SOURCE: The St. Petersburg Times
DATE: Issue #1544 (5), Tuesday, February 2, 2010
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TITLE: First Test Flight For Stealth Fighter
AUTHOR: By Alex Anishyuk
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — A prototype of Russia’s first stealth fighter successfully completed its long-delayed maiden flight Friday, receiving a warm welcome from government officials who hope that the jet will become a new centerpiece for the country’s aging air fleet.
The flight is also welcome news for Russia’s military industry, which is struggling to develop technologies not based on Soviet designs. The military’s 13th test of its new Bulava intercontinental missile failed in December, resulting in a bizarre and much-publicized light show over northern Norway.
The successful test of the T-50 PAK FA fighter, made by state-run Sukhoi, comes amid a spate of crashes involving the company’s aging Su-27, which are often blamed on human error. But concerns remain over the new plane’s engine, being developed by NPO Saturn, and military analysts say commercial production is still at least eight years off.
Pilots should begin training on the T-50 at a facility in Lipetsk as soon as 2013, Prime Minister Vladimir Putin told a government meeting Friday. Mass production should begin in 2015.
“It’s a remarkable event,” Putin said, while acknowledging that the fighter, and particularly its engine, still needed work. “I am personally following it.”
Deputy Prime Minister Sergei Ivanov, who oversees the military-industrial complex in the government, praised the jet as “unique” during the meeting.
“This jet is equipped with a radically new avionics complex, with an integrated ‘electronic pilot’ function and promising radio detection and ranging equipment with a phased-beam array,” he said.
The plane took off from a test range at the production facility in the far eastern city of Komsomolsk-on-Amur and flew for 47 minutes, piloted by Sergei Bogdan, Sukhoi said in a statement.
“We’ve conducted an initial evaluation of the aircraft controllability, engine performance and primary systems operation. The aircraft had retracted and extracted the landing gear. The aircraft performed excellently at all flight-test points scheduled,” pilot Sergei Bogdan said in the statement. “It is easy and comfortable to pilot.”
A source in Komsomolsk-on-Amur told Interfax that the T-50 had lowered and raised its landing gear twice during the flight, which “the American F-35 fifth-generation jet couldn’t do” on its test flight.
But the success comes well behind that of its U.S. competition.
Sukhoi won a tender to build the T-50 in 2002, replacing similar projects to build a fifth-generation jet fighter that had been discussed since the late 1980s. The jet will have a speed of 2,000 kilometers per hour and a range of up to 5,500 kilometers, according to Sukhoi.
The T-50 is intended as a rival to the U.S. military’s F-22A Raptor, the world’s only fifth-generation jet in service. The F-22A, produced by Lockheed Martin and partner Boeing Integrated Defense Systems, first flew in 1997 and entered service in the U.S. Air Force in 2005.
“This is a great success of both Russian science and design school. This achievement rests upon a cooperation team comprised of more than a hundred of our suppliers and strategic partners,” Sukhoi chief Mikhail Pogosyan said in the statement.
He said the plane — along with its fourth-generation fighters — would “define Russian Air Force potential” for decades to come.
“Sukhoi plans to further elaborate on the PAK FA program, which will involve our Indian partners. I am strongly convinced that our joint project will excel against its Western rivals in cost-effectiveness and will … gain a significant share of the world market,” Pogosyan said.
Russia intends to increase spending on military equipment by 8 percent to 1.17 trillion rubles ($38.5 billion) in 2010, Putin said last month. Arms export monopoly Rosoboronexport said Thursday that sales of planes and helicopters comprised half of its exports last year, with India remaining its largest client.
Analysts were skeptical, however, that Sukhoi would be able to deliver the jet on time, as testing could take years and concerns regarding the engine remain.
“Taking into consideration … the promise by Finance Minister Alexei Kudrin to freeze state spending in real figures beginning with the 2011 budget, it is hardly possible that the PAK FA will join military units earlier than 2018 to 2020,” Ruslan Pukhov, head of the Center for Analysis of Strategies and Technologies, a Moscow-based defense research company, told Kommersant on Saturday.
TITLE: Thousands Decry Putin in Public Protests
AUTHOR: By Alexandra Odynova and Sergey Chernov
PUBLISHER: Staff Writers
TEXT: Up to 12,000 protesters called on Prime Minister Vladimir Putin to resign in a rare outpouring of anger with the popular leader during a weekend rally in Kaliningrad, a city with a population of one million.
The peaceful protest was the largest in a flurry of weekend demonstrations, including one in St. Petersburg, all of which shared a common thread: Growing frustration with the country’s leaders.
Police detained about 160 protesters Sunday evening at an unauthorized Moscow rally of more than 700 people organized by the political opposition and human rights groups, while 41 were detained at a similar event on the same day in central St. Petersburg.
In Moscow, more than 700 gathered late Sunday on Triumfalnaya Ploshchad near the Mayakovskaya metro station, but police quickly dispersed the protest and detained around 160 people, including former deputy prime minister and leader of the opposition Solidarity movement Boris Nemtsov, NBP and Other Russia leader Eduard Limonov, veteran human rights activist Lev Ponomaryov and Oleg Orlov, head of the Memorial human rights group.
The demonstration was part of the Strategy 31 movement, a series of protests introduced by Limonov last year to call for the constitutional freedom of assembly to be upheld. Held on the 31st day of every month of the year that has 31 days, the protests aim to win back the “right to assemble peacefully, without weapons” guaranteed by the 31st article of the Russian Constitution. The Moscow authorities have not authorized any of the rallies, the first of which was held on July 31 last year, and have employed a large police force and detained many protesters at all the rallies held so far.
