SOURCE: The St. Petersburg Times
DATE: Issue #603 (0), Friday, September 15, 2000
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TITLE: Apartment Blasts Remain Unsolved
AUTHOR: By Simon Saradzhyan
PUBLISHER: Staff Writer
TEXT: MOSCOW - One year after a wave of deadly apartment building explosions rocked Moscow and two other cities, killing over 300 people, federal law-enforcement officials have charged only a handful of the suspected culprits, despite dozens of arrests in the cases.


Investigators from the Federal Security Service and the Interior Ministry - who say they have identified over 50 suspects in the four blasts and have prevented numerous terrorist attacks in the making - continue to adhere to the original explanation for the attacks touted by officials and widely publicized last fall: The trail leads to Chechnya. 

The head of the FSB's anti-terrorism department, Vladimir Kozlov, told a press conference on Sept. 7 that all of the terrorists had been trained in Chechnya and most of them are members of a radical Islamic sect.

Nonetheless, the official "Chechen version" has been repeatedly questioned in the press. Some journalists have gone so far as to speculate that federal agents helped organize some of the explosions.

Regardless of who was responsible, most observers agree that the Chechen version played an integral role in securing overwhelming public support for President Vladimir Putin's military crackdown in Chechnya and laid the groundwork for his meteoric ascent to the presidency and his popularity in the post.

The FSB and other law-enforcement agencies say they have arrested 33 suspects, but only six of those who have remained in custody will be charged with terrorism in connection with the blast in the southern city of Buinaksk.

Investigators have detained two men suspected of involvement in the Moscow attacks, Taukan Frantsuzov and Ruslan Magayayev. But the other suspects - identified by the FSB as Achemez Gochiyayev and several accomplices - are still on the run, according to investigators. The two explosions, the first on Ulitsa Guryanova and another blast less than five days later on Kashirskoye Shosse, claimed the lives of 92 and 130 sleeping Muscovites, respectively.

Nor have law enforcers managed to apprehend Yusuf Krym sham kha lov, Timur Batchayev and Adam Dekkushev, who they allege were behind the powerful blast that killed 17 in the southern city of Volgodonsk on Sept. 16, three days after the second Moscow blast. Krym sham kha lov is also suspected by the FSB of having helped Gochiyayev and Denis Sai ta kov in organizing the two blasts in Moscow.

Many of those who have been arrested were subsequently released for lack of evidence against them.

Among them was Timur Dakhkilgov, an ethnic Ingush, who was seized hours after the second apartment blast in Moscow and spent weeks in jail, repeatedly beaten by police. According to Dakhkilgov, his crime was that he is a native of Grozny and that his palms were found to have traces of hexane, a chemical widely used in dying fabric and similar to hexagen, the explosive believed to have been used in most of the blasts. Dakhkilgov worked at a textile plant.

The FSB said that, while detectives grilled the innocent Dakhkilgov, more than a dozen suspects managed to flee to Chechnya, including Gochiyayev, who was allegedly paid $500,000 for arranging and executing the Moscow blast by warlord Khattab.

Most of the suspected culprits remain in the province, according to the FSB. Six of the suspects, including Batchayev, have been killed in fighting with federal forces in Chechnya, the FSB said.

Investigators say the most progress has been made in the Buinaksk attack, the first of the four blasts, which killed 62 when a powerful bomb went off in front of a 50-apartment residential building on Sept. 4, 1999.

Isa Zainudinov, whom prosecutors in the republic of Dagestan believe to have masterminded this blast plus an abortive bomb attack in Buinaksk, and five of his accomplices, are to go on trial within the next few months, according to the office's spokeswoman Zulfia Gasanaliyeva. Six more suspects in the Buinaksk explosion, including Khattab, remain at large.

Over the last several years, investigators have come under fire for their failure to solve the high-profile crimes that have come to characterize Russia in the public imagination.

But an FSB official reached by phone Wednesday defended his agency's record in investigating the blasts and averting more attacks by "Chechen-trained terrorists."

"These cases have been solved. ... There is only one thing left - to catch the perpetrators," said the official, who asked not to be named.

FSB officials have explained the methods used by the terrorists in the following way.

After training, they were dispatched to neighboring North Caucasus republics, such as Kara chaye vo-Cherkessia, with tons of explosives. There they rented trucks and smuggled the explosives to Moscow, Vol godonsk and Buinaksk.

Not all of these bombs went off, however. And in addition to the averted second bomb in Buinaksk, police and FSB agents pride themselves on preventing several other attacks.

Some nine tons of explosives, which officials say were stored by Gochiyayev and his team, were found as Moscow police combed the city's cellars and storage facilities after the September blasts. Five more blasts were averted in Pyatigorsk and another two in Buinaksk and Pyatigorsk, according to FSB.

Most of the bombs were made of a mixture of potassium nitrate and aluminum powder with Casio watches used as timers, according to Kozlov.

FSB detectives say they also found 500 kilograms of this mixture near the Chechen city of Urus-Martan last December, calling this additional proof that those responsible for the terrorist attacks were not only trained in Khattab's camps in Chechnya, but also obtained explosives there.

Despite the evidence collected by investigators, some newspapers have repeatedly questioned the FSB's findings. Moreover, the biweekly Novaya Gazeta claimed that the secret services could have been involved in arranging the blasts.

The strongest tide of speculations came when a resident in Ryazan spotted two men unloading sacks into the basement of his apartment building on Sept. 23 and contacted police. Upon inspection, residents found that the sacks were wired to a detonator and a watch, and an initial test exposed vapors of hexogen.

However, attempts to detonate the substance inside the sacks failed, and FSB chief Nikolai Patrushev said soon after that they had contained sugar and were planted as a dummy to test the vigilance of law enforcers and residents.

