally will see aspiring newcomers competing against seasoned veterans. The first crew is scheduled to depart at 11.00 a.m. from the designated area outside the Novgorod Drama Theater. The race is expected to take around three hours, and the winners will be announced at the same spot at 3.30 p.m.
The program of events for Monday is called “In Praise of Wisdom.” The day aims to highlight the role of Novgorod as Russia’s oldest center of Russian Orthodoxy, education and culture. Novgorod prides itself on the fact that back in the 11th to 12th centuries the population of the city was almost 100 percent literate — an achievement still unthinkable for some parts of the country today.
The Kremlin’s St. Sophia Cathedral will be the main venue for events on Monday. The Russian Orthodox tradition of bell ringing will take center stage in the “Zlatozarny zvony” ringing festival in the bell tower. Also on Monday, a monument to Sergei Rachmaninoff, one of Russia’s best known composers and a native of Novgorod will be installed in the Kremlin park. The city’s Philharmonic Hall will also host a piano recital dedicated to the memory of the great composer.

For more information, please visit: www.novgorod1150.com, www.novgorod.ru

TITLE: Word’s  Worth
TEXT: By Michele A. Berdy
<em>Ńđî÷íűé</em>: urgent, pressing, fast, immediate, emergency, term, priority, express.
Stop the presses! I finally stumbled across a back-to-school, we’re-in-an-economic-crisis sale in Moscow. OK, maybe it wasn’t a great sale, or even really a sale at all. A bookstore I frequent was giving out discount cards to customers who had spent 5,000 rubles ($160) in the last month — way down from precrisis 7,000 rubles. I went wild in the reference book section and was handed my very own äčńęîíňíŕ˙ ęŕđňŕ (discount card) that the salesclerk assured me was áĺńńđî÷íŕ˙ (of indefinite duration; literally, “without term.”)  
And with that, I forgot completely about the crisis and instead began to obsess about what a curious word <em>ńđî÷íűé</em> is.
<em>Ńđî÷íűé</em> is derived from the word <em>ńđîę</em>, which means a term or period of time, from <em>ňţđĺěíűé ńđîę</em> (a jail term) to <em>ďđĺçčäĺíňńęčé ńđîę</em> (presidential term) to a product’s <em>ńđîę ăîäíîńňč</em> (shelf life; literally, “term of usability”). To do something <em>â ńđîę</em> is to do it “within the time frame” — what we’d call in English “on time.” Somehow doing something “in the designated period of time” came to be associated with doing something quickly or urgently. And so, when someone asks you to do something ńđî÷íî, it means “on the double!” or “ASAP!”
For translation purposes, I’ve mentally divided up concepts of <em>ńđî÷íîńňü</em> (urgency). When modifying a task to be done, <em>ńđî÷íűé</em> means the task is pressing or urgent — “must be done quickly.” <em>ß äîëćĺí ńäĺëŕňü îäíî ńđî÷íîĺ äĺëî äî ęîíöŕ đŕáî÷ĺăî äí˙</em> (I’ve got to finish an urgent matter by close of business). <em>Ó ěĺí˙ ńđî÷íűé çŕęŕç</em> (I’ve got a rush job). Because anything pressing is probably very important, sometimes this can be translated as “priority.”
When modifying a service, <em>ńđî÷íűé</em> means “done quickly.” Depending on the service, U.S. advertisers call this while-u-wait, same-day or emergency service. For example, <em>ńđî÷íűé đĺěîíň îáóâč</em> is what I’d call “shoe repair while you wait.” <em>Ńđî÷íűé đĺěîíň ęîěďüţňĺđîâ</em> might be “emergency computer repair.”
When modifying information, <em>ńđî÷íűé</em> has the sense of “must be paid attention to right away.” <em>Ńđî÷íîĺ ńîîáůĺíčĺ</em> (urgent message) is what U.S. news broadcasters call “breaking news.” 
<em>Áĺńńđî÷íűé</em> means something that is not term- or time-bound — that is, something of indefinite duration. Sometimes this is what we call “lifetime,” as in <em>áĺńńđî÷íŕ˙ ăŕđŕíňč˙</em> (lifetime guarantee).
In the case of my new discount card, there’s a translation problem. In U.S. stores, “<em>áĺńńđî÷íŕ˙</em>” is more likely to be the default position and therefore not specified. If salesclerks had to say something, I’d guess they’d call <em>áĺńńđî÷íŕ˙ ęŕđňŕ</em> “a card with no expiration date.”
Which means a lifetime of discounted books. Not a bad deal.