A previous attempt to protest on New Year’s Eve was broken up by the police, and more than fifty people were detained, including Lyudmila Alexeyeva, the 82-year-old head of the Moscow Helsinki Group, a human rights organization.
Alexeyeva was not detained Sunday night.
The Strategy 31 movement aims to attract parties and people with a range of views who care about defending their right of freedom of assembly, according to its organizers. Limonov said the movement is growing rapidly, with Sunday’s event in Moscow drawing “twice as many people” as the Dec. 31 protest. On Sunday, Strategy 31 was also expanded to include St. Petersburg and several other cities.
In St. Petersburg, more than 200 people gathered at a site near Gostiny Dvor metro on Nevsky Prospekt, the city’s main thoroughfare, which was surrounded by the police and OMON special-task force. City Hall had banned the rally on the grounds that snowplows would be working at the site at the time of the protest, but there were no plows to be seen there on Sunday.
In accordance with its goal, the rally, which was organized by the NBP, Mikhail Kasyanov’s Russian People’s Democratic Union (RNDS) and the Russian Communist Workers’ Party (RKRP), also attracted activists from other parties and groups ranging from preservationists to gay activists, as well as protesters not aligned with any organization.
Several minutes into the event, as NBP activists raised signs featuring the number 31 and chanted “Russia will be free!” and “You can’t ban us!,” the crowd was stormed by the police. Dozens of protesters were arrested and taken to a central police precinct.
When a number of protesters went to the precinct to demand the release of those who had been detained and find out why they had been arrested, the detainees were quickly transported to another precinct in Kupchino on the city’s southern outskirts, and were released three hours later. Forty-one people were detained during the course of the event.
“It’s first and foremost a civic event to defend our rights,” NBP local leader Andrei Dmitriyev said by phone on Monday. “It’s an ongoing campaign, and we will come again and again until we win the right to assemble and speak freely in our own city without being detained by the OMON and police.”
Dmitriyev, who was detained Sunday, said that the rallies would from now on be held in St. Petersburg and would attract more and more people.
“In the police bus with us there were also ordinary members of the public, for instance a 50-year-old woman — I talked to her and it turned out it was the first time she had been to an oppositional rally; she said she would keep on coming,” he said.
“There was also a pensioner [in the bus] who had come for the first time too — St. Petersburg’s intelligentsia.”
The Strategy 31 rallies also took place in a number of other Russian cities, where they were mostly authorized.
“Why [Moscow mayor Yury] Luzhkov and [St. Petersburg Governor Valentina] Matviyenko are being that stubborn is not quite clear; it shows the value of Matviyenko’s words about St. Petersburg being an European city, where human rights are respected,” said Dmitriyev.
As with previous, smaller outbursts of public anger, the weekend protests were ignored by all the national television channels, which are state-owned.
A leader with the opposition Solidarity group, Ilya Yashin, who attended the Kaliningrad rally, said he had not seen such a large anti-government demonstration since 2001, when hundreds of people rallied in Moscow against the takeover of the last private national television channel, NTV, by state-owned Gazprom.
“The rally held in Kaliningrad might really be a sign of a change in the country,” Yashin told The St. Petersburg Times on Sunday.
He stressed that the event was anti-Putin but had still managed to unite a large crowd with various political allegiances.
In addition to Solidarity, the rally included activists with the Communist Party, the Liberal Democratic Party, Yabloko, the Patriots of Russia party, the banned National Bolshevik Party (NBP), motorists’ groups and several minor opposition movements, Solidarity said on its web site.
Hundreds of police officers kept watch at Saturday’s gathering but did not intervene.
About 12,000 people participated, Solidarity said. Police put the figure at 7,000.
The demonstration was initially called to protest a plan by the regional administration to increase the transportation tax. The regional legislature later cancelled the bill, but the rally went ahead anyway and focused instead on rising utility bills and unemployment.
The last opposition rally staged in the city attracted 5,000 people on Dec. 12.
Yashin said, however, that the protesters were united over their anger with Putin, not over a popular issue like the transportation tax.
Dmitry Oreshkin, an independent political analyst, said the size of the protest was not surprising given Kaliningrad’s close proximity to the rest of Europe, but that it would take time for other cities to follow suit.
“Kaliningrad is surrounded by the European Union, and the residents can compare,” Oreshkin said.
TITLE: Hacker Attack Shuts Novaya Gazeta’s Site
AUTHOR: By Nikolaus von Twickel
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — Novaya Gazeta’s web site was paralyzed by a hacker attack for a sixth day Sunday in what editors called the strongest assault ever to hit the opposition newspaper’s online edition.
The denial of service attack started Tuesday morning and peaked Thursday when the site recorded 1.5 million visits per second, said Sergei Asriyants, the newspaper’s web editor.
“We had hacker attacks before but never as strong as this,” he told The St. Petersburg Times.
The attack was weaker Friday but still too strong for the newspaper’s server, he said.
Novaya Gazeta’s stories continue to appear online on the paper’s live journal site at Novayagazeta.livejournal.com.
Asriyants could not say where the attack had originated or who was behind it but acknowledged that it was well organized.
“The only thing I can say is that this is not the work of amateurs,” he said.
The Russian Internet was awash with speculation over the weekend of what had triggered the attack and who was to blame. One widely circulating theory was that it was motivated by a commentary by Yulia Latynina published in Monday’s Novaya Gazeta. Latynina is also a St. Petersburg Times columnist.