This statement caused an uproar in the press. The suspicions gradually subsided, but reappeared in March when Novaya Gazeta alleged that sacks of hexogen were found at a military unit in the Ryazan area last fall. However, the paper failed to substantiate its claims and prompt an investigation.

TITLE: President, Deputies Set Agenda
AUTHOR: By Andrei Shukshin
PUBLISHER: Reuters
TEXT: MOSCOW - Russia's parliamentary leaders and President Vladimir Putin agreed on Wednesday to embark on a three-year crash course to thwart what they said was an anticipated chain of disasters due to hit the country in 2003.


"[These are] issues of extraordinary importance, strategic issues which may degenerate into a serious threat for the existence, I want to stress this, for the existence of Russia," former prime minister Yevgeny Primakov told reporters.

Some experts have singled out 2003 as the year when three problems - a big debt bill, eroding infrastructure and an aging population - could combine to throw Russia into turmoil.

Primakov, leader of the center-left OVR parliamentary faction, was one of several top members of the State Duma lower house of parliament to meet Putin in the Kremlin.

In addition to the "2003 problem," the agenda included next year's budget and media freedom and ownership. Both sides agreed urgent measures had to be taken to avert the looming disaster.

Problems of Russia's crumbling industrial base were highlighted last month when a nuclear-powered submarine sank with the loss of all 118 crew on board and a day-long fire gutted Mos cow's Ostankino television tower, a national symbol.

Putin said at the time the fire was proof of the dangerous condition of the Russian infrastructure.

A power shortage last weekend also forced officials to shut down nuclear reactors, including those at a giant, top-secret fuel-reprocessing plant whose boss said that only staff discipline prevented a major crisis.

Boris Gryzlov, leader of the pro-Kremlin Unity faction which was the first to raise the issue, said Russia would also have to deal in 2003 with a colossal $17-billion foreign-debt payout and a massive population shrinkage.

Gryzlov said the problems had already been discussed with cabinet ministers and the parliamentarians had agreed with Putin to set up a commission to tackle the issue head on.

"The question was discussed at length and the president approved our initiative and said he would dispatch representatives of his administration to the working group," Gryzlov said after the Kremlin meeting.

He said the commission could start work as early as Monday and suggested the government could alleviate the crisis by using budget windfalls, such as extra revenue from higher oil prices, on paying off right away debts maturing in 2003.

Some observers said the 2003 deadline was rather artificial and might serve political purposes.

Dmitry Pinsker, Kremlin watcher for the liberal weekly Itogi, said Kremlin spin doctors planned to make a fuss over the initiatives, in part to answer critics who charged them with inaction during the Kursk submarine disaster last month.

Economic analysts say Russia's financial and infrastructure problems are real, but picking a date is somewhat arbitrary.

"A lot here is artificial," said Oleg Vyugin, a former first deputy finance minister and now executive vice president at Troika Dialog investment bank.

Russia is due to pay slightly more than $16 billion in debt payments that year, compared with $11.3 billion due in 2001, he said. But there was still plenty of room for restructuring.

TITLE: City Hall Unveils Its 4-Year Program
AUTHOR: By Vladimir Kovalyev
PUBLISHER: Staff Writer
TEXT: The St. Petersburg administration has announced a four-year plan to press on with a trio of city projects that have been in the works for a number of years.


But as analysts and officials mull the projects over, nobody seems to know where the finances are going to come from.

The plan - which was revealed at the end of last month - is aimed in part at preparing the city and the region for an expected rise in goods traffic through the St. Petersburg Sea Port, which city officials say will increase from today's 30 million tons annually to 60 million tons by 2010. 

Specifically mentioned are three of St. Petersburg's biggest white elephants: the Ring Road, the high-speed motorway, and the Flood Protection Barrier, known locally as the damba, or dam. 

With the announcement, Gov. Vla di mir Yakovlev has put the projects at the forefront of his second term in office. At the same time, City Hall officials are openly admitting that it will take far longer than four years to complete them.

Furthermore, while Russia's tax revenues are well over expected figures, oil prices are still high and the ruble stronger than the 2000 budget had predicted, City Hall is gambling on a multi-billion ruble windfall from the state with little concrete evidence it will be forthcoming.



HIGHWAY TO NOWHERE

Two of the keystone projects were begun under the reign of former mayor Anatoly Sobchak, whom Yakovlev ousted in 1996. The idea of building the 63-kilometer high-speed motorway, for example, was launched in 1995, when Sobchak was spearheading St. Petersburg's bid to host the 2004 Olympic Games. The road, called the Olympic High-Speed Diameter, was intended to connect all the venues for the games.


When in 1997 St. Petersburg lost out to Athens, the main purpose of the motorway switched to the transfer of cargo out of the city center. Planned in three sections, the first would link Pulkovo airports with the St. Petersburg Sea Port, with the second crossing the Gulf of Finland to Primorsky Prospect, and the third joining up with the E-18 auto route that heads to the Finnish capital, Helsinki.

The 12-lane highway would thus require the additional construction of 10 bridges and a tunnel. Up to 78,000 vehicles would use the road daily, according to City Hall's report on the project's state.

While nobody contacted by The St. Petersburg Times was willing to offer their views on the potential cost of the road - Igor Lukyanov, the head of the city-owned company in charge of the project, refused point blank "to talk about money" - City Hall says it has spent $1.2 million on feasibility, cost and other research alone.

And it says it is looking for investors who would be willing to spend a combined total of $1.7 billion on the project.

Yurat Safarov, who is managing marketing research on the motorway for PricewaterhouseCoopers, said on Thursday that the project "looks an attractive one for St. Petersburg, as would any project to do with the development of [the city's] infrastructure."

But Boris Usanov, an adviser to the City Economics Committee, said in an interview last week that the road was unlikely to be completed in the near future, not only because of a lack of finances but also because it had lost much of its urgency when the Olympic bid failed.

