SOURCE: The St. Petersburg Times
DATE: Issue #1516 (78), Friday, October 9, 2009
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TITLE: Minister Of Culture Slams Plans For Tower
AUTHOR: By Sergey Chernov
PUBLISHER: Staff Writer
TEXT: Russia’s Ministry of Culture on Thursday objected to Gazprom’s plans to build a 400-meter skyscraper near to the historic center of St. Petersburg.
“Our opinion is negative,” Culture Minister Alexander Avdeyev was quoted by Interfax as saying. “As a minister of culture, the ministry’s staff and I are against the construction of such a tower.” He added that if built, the skyscraper would spoil the city’s historic appearance.
The latest twist in the saga of the controversial skyscraper came just two days after St. Petersburg Governor Valentina Matviyenko finally signed off on the Sept. 22 decision allowing Gazprom to build its Okhta Center tower — contrary to the laws protecting St. Petersburg’s historical skyline.
Also Tuesday, City Hall granted permission for the rally for the protection of St. Petersburg to be held on Saturday, despite initial objections.
Permission was however given for a stationary meeting rather than for a rally — an alteration its organizers, the Citizens’ Coalition to Protect St. Petersburg, were against. On Friday, the organizers submitted an application listing 16 possible routes for the march, instead of the six that City Hall had already rejected.
“We realized that they would issue 16 rejections; it was made clear to us that they would not authorize the march,” Maxim Reznik, the leader of the local branch of the oppositional Yabloko Democratic Party, which is a member of the Coalition, said by phone Thursday.
“That’s why we agreed — so that people could come and express their protest without fear. That’s more important for us than fighting with the OMON [special-task police].”
Last week, City Hall’s law and order committee forbade the protesters to meet outside Yubileiny Sports Palace, referring to an event due to be held inside, but on Tuesday it granted permission for the stationary meeting to be held at the same spot at noon on Saturday.
Reznik said that one flag from every member organization of the coalition would be displayed at the rally, while the rest will be the flags of St. Petersburg. Blue ribbons may be worn by protesters as a symbol of St. Petersburg’s skyline.
On Wednesday, a number of Russian public figures, including author Andrei Bitov, musician Boris Grebenshchikov, ballerina Alla Osipenko, film director Yury Mamin and architect Svyatoslav Gaikovich called on St. Petersburg residents to come to the meeting.
“The decision about the construction has been taken,” they said in their address.
“Now there is only one way to prevent it — massive public protest. Nobody except you now can stop Gazprom destroying our great and beautiful city.”
TITLE: Medvedev Embraces Nanotechnology
AUTHOR: By Alex Anishyuk
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — Nanotechnology will rival oil as a global powerhouse industry, so Russia’s economy needs to embrace it now to avoid a repeat of the “well-known scenario” in which growing oil prices keep it from modernizing, President Dmitry Medvedev said Tuesday.
Medvedev spoke at the opening of the International Nanotechnology Forum, where one senior official said the burden to create new innovations should fall on small and midsized businesses.
Rusnano chief Anatoly Chubais, meanwhile, gave Deputy Prime Minister Sergei Ivanov a guided tour of an exhibition of new Russian nanotechnology, including a photodiode lamp that appeared to temporarily blind Ivanov.
“The economic crisis is a great impetus for an economic renewal,” Medvedev said in his speech at the Krasnaya Presnya Expocenter.
“But the main challenge,” he said, “is to avoid the well-known scenario where oil prices are on the rise and the economy is improving and, again, just like in previous years, no one needs nanotechnology because we can relax and make ends meet without innovations. We therefore must make nanotechnology one of the main sectors of the economy.”
Medvedev also said the main lesson that Russia should learn during the crisis was the need to diversify its natural resources-oriented economy.
“We should not focus our economy on natural resources, no matter how tremendous they are,” he said. “However, there haven’t been any changes so far. The crisis hit the economy, but no one wants to change anything, which of course is a sad conclusion.”
The global nanotechnology market is worth about $250 billion today and may reach $2 trillion to $3 trillion by 2015, making it comparable to the market of natural resources, Medvedev said, citing independent estimates.
Russia has a number of advantages that could make it a leader in this field, he said.
“We have a competitive scientific base, spacious domestic market and active state support,” he said.
Medvedev said a nanotechnology funding program approved by the government Monday was the largest in the world, with up to 318 billion rubles ($3.95 billion) earmarked until 2015. He said the sector’s sales in Russia would reach 900 billion rubles by that time, but he scolded the state’s management of the sector as “disorderly.”
“The role of the sector is clear and the state’s efforts are quite active, but we have failed to understand the essence of what exactly needs to be done,” he said.
The new innovations should be created by small and midsized businesses, Sergei Mazurenko, head of the Federal Science and Innovations Agency, told The Moscow Times.
“We should be more systematic in developing new high-tech production by creating medium-sized and small science-intensive businesses,” Mazurenko said. “In addition, we need extensive applied research in order to create competitive nanoproducts.”
Most small businesses in Russia nowadays are in the service sector, not high technology, he added.
Medvedev criticized private companies for being “inert” when it comes to investing in nanotechnology, saying the state’s main task was to stimulate the interest of private investors in this sector.
Medvedev said that to develop the sector, the government needed to reform the tax system, introduce “green customs corridors” for high-tech exports, and place orders for innovative products.
He stressed that qualified specialists needed to be trained to work in nanotechnology. “The demand for these specialists is roughly 100,000 to 150,000 people today,” he said. “We have a list of related professional training courses approved by the Education and Science Ministry, and if this list doesn’t give us enough capabilities, it should be changed.”
Ivanov, the deputy prime minister whose portfolio includes nanotechnology, praised the allocation of funds for state-owned Rusnano that was signed Monday by Prime Minister Vladimir Putin as he was escorted by Chubais around the nanotechnology exhibition shortly before the opening of the forum.
TITLE: Prokhorov Recommends Investing in Debt Restructuring
AUTHOR: By Nadia Popova
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — Billionaire Mikhail Prokhorov said the best place to invest during the crisis is in debt restructuring, a niche that has so far gone largely unfilled.
Prokhorov, Russia’s richest businessman, also said a government goal to halve inflation to about 6 percent was realistic, and he criticized the authorities for cutting investment in infrastructure.
Prokhorov, who spoke in a wide-ranging interview with The St. Petersburg Times, voiced hopes of turning the New Jersey Nets into a profitable basketball team in three years and appealed to the government to allow heating generators to redirect their investment from constructing power stations to building grids. (See stories, page 11.)
“We want to help the state by participating in the restructuring of the bad debts of banks and companies,” Prokhorov said last week, sitting in his penthouse office on Tverskoi Bulvar.
“State-owned banks and big private commercial banks are dealing with their own problems, so there is no one to deal with the problems of other banks or the complex problems of the banks’ clients,” he said. “That is the job MFK plans to do.”
MFK Bank, which is controlled by Prokhorov’s Onexim Group, said Sept. 24 that it would help debt-saddled developer Mirax Group restructure its debt of $743 million. The bank, whose assets total 17 billion rubles ($565 million), said it had switched its business strategy from corporate banking to debt restructuring because of changes in the market.
Problem loans could soar to 40 percent of banks’ assets, Standard & Poor’s said late last month. But Russian officials said nonperforming loans would amount to 10 percent to 12 percent this year and have called for a scaling back of state support for the sector.
“The problem with bad debts is wider than the banking sector,” Prokhorov said, nibbling on chocolate and sipping black tea in his spacious office, which has a parquet floor and green marble-covered walls.
Onexim Group has estimated Russian companies’ debts to one another at 700 billion rubles.
“There are specialists on our team who went through the restructuring of Oneximbank, Inkombank and MOST-Bank in the 1990s. And our competitive advantages are in Russia, whose market for restructuring debts is limitless now,” he said. “But when we have harvested it, we could think about expanding this business abroad.”
Prokhorov, 44, is one of the few businessmen who has not been hurt by the drop in commodities prices and closure of foreign lending markets. The billionaire, who made his fortune in banking and metals, sold his 25 percent stake in Norilsk Nickel to United Company RusAl for about $7 billion in cash and 14 percent of RusAl in April 2008, just months before the crisis hit Russia. Onexim Group, whose interests range from insurance and media to nanotechnologies, currently has no debt.
Turning to state policy, Prokhorov said the government’s inflation goals were realistic but it needed to increase investment in infrastructure. Prime Minister Vladimir Putin told investors at a VTB forum last week that the government had set a target inflation rate of 5 percent to 7 percent by 2012.
“To get that, we need to make structural changes in the functioning of the economy, but I don’t mean diversification or innovation,” Prokhorov said. “You can build an innovative economy, but it will still be generating the same high inflation. However, if you create competition in the fields currently monopolized by a single state-run market player such as housing services or the distribution of food grown by farmers, the inflation level would drop, as the current monopolists raise prices regardless of market conditions.”
“I am not calling for the privatization of all the currently monopolized industries. Some of them should remain state property. But competition should appear in these sectors as well. It could be done through the creation of at least several state-run companies in each sector, which will compete for the consumer,” Prokhorov said.
There are fields that should never be privatized, he added. “Nuclear power stations should not go to private business. The state should also keep a monopoly on gas exports,” he said.