<em>Michele A. Berdy is a Moscow-based translator and interpreter.</em>

TITLE: Identity crisis
AUTHOR: By Alex Dizer
PUBLISHER: The St. Petersburg Times
TEXT:  On the other side of a pair of black tinted doors situated at the top of the stairs leading to Kult Lichnosti lie an interior and atmosphere that cannot fail to make an impression. 
Despite the sparse scattering of customers around the restaurant’s 20 tables on a recent weekday evening, the plethora of luscious decorations in the one-room establishment made it feel far from empty. The black chandeliers, gold spray-painted chairs, purple wallpaper and red phallic sculpture in the center conjure up something of a cross between a luxurious burlesque house from 19th-century Paris and a Prince video. The atmosphere is overwhelming, and it is easy to forget that outside this candlelit, palatial world, an asphalted street and colder reality await.
 The menu is expansive, covering a whole array of Italian food from pastas, soups and salads to cold and hot starters and mains, but this is nothing compared to the practically encyclopedic drinks menu, which resembles an A-to-Z of every alcohol under the sun, including a good selection of Grappa. Bottles of wine start at a fairly pricey 1,200 rubles ($39), but a glass costs just 150 rubles ($5) and would be a perfect companion for the bargain 350 ruble ($11.50) business lunch.
 The first courses arrived promptly, and were brought with a smile. Pasta Carbonara (260 rubles, $8.50) was unfortunately over salted and left the tongue numb. Perhaps the idea was to draw attention to the drinks menu. The Panzanella, a kind of Italian bread salad (260 rubles, $8.50,) was exhilarating, however, with strong flavors of coriander and baked paprika that left the taste buds constantly surprised. 
 As the meal progressed, the music became increasingly intrusive. The playlist changed in volume, tempo and style, with Ella Fitzgerald and Louis Armstrong’s smooth ‘Summertime’ jazz changing abruptly into a house-like Moby track. At weekends there is a DJ playing “lounge” music from 9 p.m. to 12 a.m., which seems a little excessive for such a small restaurant. Sometimes the music strayed into hip hop, which spoilt the sensual burlesque atmosphere and instead made it border on that of a 50 Cent rap video, with plenty of decorative bling, but also the fear that a pole dancer would appear any second.
 Despite opulence dripping from every possible crevice, the main courses were quite dry. However, in keeping with Kult Lichnosti’s self indulgent vain, they were also too complicated and over flavored. The trout baked with mint and ciabatta (490 rubles, $16) was stuffed on the inside with artichokes and almonds, but also had a bonus piece of pancetta (not mentioned on the menu) wrapped around it, completely overpowering the poor fish’s flavors. The duck breast with pepper, pear and foxberry sauce (600 rubles, $20) was dry, but the sauce helped, with the light fruitiness complementing the delicate flavored meat well.
 The toilets complete the nightclub-cum-harem feel to the place, with red leather sofas and several disco balls in the waiting area. The toilets are unisex, with each utilitarian stall containing its own sink, hand towels and a full-length mirror opposite the toilet, which is quite frankly off-putting (both in terms of performance and dessert.)
 Luckily, the desserts were fantastic. Our well-meaning but English language-challenged waitress was replaced with an English-speaking one who was equally friendly. She recommended the lemon pie (160 rubles, $5.25) and Semifreddo with raspberry and mint (170 rubles, $5.60), both of which ended the meal nicely. The lemon pie was particularly commendable, with the strong citrus taste refusing to give way to the creamy flavor that can sometimes be overpowering.
 Kult Lichnosti is very hit and miss. At times the decoration works well, but then the fake reptile-skin curtains take over and make the place seem tacky. At first, the atmosphere is striking, but after a while may border on sleazy. The food reflects this, with the courses (apart from the desserts) varying in quality vastly. The restaurant in many ways is like a peacock dipped in chocolate: Impressive to an extent but ultimately over the top.