On the other hand, Usanov added, it would "still be useful to connect the port with major state roads and the Pulkovo airports."

"That would help to make transporting cargo a lot easier." 

Past history is not encouraging, either. Lukyanov's company, set up by Smolny in 1997, was handed thousands of square kilometers of land in the city's Primorsky district to organize the motorway's construction. Since then, little visible progress has been made, while the project's costs have been criticized as unrealistic by politicians in opposition to City Hall, such as Yabloko's Igor Artyemev, who was St. Petersburg's finance chief from 1996 to 1998.



ROUND AND ROUND

Similar problems beset the 150-kilometer Ring Road, 22 kilometers of which were completed last year after City Hall allocated 210 million rubles (about $7.5 million) for that purpose.


Begun in 1994, when an Italian consultancy company called SPEA completed a report on the road, it is intended to link up to another regional project, the so-called Intermodal Corridor No. 9, and connect - eventually - European Union states to Russia's far eastern and southern regions.

Its total cost is estimated by City Hall at around $1 billion, although SPEA could not be contacted to confirm this, and anywhere from 17,000 to 117,000 vehicles are expected on it at any one time.

Viktor Petrov, deputy head of Mor zashchita, or Sea Defense - the state-owned company responsible for the road's construction - refused to comment on the project's perspectives.

"We should wait until financial questions have been clarified," he said in an interview on Wednesday.

Translation: Officials are waiting on the outcome of discussions on the 2001 federal budget, now before the Duma, and the St. Petersburg budget, to go before the Legislative Assembly in October.

Otherwise, the Ring Road faces the same hunt for investors that the high-speed diameter does. A third option being discussed by officials is making drivers pay to use the Ring Road, although Petrov said that this would be impractical and unprofitable. "Drivers [in Russia] cannot afford to pay road tax and tolls on a particular road," he said.

"This is not the way to get a return on your investment," said Usanov. "Investors should be able to lease out plots of land ... and they in turn could allow various companies to build hotels and gas stations on the land and take the money from this. We just need the Duma to pass the necessary law."

He added that a draft law had been passed to the Duma, but no date for its discussion had been set.



TROUBLED WATERS

As for the dam - which, if and when completed, would form part of the Ring Road - a Communist Party decree of 1979 stated that work was supposed to be completed in 12 years. Ironically, the date planned for the opening was Aug. 19, 1991 - the day of the putsch that effectively finished off the Soviet Union and the funds it had provided for the project. Work resumed in 1995, when City Hall lobbied the government to set a completion date for 2001.


The five-year gap was not kind to the dam, however, causing it to fall into disrepair. Already the concern of a number of environmental groups, warnings came that it was about to collapse.

Viktor Loktionov, the former head of the City Construction Committee, was this summer put in charge of the dam's construction. He said that technically it could be finished in 2003 - if the government is forthcoming with the funding. Cost estimates run at around $660 million.

A ray of hope came this week with a statement signed by President Vladimir Putin, saying that the dam "should be completed without delay." But Loktionov said this week that, like everyone else, he was waiting for Moscow to release the money.

TITLE: Petersburg Scientists Unlock Secrets of a Longer, Healthier Life
AUTHOR: By Irina Titova
PUBLISHER: Staff Writer
TEXT: It works on mice. It seems to be working on Gazprom employees. And scientists in St. Petersburg reckon that they have come up with a formula for a longer, healthier life that can work for anyone.


Researchers at the city's Institute of Bioregulation and Gerontology - the only institute of this kind in the country - say that they can prolong a human being's life expectancy up to as much as 110 years, thanks to a series of bioregulators that slow the aging process and help keep certain diseases at bay.

The advantages of the longevity medicines they have come up with - which involve extracting chemicals from the organs of a calf - include expanding the human reproduction cycle, and adding years to people's working capabilities, as well as preventing early aging and its attendant illnesses.

"We are not trying to fight the laws of nature," said Vladimir Cherkashin, head doctor at the institute. "[Our work] has nothing to do with turning old men into infants. Our methods are more realistic: We are trying to slow the aging process down."



ELIXIR OF LIFE

The search for the fountain of youth or the elixir of eternal life has preoccupied mankind for centuries, and is the stuff of legend. But gerontology as a more mainstream branch of medicine began to take off in the 19th century, as scientists experimented with varying diets, climates and people's ways of life in an effort to find the magic formula that would prolong human existence.


In addition, cultures around the world have long believed in the life- or courage-enhancing effect of animal organs, and in some countries the practice still exists - not to mention the widespread use of animal parts in the preparation of medicines.

But Vladimir Khavinson and his team at the Gerontology Institute - affiliated to the Russian Academy of Sciences - cracked the problem after 25 years of experiments on mice, in order to prove the curative effects of bioregulators. They presented their work to date to gerontologists from around the world at a congress on the subject held in St. Petersburg at the end of August. 

"The numerous experiments on mice that my colleagues and I carried out proved that, after taking such bioregulators, the animals' life expectancy increased by around 30 to 40 percent," Khavinson said.

"Furthermore, the mice were able to reproduce at an age which, if translated into human terms, would be 60 or 70 years old."

The treatment on offer, according to Kha vinson, is aimed at people aged around 40 years old in order to rehabilitate the failing functions of tissues and organs.

He said that aging disorders result when the body's hormonal system changes, and when human tissue begins to suffer from a lack of the necessary proteins. Main problems include diseases such as cancer, arthritis, and arterial and heart defects. Diabetes is also a concern.

By administering the new bioregulators, however, the scientists say they add natural protein to the body's organs when the hormone system can't supply them anymore. They offer 17 different kinds of prophylactic bioregulators - known as cytamines - plus an additional six kinds of drugs, called cytamedines, that have a stronger effect for those already suffering from an illness caused by aging. 