In the articled titled “Bee Cluster or Anti-Baker,” Latynina argues that Russia is so corrupt that even Adam Smith’s invisible hand does not work as a regulating force.
Latynina said by telephone Friday that she had no evidence that her article was to blame. But, she said, a hacker attack over her article would confirm the article’s premise that corruption is uncontrollable.
“Maybe someone is just spending his royalties now,” she said in regard to the hacker attack.
But Novaya Gazeta spokeswoman Nadezhda Prusenkova dismissed the possibility of a connection to Latynina’s article, noting that it had been online a whole day and spread widely on the Internet before the attack started.
“Maybe someone just wants to punish us for our overall work,” she said.
Novaya Gazeta asked law enforcement authorities to open a criminal investigation Friday.
“The complaint went to the Interior Ministry, the prosecutor general and the Federal Security Service,” Prusenkova said, adding that no answer could be expected from the agencies before Monday.
Phone calls to the Interior Ministry’s press service went unanswered Friday, but the ministry said Thursday that it would investigate the attack once it received a complaint.
Prusenkova said she hoped that the problem would be solved by Monday.
Novaya Gazeta is frequently critical of the government, and four of its reporters have been killed since 2000, including Anna Politkovskaya.
The newspaper is co-owned by businessman Alexander Lebedev and former Soviet leader Mikhail Gorbachev. Lebedev did not return a request for comment Friday. Hackers have troubled national media organizations in the past.
In late November, a mystery virus destroyed the web site of Moskovsky Komsomolets. Editors of the popular national tabloid determined that hackers were behind the attack, which deleted parts of the paper’s archive.
The government has been accused of orchestrating denial of service Internet attacks, including assaults on Georgian sites during the 2008 war in South Ossetia and on Estonian government sites in 2007. The Russian government has denied wrongdoing.
TITLE: Sapsan Train Attacked With Stones, Ice
AUTHOR: By Irina Titova
PUBLISHER: The St. Petersburg Times
TEXT: The Sapsan train, the new high-speed link between Moscow and St. Petersburg launched late last year by Russian Railways (RZD), was attacked with stones and chunks of ice twice in January.
Last Tuesday, the window of one of the passenger cars was broken while the train was traveling through the Tverskaya Oblast.
On Jan. 12, a 35-year-old villager with prior convictions threw a chunk of ice at the Sapsan as it was traveling at full speed, breaking the window. When police detained the man he said that he was taking his revenge on the train. The man said that on Jan. 11, as he was walking beside the railway, the force of the wind created when the Sapsan hurtled past blew him into a snowdrift, Komsomolskaya Pravda newspaper reported.
Dmitry Pertsev, a spokesman for Russian Railways, said he couldn’t think of any explanation for the stone and ice attacks other than “hooliganism and possible psychiatric illness on the part of the attackers.”
“These people really must have nothing better to do, and be insane to do such things to trains,” Pertsev said.
Pertsev said, however, that other trains traveling in Russia are also sometimes targets for stone-throwers.
Viktor Korsakov, spokesman for RZD’s Oktyabrskaya network, on which the train operates, said that due to the recent attacks the company has had to strengthen police surveillance on the line.
“If a driver sees people behaving suspiciously near to the train, he or she will immediately inform the police about the situation,” Korsakov said.
Meanwhile, a number of bloggers have responded to the reports by claiming that the attacks could be a response to a number of commuter trains having been canceled in order to allow for the operation of the Sapsan.
“The stone-throwing is probably a protest against the new, inconvenient scheduling of local commuter trains. Some of them have been cancelled altogether and the schedules for the others have been moved an hour back or an hour forward,” wrote one blogger calling himself Alex.
Vasily Deryabin, 30, said that the attacks could also be the result of the “frustration” that some people who live in relative poverty in villages and small towns in rural areas between Moscow and St. Petersburg feel.
“When they see those elite trains taking wealthy people to wealthy cities, and making lots of noise, they can get really annoyed,” he said.
The Sapsan train began to travel between Moscow and St. Petersburg on Dec. 18. It is capable of speeds of up to 300 kilometers per hour and covers the distance between St. Petersburg and Moscow in 3 hours and 45 minutes.
TITLE: Cargo of Toxic Waste Arrives in City’s Port
AUTHOR: By Galina Stolyarova
PUBLISHER: Staff Writer
TEXT: A cargo of 650 tons of depleted uranium hexafluoride arrived at the city’s port on Monday. The radioactive load, which is due to travel on by rail to the Siberian Chemical Factory in the Siberian town of Seversk for reprocessing, was brought in by The Captain Kuroptev ship, a vessel that has repeatedly come into conflict in the past with ecological groups trying to prevent it from docking.
The French company AREVA, one of the largest exporters of depleted uranium to Russia, along with the German-Dutch holding URENCO, is responsible for the radioactive cargo. During the past 15 years, the companies have jointly sent to Russia nearly 140,000 tons of radioactive material, according to Greenpeace Russia.
Radioactive loads on board foreign ships have been arriving at the port of St. Petersburg on a regular basis for a decade, being sent on by rail to factories in Siberia and the Urals.
The trains carrying the hazardous loads set off from Avtovo railway station — located in the south of the city close to residential areas — according to the local branch of the ecology group Bellona. Bellona’s research has shown that most residents in the area have no idea about the risks to which they are regularly exposed as a result of these toxic cargoes.
Ecologists have difficulty monitoring the cargoes, as officials restrict information concerning the transportation of nuclear material, and often prevent independent experts from gaining access to the trains. When volunteers have been able to get close to the trains they say they have often registered increased radiation levels.