Asked when Russia might recover from the crisis, Prokhorov said it depended on the country and local businesses and not on anyone else in the world. “It is an absolutely individual case, and it will depend on our market position, competitiveness and the qualification of the state’s and private companies’ management,” he said.
Prokhorov differed with the state over several measures that it is taking to tackle the crisis, saying demand, not supply, should be stimulated. “This is very easy to do. You can build infrastructure: roads and homes,” he said. “But look at the budget for next year. Financing for the sectors whose development could bolster demand has been cut drastically.”
Prokhorov is ranked by Forbes magazine as Russia’s richest man with a fortune of $9.5 billion. But Prokhorov said he could not say exactly how much he is worth. “It’s not my job to count that, and I’m not very much interested in doing so,” he said. “There are always a lot of people who will do that for you.”
Prokhorov is known for his dislike of computers and cell phones, and plates of watermelon slices sat on his mahogany desk instead of a computer.
“The computer brings a lot of unnecessary information,” Prokhorov said. “I am a principal. I order the exact information I need, and I get it. I have a team who works on that for me.”
TITLE: Hundreds Pay Tribute to Politkovskaya
AUTHOR: By Alexandra Odynova
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — Investigators have identified new suspects in the 2006 killing of Novaya Gazeta reporter Anna Politkovskaya, the newspaper’s deputy editor said Tuesday.
The suspected triggerman, meanwhile, evaded capture in April and is traveling in Europe, the editor, Sergei Sokolov, said at a news conference.
Wednesday marked the third anniversary of Politkovskaya’s death, which stirred Western outrage and raised new fears about media freedom in Russia. A Paris-based media watchdog complained of state interference when its representatives failed to receive Russian visas to attend events commemorating the killing.
Politkovskaya, an investigative reporter who exposed abuses in Chechnya and was critical of the Kremlin, was shot dead in her Moscow apartment building on Oct. 7, 2006.
No one has been convicted of her death. Three men accused of being accomplices were cleared in a jury trial in February. The Supreme Court overturned the verdict in June and ordered a retrial in September. But the start of the retrial was indefinitely postponed at the insistence of Politkovskaya’s adult children, who believe that the initial investigation was carried out poorly. The case has been sent back to prosecutors.
Investigators have failed to identify the organizers of the murder, and a fourth suspect, Rustam Makhmudov, who is believed to have pulled the trigger, remains at large.
“The killer could have been arrested in April but managed to escape,” Sokolov told reporters.
He said he was aware that the killer was in Europe, traveling from one country to another.
Novaya Gazeta has been conducting an independent investigation into the killing and has been cooperating with the authorities.
Sokolov said investigators have identified new people who might have been involved in the killing, but their names cannot be disclosed yet because the investigation is ongoing.
He said the newspaper’s investigation suggested that the three suspects who were acquitted in February were involved in the killing, as well as several people in the security forces.
Two representatives of Reporters Without Borders were supposed to attend the news conference Tuesday but failed to obtain Russian visas.
The group’s head, Jean-Fran?ois Julliard, accused the Russian authorities of meddling, a charge that they denied.
“It was extremely important for us to be in Russia alongside Anna Politkovskaya’s colleagues and family on the third anniversary of her murder,” Julliard said in an e-mailed statement. “Moscow does not want us to address the Russians directly. But we will not give up.”
A spokesman for the Russian Embassy in Paris, Andrei Kleimenov, said the visa denials had no political motivations.
“There is no politics. They didn’t get their visas because the papers were incorrectly filled out,” Kleimenov told Interfax.
Kleimenov didn’t elaborate on what was wrong with the two representatives’ application forms.
A Foreign Ministry spokesman said the visas were denied because of “some technical reasons.”
He said he did not have further details.
??A lawyer for Chechen President Ramzan Kadyrov, who won a defamation lawsuit against Memorial human rights leader Oleg Orlov on Tuesday, said Kadyrov would file a defamation lawsuit against Novaya Gazeta editor-in-chief Dmitry Muratov and several of the newspaper’s journalists.
Novaya Gazeta, known for its critical investigative stories about Chechnya, said in a statement that “there was nothing to comment on yet.”
TITLE: Radio Show Reunites Relatives
PUBLISHER: Agence France Presse
TEXT: LONDON — Britain’s Climate Change Secretary Ed Miliband was stunned when a long-lost Russian family member rang in as he appeared on a radio show in Moscow, he said Wednesday.
In the country this week to discuss climate change, Miliband was taking questions on Ekho Moskvy when an 87-year-old woman rang up and said in Russian: “I am Sofia Davidovna Miliband, I am your relative; I am the only one left.”
Thinking the call was a hoax, the radio station initially cut her short.
However, through translation the pair worked out that his great-great-grandfather was the brother of her grandfather, both of whom were born in the Jewish quarter of Warsaw.
The minister’s grandfather fled to Belgium in the 1920s and then to Britain on forged papers to escape the Nazis. Unbeknownst to them, another branch of the family had headed east to Moscow.
Ed, whose brother David is Britain’s foreign secretary, rushed off to meet Sofia, ditching the British ambassador and invited guests at a reception.
Miliband told BBC radio it was a “very moving and fantastic experience,” describing his relative as “an amazing woman.”
Sofia Miliband was once an expert on Iran at the Moscow School of Oriental Studies.
“After the program she described who she was, I knew that absolutely checked out and this was absolutely her,” he said.
TITLE: State Hopes to Raise $2.3Bln in Sell-Offs
AUTHOR: By Anatoly Medetsky
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — The government plans to raise 70 billion rubles ($2.34 billion) next year by selling stakes in more than 450 companies, Economic Development Minister Elvira Nabiullina said Tuesday.
Prime Minister Vladimir Putin reiterated his support for the major sell-off of government property, saying the efforts would help fill the federal budget.
The forecast revenues from the privatizations would be dwarfed by the anticipated budget deficit of 3 trillion rubles. The government previously wanted to collect 7 billion rubles through sell-offs.
The assets to go on the block will include 13.1 percent of the government’s blocking stake in insurance industry leader Rosgosstrakh, Nabiullina said. President Dmitry Medvedev excluded the company from a list of strategic companies last month, removing a hurdle for its privatization or an additional share offer.
Nabiullina, speaking after a Putin-chaired government meeting on privatizations, reiterated plans to sell up to 20 percent in shipper Sovkomflot through an initial public offering or a sale to a single investor either at the end of next year or in early 2011.
Most of the privatization money will come from selling government stakes in ports and airports, Nabiullina said, without naming them.
Nabiullina said the government dropped plans to privatize Sheremetyevo Airport, saying it would instead invite bids to manage the airport.
The government will not offer stakes in Rosneft, Sberbank, Aeroflot, VTB, Gazprom Neft or Russian Railways next year, Nabiullina said.
In offering stakes, the government will scrutinize national security consequences, especially when it comes to selling assets in strategic industries, which include oil and gas production, Putin said. Also, bidders should promise to invest in the companies that are being privatized, Putin said.
Bidders must offer a fair price to help plug the federal budget deficits that are projected for the next three years, Putin said.
“Some federal property may have to be sold, but it has to be sold only at real market prices, without any discounts,” he said.
The government annually drafts plans to sell stakes in various companies, Putin said, but the plan for next year will be special because the state has increased its corporate holdings countrywide as part of its efforts to bail out crisis-stricken enterprises. Putin ordered next year’s plan to be completed in the near future.
Putin previously raised the issue of the privatizations at an investment conference last week, saying the government would support the sell-offs. First Deputy Prime Minister Igor Shuvalov first announced the government’s extensive privatization plans when he accompanied Medvedev on a U.S. trip at the end of last month.
Despite the weakened economy, sales of government stakes would likely attract interest, said Nadezhda Timokhova, an analyst at the investment bank Metropol.
TITLE: Pamfilova Won't Apologize to Nashi
AUTHOR: By Alexandra Odynova
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — The Kremlin’s human rights council won’t apologize for a statement condemning the Nashi youth group for “persecuting” a journalist and intends to send the matter to prosecutors, council head Ella Pamfilova said Wednesday.
The comments came as United Russia and Liberal Democratic Party deputies piled on Pamfilova, demanding that she apologize for offending veterans and defending Alexander Podrabinek.Pamfilova, who was first appointed as a Kremlin human rights aide by then-President Vladimir Putin in 2002, has stressed that she and the council’s members do not share Podrabinek’s views.
In an article last month, the journalist and human rights activist wrote that members of a veterans group were probably former “camp guards” and “executioners” for demanding that a Moscow restaurant be renamed from Antisovetskaya, or Anti-Soviet, to Sovetskaya.
Podrabinek was forced into hiding, saying he and his family received threats, and Nashi has held daily demonstrations outside his apartment for the past week.
At a State Duma session Wednesday, Robert Shlegel, a deputy with United Russia, proposed that the president dismiss Pamfilova for advocating Podrabinek’s rights. Another United Russia deputy, Frants Klintsevich, who also heads the Russian Union of Afghanistan Veterans, said Tuesday that Pamfilova must be sacked.
On Monday, Pamfilova’s watchdog released a statement condemning the “persecution campaign … organized by irresponsible adventurists from Nashi” and cautioning that the activists were showing open signs of extremism.