LIVING PROOF

Sound unlikely? Khavinson is 53 years old, and looks 10 years younger. "I've been taking cytamines for eight years," he said. Two colleagues, Vladimir Ani si mov and Vyacheslav Morozov, said that in their opinion Khavinson has the skin more commonly to be expected of a 35-year-old.


And energy giant Gazprom has gotten so interested, it has actually started offering the bioregulators to its employees.

Sergei Okhotnikov, head of Gaz prom's health department, said last week that most of the company's 200,000 employees work in inhospitable climates such as the Far North and Siberia.

"Our employees are exposed to harmful factors such as low temperatures, unusual daylight regimes, anomalies of climate and geography - factors that lead to premature aging and related illnesses," Okhotnikov said. 

Gazprom workers began testing bioregulators in 1995-96, he added, and they have already obtained good results. "Their health improved, and the sick lists got shorter," he said.

Okhotnikov said that Gazprom had been extending the bioregulators program to more staff this year.

Although the bioregulators have been in use only within the last five years, the institute claims that a large number of other people have shown an interest - including various celebrities, although scientists would not divulge their identities.



PRACTICAL USES

Khavinson also said that because the trend in Europe shows populations aging, the fact that his program could potentially prolong the working age up to 80 years old was important. 


"The main aim of our medicine is not only to make human life longer, but also to make that long life a healthy one," he said.

"For instance, when a woman reaches her menopause at 40 years, her body's regulation of endocrines gets totally disoriented. This immediately affects all her biological systems." A way of avoiding this, he said, was by taking bioregulators taken from the endocrine organs of a calf, "which would add the missing substances to the body and let it function in its normal way."

Alexander Sidorenko, coordinator of the United Nations Program on Aging, who attended the recent conference on gerontology in St. Petersburg, said that Khavinson's work was interesting because it offered "not some mystic medicine, but one that helps correct the disorders that influence the length of human life."

"The most attractive feature of these bioregulators is that their toxicity is extremely low - if it is present at all - since the doses of medicine involved are very small.



EYE ON THE FUTURE

Svetlana Trofimova, the institute's chief ophthalmologist, said that scientists had also developed a new drug used for treating the loss of vision that diabetics can undergo. 


"Scientists from England and Germany are already interested, and we are planning to organize a symposium for leading German eye specialists," she said.

One person who will attest to the drug's benefits is 42-year-old accountant Maria Kupyetskaya. Too many hours in front of a computer had given Kupyetskaya headaches and chronic fatigue at the end of each working day - and catastrophically low minus-10 vision.

When she heard about the institute and its vision drug, Kupyetskaya signed on. She said that since she started taking a twice-yearly course of the medicine, her vision stopped deteriorating - it even went up slightly to minus nine - and the headaches and fatigue were banished.



AT WHAT COST?

Several observers have given the institute's work their seal of approval. Sidorenko praised the St. Petersburg scientists for "their systematic approach - they don't prescribe this medicine to everyone, but only after a careful diagnostic screening."


But here's the drawback: While the bioregulators themselves are relatively affordable - the scientists were cagey on the exact cost - the cost of testing a patient for his or her suitability for bioregulators is much higher, putting it well beyond the reach of anyone earning the average Russian wage.

The diagnostic process is extremely sophisticated, according to Dina So lo vyova, a genetics expert at the institute. Analysts examine 20 of the body's best-known genes responsible for diseases such as Alzheimer's, cancer and diabetes, and make predictions accordingly.

"According to the data we receive, we can say if a person has a genetic predisposition to such-and-such a problem," Solovyova said. "Then we can prescribe the bioregulators to prevent it. We can also define how dangerous smoking can be for the development of lung cancer, because some smokers are twice as susceptible as others."

Alexander Gorbunov, a colleague who screens patients for bioregulator use, said that prescribed medicines had halted tumor growth, as well as effecting a decrease in the number of new, benign growths.

"However, we need many more examples [of this kind of success] before we can claim to have proof," he said.

Khavinson said that the team was working on ways to bring the cost of treatment down.

"We are now working on a synthetic replacement for the natural animal substances [used at the moment]," he said.



AND THE FUTURE HOLDS ...

Mario Passeri, president of the European department of the International Gerontology Association, also attended the conference in St. Petersburg. He said that it would take time for the program to prove its effectiveness in full.


"The St. Petersburg scientists should publish their news in scientific magazines to inform more people about their studies," Passeri said. "Usually, these kinds of experiments have to be performed by other scientists in order for the results to be confirmed." 

However, Khavinson pointed to a long list of publications documenting his team's findings: With tongue-twisters such as, "The Effect of low-molecular weight factors of thymus and pineal gland on life span and spontaneous tumor development in female mice of different ages" - published in 1989 - and, "Results of 25-year study of pineal peptide preparation epithalamin in experimental gerontology" - a lecture delivered to the 16th Congress of the International Gerontology Association in 1997 - Khavinson can fairly claim to have made his work public.

TITLE: Media Alarmed by Policy's Vague Strictures
AUTHOR: By Oksana Yablokova
PUBLISHER: Staff Writer
TEXT: MOSCOW - Although prescribing no explicitly repressive measures against the press, the doctrine on information security signed this week by President Vla di mir Putin has journalists and analysts worried that its vague wording and focus on state security may lead to a state-sanctioned crackdown on press freedom. 


The 46-page document drafted and approved by the advisory but influential Security Council last June, and displayed in full on the council's Web site Wednesday, identifies four major areas of national interest: 


. the constitutional right of citizens to procure and use information; 

. the necessity to provide reliable coverage of state policy; 

. the development of new technologies in media-related areas;

. and the need to safeguard sources of information against illicit access. 


Although the doctrine is peppered with terms like "freedom of speech" and "the right to access to reliable information," critics said this week that it was developed without input from government bodies directly linked to the media, such as the Press Ministry or the State Duma's committee for information policy. 