AREVA is not the only French company that regularly sends uranium hexafluoride to Russia. EURODIF also continues to send regular shipments of radioactive loads. Russia’s contracts with both AREVA and EURODIF expire in 2014, and ecologists are actively campaigning in France against their renewal.
International environmental groups recently organized the screening of a new documentary film focusing on this issue. The screening prompted the French authorities to create a special commission to investigate such shipments.
Ecologists have questioned the ethics of these deals. It has been calculated that it is at least three times cheaper for Western European companies to send depleted uranium for reprocessing to Russia than to do the job at home.
In 2008, Russia also signed contracts with India, Pakistan and China to receive spent nuclear fuel and highly toxic uranium hexafluoride in addition to the regular shipments of radioactive cargoes from Western Europe.
In November last year, environmentalists trumpeted their first major success in years when the German-Dutch company URENCO announced that it would end the practice of sending spent nuclear fuel to Russia for reprocessing and storage.
Ecodefense, Bellona, Greenpeace and other pressure groups argue that the containers containing the waste are not completely leak-proof and that the freight loads across the country are unguarded. Similarly, they warn that the drivers of the trains that carry the dangerous cargoes are typically left in the dark about the radioactive content of the containers.
While the Russian authorities have remained resistant to pressure, the Dutch government has stopped sending radioactive waste to Russia from the Netherlands.
Greenpeace volunteers from across Europe have been campaigning against this practice since the mid-1990s, when the Russian government inked its first contracts with a string of foreign companies to receive uranium hexafluoride and other radioactive material for reprocessing and storage.
“Those contracts were extremely profitable and beneficial for the foreign companies, and humiliating for Russia, as it allowed foreign states to easily dispose of nuclear waste, which is extremely expensive to process and store,” explained Vladimir Chuprov, head of Greenpeace’s energy program in Russia.
TITLE: Migration Drives Population Growth
AUTHOR: By Alexander Bratersky
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — The Federal Migration Service announced Friday that it had contributed to Russia’s first demographic increase in 15 years by granting Russian citizenship to about 400,000 people last year.
The new Russians along with 227,000 migrants who arrived to Russia in 2009 have helped to offset the country’s shrinking population and even allowed a small growth of 1.4 percent, Federal Migration Service chief Konstantin Romodanovsky said.
“This is the first demographic increase in the past 15 years,” Romodanovsky said, Interfax reported.
President Dmitry Medvedev touted the end of a 15-year drop in the country’s overall population in mid-January after Health and Social Development Minister Tatyana Golikova announced that preliminary statistics for last year showed that the country’s population of 141.9 million had either remained stable or increased by 15,000 to 25,000 people.
The Federal Migration Service expelled 34,000 migrants from the country last year, an increase of 70 percent from 2008, and called $113 million in fines from people and companies that violated migration laws, Romodanovsky said.
He said 1.3 million migrants are expected to work in Russia this year, far below a cap of 2 million set in a government quota announced late last year.
Romodanovsky also said his agency planned to speed up the procedure for Russians to obtain passports for foreign travel, making it possible to order the document online.
“I think we will resolve this question within a year,” Romodanovsky said.
The service will start issuing new foreign passports valid for 10 years in March, according to the decree signed by President Dmitry Medvedev last month. The change will only apply to new biometric passports.
Romodanovsky also said all Chechen refugees have been returned to Chechnya and the camps that hosted them for many years in Ingushetia and other regions have been closed.
TITLE: Clinton: Russia Should Cooperate
PUBLISHER: The Associated Press
TEXT: PARIS — U.S. Secretary of State Hillary Clinton on Friday challenged Russia to cooperate with the U.S. administration and with NATO to ensure European security against new threats such as terrorism.
Citing a wide array of differences between Washington and Moscow, Clinton called for Russia’s leadership to drop its opposition to a European missile shield and its demands to renegotiate a Cold War-era treaty limiting the deployment of troops and conventional weapons on the continent.
In a speech at France’s Ecole Militaire in Paris, she said Europe should not be divided as it has been in the past and that Russian ambitions to maintain a zone of influence in former Soviet satellites, some of which are now NATO members or aspirants, were obsolete.
“We object to any spheres of influence in Europe in which one country seeks to control another’s future,” she said, referring specifically to Georgia and territorial disputes over its regions of Abkhazia and South Ossetia, both of which Russia recognizes as independent.
Russia has made several proposals on European security cooperation that some believe are aimed at limiting NATO’s influence. But Clinton said security matters are best dealt with through existing frameworks. Negotiating new treaties, as Russia suggested, “can a very long and cumbersome process,” she said.
And all European states should be eligible for NATO membership, she said, rejecting Russian objections to the expansion of the alliance.
“We strongly believe that the enlargement of NATO and the EU has increased security, stability and prosperity across the continent and that this, in turn, has actually increased Russia’s security,” Clinton said.
Also key to European security and stability is the Conventional Forces in Europe Treaty, which Russia unilaterally suspended two years ago, she said. The treaty governs where and how many troops and conventional weapons can be stationed on European soil.
“This valuable regime is now in danger of crumbling,” Clinton said, urging Russia to join in discussions to ensure that the treaty is once again the “cornerstone” of conventional arms control.
Clinton said the United States and Russia are close to concluding a new Strategic Arms Reduction Treaty to reduce the size of Cold War arsenals in both nations. The old treaty expired last year, but both nations say they will abide by it during talks on a new one.