TITLE: In the Spotlight: Trading Places
AUTHOR: By Anna Malpas
PUBLISHER: The St. Petersburg Times
TEXT: When Gosha wakes up after a typical night of boozing with journalist colleagues and dodging phone calls from his latest one-night stand, he has a problem: he is no longer Gosha, but has become an attractive brunette with legs to die for. That is the surreal premise of CTC’s new sitcom, “Margosha,” which started Monday.
The plot is based on a show from Argentina, where magic realism probably comes naturally. In the CTC show, the transformation was effected by a magnificently over-the-top witch with terrifying talons. Asked for her price, she named it as “3,000.” And that wasn’t rubles. “For 3,000 rubles I wouldn’t even swat a fly,” she said.
Gosha is the jutting-jawed editor of a men’s magazine.  In the first episode, the voiceover describes him as the “typical hero of his own magazine.” His answering machine message warns: “If you’re not a beautiful woman, put the receiver down now.”
He is shown creeping out of Moscow’s Golden Apple hotel, leaving his latest conquest, Karina, asleep. She then keeps phoning him, sitting in a chauffeur-driven car with her lapdog, and finally confronts him in his favorite watering hole, a bar called Deadline.
Karina’s fury knows no bounds, as she has broken up with her long-term boyfriend to be with Gosha. “You don’t know who you’re mixed up with. When you work it out, it will be too late,” she shouts as her parting shot.
Gosha goes home to share his bed platonically with his only real woman friend, Anna, who has moved in after breaking up with her boyfriend and clearly carries a torch for him. Meanwhile, It Girl Karina visits the witch, who casts a spell during a lunar eclipse for extra effect.
CTC can’t afford any fancy special effects, so Gosha’s arms and legs are simply shown shrinking into his pyjamas. “That was the last time I ever saw Gosha,” Anna reminisces. Just in case there is any doubt, Karina leaves a cackling message on the answer machine.
The show looks more grown-up than CTC’s previous sitcom hits, local versions of “The Nanny” and “Ugly Betty,” which were big with the early-evening homework crowd. It has a theme song by arty rock band Mumy Troll and the characters all wear suits and talk about regional sales.
So far, we haven’t got much idea of the magazine that Gosha edits, but it seems to pay pretty well. In the first episode he drives a black Range Rover and is busily preparing some kind of business proposal on his laptop. Rather unusually in the scruffy men’s magazine world, his colleagues all wear suits, too.
At the end of the episode, Gosha — now played by an actress, and hastily renamed Margosha — hobbles into the office on stilettos, pretending to be the editor’s cousin. “Gosha is in another city,” she explains to the baffled publisher. “Which city?” he asks despairingly. “Sydney,” she replies.
Margosha saves the day by delivering a presentation to some regional partners, and is swiftly offered Gosha’s old job, much to the male chauvinist journalists’ chagrin. Cue jokes about urinals and groping in the elevators.
The show is pretty enjoyable, but I’m not sure how far it will dare to go. Margosha is already attracting plenty of admiring glances from the token nice guy, photographer Andrei, but will there be any gender-bending romance?
So far Margosha is learning life lessons about the difficulty of wearing high heels and the advisability of knowing more about your sexual partners than their first name.  
Margosha has begun a search for Karina, in order to reverse the sex change. Unfortunately, he only has her cell phone number, and it’s switched off.