Alexander Pikayev, a defense analyst with the Carnegie Endowment for International Peace in Moscow, said the doctrine differs from other policy documents drafted by the Security Council on issues such as foreign policy and defense - which were prepared in close cooperation with the relevant ministries - in that it was produced and presented exclusively by the council. 

"I doubt the doctrine makes the Press Ministry happy," he said. Ministry officials were not available for comment late this week.

While the text was short on specifics, Security Council officials said earlier this year that one of the doctrine's goals should be to prevent the media from becoming a threat to national security. 

In June, Vladimir Sherstyuk, the Security Council's first deputy secretary and a moving force behind the doctrine, warned of the potential threat from the media when they publish or broadcast "untrue or biased information." 

Speaking on RTR television Tuesday, another Security Council official and an author of the doctrine, Anatoly Streltsov, said that implementing the doctrine may require changes to the existing law on mass media and other legislation. 

But Carnegie's Pikayev said it is this factor more than any other that distinguishes the new doctrine from similar but relatively innocuous policy papers recently produced by the Security Council. 

"The declared necessity for changing the media law - the main achievement of Yeltsin's reforms and the highest achievement of the entire post-Soviet decade - gives reason for concern," he said, adding that amendments suggested by the council were unlikely to be liberal. 

Among the most controversial points of the document is a paragraph saying that the government must "clarify'' the status of foreign media and foreign journalists working in Russia. 

The Security Council's Streltsov told Interfax that the idea behind clarifying the status of foreign media is to "create equal working conditions for Western and Russian media working in Russia." 

But the 1995 law on mass media already guarantees such equal working conditions for Russian and foreign journalists.

TITLE: Narusova To Host Own Show
AUTHOR: By Galina Stolyarova
PUBLISHER: Staff Writer
TEXT: Lyudmila Narusova, ex-Duma deputy and widow of former St. Petersburg mayor Anatoly Sobchak, will be hosting a weekly debate program entitled "Freedom of Speech" on RTR state television starting next week.


But some observers have questioned the integrity of the program, hinting that it has been launched specifically to irritate - and perhaps attack - Gov. Vla dimir Yakovlev.

The show, which debuts on Wednesday and will air weekly at 6 p.m. - but only for St. Petersburg residents - is the brainchild of Marina Fokina, who recently replaced Bella Kurkova as director of the St. Petersburg office of RTR television.

Kurkova is now deputy director responsible for programming with the Kultura channel.

As first guests for Narusova, Fokina has invited Yakovlev's spokesman Alexander Afanasiyev, and editor of the local Nevskoye Vremya, Alla Manilova, to debate ... well, freedom of speech. 

The program will have a local, rather than national, focus, Fokina said. Two opponents, several experts and an audience will structure the show - much like NTV's Glas Naroda, or Vox Populi.

The show's purpose, as Fokina sees it, is not to find any ultimate truths, but to allow people to air a wide range of opinions on socially important topics. 

"The show is not a battle for losers or winners," she said in an interview earlier this month.

Talking about the topic before the first program was recorded, Narusova herself said that she saw the greatest threat to freedom of speech coming from regional authorities who influence local media, rather than from federal authorities headed by President Vladimir Putin.

And she recalled the days when her husband was mayor of St. Petersburg as a better time for people to voice independent views. Narusova mentioned specifically a show called "600 seconds," which, she said, was a vehicle for anti-City Hall opinion, but which was nevertheless defended by Putin and Sobchak.

"There were lots of lies in the program, but it was still clearly a project of the opposition," said Narusova.

"But can you imagine Yakovlev allowing an opposition show now on Petersburg TV?" 

However, one observer who wished to remain anonymous, said that the "Freedom of Speech" show was a gambit on the part of Viktor Cherkesov, the new governor general of the Northwest region, who is seen as a counterweight to the governor's power.

"It looks as though the invitation [to Narusova to host her own show] is a display of muscle from Cherkesov's team," said the source. "Actual freedom of speech, unfortunately, takes second place in this instance."

Narusova's own record concerning freedom of the press is far from unblemished. When in 1996 Sobchak was seeking a second term of office, journalists at the local TV station - then called Channel Five - complained that the mayor's wife was constantly trying to influence coverage of the elections.

Newspaper journalists said they experienced similar pressure, and editors of local papers were reportedly offered new apartments at cut-price rates in return for showing Sobchak in the best possible light. A number of papers began to show a markedly more sympathetic attitude to Sobchak - including Nevskoye Vremya, under Manilova's stewardship.

Perhaps not coincidentally, Fokina was one of Sobchak's PR managers for his campaign to become a State Duma deputy last December.

When Sobchak lost gubernatorial elections, however, the tables were turned, and local media went for the ex-mayor to such an extent that Narusova blamed her husband's deteriorating health on the hounding.

Considering this controversy, some media analysts predict a high refusal number from potential guests. 

"Narusova has a very emotional and tough nature, while an ideal anchor for such a show should be full of tact and diplomacy," said Vladimir Osinsky, head of the Television and Radio Department at the journalism faculty of St. Petersburg State University. 

Osinsky added that Narusova's controversial reputation may lead many viewers simply to switch her off. 

Indeed, Narusova - a history graduate focusing on reforms in Russia starting from Peter the Great, and now completing a doctorate dissertation on the same topic - had reservations about taking the job at first, given the media meat grinder her own family has been through. 

But she said that she had earned the right to host the program.

"Unlike many journalists who are famous just for being around for a long time, I cannot be accused of constantly changing my opinions according to the political winds," she said. "I believe I am the person for the job."

Fokina said she had been nursing the idea of "Freedom of Speech" for two years, and had no doubts about its star.

"Almost no one is indifferent to Na ru sova, [which] is to the program's advantage," said Fokina. "She attracts absolutely contrasting opinions, and whatever they think of her, audiences will watch."