The threat behind the old START treaty — a nuclear war as an option by the governments of two well-armed nations — has changed, Clinton said. “Now we face increased threats — that nuclear materials will fall into the wrong hands, or that certain states will develop or even use nuclear weapons.”
TITLE: Russia, South Ossetia Agree Visa-Free Travel
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — Russia and Georgia’s breakaway province of South Ossetia agreed to visa-free travel Monday, provoking outrage from Georgia.
Foreign Minister Sergei Lavrov and his South Ossetian counterpart, Murat Dzhioyev, signed the deal in Moscow as part of a bilateral friendship and cooperation agreement signed in September 2008, South Ossetia’s representative office in Moscow said in a statement.
Georgian Deputy Foreign Minister Nino Kalandadze said the treaty contradicted international laws. She also called it a “cynical step,” accusing Russia of forcing South Ossetians to obtain Russian passports in recent years, Gazeta.ru reported.
Lavrov told reporters that Russia would seek the representation of South Ossetia and Georgia’s other breakaway province of Abkhazia in the United Nations, the Organization for Security and Cooperation in Europe and the Council of Europe, Interfax reported.
Moscow recognized the independence of South Ossetia and Abkhazia, where most residents hold Russian passports, after a brief war with Georgia in August 2008.
TITLE: Crash Mars First Casino Opening in Gambling Zone
PUBLISHER: Combined Reports
TEXT: A senior Krasnodar lawmaker died in a weekend car crash as he was traveling home from the opening of the first casino in a new gambling zone, an accident that promises to raise new concerns about a government decision to limit legalized gambling to four remote areas.
Nikolai Kotlyarov, speaker of the Krasnodar city legislature, and his driver were killed on the spot when their Toyota Camry crashed into a car parked on the roadside of the Krasnodar-Eisk Highway at about 1 a.m. Sunday and slammed into a guardrail, Interfax reported.
Kotlyarov was among about 500 people who attended the opening of the Oracle casino in Azov City, a Rostov region gambling zone located about 200 kilometers from Krasnodar and 100 kilometers from Rostov-on-Don, the nearest sizable city.
It’s unclear how many people will be eager to travel long distances for a gambling excursion, but the casino’s operators said they were convinced that there is a market and they plan to start building a four-star hotel for gamblers this summer.
“There’s a lot of gambling people here” in the region, said Valery Saparin, marketing director for casino operator Royal Time. “We hope that a lot of people will be drawn to us in the near future.”
The casino, in a large shed-like building in a snowy field, has about 200 slot machines and 10 table games. Only about 100 of the visitors appeared to be actually placing bets Saturday.
Casinos and slot-machine halls were closed across the country July 1 under a government plan to limit gambling to Azov City, the Kaliningrad exclave, the Altai region in Siberia and the Primorye region in the Far East.
The car crash highlights a risk of placing casinos in remote zones, and it draws new attention to Russia’s dangerous roads. President Dmitry Medvedev has described the high road-accident rate as a national problem and resolved to make roads safer.
Investigators said Sunday that they believed that a violation of traffic safety rules was responsible for Kotlyarov’s accident and had opened an investigation, Interfax reported.
Kotlyarov, 72, was born in the Krasnodar region and had served as speaker of the city legislature since 2005.
(SPT, AP)
TITLE: Saakashvili Offers New Supply Route to U.S.
PUBLISHER: The Associated Press
TEXT: MOSCOW — Georgian President Mikheil Saakashvili said he has proposed to the United States that his country become a logistics hub for the expanding U.S.-led war in Afghanistan.
In a telephone interview with The Associated Press, Saakashvili outlined a Georgian proposal to develop a corridor for armaments across Georgia and Central Asia to Afghanistan. Georgia is offering its Black Sea ports to Western military supply ships and its airports as refueling points for cargo planes.
The idea of an influx of Western military supply ships sailing the Black Sea would be likely to rile Moscow. But Saakashvili noted that Russia has said U.S. success in Afghanistan is in Russia’s interests.
“I don’t think that Russia can openly object to this,” he said.
Georgia is interested in having a greater U.S. military presence in the region, Saakashvili said, but not as a deterrent.
“The best containment of Russia’s adventures in this region is political,” he said. “I don’t think the Americans have the resources to do it militarily, and I don’t think this route can in any way even indirectly serve as military containment or deterrence.”
Saakashvili said the idea was first presented to U.S. Vice President Joe Biden when he visited Georgia in July. He said he has also discussed the idea with the head of U.S. Central Command, General David Petraeus.
Kevin Aandahl, a spokesman for the U.S. Defense Department’s Transportation Command, said the department was aware of Georgia’s willingness but has not substantially explored the proposal. The White House would not comment.
Saakashvili has long sought to steer Georgia toward the West and eventual NATO and EU membership. That course has been in doubt since Georgia’s war with Russia in 2008. Georgia also has been unnerved by U.S. President Barack Obama’s move to reset relations with Russia and the ambivalence in Washington and many European capitals about Georgia’s Western integration.
Saakashvili’s offer follows extensive Georgian contributions to U.S. and NATO operations in Afghanistan that include a commitment of 900 combat troops, a high number for a small, relatively poor country. It comes as the United States is ramping up its operations in Afghanistan and looking for ways to boost supply.
“Part of our business model is options,” said Aandahl of TRANSCOM. “We need to have options into Afghanistan.”
The United States already uses a supply corridor through Russia and Central Asia, besides its primary route via Pakistan. On Wednesday, NATO said Russia had expressed interest in developing more routes.