TITLE: Albright Left Putin Guessing With Her Choice of Brooch
PUBLISHER: Bloomberg
TEXT: MOSCOW — Vladimir Putin was among the people scratching their heads when Madeleine Albright started using jewelry to send messages to world leaders, foreign governments and the press after becoming the first female U.S. secretary of state in 1997.
Putin told then-President Bill Clinton that he routinely tried deciphering the meaning of Albright’s brooches, Albright writes in her new book, “Read My Pins: Stories From a Diplomatic Jewel Box.”
Sometimes, she offered the interpretation. She wore an arrow-like pin during talks with Russian Foreign Minister Igor Ivanov.
“Is that one of your interceptor missiles?” he asked. “Yes, and as you can see, we know how to make them very small. So you’d better be ready to negotiate,” Albright replied.
It all started in 1994 when Albright, after being called an “unparalleled serpent” by the Iraqi press, met the country’s officials wearing a snake brooch.
Albright was then the U.S. ambassador to the United Nations.
“Before long, and without intending it, I found that jewelry had become part of my personal diplomatic arsenal,” Albright writes. Used at the right time, the symbol “can add warmth or needed edge to a relationship.”
She wore a very large American flag brooch when meeting North Korea’s Kim Jong-Il and stuck on her favorite zebra pins for a get-together with Nelson Mandela at his estate in South Africa.
As the pins became part of her public persona, the collection grew. There were numerous ladybugs, butterflies and hot-air balloons to express her good mood. Spiders, snakes and flies came in handy for more combative occasions. Turtles marked slow negotiations and owls sought wisdom.
Now more than 200 bugs, reptiles, crustaceans and other jeweled accessories from Albright’s collection make up a new exhibition at New York’s Museum of Arts and Design.
TITLE: Committee Head Proposes Corporate Raiding Law
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — Investigative Committee chief Alexander Bastrykin on Tuesday proposed introducing a new clause in the Criminal Code that would cover corporate raiding, Interfax reported.
Bastrykin also said criminal punishment must also be stipulated for private and state registry offices that act as accomplices in corporate raiding.
Deputy Prime Minister Sergei Sobyanin proposed that the Justice Ministry draft legislature to add the clause.
The Investigative Committee investigated more than 70 cases of corporate raiding over the past two years, of which 12 cases were sent to court, Bastrykin said. It is doing so despite the fact that the crimes do not officially fall into the agency’s purview, he said.
Bastrykin cited the Kumarin group case as one of the larger-scale examples of corporate raiding. He said the group attempted to rip off businessmen of a number of enterprises and shopping malls in St. Petersburg using murder, blackmail and intimidation.
TITLE: Shuvalov: Renault to the Rescue
AUTHOR: By Maria Antonova
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — First Deputy Prime Minister Igor Shuvalov said Tuesday that Renault was ready to invest more into AvtoVAZ, but the French carmaker cautioned that such support may not mean more money.
“[Renault] confirmed its strategic interest in the development of AvtoVAZ and said it was ready to invest in the development of the enterprise,” Shuvalov told journalists. “The size of the investment will be determined after a development plan is approved.”
But Renault spokeswoman Oksana Nazarova said helping does not necessarily mean giving money. “Renault wants to remain a shareholder and is in talks with the government,” she said Tuesday. She declined to provide further comment before a final decision is made.
The announcement comes after Prime Minister Vladimir Putin gave an ultimatum to AvtoVAZ shareholders Friday, saying the automaker would be forced to issue more equity — thus diluting current shareholder stakes — if shareholders don’t provide assistance to the struggling carmaker. Putin gave Shuvalov two weeks to determine what kind of financial support AvtoVAZ would need.
Renault owns a blocking stake of 25 percent plus one share in the company.
Shuvalov will travel to AvtoVAZ’s headquarters in Tolyatti on Thursday to finish his report.
On Monday, Putin met with AvtoVAZ executives and Renault Russia chief Christian Esteve, where he adopted a softer tone. He urged stakeholders to help give the carmaker a second wind so that it won’t “leave the market and cease to exist.”
AvtoVAZ urgently needs a cash injection to pay off its short-term loans and finance its investment program. Last month, the carmaker said it would lay off 27,600 employees in an effort to minimize excess capacity.
The company is asking for 70 billion rubles — 54 billion for paying off its debt — and an additional 12 billion to institute the necessary social programs for laid-off employees.
In total, Russian automakers are in debt to the tune of 100 billion rubles, Shuvalov said after his government economic commission met Tuesday to discuss the domestic auto industry.
About a quarter of AvtoVAZ’s debt is owed to Sberbank, said German Gref, the bank’s CEO.
“We are ready to take part in improving the financial health of AvtoVAZ after we receive a business plan and a restructuring program” for coming out of the crisis, Gref said Tuesday, Interfax reported.
A working group will be created to discuss reform and development of the auto industry, chaired by Economic Development Minister Elvira Nabiullina and the Industry and Trade Minister Viktor Khristenko. The working group will present strategies for the industry on Nov. 30 together with key Russian banks, Shuvalov said Tuesday.
State guarantees are one possible way to solve the industry’s debt problem, Shuvalov said. GAZ Group, another floundering automaker, may receive government guarantees on its loans “in a few days.” GAZ owes about 39 billion rubles to banks.
TITLE: Analysts Say Economic Reform Forced by Crisis
AUTHOR: By Alex Nicholson
PUBLISHER: Bloomberg
TEXT: MOSCOW — Russia’s economic decline is forcing the country to walk the walk after more than a decade of talk about dragging the largest energy exporter away from its oil dependency and reducing the footprint of the state.
“There is a genuine reform agenda, but it has been advanced because of economic necessity,” said Tom Mundy, a strategist at Renaissance Capital in Moscow. “We should welcome it; it brings transparency, it brings liquidity, it brings foreign investors back. But I think it’s something that is a result of the financial crisis.”
Prime Minister Vladimir Putin wants to use state asset sales to help plug next year’s budget deficit, which his government estimates at 6.8 percent of output, and use the privatization push to modernize derelict infrastructure. Last year’s 54 percent slump in oil prices, which pushed the economy into a 10.9 percent contraction in the second quarter, has forced the government to revive its commitment to renouncing its commodity reliance.
“The shock of the oil price collapse destroyed” Russia’s “complacency, and ‘‘the government has a renewed desire to advance a more radical reform program,’’ Troika Dialog, the country’s oldest investment bank, said in a note.
Russia wants to generate 70 billion rubles ($2.4 billion) next year, 10 times the original target, by selling all or part of state stakes in 450 enterprises, Economy Minister Elvira Nabiullina said on Tuesday. Sales will consist mainly of river and sea terminals.
First Deputy Prime Minister Igor Shuvalov said on Sept. 22 the government may offer as much as 20 percent of Sovcomflot, the shipper that merged with Novoship in 2007.
Next year’s sales won’t include Rosneft, which has 15 percent of shares freely traded, Sberbank, the biggest lender, or rail monopoly Russian Railways.
This isn’t the first time Russia is selling assets. In the 1990s some of the biggest companies were auctioned to hand-picked businessmen, later to become oligarchs, at knockdown prices after a so-called loans-for-shares plan to prop up late President Boris Yeltsin’s government.
Putin, who was president between 2000 and 2008, oversaw the expansion of state domination in the oil industry and created holding companies in the aerospace, shipbuilding and nanotechnology sectors.
Russia’s last major asset sale was in 2007, when VTB Group, the second-largest bank, raised $8 billion in the biggest initial offering of the year. Rosneft’s IPO a year earlier raised $10.6 billion.
The government has about 5,500 enterprises that can be converted into joint stock companies and sold starting as early as this year, Shuvalov said on Sept. 21.
State corporate ownership stood at 45 percent at the start of the year, according to a February report by the Moscow-based Institute of Contemporary Development.
Putin, who stewarded eight years of unprecedented economic growth as president, said on Sept. 29 the government will continue its modernization course unhindered by fiscal or political developments.
‘‘There will be no return to the past,” Putin told investors in Moscow. “Russia will remain a liberal market economy.”
President Dmitry Medvedev, in his “Go Russia” open letter of Sept. 10, said the country’s raw-material reliance is “humiliating” and “primitive,” adding that “achieving leadership by relying on oil and gas markets is impossible.”
While political leaders declare their determination to change course, some economists remain skeptical about how wedded the government will be to its diversification push if energy prices recover.
“Oil revenues will dictate the pace of this program,” said Chris Weafer, chief strategist at UralSib in Moscow.
Russia’s 2010 budget is based on an average oil price of $58 a barrel, rising to $59 in 2011 and $60 in 2012. Crude oil was at $69.86 a barrel Wednesday. Energy export prices could be higher than the government forecasts, Putin said on Sept. 18.
TITLE: In Brief
TEXT: Lada Still Most Popular
MOSCOW (Bloomberg) — Russian sales of new cars and light commercial vehicles fell 52 percent in September from the same period last year, the Association of European Businesses said.
Sales dropped to 117,981 vehicles in September from 245,813 in the same month last year, the lobby group said in an e-mailed statement Thursday. Nine-month sales fell 51 percent to 1.11 million.
AvtoVAZ’s Lada remained the most popular brand, with sales of 28,109 last month, down 43 percent on the year.
Strabag Objects to Probe
MOSCOW (Bloomberg) — Strabag said the Russian tax probe that led to raids on its Moscow offices this week is unfounded because authorities are “unjustifiably” holding the company liable for taxes owed by subcontractors.