Tatyana Poznyak, a media analyst for the weekly Obshchaya Gazeta, said that Narusova's appearance on RTR was symptomatic of Fokina's approach to television, calling her "more ratings-oriented, dynamic and manageable" than her predecessor.

As a taster of the first edition of "Freedom of Speech," Afanasiyev was somewhat dismissive of the topic.

"I don't see any danger to freedom of speech from anyone," he said. "It's more a case of society being helpless before an increasing number of unscrupulous journalists, and [society] needs to be protected. Everything is done in the name of freedom of speech, but news is being replaced by opinion."

TITLE: Nikitin Is Free at Last as Court Dismisses Appeal
AUTHOR: By Anna Badkhen
PUBLISHER: Staff Writer
TEXT: MOSCOW - After five years of investigations and hearings, the case against naval officer-turned-environmentalist Alexander Nikitin is officially over.


After an hour-long session Wednesday, the Presidium of the Supreme Court, the country's highest appeals body, dismissed the prosecution's appeal to send the 28-volume case for a renewed investigation, putting an end to the Kafka-esque saga.

The prosecution can not appeal the acquittal any further.

"That's it! That's it!" the jubilant Nikitin exclaimed as he brushed past reporters and international observers waiting outside the courtroom. 

"This is final. I am officially a free man now," he told reporters during an impromptu press conference held under a light drizzle just outside the courthouse.

A retired Navy captain, Nikitin caught the eye of the Federal Security Service, or FSB, in 1995, when he co-authored a report exposing the dangers of radioactive contamination by Russia's crumbling nuclear fleet, which was published by the Norwegian environmental group Bellona in 1996. 

Nikitin was jailed for nearly 11 months. Initially, he was denied a lawyer, a doctor and the right to know the charges against him, but was charged several months later with espionage and high treason. He was subsequently charged on seven more counts, each connected with violating secret military decrees that neither he nor his lawyers were allowed to see, or laws that came into force months and even years after the alleged crime.

Last December, a St. Petersburg court acquitted Nikitin, saying the charges were illegal because they were based on regulations that were not publicly accessible. The Supreme Court upheld the decision in April. 

However, the prosecution appealed the acquittal to the Supreme Court's 11-member Presidium, requesting permission to start over and reassemble the entire case against Nikitin. The prosecution argued that the case called for reinvestigation because investigators had violated Nikitin's civil rights the first time around. 

"This has been a long fight of huge importance," said Frederik Hauge, the president of Bellona, which has supported Nikitin from the beginning of the case. "It is ... a victory of the Russian Constitution, of the rule of law, over the secret police.

"It shows young Russians that if you fight, you can win."

TITLE: Assembly Approves 3 More to City Hall's Team
AUTHOR: By Vladimir Kovalyev
PUBLISHER: Staff Writer
TEXT: Legislative Assembly lawmakers on Wednesday approved another three vice governors to Gov. Vladimir Yakovlev's administration, leaving only two posts out of a total of 15 to be filled.


Vladimir Derbin replaced Vyacheslav Shcherbakov as the head of the City Social Committee, as Smolny lost the last of the committee heads who served under former St. Petersburg mayor Anatoly Sobchak. Vladimir Shitarev replaced Vladimir P. Yakovlev as Culture Committee chief, while Anatoly Kogan retained his post as head of the Health Committee.

Shitarev, who used to be the director of two local construction-materials companies, was the only one of the three not to have served previously in Smolny, and his appointment as the local culture supremo was the least enthusiastically received by the assembly.

According to the City Charter, each vice governor must receive a minimum of 25 votes for approval. Derbin and Kogan received 38 and 32 votes respectively, compared to 27 votes for Shitarev.

Alexander Prokhorenko, City Hall's representative in the Legislative Assembly, said in an interview on Wednesday that Shitarev was chosen by Yakovlev because "he is a proven and unbiased manager." 

But Leonid Romankov, a deputy from the Bloc of Yury Boldyrev, said that Shitarev's professional training "excites only skepticism and apprehension." 

Shitarev defended himself by saying that he would do nothing to harm St. Petersburg culture.

"I won't destroy anything - I will create the conditions to develop this sector," he said in his address to the Legislative Assembly on Wednesday.

The two remaining vice-governor slots are with the oddly named Sport, Communications and Transport Committee, and the Media Committee. The latter is now occupied by Alexander Potekhin, and the vote on his approval is expected next week. 

Yakovlev has been reported by local media as saying that the former position is open for a return to the city's government for Valery Malyshev, the former Sports and Physical Education Committee head, repeating remarks he made earlier this summer. Malyshev was elected to the State Duma in December 1999.

He would, however, be a potentially controversial choice. He has been mentioned by the federal Interior Ministry in connection with a shell company that illegally financed the All Russia faction congress in May 1999. All Russia was then headed by Yakovlev.

Malyshev has not yet said whether or not he intends to return to St. Petersburg.

TITLE: Spying's Murky World Gets Own Internet Portal
AUTHOR: By Alexander Bratersky
PUBLISHER: Special to The St. Petersburg Times
TEXT: Even spies need a who's who guide. 


While the secrets of the Russian secret services aren't likely to be made available to the general public anytime soon, a curious person can now turn to a new Internet portal, www.agentura.ru, to make basic inroads into the murky world of spies. 

"We're counting on the big existing interest in this topic and we want to fill in the information vacuum," said Andrei Soldatov, a political journalist with the influential Izvestia daily, who together with his father - Alexei Soldatov, president of the Relcom Internet provider - started the portal.

The younger Soldatov, who covers the Russian intelligence-services beat, said the idea for the portal came to him after he started to receive calls from readers who wanted to get access to some of his older articles. He then decided to place his stories on the Internet and asked fellow journalists from other newspapers to collaborate. 