TITLE: In Brief
TEXT: Dam Investigation
MOSCOW (SPT) — Khakassia’s police have opened a criminal investigation into a company accused of embezzling money meant for maintenance work at the Sayano-Shushenskaya hydroelectric plant, where an accident killed 75 people in August.
The head and the chief accountant of the Gidroelectroremont company, a subcontractor of plant owner RusHydro, are accused of pocketing 24 million rubles ($800,000) allocated by RusHydro for plant repairs in 2007, police said in a statement.
The statement did not identify the two suspects. If charged and convicted of embezzlement, they face up to 10 years behind bars.
The parliamentary commission that investigated the disaster found that the neglected plant’s equipment had caused the deadly accident.
NGOs Get ‘Russia’
MOSCOW (SPT) — Prime Minister Vladimir Putin has abolished a decree that banned the unauthorized use of the words “Russia” and “Russian Federation” in the names of nongovernmental organizations, the government said on its web site Friday.
The decree signed in 1996 permitted only political parties, trade unions and public organizations that had branches in all Russian regions to use the words in their titles freely.
Otherwise, NGOs had to receive permission by special presidential decree or from a government commission.
Lithuanian FM
VILNIUS, Lithuania (SPT) — Lithuania’s proposed new foreign minister said Friday that relations with Russia were complicated and promised to be straightforward in dealings with Moscow.
The office of President Dalia Grybauskaite said in a statement that she would sign a decree to appoint Audronius Azubalis as foreign minister. The tough-talking Grybauskaite forced the resignation of the last foreign minister.
Azubalis is the conservative head of the parliament’s foreign affairs committee.
“I think Russia is a complicated neighbor and some of its steps can be considered as dangerous,” Azubalis told reporters.
“For instance, shutting down the Druzhba pipeline was dangerous from the economic point of view,” he said, referring to the closure by Russia of a pipeline that used to take crude oil to a Lithuanian refinery, which was bought by Polish oil group PKN Orlen.
“The more open, the more straightforward we are going to be in our assessment, the better atmosphere we will have in our bilateral relations,” he said.
Georgian ‘Spy’ Jailed
TBILISI, Georgia (SPT) — A former Georgian diplomat who advised the country’s mission to NATO was sentenced to 20 years in jail Friday after being convicted of spying for Russia during the 2008 war, Reuters reported.
Military expert Vakhtang Maisaia was arrested in May last year on suspicion of passing information to Russia about Georgian arms purchases and military movements during the five-day war.
“The court found Vakhtang Maisaia guilty on the basis of the evidence submitted,” said a spokeswoman for Tbilisi City Court, which held a closed-door trial.
At the time of Maisaia’s arrest, Georgian President Mikheil Saakashvili said he “inflicted great damage to the security of the country” and accused him of supplying Russia with hourly updates on Georgian army positions.
Jews Slam Yushchenko
KIEV (AP) — A prominent Jewish human rights organization has criticized the Ukrainian president’s decision to give a posthumous award to a nationalist leader whom it describes as a Nazi collaborator.
The Simon Wiesenthal Center said in a statement Friday that Stepan Bandera and his followers were linked to the deaths of thousands of Jews in the early stages of World War II.
President Viktor Yushchenko on Wednesday bestowed the Hero of Ukraine award to Stepan Bandera for his role in fighting for an independent Ukraine.
A Yushchenko spokesman declined comment Friday.
TITLE: Hotel Conversion Planned on Nevsky
AUTHOR: By Nadezhda Zaitseva and Anatoly Tyomkin
PUBLISHER: Vedomosti
TEXT: The joint owners of Ilim pulp-and-paper company, Mikhail and Boris Zingarevich, intend to take part in the conversion of a building on Nevsky Prospekt into a hotel.
IFG-Basis-Project submitted a planning application to turn 7-9 Nevsky Prospekt into a hotel in July last year, said Yelena Kokshina, press secretary of the city’s construction committee. The application is currently under review, she said.
According to SPARK-Interfax, IFG-Basis-Project belongs to a Cypriot offshore company, Aplerson Holding Limited, whose general director is Danat Bulavko.
He is also the general director of Aditum, which is planning to build a multi-functional complex beneath Ploshchad Vosstaniya.
The co-owners of Aditum are brothers Boris and Mikhail Zingarevich, minority stakeholders in the Ilim pulp-and-paper group.
In 2007, the Zingarevich brothers, together with Zakhar Smushkin and Leonid Yerukhimovich, sold a 50-percent stake in the Ilim group to the American concern International Paper for $650 million.
The Zingarevich brothers are among the founders of the IFG Basis invest fund, based in Cyprus, which controls Aplerson, Vedomosti was informed by two officials at City Hall. They did not name the other participants in the fund. The Zingarevich brothers declined to comment via their representative, and Bulavko could not be reached by Vedomosti.
The six-story building at 7-9 Nevsky Prospekt, according to Yelena Bodrovaya, the press secretary of the State Property Management Committee, comprises an area of 9,200 square meters. Until 2009, it was managed by the Piter management company, which won the right to administer the building at an auction in 2005.
The site currently has tenants, the largest of which are the Central Air Services Agency, which occupies 3,648 square meters, and the St. Petersburg branch of the Federal Anti-Monopoly Service (FAS), which rents 1,000 square meters.
IFG-Basis-Project already has 1,200 square meters of premises to which the FAS branch will move, Oleg Kolomiichenko, head of the St. Petersburg branch of the FAS said. The investor will get the premises at 7-9 Nevsky Prospekt after the move has been made.