Strabag paid the 2.5 million euros in taxes that police said were owed by its subcontractors and is seeking reimbursement because the company wasn’t aware that the subcontractors set up “dummy companies” to hide revenue, Vienna-based Strabag said in an e-mailed statement Thursday.
TITLE: Avoiding a New Berlin Wall
AUTHOR: By Denis MacShane
TEXT: The continuing bitter feud between Russia and the Council of Europe reflects a major problem about Russian engagement with the rest of Europe.
Most contacts that Russia has with other European nations are state-to-state, business-to-business or other bilateral relations ranging from culture to tourism. At the Parliamentary Assembly of the Council of Europe, hundreds of delegates come together.
The Strasbourg-based Council of Europe was set up after World War II to oversee the European Convention on Human Rights. Its main agency is the European Court of Human Rights. But it also is supervised by a Parliamentary Assembly where experienced members of parliament and former ministers who care about democracy and human rights come together to debate and decide policy.
World leaders such as President Dmitry Medvedev or German Chancellor Angela Merkel play no role. This is raw parliamentary democracy with clashes within delegations as much as disagreements between representatives of different countries. Unlike the European Union, the 47-member Council of Europe includes Turkey and Serbia, Norway and Azerbaijan. There is a side spectrum of political views represented, from right-wingers to Communists, from liberals to ultranationalists.
Russia’s fundamental problem is that it wants to be a member of the Council of Europe, but it doesn’t want to abide by the rulings of the European Court of Human Rights or conform to the norms and values of the European vision of what democracy and freedom entails. And what is puzzling to all other delegates is the extent to which all representatives of the State Duma and Federation Council always toe the official Kremlin line in the positions they take during Council of Europe sessions. Russia is the only member of the council whose delegates act and speak as if they were government spokesmen or diplomats.
With other member countries, different views are expressed among delegates and issues are debated fully. One vivid example: When the Council of Europe produced a hard-hitting report on extraordinary rendition, there were differences in the Polish, British and Romanian delegations over how their governments had cooperated with the United States in detaining al-Qaida suspects.
Russia has already had its credentials suspended over the refusal to cooperate with the Council of Europe over investigations into the deaths and disappearances of thousands of citizens in Chechnya. As of today, Russia has refused to accept 115 rulings from the European Court of Human Rights.
After the August 2008 war between Russia and Georgia, there was great concern among delegates that despite Georgian President Mikheil Saakashvili’s provocations, Russia mobilized its military power to go well beyond the contested regions of South Ossetia and Abkhazia. Today, Russian troops de facto occupy a fifth of Georgia. The Kremlin has refused to allow EU or Council of Europe missions to examine the problem on the ground. The recommendations of Council of Europe commissions have been rejected.
How should the Council of Europe respond to this conflict? Everyone wants better relations with Russia, but if Russia wants to join and be active in the Council of Europe, then a new approach is needed. If you are in a club, then you should live by its norms, values and rules.
Denis MacShane, formerly Britain’s longest-serving minister of state for Europe, is a member of Parliament from the Labour Party.
By Vasily Likhachev
Since the end of the Cold War, the number of European nations has increased, NATO expanded while the Warsaw Pact was dissolved. Meanwhile, organizations such as the Council of Europe, the Organization for Security and Cooperation in Europe and the European Union became more important players in the global arena. Europe sought its own model of security but, unfortunately, it has not formed the necessary structures to do this. Major political innovations do not appear out of thin air. The road from conceptualization to realization is a long one.
The entire world will celebrate the 20th anniversary of the fall of the Berlin Wall on Nov. 9. This was an epochal historic event, and we must heed the call — the call to democracy, respect for a nation’s sovereignty and individual rights, closer cooperation among European countries, the harmonizing of national, European and international law and the establishment of peaceful relations among all Europeans. That call should be transformed into concrete actions, but numerous obstacles stand in the way of such a project. For example, new political and psychological walls have been constructed in Europe. Young European countries that have only recently declared their sovereignty are the main instigators of this division and antagonism. I am speaking about countries that are trying to define their own identity, that possess great ambitions but few resources. Their names are well known — Georgia, Latvia, Lithuania, Estonia, Poland and others. Under the patronage of the United States, they have become valuable pawns for conservatives and neoconservatives in the West in their global chess game against Russia.
As a result, these European states are actively cultivating Russophobia to give the United States the upper edge in the game. Recall the recent resolution of the Polish Diet concerning the Molotov-Ribbentrop Pact, anti-Russian resolutions of the Parliamentary Assembly of the Council of Europe concerning events in the Caucasus in August 2008 and the resolution of the European Parliament regarding energy security. These initiatives indicate an escalation of anti-Russian rhetoric in Europe. That is why we should heed President Dmitry Medvedev’s words that he spoke at the UN General Assembly several weeks ago: that “irresponsible political regimes” should not be allowed to provoke divisions in Europe.
In any case, political manipulations under the guise of Russophobia are like the “political AIDS” of the 21st century, and we must take firm measures to eliminate them. It is clear that legal nihilism, double standards and U.S. hard-power tactics only lead to an increase in global conflicts. It takes away time and resources of the state that could be used for working together to find effective solutions to such urgent problems as terrorism, piracy, health pandemics, nuclear nonproliferation, other weapons of mass destruction, the demilitarization of space and overcoming the global economic crisis.
One of the lessons from the fall of the Berlin Wall is that Europeans — including Russia — need to work together to solve the most pressing political, economic, legal, ecological and social problems facing the continent. A united Europe can and should be a shining example of cooperation, freedom, democracy and respect for international law.
Vasily Likhachev, formerly Russia’s ambassador and permanent representative to the European Union in Brussels, is the deputy chairman of the International Affairs Committee in the Federation Council.
TITLE: A Murder With No Killer
AUTHOR: By Yulia Latynina
TEXT: The EU fact-finding commission report that was released last week on the causes of the Russia-Georgia war was terrible — not because it placed blame for the conflict on one particular side, but because it failed to place any blame at all.
“Who is responsible for what happened?” the authors of the report ask. The answer given: The conflict was the result of too many factors to be able to “place responsibility on only one side.”
The commission was supposed to carry out an investigation, and the primary purpose of any investigation is to discover who is guilty. Imagine Agatha Christie’s detective Hercule Poirot gathering the relatives of a murder victim together to reveal the identity of the killer and saying, “You know, all of you are such complex people, and you’ve all committed so many misdeeds, that the person simply died as a result of your collective wrongdoing.” If a murder has been committed, there must be a killer.
How can a commission come to the unbelievable conclusion that a person was murdered as a result of collective responsibility? Here is how:
According to the report, Georgia claimed that it gave notice of a large-scale concentration of Russian forces on Georgian territory prior to Aug. 7, when the five-day war began. Russia denies Georgia’s allegation, and the Kremlin asserts that Russian forces entered South Ossetia well after Georgia started military operations in the breakaway republic.
Who is correct? It might seem funny, but the commission doesn’t know. It couldn’t confirm that Georgia’s assertions “are well-founded,” despite the significant number of “witnesses, including Russian ones” who confirmed it.
Thus, we have a so-called fact-finding commission, formed and financed under the auspices of the European Union, but the only thing it can conclude is that Georgia says one thing and the Russians another? Thanks for this valuable information, but we all knew this without any help from the commission. The task of a tribunal is to determine who is lying and who is telling the truth.
There are some other amazing treasures in the report. For example, the commission labors at length over whether Georgia violated human rights by shelling Tskhinvali with truck-based Grad missiles “on the night of 7 to 8 August.” Naturally, the report concludes Georgia did violate human rights.
But Tskhinvali was shelled on Aug. 9 and 10 as well. During these days, Georgians were in the city, but the Georgian Air Force was already grounded.
Is it really possible that the commission didn’t know that Tskhinvali was bombed on Aug. 9 and 10 and didn’t know who started the bombing? Why didn’t the commission evaluate the actions of those who bombed Tskhinvali during those days?
It is clear from the findings of the commission, which was chaired by Swiss diplomat Heidi Tagliavini, that the EU thinks it is impossible for Europe to exist without Russia and that respect for Russia will bring more positive results than fruitlessly trying to isolate it. This may be true. But if you want to be a diplomat, you can’t be a judge at the same time.
Yulia Latynina hosts a political talk show on Ekho Moskvy radio.
TITLE: Flying start
AUTHOR: By Raymond Stults
PUBLISHER: The St. Petersburg Times
TEXT: The 227th season of St. Petersburg’s Mariinsky Theater got off to an astoundingly good start last week with the debut of a new production of Pyotr Tchaikovsky’s opera “Iolanta,” coproduced by the Mariinsky with the Festspielhaus of Baden-Baden, Germany, where it premiered in July.
If until last week, some may have thought that “Iolanta,” though quite beautiful in parts, could hardly be counted among its composer’s major achievements, then all of that changed with the Mariinsky’s performance last week.
Thanks to a cast of principals, a conductor and a staging of unprecedented quality, the opera emerged both musically and dramatically as a truly noble work, worthy to be placed alongside the composer’s “Eugene Onegin” and “The Queen of Spades,” as well as his unjustly neglected “Cherevichki.”