Soldatov said he has already received an agreement from Versiya - a semi-sensational tabloid published in Moscow in cooperation with the New York Daily News - to add their stories to the portal. 

While all the stories are related to the activities of the secret service - from the expulsion of diplomats accused of espionage to the restoration of the monument to KGB founder Felix Dzerzhinsky - Soldatov said his portal would not be in the business of publishing kompromat, or compromising information. 

Among the newspaper stories featured on Agentura - the Russian word for a spy network - are background pieces on foreign intelligence services and even a dab of culture in the form of reviews of spy-related books and movies. 

While the new portal is aimed to inform the average Internet user about Russia's current intelligence services and their infamous predecessor, the KGB, it is also meant to act as a strike against the security services' efforts to control public life. 

"It's not a secret that secret services are able to control all of us," the site's home page reads. "They have SORM" - a government program to monitor e-mails and other electronic or Internet communications - "and the most sophisticated listening devices and power. But they are always able to preserve their own anonymity. We want to use their methods. They are collecting files on us, but we are trying to collect files on them."

But while agentura.ru offers well-researched information on the structure and history of Russian and foreign intelligence services, the site has nothing truly secret to reveal.

"All the information which is published on the site has already been published, so there is no reason to prosecute us," said Soldatov, adding that the portal's broad coverage of Russia's existing intelligence services, from the FSB [Federal Security Service] to the SVR [Foreign Intelligence Service] - makes it possible to remain independent. 

"Because there are a lot of [services], it's hard for the portal to be controlled," he said. 

Asked if any of the secret services are aware of the existence of the new site, Soldatov said jokingly, "We haven't received any calls so far, but of course they know about it - they're intelligence services."

Even if they don't, they may have no reason to worry. "I don't think private providers know more than the secret services themselves," said an FSB spokeswoman. 

But despite the site's dearth of top-secret dish, the new portal is still likely to attract plenty of fans. In a country with an almost romantic nostalgia for Soviet-era spies and a former KGB officer as president, agentura.ru won't have to look far to find its audience. 

"Secret services have already become a part of our culture and the image of the spy is part of it," Soldatov said.

TITLE: Visas Replace Passes On Estonian Border
AUTHOR: By Vladimir Kovalyev
PUBLISHER: Staff Writer
TEXT: Estonia changed its rules for Russian citizens living right on the two countries' border last week, revoking special passes and making visas compulsory.


The move, announced last week, mainly affects the residents of Ivangorod and Pechora and their neighboring villages, many of whom have relatives in Estonia and who were given passes to travel across the border after the collapse of the Soviet Union in 1991. Many Russians also have property and even jobs on the other side of the border, particularly in Ivangorod's Estonian "twin," Narva, which is a 10-minute walk away.

Visa regulations for other Russian citizens were introduced in 1992. Russia started requiring visas for Estonian citizens a year later.

The new, one-year multi-entry visas for border-town residents are free of charge, and will allow holders to stay in Estonia for a maximum of 180 days a year. However, Russian foreign passports - as opposed to the internal passport - allow holders only 70 journeys, out of the country and back again. Russia is the only European country that stamps the passports of its own citizens.

Estonia said that the move was necessary for the country's preparation to join the European Union, for which it has set a target date of 2002.

"If Estonia wants to become an EU member, we must introduce a complete visa system," said Heike Sammel, an Estonian Foreign Ministry spokesman, by telephone on Tuesday. "According to the EU, we cannot have a simplified version of the rules with a country that requires visas for EU citizens."

Sammel added that all subsequent visas of this type would also be free.

The Russian Foreign Ministry issued a statement on Monday expressing regret for what it called a "hasty decision [on the part of] the Estonian government."

But Estonia replied by saying that it had informed Russia of the changes several months in advance.

"We had mutual consultations in April together with Russian officials, and made the decision that the [affected] citizens would get free one-year visas. Russia was informed of the date of implementation [of the new system] on June 20," Sammel said.

Sammel also said that the new rules would even benefit Pechora residents. "Before, Russian citizens from the Pechora area [unlike those from Ivangorod] could cross the border only for Orthodox Church celebrations. Now they can go any day they need to," he said.

Approximately 1,300 people in Pechora and 4,000 in Ivangorod - out of 50,000 and 11,000 people respectively - will be able to exchange their old passes for the new visas. Many people in Pechora also hold Estonian passports.

"We are collecting all the necessary documents here in Ivangorod, and we send them for processing to the Estonian Consulate in St. Petersburg at our expense," said Nikolai Kolomeytsev, the head of the Ivangorod administration, by telephone on Monday.

Kolomeytsev said that the new rules would have an adverse affect on older residents, who had become accustomed to making a living by selling Russian vodka and cigarettes, which are more expensive in Estonia.

"But I understand [the Estonians], because they are going to join the European Union. People over there create unions and introduce a single currency, while we are left behind an iron curtain."

TITLE: Some Kursk Sailors To Remain in Sub
PUBLISHER: Combined Reports
TEXT: ST. PETERSBURG - Deputy Prime Minister Ilya Klebanov said Wednesday he doubted the bodies of all 118 sailors could be safely evacuated from the Kursk nuclear submarine, which sank a month ago in the Barents Sea.


Klebanov told a news conference that an operation to evacuate the bodies would start in early October and be completed by Nov. 15.

But he said the blast that sank the submarine was so powerful that at least some of the bodies were badly mutilated and extracting them from the wreckage could be impossible.

"I have said this already - that damage in the first four sections of the submarine was catastrophic," Klebanov, who heads a government commission investigating the accident, said.

"There were at least 68 people in the first four sections. Unfortunately, we cannot say how many bodies we will be able to evacuate."

Norwegian experts and divers are expected to take part in the attempt to recover the bodies, but negotiations on the operation have snagged over the cost of the contract.