The location for a high-class hotel is very good, but the implementation of such a project will be made very difficult by its protected status as a historic monument, said Oleg Barkov, general director of Knight Frank St. Petersburg. Barkov estimated that the investment required to reconstruct such a building would be $3,000 to $4,000 per square meter.
TITLE: BasEl Ponders More IPOs
PUBLISHER: Bloomberg
TEXT: MOSCOW — Russian billionaire Oleg Deripaska may list “several” businesses this year following the initial public offering last month of aluminum producer United Co. RusAl, the deputy chief executive officer of his investment company said.
“We have several candidates for IPO in the group,” Andrei Elinson, deputy CEO of Moscow-based Basic Element, said in an interview Saturday. “You might” see some listings this year, he said on the sidelines of the World Economic Forum in Davos, Switzerland. Basic Element will decide on the location of any listing based on investor interest, Elinson said.
Deripaska’s RusAl, the world’s largest aluminum producer, was the first Russian company to list in Hong Kong, raising HK$16.7 billion ($2.2 billion) from investors including Russian state development bank VEB and Asian billionaire Li Ka-shing. Units of state-run Russian Railways and aircraft-leasing company Ilyushin Finance said they may follow RusAl to Hong Kong as Russian companies seek alternatives to a London listing.
The Chinese market is becoming “more and more important” for Deripaska’s business empire and Basic Element is considering partnerships with Chinese insurance companies, automakers and pulp producers, Elinson said.
Deripaska’s GAZ, Russia’s second-largest automaker, may start sales of the Gazelle light commercial vehicle in China, Elinson said. Basic Element’s Military Industrial already supplies the Tiger armored military carrier to the Chinese army and police, he said.
“In some business lines we’ve come to something a lot more tangible than just discussions, such as in manufacturing,” Elinson said.
TITLE: Russia Low On Globalization Report
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — Russia is one of the least globalized countries among the 60 largest economies in the world, according to a report released Friday.
The country ranks 55th on the list, compiled by the Economist Intelligence Unit and Ernst & Young — just above Indonesia and below Ecuador.
Each of the countries was graded by analysts using a 1 to 5 scale on a number of factors, ranging from trade policy to Internet subscribers to migration.
While Russia scored relatively well in categories ranking countries’ trade policies and capital restrictions, it ranked much lower in indicators measuring the exchange of technology and ideas, such as the number of Internet users, as well as measures of cultural integration, such as tourism. Russia scored a 1.77 in the technology category and a 2.01 in the cultural category.
Russia’s aggregate score in 2009 was 2.77, up only slightly from the 2.51 it scored in 1995.
BRIC countries (Brazil, Russia, India and China) all rank in the bottom half of the list and “none has increased, or is even expected to increase, its globalization progress at anything like the pace of its economic growth rate,” the report said. “This may be explained in large part by a greater focus on new opportunities arising in home markets.”
TITLE: Light At the End Of The Orlovsky Tunnel
AUTHOR: By Anatoly Tyomkin
PUBLISHER: Vedomosti
TEXT: City Hall is reopening the tender for St. Petersburg’s 47.7 billion ruble ($1.6 billion) Orlovsky Tunnel.
The tender commission will begin examining bids for the construction and operation of the Orlovsky Tunnel on Feb. 18, said Alexei Chichkanov, chairman of the city’s investment and strategic projects committee. Officials plan to select a private partner for the project on April 2, he said.
The tunnel, which will run for one kilometer underneath the River Neva between the Smolnaya and Sverdlovskaya embankments, is due to be financed equally by the city budget, the federal investment fund and a private partner. City officials started looking for a private partner for the project in 2007. Originally estimated at 26.4 billion rubles ($900 million at today’s exchange rate), the tunnel’s cost was raised to 47.7 billion rubles in April of last year.
A preliminary screening for applicants was held in December 2007. Nevsky Concessionary Company (a daughter company of Vinci;) Nevsky Tunnel (a consortium of Strabag, Zublin, Egis and Basic Element;) Bouyguesproject Operating (a daughter company of Bouygues;) and Neva Traverse (a consortium of Hochtief and Boskalis) passed the first round.
Government officials planned to select a partner by mid-2008 and expected the tunnel to open by 2013, but the selection process experienced repeated delays. Deputy-governor Yury Molchanov announced in early 2009 that the city budget and federal investment fund would not be able to finance the tunnel’s construction until at least 2011. Last April, the federal government officially put back the tunnel’s completion deadline to 2015.
According to Chichkanov, the original conditions for the tender have not changed and the results of the preliminary screening still stand. While no new bids have been submitted, Chichkanov confirmed that there will be several. Officials have received word that bidders are formatting their applications, he said, adding that St. Petersburg will find the necessary funds for the tunnel despite the economic crisis.
Representatives of Bouyguesproject Operating and Neva Traverse confirmed that their respective companies are continuing to work on the Orlovsky Tunnel project. Strabag also remains interested, a source close to the company said. Zublin, Egis and Boskalis did not respond to inquiries, while representatives at BasEl declined to comment. Viktor Saveliyev, general director of Nevsky Concessionary Company, was unavailable for comment on Friday.
The federal investment fund agreed to provide financing for the Orlovsky Tunnel in 2005 to 2006, along with another St. Petersburg project, the Western High-Speed Diameter road (WHSD). Nevsky Meridian (a consortium of Hochtief, Strabag, Bouygues, Egis, BasEl and Mostootryad 19) won the tender for the WHSD after submitting the only bid in June 2008. An agreement with the consortium has yet to be signed. Meanwhile, the St. Petersburg city budget has been financing the construction project since early last year. According to Chichkanov, a new tender will be announced in 2011, but different regulations will be required since construction of the WHSD has already begun.