Tchaikovsky wrote “Iolanta” to a libretto by his brother, Modest, who based his text on a once-popular play by Danish writer Henrik Hertz. The opera premiered at the Mariinsky in December 1892, in a double bill with the composer’s ballet “The Nutcracker.” Soon afterward, however, the opera and ballet parted company, “Iolanta,” which Tchaikovsky himself considered much the finer of the pair, largely falling by the wayside until fairly recent times. “The Nutcracker” went on to become probably the most frequently performed of all ballets.
“Iolanta” tells of a princess, blind from birth, who, at the command of her father, King Rene of Provence, is kept secluded from the world and unaware of her handicap. A Burgundian knight named Vaudemont blunders into Iolanta’s abode, discloses to her that she is blind and awakens in her the sensation of love. With love at her command, Iolanta miraculously gains the gift of sight.
Mariinsky boss Valery Gergiev, a peerless conductor of Russian opera, was on top form at “Iolanta” last week. The opera’s score contains much that seems to mark the path Tchaikovsky’s music might have taken had his life not been cut short just a year after the opera’s premiere. In particular, many of the score’s earlier pages are filled with sounds almost eerily akin to those found in Claude Debussy’s opera “Pelleas et Melisande,” composed a decade later. And thanks to Gergiev, those sounds were given full value. Thanks also to him, the opera’s closing scenes rang out more truly triumphant than they are usually played and sung.
The title role at last week’s performance was taken by glamorous superstar soprano Anna Netrebko. There was nothing, however, either glamorous or superstar about the way she played it. From the very first moment, her Iolanta was simply Iolanta, making the transition from darkness and bewilderment to the joys of love and eventually to sight with extraordinary conviction. Netrebko’s voice may not be the crystal-clear instrument it was in earlier days, but it still remains remarkably beautiful and seems to have gained much of late by way of drama and intensity.
Playing the youthful Vaudemont and his companion, Duke Robert of Burgundy, were tenor Sergei Skorokhodov and baritone Alexei Markov, two of the most gifted young singing actors to be found in Russia today. Skorokhodov possesses a strong, clear voice, with an exceptionally winning upper register. Singing with great distinction in a single performance at the Bolshoi Theater two years ago at the premiere of its current “Boris Godunov,” he was then curiously passed over in favor of a much less talented singer. Since then, he has gone on to become one of the Mariinsky’s principal treasures. Markov, the winner of a Golden Mask award last April, also has a voice of superlative quality, and sang Duke Robert’s famous aria in praise of his beloved Mathilde with great spirit and beauty.
The staging of “Iolanta” fell to Mariusz Trelinski, artistic director of Warsaw’s Grand Theater – National Opera, who told the opera’s story with clarity and imagination and moved his cast about the stage in a meaningful fashion.
Central to the decor, by Slovakian designer Boris Kudlicka, was a large cube, open on three sides that served as Iolanta’s bedroom and revolved at times to reveal the entrance to her place of safekeeping. In a novel approach by director and designer, that place proved to be a humble dwelling in the midst of a dark forest, which seemed a better choice to isolate Iolanta than the grand castle which she inhabits in most productions.
TITLE: Chernov’s Choice
TEXT: Local rock musicians protested the Gazprom Tower after Matviyenko signed a decree this week approving the controversial 400-meter skyscraper, despite the 100-meter height limit stipulated by law and protests by UNESCO and Russian experts and public figures.
In anticipation of Saturday’s rally protesting the decision, Vadim Kurylyov of the band Electric Guerillas, Mikhail Borzykin of Televizor and Sergei Parashchuk of NEP met in a studio on Wednesday to record Kurylyov’s anti-tower song, tentatively called “Bud Protiv”(Be Against It.) Alexander Chernetsky of Razniye Lyudi and Mikhail Novitsky of SP Babai recorded their parts of the song earlier this week.
“The chorus includes the words that the city must wake up and fight against the skyscraper, to resist,” Borzykin said by phone on Wednesday.
“It’s a punk song, very angry and high-energy.”
Borzykin has long been opposed to the construction of the skyscraper and the way the decision was pushed through by the state-owned energy giant and bureaucrats.
“It’s a spit in the face of people with delicately-organized souls from people who are thick-skinned, cynical and insensitive to beauty,” he said.
“If this project is taken further, it will face the fate of the Tower of Babel, because I suspect that what lies in its foundation is the arrogance of the Gazprom managers, who are, in fact, the leaders of our state. That arrogance will bring this tower down.”
According to Borzykin, the Gazprom tower is the point where politics and aesthetic ugliness meet.
“Vulgarity, ugliness and cynicism take on perverted architectural, musical, legal and political forms. Inferiority complexes lead to ugliness and unhealthy manifestations of authority,” he said.
“Sometimes I get the feeling that this attempt to prevail over everybody, including their own people, has taken such ugly forms because of the eternal desire of these managers to create the illusion that at least something in the country is standing. There’s a Freudian hint to that.
“If everything else is ruined in the country, let this phallus stand up. Sometimes I feel it has something to do with the psychological and sexual problems of our glorious national leaders.”
Kurylyov’s band will be on tour in Ukraine this weekend, but the recording might be played at the rally, according to Borzykin.
“It fits the situation perfectly, and with its energy and healthy anger, it will come across very well,” he said.
Meanwhile, Boris Grebenshchikov of Akvarium, who earlier described the planned tower as the “spit of the devil,” and Diana Arbenina of Nochniye Snaipery were among writers and artists who signed an appeal to St. Petersburg residents to come to Saturday’s rally.
The Meeting for the Protection of St. Petersburg will be held outside Yubileiny Sports Palace at noon on Saturday.
— By Sergey Chernov
TITLE: Out and about
AUTHOR: By Sergey Chernov
PUBLISHER: Staff Writer
TEXT: The Tunics played a great rock and roll concert at A2 on Sunday, taking the public by storm while proving again that this venue is home to some of the most exciting shows in the city.
The British trio seemed to like the concert itself; the musicians spent nearly an hour after the show giving autographs to everybody who wanted them — which it seemed was almost everybody at the concert.
The venue was not fully packed on Sunday, but club business insiders say this is a problem with every concert nowadays. Even the projects with the most potential often make a loss.
But A2 was perfect for the concert, and The Tunics now have a growing fan base in St. Petersburg. Bassist Scott Shepherd said the band definitely wanted to come back.
Launched in April 2008 by Svetlana Surganova, the frontwoman of the local band Surganova i Orkestr, A2 has played host to Patrick Wolf and Spiritualized, among others. Future shows to look out for include singer-songwriter Yoav on Oct. 16; SoiSong, a band formed by Peter Christopherson of the British industrial band Coil; and the Dallas, Texas-based alt-rock band The Paper Chase (Nov. 8.)
A2 is located at 12 Razzhyezzhaya Ulitsa, Metro Vladimirskaya, Tel. 922-4510.
But despite the economic situation, some new additions to the club scene are expected, one of them being Tantsy.
In a way a continuation of Sochi (it is run by the same team), Tantsy, translated as “Dances,” will host DJ nights and frequent live concerts, three or four nights a week, art director Denis Rubin said. As at Sochi, which was closed in August, DJs will not spin any techno or electro, giving preference to acoustic music from jazz to ska to hip-hop.
The difference is that Tantsy will only have a bar — no kitchen — and slightly less space. The club will open on Oct. 16 with a party and performances from a number of bands including Grandshuttleband, Produkty 24, Half-Dub Theory and Digital Forks.
Tantsy will be located at 49 Gorokhovaya Ulitsa, Metro Sennaya Ploshchad, Tel. +7 950 001-6506.
The city’s oldest surviving club, Griboyedov, will celebrate its 13th anniversary with an all-nighter on Oct. 18. St. Petersburg’s favorite bands Markscheider Kunst, Tequilajazzz and Dva Samaliota will perform, alongside a dozen others. The festivities will start at 8 p.m.
Set in a Cold-War bunker, it expanded in 2006 to include rooms atop the so-called Griboyedov Hill, where concerts are also held. The most recent addition is the semi-open Amsterdam bar.
“In the past 13 years very many clubs and bars have opened – and closed,” Griboyedov’s director Mikhail Sindalovsky, who is also the drummer with Dva Samaliota, said this week.
“Many of them tried to copy Griboyedov, but there is only one Griboyedov, Griboyedov is eternal.”
Sindalovsky explained the club’s longevity as being down to permanent upgrades and changes to the club. “We upgrade the club frequently and think about it all the time.”
The latest plans are to make Griboyedov twice as large by extending the overground part.
According to Sindalovsky, the recession has hit the club business from three sides.
“Slightly fewer people have started coming to the club; those who still come have started to spend less money, while the wholesale prices for food and drinks went up,” he said.
But Sindalovsky argues that the way to deal with the situation is by keeping bar and restaurant prices low in order to remain attractive to the club-going public.
This year, on Tuesdays, Griboyedov has been lending its rooms to jazz musicians from the legendary jazz club Kvadrat, which does not have any rooms of its own right now. Griboyedov is located at 2A Voronezhskaya Ulitsa. M: Ligovsky Prospekt. Tel.: 764-4355, 973-7273.
TITLE: Little luxuries
AUTHOR: By Nadia Orekhova
PUBLISHER: The St. Petersburg Times
TEXT: The Russian language has an ideal phrase for describing Brasserie Repin — “dorogoe udovolstvie,” or “enjoyment at a high price.” This restaurant’s lovely atmosphere and outstanding service make it worth visiting — for those who can afford it.
The restaurant’s charming interior and calm ambiance make dining there a pleasant distraction from the restless wind and traffic outside. Soft amber lighting, dark wooden furniture and elegant mirrors create a sophisticated but welcoming atmosphere. Crisp white tablecloths are tastefully paired with elegant chaises, while comfortable couches beckon diners with brightly colored velvet pillows.
At 5:30 p.m., the spacious brasserie was mostly empty. Relaxing jazz and contemporary music played over soft chatter (often in foreign languages) and the occasional clink of glasses. A server appeared right away, inviting us to choose from the twenty or so tables surrounding Brasserie Repin’s impressive bar.
The restaurant’s leather-bound menus (politely opened by our server) present a selection of Russian and French dishes. Prices vary: a traditional Olivier salad costs 320 rubles ($11), while main courses such as pork shashlik or foie gras run from 520 to upwards of 1,000 rubles ($17 to $34+.) Brasserie Repin’s staff readily answer questions and offer recommendations in English or in Russian.
Spring water (270 rubles, $9) and a basket of warm bread arrived without delay. Vampires and proponents of fresh breath beware — the Brasserie’s fresh rolls come with a strong garlic butter spread. Between bread and the first course, diners can look over photographs of St. Petersburg adorning the restaurant’s walls or enjoy a cool glass of Riesling (recommended by the waitress, 250 rubles, $8). The wait was not long — our appetizers were delivered very quickly and steaming hot. The fried Camembert (360 rubles, $12) came in carefully portioned dollops, rolled in walnut crumbs and garnished with berry mousse and orange slices. Despite the appealing presentation and fancy add-ons, however, the crispy cheese balls tasted essentially like the mozzarella sticks offered at American sports bars and family restaurants. French onion soup (220 rubles, $7) missed the mark as well, with a strong flavor of thyme masking its traditional flavors.
Between our appetizers and main courses, the Brasserie redeemed itself with a pleasant surprise — a raspberry and mint sorbet, complements of the chef. Although this amuse-bouche was rather sweet for the middle of a meal, it was refreshing and delivered with a smile.
A quick trip to the bathroom while awaiting the next dish revealed another dozen tables, a private room, and even a wine cellar. Brasserie Repin’s back area is furnished uniformly, with fewer colorful accents, but still maintains the elegance found on the other side of the bar. The restaurant’s clean, classy environment is even present in its bathrooms, which are spacious and exceptionally well-kept. Neat wicker baskets holding individual hand towels for guests line long, sparkling countertops in the ladies’ room.
Back in the dining area, the smell of our main dishes began to fill the air. This olfactory preview was followed up with very reasonable portions of beef filet (980 rubles, $33) and scallops in a herb sauce (780 rubles, $26). Both proved satisfying; perfectly cooked wild rice added texture to the seafood dish, while the steak was paired well with grilled zucchini and eggplant. The beautifully arranged plates were garnished with parsley and dill, giving them a traditional Russian touch.
Choosing what came next was easy: Brasserie Repin’s desserts are displayed in a glass case with rotating trays. Here, it seems the restaurant chose convenience over subtlety: with its bright, fluorescent lights, the case would be more appropriate for a grocery store or pastry shop. Nevertheless, its contents will not disappoint! Chilled truffles coated in coconut (120 rubles, $4) were a delicate treat. The chocolate mousse (250 rubles, $8), meanwhile, was far from understated — three dense scoops on a plate of mixed berries drizzled with chocolate syrup. The combination of fresh strawberries and apricot preserves with bittersweet chocolate made for a decadent ending to the meal.
TITLE: Oligarch Eyes Heating Reform
AUTHOR: By Nadia Popova
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — The government should set long-term prices for heat producers and use money earmarked for new power stations to modernize the country’s inefficient grid system, which would help keep costs down for consumers, billionaire Mikhail Prokhorov said.
As industrial production plummeted over the past year, electricity and heat producers have lobbied the government for leniency with their state-mandated investment programs, which were approved during the sector’s privatization.
But Prokhorov, who controls 25 power stations in the European part of the country, told The St. Petersburg Times that urgent changes in the state’s approach toward the sector were needed.
“The reform of the electricity sector has been held. Now the time has come for changes to the centralized heating system,” Prokhorov said. “The changes are urgent.
“The government should allow the so-called territorial generating companies, or TGKs, to redirect investment planned for the construction of new power stations to build new heat grids and new boiler houses,” he said.
Most of the country’s heat grids are outdated and technologically exhausted, meaning up to 50 percent of heat can be lost between the generator and the consumer.
If generators are allowed to redirect their investments, consumers will pay significantly lower rates and power stations will become far more efficient, Prokhorov said.
“Building a new power station leads to higher tariffs for heat since the investments to build it have to be returned,” he said. “If a new grid is built and the capacity of the working power station is used more efficiently, tariffs will grow insignificantly because much less heat will be lost on the way to the consumer.”
Prokhorov offered his TGK-4 as an example.
“I have 5,000 kilometers of grids, which have been in use for 30 years on average,” he said. “So I have to build at least 290 kilometers of new grids per year. But with the tariffs set by the state I could only afford to replace 120 kilometers last year and will only replace 80 kilometers of the grid in 2009.”
The situation could be changed, for example, if some of the funds intended to build a 240-megawatt power station in Lipetsk, which is part of TGK-4, were redirected to replace grids.
“If that were done, prices for heat would only rise 13 percent next year, instead of 89 percent,” he said, referring to the local market. “The utilization of the power station will skyrocket to 70 percent from the current 40 percent.”
TGK-4 has sent the suggestions to the Energy Ministry, Prokhorov said, and he presented this approach to President Dmitry Medvedev at a Sept. 30 meeting of a state commission on the modernization and technological development of the economy.
Under the electricity sector privatizations from 2004 to 2008, state-run monopoly Unified Energy System sold off its assets to domestic and foreign investors, who took on obligations to modernize the country’s dilapidated electricity and heating industry by building new power stations.
A market for the electricity sector has been created and prices for half of the power generated in Russia have been liberalized. Heating rates, however, are still set annually by regional energy commissions controlled by the local administrations.
“When the tariff for the heat is changed every year and is mainly dependant on the will of the region’s governor, you can’t plan any long-term energy-efficient measures,” Prokhorov said. “Long-term heat tariff planning is badly needed for the sector.”
Separately, Prokhorov said TGK-4, based in the Tula region, was holding negotiations with a number of foreign investors to attract additional financing and acquire new technology.
“TGK-4 is working with a few potential partners, some of which want to buy a share in the company, while another wants to create a joint venture with us,” Prokhorov said. He declined to identify the companies.
Onexim Group, Prokhorov’s holding company, was involved in one of last year’s biggest corporate governance disputes after it backed out of a deal to buy out minority shareholders in TGK-4.
In May 2008, Onexim bought a 50.4 percent stake for 2.7 kopeks per share, which required the company to make a buyout offer to the minorities at that price.
But the firm’s shares plummeted last fall to as low as 1 kopek, and 40 percent of the firm’s minority shareholders decided to exercise the buyout right, requiring Onexim to pay a total of 21 billion rubles.
Onexim said in October that it did not have to buy the shares because TGK-4 had recently been placed on a list of natural monopolies, which meant that Cyprus-registered Onexim would have to get permission from the state before it could increase its stake.
Onexim has since issued dozens of lawsuits asking the court to call the initial deal invalid. Some of the lawsuits are still pending.
TITLE: Prokhorov: Nets Will Make Profit
AUTHOR: By Nadia Popova
PUBLISHER: The St. Petersburg Times
TEXT: Billionaire Mikhail Prokhorov said he was counting on his newly acquired New Jersey Nets basketball team to become profitable as soon as it moves to Brooklyn for the 2011-12 season.
Prokhorov, who has agreed to invest $200 million into the construction of a sports arena for the team in Brooklyn, also said he believed that the $4.9 billion stadium and a nearby development project would soon overcome a legal challenge.
“We have carried out our due diligence. We understand the current state of the team, and we understand how it will be transformed into a successful and profitable undertaking when it moves to Brooklyn,” Prokhorov said in an interview.
“We understand the legal situation around the arena, our lawyers have attentively looked through all the documents. Under the agreements, we are protected from delays at the arena and expect that the management team will be able to deal with this,” he said.
The team’s move from New Jersey to Brooklyn has been delayed repeatedly because of a legal challenge from Brooklyn residents led by the community coalition Develop Don’t Destroy Brooklyn. A New York court will hold a hearing on eminent domain issues linked to the project next Wednesday.
“We don’t see any problems there,” Prokhorov said. “I think we will win in all the courts.”
Prokhorov’s investment vehicle, Onexim Group, signed an agreement with Forest City Ratner Companies, headed by Bruce Ratner, on Sept. 23 to invest $200 million into the construction of a $800 million arena in Brooklyn. In exchange, Prokhorov received an 80 percent stake in the Nets, 45 percent of the arena and the right to buy up to 20 percent of Atlantic Yards Development, a company that will oversee construction on a 9-hectare real estate development around the arena. The development is to include a rail yard, warehouses and several high-rises containing residential and office space, and the first high-rise is expected to be completed 69 months after the ground is broken, which, barring legal hurdles, is to take place this year.