A representative from the Ministry of Regional Development did not rule out that the investment fund will finance both the WHSD and the Orlovsky Tunnel after 2011.
Kirill Ivanov, the chief operating officer of Dormost, said it is difficult to attract funding at less than 15 percent annual interest for a complex project like the Orlovsky Tunnel. This increases the payback period, which may make it pointless for a private partner to get involved, Ivanov said. A builder working on the project estimated that investors would not see a return on the tunnel for at least 25 years.
TITLE: City’s Ferry Connection To Helsinki Set to Be Restored
AUTHOR: By Yelena Zborovskaya
PUBLISHER: Vedomosti
TEXT: A ferry connection between St. Petersburg and Helsinki is once again being launched after an 18-month gap.
From April this year, the St. Peter Line company will operate the Princess Maria passenger ferry, said Andrei Mushkarev, development director of Inflot Worldwide, which is the official representative and agent of the operator in St. Petersburg. St. Peter Line is registered in the EU, according to its site. Vedomosti was unable to contact the company.
The ferry, which will have a passenger capacity of 1,638, will depart from St. Petersburg every other day, said Mushkarev. The journey time will be 11 hours. The Princess Maria has 606 cabins and a car deck for 395 vehicles, and the minimum cost of a ticket will be 30 euros per person, he added. Mushkarev estimates that the average occupancy of the ferry will be about 80 percent.
In May last year, the Russian government passed a resolution allowing ferry passengers to visit Russia without a visa for up to 72 hours. Before this law was passed, attempts to launch a sea connection with Finland proved unsuccessful. There was a ferry connection to Helsinki from 2003 to 2006 and in 2008, but their occupancy rates were low, said Sergei Khokhlov, commercial director of West Travel. Now St. Petersburg will join the ferry transport network that connects the other countries located on the Baltic Sea, he said.
The volume of people traveling in both directions will increase by 10 to 15 percent, predicts Sergei Korneyev, vice president of the Russian Tourism Union. Mushkarev estimates that between October and May, an extra 100,000 to 150,000 foreign tourists could visit St. Petersburg. According to data from the city’s investment committee, 4.8 million tourists visited the city in 2009, of whom 2.3 million were foreign.
Demand for trips to Scandinavia decreased by 15 to 20 percent last year compared to 2008, said Khokhlov. The number of people going there from St. Petersburg is unlikely to increase, he said, since tourists have gotten used to going to Helsinki by train, bus or car. Mushkarev listed the advantages of going by ferry as getting through the border and passport control quickly.
TITLE: In Brief
TEXT: Recovery Speeds Up
MOSCOW (Bloomberg) — Russia’s economy grew a seasonally adjusted 6 percent in the fourth quarter compared with the previous three-month period, Goldman Sachs economist Rory MacFarquhar estimated after full-year figures were released Monday.
“The recovery in the last few months of the year was considerably faster than we had expected,” he said in an e-mailed note to investors.
McDonald’s to Expand
MOSCOW (Bloomberg) — McDonald’s, the world’s largest restaurant company, plans to increase its number of Russian outlets by 20 percent this year to capitalize on its fastest growing market in Europe.
The Oak Brook, Illinois-based company will add 40 to 45 new restaurants to the 245 it operates in Russia, creating as many as 4,500 jobs, according to an e-mailed statement Monday. The country “remains a significant growth opportunity in Europe, and McDonald’s will continue to invest in its economy, people, supply chain and restaurants,” Denis Hennequin, president of McDonald’s Europe, said in the statement.
The fast-food chain opened its first Russian restaurant on Jan. 31, 1990, and employs around 25,000 people in the country.
Hotel Prices Fall 36%
MOSCOW (Bloomberg) — Moscow hotels cut prices by 36 percent last year, Kommersant reported, citing Hotel Price Index.
Prices fell to an average of $267 a night, the newspaper said, citing the data. Hotels cut prices on lower numbers of tourists in 2009, Kommersant reported, citing unidentified analysts.
Yandex Revenue Soars
MOSCOW (Bloomberg) — Yandex, the most-used Russian search engine, said revenue rose 14 percent last year on higher advertising revenue.
Sales climbed to 8.7 billion rubles ($287 million), Moscow-based Yandex said in an e-mailed statement Monday, without giving comparative figures.
Tech Firms Plan IPOs
MOSCOW (Bloomberg) — Three Russian technology companies plan to hold initial public offerings this quarter, Vedomosti reported, citing the companies.
Telecommunications services provider Nauka-Svyaz, biotechnology developer Diod and B2B-Center, which develops electronic trading systems, plan to list shares in the Micex Stock Exchange by the end of March, the Russian newspaper said Monday.
Prof-Media to List
MOSCOW (Bloomberg) — Russian billionaire Vladimir Potanin plans to list his Russian media company, Prof-Media, in London in April, Vedomosti reported, citing unidentified people familiar with the matter.
Potanin pledged 60 percent of Prof-Media to VTB Group as collateral for a $3.5 billion loan to his holding company, Interros, after the value of the original collateral, shares in GMK Norilsk Nickel, declined in value, the Russian newspaper said Monday. He is asking VTB to free the Prof-Media stake before the initial public offering, citing recent gains in Norilsk stock, Vedomosti said.
Bankers valued Prof-Media at as much as $2.5 billion, according to the newspaper.