Prokhorov said that while Onexim Group has sufficient funds, it might raise the financing required from Western banks. The New York Times reported Sept. 25 that the agreement also envisioned future Nets losses, up to $60 million, that are expected to accumulate before the move to Brooklyn. Prokhorov also will be responsible for 80 percent of the team’s $207 million debt, the newspaper said, citing an unidentified executive involved in the transaction.
Prokhorov declined to provide details about the deal.
“We borrow the money and essentially give the loan to someone else,” Prokhorov said. “For that, we get the team and a share in the real estate project. To use simple language: the group doesn’t spend any of its own money.
“We are in the process of negotiating with Western banks,” Prokhorov added, declining to identify the banks or disclose the interest rate of the loans. “We will attract the full sum of the needed investment.”
The deal is contingent on Ratner obtaining financing for the arena and control of all the land required for it by Dec. 31, The New York Times said.
Prokhorov, who has to secure the approval of 23 of the 30 team owners in the National Basketball Association to finalize the transaction, said he could not confirm the details of the deal.
TITLE: Animal Rights Movement Finds Growing Following
AUTHOR: By Anna Malpas
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — Eight animal rights protesters posed in T-shirts printed with fake blood, several hiding their faces in surgical masks, outside the trial of a man accused of shooting pet dogs.
The trial could result in one of the country’s first serious convictions for animal cruelty. It also provides a showcase for a new, more radical animal activism that is gaining popularity in Russia.
Dmitry Khudoyarov is on trial at Moscow’s Cheryomushkinsky District Court on charges of killing a dog and permanently disabling a puppy by shooting them from his all-terrain vehicle.
He has pleaded guilty and could serve up to six months in jail, a year of community service, or pay a fine of up to 80,000 rubles ($2,580).
Activists standing outside the courthouse during a recent hearing wore T-shirts with splattered blood and the slogans, “Prison for the Slaughterer” and “Prison for the Serial Killer.”
“Khudoyarov is a disease of our society,” said one protester, Emilia Nadin. “This is really the first case in Russia where people have managed to bring a case to court, and it’s very important for us to create a precedent.”
Fueling their cause is the fact that the country’s courts have handed down few convictions for animal cruelty. In 2007, a guard was convicted of killing a stray dog named Ryzhik who lived in the Konkovo metro station. He received a suspended sentence of two years and eight months.
This year, residents in both the Far Eastern city of Khabarovsk and the Oryol region were convicted of killing dogs and received sentences of three months and six months of community service, respectively. A man from Samara was given a suspended sentence of one year and fined 12,000 rubles.
In 2002, a model deemed by psychiatrists to be psychologically unstable stabbed a stray dog at the Mendeleyevskaya metro station. She was sent to a psychiatric hospital, and shocked Muscovites paid for a statue of the dog to be placed in the station.
The protest outside the courthouse this month was officially a flash mob, since officials had asked them to hold the rally 2.5 kilometers away. Police stood outside the courtroom and made no attempt to move on the protesters.
“We want the guy to be jailed — and for a long time,” said protester Marat Makhmutov.
The protesters represent a secretive grass-roots organization called Alliance for Animal Rights, which Nadin said she quit her job to join full-time two years ago. She has no office, and activists print up leaflets at home or work, she said.
The group provides a more attractive face for animal rights, Nadin said. “Our position has got better, we appear on television. They used to film crazy women with unwashed hair, now it’s young people,” she said.
Makhmutov and another protester, Emil Baluyev, both wore surgical masks, which they said were to prevent them from being identified by “boneheads,” members of a group of skinheads who target and beat up anti-fascist groups.
“They monitor all this with photographs and can find us later,” Makhmutov said. “They could beat us up or kill us.”
Baluyev, a law student, said he wants to become a rights campaigner after he graduates. Makhmutov, who works in telecommunications, said he became an activist 1 1/2 years ago.
Both said they came into the animal rights movement through the punk subculture.
A nebulous organization, the Alliance for Animal Rights has no formal registration, and it is unclear who is in charge.
Its spokesman, Semyon Simonov, answered e-mails from Sochi. He said the group has 500 members and was set up five years ago, initially as a purely Internet-based project, but had been holding rallies since 2005. He said the protests usually attract 50 people, but sometimes all 500 members show up for popular issues such as homeless animals.
Among the causes that the group backs is the controversial Stop Huntingdon Animal Cruelty, or SHAC, campaign against British animal testing company Huntingdon Life Sciences. The international campaign calls for targeting all shareholders and partner companies. In Britain, activists have vandalized houses, published the names of investors and sent letters with threats.
Seven British activists were jailed for blackmail last year. “We call for everyone who takes part not to break the law,” Simonov said. “For us it’s important because our society could react badly to illegal actions.”
Nevertheless, he warned, “In Russia there are people who have been disappointed by legal methods, and they could ignore laws that allow the killing of animals.”
Activists said they knew of the jail terms for the British activists and were sympathetic.
“Such radical activities are over the top,” Baluyev said. “We hope to achieve success with peaceful methods, but we support these people all the same.”
“We think this is bad,” Makhmutov said of the jailings. “We feel that any defense of animals isn’t a crime.”
Last month, the activists picketed pharmaceutical giant Bristol Myers-Squibb in Moscow. They have also picketed AstraZeneca and Novartis, Nadin said.
Novartis has “experienced protests by animal rights activists and extremists at our offices in Russia,” spokeswoman Tatyana Loginova said in answer to e-mailed questions. “Overall, we have seen an increase in the number of acts committed by these groups, as well as an escalation in the severity of their actions across continental Europe.”
Loginova said the campaign was “directed at the entire research-based pharmaceutical industry.”
A spokeswoman for Bristol Myers-Squibb said the company did not comment on animal rights activists.
The alliance was given permission by Moscow officials to picket the pharmaceutical companies, Nadin said.
There are an increasing number of supporters of radical action in Russia, Simonov said, including supporters of the Animal Liberation Front, a movement of activists who use tactics such as removing animals from cages and damaging property of targets.
“In Russia there are supporters of the Animal Liberation Front and their numbers are growing, since there is more deprivation of animal rights in our country than in many others,” Simonov said.
He listed the lack of a law on animal rights and public monitoring of laboratories, farms and slaughterhouses.
“It’s obvious that if the situation doesn’t change, many people will turn to direct action,” Simonov said.
Last year, American activist Steven Best visited Russia and talked to students in Moscow and St. Petersburg.
Best, who teaches philosophy at the University of Texas at El Paso, is a controversial figure. He co-founded a media information center for the Animal Liberation Front in the United States. He was banned from visiting Britain in 2005 under anti-terrorist legislation after telling a conference, “We will break the law and destroy property until we win.”
“The Moscow animal rights community is one of the most active and dedicated I know,” Best said in an e-mail.
He described it as comprising “both a highly visible legal and aboveground presence” and also “underground activities of the Animal Liberation Front.”
“Activists tend to be young students and workers,” he said. “Many activists are anarchists and anti-fascist and understand the connections between animal liberation and human liberation.”
Animal rights protesters aren’t yet seen as a threat by the authorities, Best said. He was “able to speak freely” in Russia, he said, although he was told that plainclothes police officers attended some of his talks.
Although Best initially was little- known in Russia, “people found out about him and he became a favorite with many animal rights activists because his ideas reflect their views,” Simonov said.
The alliance opposes mainstream wildlife organization WWF over its involvement in a law on hunting and the preservation of hunting resources in Russia that was signed by President Dmitry Medvedev in July.
“They are our enemies,” Nadin said of WWF, adding that the law allows “VIP hunting” and hunting in nature reserves.
“They collect a huge amount of money. They buy a lot of television advertising and they themselves carry out such laws,” she said.
WWF “thinks about its personal profit. That is our general point of view,” Baluyev said.
Last month, the group held a protest in which one member dressed up as WWF’s panda symbol.
“This view is voiced by people who simply haven’t bothered to read the law on hunting,” said a WWF representative, Vladimir Krever.
The law does not allow hunting in nature reserves but only in some sections of national parks, Krever said. A WWF researcher took part in a working group that helped draft the bill.
“I think that all citizens have the right to their views in a civil society, but there needs to be a balance,” Krever said. “I really don’t like it when they stop using a normal tone in a discussion.”
Nevertheless, Krever said he did not think that Russian radicals would resort to violence. “I don’t think that could happen in Russia,” he said.
“Sometimes we don’t very much support the methods that these organizations use, let’s say, extremist ones,” said Olga Pegova, head of the WWF’s information service in Moscow. “But we support them when their position is reasoned.”
TITLE: Berlusconi Vows to Fight Legal Setback
PUBLISHER: The Associated Press
TEXT: ROME — Italian Premier Silvio Berlusconi said Thursday he will go on TV and appear in courtrooms to prove that corruption and tax fraud charges in two trials against him are false.
The trials in Milan are set to resume after a top Italian court overturned a law granting Berlusconi immunity from prosecution while in office. The ruling by the Constitutional Court on Wednesday dealt the Italian leader a significant blow, handing prosecutors another chance to seek his conviction.
The ruling added to the problems of the premier, already engulfed in a headline-grabbing sex scandal over his purported dalliances with young women.
Last weekend tens of thousands took to the streets of Rome against his alleged attempts to curb freedom of the press. A few days later a court in Milan ordered his holding company Fininvest to pay a devastating $1 billion to a rival for a case dating from the 1990s.
“These two trials are laughable, they are a farce which I will illustrate to Italians also by going on TV,” Berlusconi said of the Milan trials that are set to resume. “I will defend myself in the courtrooms and ridicule my accusers, showing all Italians ... the stuff I am made of.”
Berlusconi has already ruled out stepping down, and his conservative allies, who have a comfortable majority in parliament, have rallied to his support.
“We’ll continue to govern without this law,” the ever-combative premier said on state radio. He added that he felt “absolutely necessary and indispensable to the democracy, freedom and well-being of this country.”
Berlusconi, 73, is still widely popular in Italy, despite accusations from his wife that he has had inappropriate relationships with far younger women and allegations from a self-described call girl that he spent a night with her. The scandal erupted in the spring after his wife announced she was divorcing him.
Berlusconi says he is “no saint” but has denied ever paying anyone for sex or having any improper relationships.
The immunity law spared the country’s four top office holders — the premier, president and two parliament speakers — from prosecution while in office. It had been pushed through by Berlusconi’s coalition in 2008 when the premier faced separate trials in Milan for corruption and tax fraud tied to his Mediaset broadcasting empire.
The proceedings against Berlusconi, who denies all charges, were suspended as a result of the law, drawing accusations that it was tailor-made for the premier. Berlusconi has a history of legal troubles stemming from his private interests and he has been either acquitted or cleared because the statute of limitations had expired.
But the Constitutional Court’s ruling said the immunity legislation violated the principle that all are equal before the law, paving the way for the trials to resume.
The corruption trial is particularly threatening, because in the meantime the premier’s co-defendant has been convicted of accepting a bribe to lie in court to protect Berlusconi.
Still, even if convicted, Berlusconi could still stay in power as sentences in Italy are usually not served until all avenues of appeal are exhausted. It is also possible that the statute of limitations will kick in before then.
In the Milan corruption trial, Berlusconi was accused of ordering the 1997 payment of at least $600,000 to British lawyer David Mills in exchange for the lawyer’s false testimony at two hearings in other corruption cases in the 1990s.
Berlusconi’s portion of the trial was frozen when the immunity bill was passed but the proceedings continued for Mills. In February, he was convicted of corruption and sentenced to 4 1/2 years in prison. Mills, the estranged husband of Britain’s Olympics Minister Tessa Jowell, has maintained his innocence.
His appeal is set to begin Friday, Italian news reports said.
Berlusconi faces the tax fraud charge in a trial over Mediaset’s purchase of TV rights.
In a separate ruling just a few days ago, Fininvest was ordered to pay $1 billion to a rival for its 1990s takeover of the Mondadori publishing house. Fininvest said Wednesday the ruling is unjust and it will seek to suspend the judgment pending an appeal.
The civil damage award stems from a case in which three Berlusconi associates were convicted of corrupting a judge so he would overturn a ruling that had gone in favor of industrialist Carlo De Benedetti and against Berlusconi for control of Mondadori.
TITLE: Earthquakes Spark Panic In S. Pacific
PUBLISHER: The Associated Press
TEXT: WELLINGTON, New Zealand — Thousands of panicked South Pacific islanders raced away from coastlines after three strong earthquakes rocked the region and generated a small tsunami Thursday, just over a week after a massive wave killed 178 people in the Samoas and Tonga.
There were no immediate reports of damage, and tsunami warnings for 11 nations and territories were soon canceled. But people across the South Pacific took no chances, scrambling up hillsides and maneuvering through traffic-clogged streets to reach higher ground.
“There is panic here, too,” Chris McKee, assistant director of the Geophysical Observatory in Papua New Guinea told The Associated Press. “People have rushed out onto the streets and are climbing hills.”
The Pacific Tsunami Warning Center issued a regional tsunami warning after a quake with a magnitude of 7.8 struck 294 kilometers northwest of the Vanuatu island of Santo at a depth of 35 kilometers. Within an hour, two other temblors of magnitude 7.7 and 7.3 followed.
The Hawaii-based center canceled the warnings after sea-level readings indicated that the wave generated by the quakes was too small to cause much damage.
There were no immediate reports of injury or damage from officials in Vanuatu, a chain of 83 islands. It lies about 2,200 kilometers northeast of Sydney.
“We felt the quake — it shook the ground, but not very strongly,” said a police officer in the town of Luganville on the island of Santo, the Vanuatu island nearest to the quakes’ epicenters. The officer declined to give his name as he was not authorized to speak to the media.
Thursday’s small tsunami came just over a week after a magnitude 8.3 quake sparked a large wave in the South Pacific that devastated coastal villages in Samoa, American Samoa and northern Tonga. The death toll from the Sept. 29 tsunami rose by five Thursday to 183, after searchers in Samoa found more bodies, said Vaosa Epa, chief executive in the office of Prime Minister and Cabinet. Another 32 people were killed in American Samoa and nine in Tonga.
That tragedy was fresh in the minds of residents of Tuvalu, a low-lying nation of eight atolls with about 10,000 people. Thousands fled inland after Thursday’s alerts, some clustering around the government building in the capital, Funafuti — the only multistory building in the country.
??A powerful typhoon tore through Japan’s main island Thursday, peeling roofs off houses, cutting electricity to hundreds of thousands and forcing flight cancellations before turning back toward the sea. Two men died.
During morning rush hour, more than 2 million commuters in Tokyo were stranded for hours as train services on several lines were suspended, while in other regions trucks were toppled on highways and bridges were destroyed by flash floods.
A man died when his motorbike slammed into a downed tree in the coastal prefecture of Wakayama, and another was killed by a falling tree just north of Tokyo, police said.
TITLE: German Author Awarded Nobel Prize for Literature
PUBLISHER: The Associated Press
TEXT: STOCKHOLM — Romanian-born German writer Herta Mueller won the 2009 Nobel Prize in literature Thursday, honored for work that “with the concentration of poetry and the frankness of prose, depicts the landscape of the dispossessed,” the Swedish Academy said.
The 56-year-old author, who emigrated to Germany from then-communist Romania in 1987, made her debut in 1982 with a collection of short stories titled “Niederungen,” or “Lowlands” in English, which was promptly censored by her government.
In 1984 an uncensored version was smuggled to Germany where it was published and her work depicting life in a small, German-speaking village in Romania was devoured by readers there. That work was followed by “Oppressive Tango” in Romania.
“The Romanian national press was very critical of these works while, outside of Romania, the German press received them very positively,” the Academy said. “Because Mueller had publicly criticized the dictatorship in Romania, she was prohibited from publishing in her own country.”
In 1987 she emigrated to Germany with her husband two years before dictator Nicolae Ceausescu was toppled from power amid the widening communist collapse across eastern Europe.
Mueller’s parents were members of the German-speaking minority in Romania and her father served in the Waffen SS during World War II.
After the war ended, many German Romanians were deported to the Soviet Union in 1945, including her mother, who spent five years in a work camp in what is now Ukraine.
Most of her works are published in German, but some works have been translated into English, French and Spanish, including “The Passport,” “The Land of Green Plums,” “Traveling on One Leg” and “The Appointment.”
Mueller is the 12th woman to win the Nobel Prize in literature. Recent female winners include Austria’s Elfriede Jelinek in 2004 and British writer Doris Lessing in 2007.
The prize includes a $1.4 million prize and will be handed out Dec. 10 in the Swedish capital.
TITLE: Immense Dinosaur Footprints Found By Scientists in French Mountains
PUBLISHER: The Associated Press
TEXT: PARIS — Paleontologists in eastern France have reported the discovery of some of the largest dinosaur footprints ever documented, measuring about 1.4 meters to 1.5 meters in diameter.
The site of the find, high in the Jura mountains, was once a literal sauropod stomping ground: So far, 20 prints scattered on a 10-hectare site have been uncovered, paleontologist Jean-Michel Mazin of France’s National Center of Scientific Research said on Wednesday.
Researchers believe there are hundreds, or even thousands, more still hidden, Mazin said.
The well-preserved footprints from the Late Jurassic period will help scientists learn more about sauropods, long-necked plant eaters that were giants among the dinosaurs. The hulking beasts that left their footprints in the mud 150 million years ago weighed 30 to 40 metric tons and were more than 25 meters long, the French research center said.
From the prints, “we can calculate their size and speed, find out about their behavior and learn how they got around,” said Mazin, who is studying the site along with fellow researcher Pierre Hantzpergue. Their discovery was announced Tuesday.
Two eagle-eyed nature lovers, Marie-Helene Marcaud and Patrice Landry, discovered the site on a path through a mountain prairie and reported it to scientists. Hikers often passed by, but nobody had reported dino prints before.
“They were very hard to see because there were a lot of little stones [on the ground], there was grass growing there, and you really had to have a trained eye to notice something,” said Mazin, the French researcher.
The Jura mountains gave the Jurassic period their name because rocks from the period were found there. Back then, the area resembled the Bahamas.
Mazin said the dinosaurs are believed to have left their tracks near the water in mud, which then dried in the sun and was set like plaster. The sea slowly washed sediment onto the prints, trapping them and sealing them off — which protected them throughout history, even during dramatic changes to the landscape.