The cause of the Aug. 12 explosion that sank the sub remains unclear. Official suggestions range from a collision with an unidentified vessel to the unsuccessful launch of an experimental torpedo. Klebanov said his commission had not yet reached a conclusion on the primary cause of the blast.

Some analysts have suggested that the apparent haste to evacuate the bodies might be an attempt to compensate for the disorganized initial rescue campaign.

Norwegian divers will cut holes in the hull of the 154-meter-long sub to reach the remains, but only Russian divers will actually enter the sunken vessel.

"Norwegians will not go inside the vessel in view of the big risk of working inside the submarine," he said, according to Itar-Tass.

Some observers have speculated that the naval command will not allow foreigners inside the Kursk because of the secrecy surrounding Russia's nuclear submarines, especially the newest models, such as the Kursk.

Klebanov said there was still no deal with the Norwegian company Stolt Offshore on its participation in the operation because of differences in assessing the cost of the project.

Under the plan, holes cut in the hull will be no more than 1 meter wide - just enough for divers to squeeze through - to minimize the danger of the submarine breaking apart when it is raised from the sea floor, said Igor Spassky, the head of the Rubin naval design company, which designed the Kursk.

The Norwegians have said they doubted the need to evacuate the bodies of the crew before the submarine itself could be moved to shallow waters next spring or summer.

Russians are planning an operation to raise the submarine, which they admit would be fraught with unpredictable difficulties. The biggest risk is that the sub, with its two nuclear reactors, would break up during the operation.

Nuclear Energy Minister Yevgeny Adamov said Tuesday he believed it would be safer for the Kursk's nuclear reactors for the sub to remain where it was. But several environmental experts have insisted it should be moved from the seabed.


- Reuters, AP

TITLE: FBI, FSB To Cooperate on Crime
PUBLISHER: The Associated Press
TEXT: MOSCOW - Russia and the United States are rapidly improving their cooperation on crime fighting, and aim to set up a joint working group to boost their work, Russia's interior minister said Thursday during a visit by the director of the FBI. 


Minister Vladimir Rushailo and FBI chief Louis Freeh praised each other's help in solving significant crimes. Freeh singled out as an example the help given by Russia in the case of Vyacheslav Ivankov, a now-imprisoned Russian emigre in New York, who ran an extortion racket that included hundreds of gangsters. 

The first meeting of the joint group is expected to be in October, Rushailo said. Neither he nor Freeh gave details of how it would be set up, but Freeh said both sides were interested "not only in organized crime, but transnational crime in general." 

"This bilateral relationship is one of the most important for the United States," Freeh said at a news conference with Rushailo after arriving for a two-day visit. 

Freeh is expected to have meetings with Russia's prosecutor general and the head of the Federal Security Service, the main successor to the KGB. Both offices have been involved in the case of Edmond Pope, a U.S. businessman who has been charged with spying and jailed since April 3. 

Pope reportedly is in poor health and his family and the State Department have called for his release and for specialized medical treatment. 

Freeh, asked if he would bring up the Pope case in his meetings, said only, "I'm sure we will be discussing a range of issues."

TITLE: IN BRIEF
TEXT: Russia Just as Corrupt


n MOSCOW (SPT) - Russia held on to its dubious position as the 82nd-most-corrupt nation in the world Wednesday, according to Privacy International's annual corruption survey.

Despite coming in 82nd for the second year in a row, Russia actually scored worse than in 1999 on the nongovernmental organization's index, which it has published for the last six years.

Ukraine and Yugoslavia tied for 89th - barely avoiding the distinction of being the most corrupt nation on earth, which this year belongs to Nigeria.

At the top of the list, No. 1 Finland was followed closely by Denmark, New Zealand, Sweden and Canada. Iceland, Norway, Singapore, Netherlands and the United Kingdom rounded out the top 10.



Missile Base Blackout


n MOSCOW (Reuters) - A Russian power company said Tuesday it had briefly cut off electricity to a military base for non-payment of bills and the move was criticized as "inadmissible" by Prime Minister Mikhail Kasyanov. The base belongs to the Strategic Rocket Forces, which controls Russia's land-based arsenal of nuclear weapons.

The base is in the town of Teikovo, northeast of Moscow. It owes about $540,000 to the local energy company, Ivenergo, said a company official. It was not clear if there were nuclear weapons at the base.

Kasyanov said the base was on the list of top-priority energy consumers not to be disconnected no matter how high their debt to the supplier. A spokesman for the Strategic Rocket Forces said the power cut had only affected the homes of personnel and the staff headquarters.



Hit Confession


n MOSCOW (SPT) - The younger brother of a former Olympic biathlon champion charged with plotting to assassinate Kemerovo Gov. Aman Tuleyev has pled guilty to participating in the conspiracy, his lawyer told a Novosibirsk TV channel.

Viktor Tikhonov, 46, did not testify against his well-known brother Alexander, lawyer Lyudmila Artamonova said in an interview Wednesday night on NTN-12 television. She refused to divulge the younger Tikhonov's role in the plot, citing confidentiality considerations in an ongoing investigation by law enforcement authorities.

The Novosibirsk branch of the FSB, which has been participating in the probe, refused to confirm or deny Artamonova's remarks Thursday.



Death Row Return?


n MOSCOW (AP) - A parliamentary group has proposed bringing back the death penalty. Gennady Raikov, head of the pro-Kremlin People's Deputy faction, said he planned to suggest the resumption of capital punishment during Wednesday's meeting with parliamentary leaders.

Russia declared a moratorium on capital punishment in 1996 as a condition for joining the Council of Europe. But parliament balked at outlawing it altogether, citing polls showing most Russians support the death penalty.



Li Peng Talks


n MOSCOW (Reuters) - President Vladimir Putin and the chairman of China's parliament, Li Peng, met in the Kremlin on Wednesday and reiterated their opposition to a U.S. proposal for a national anti-missile defense system.

The two also talked about their strategic partnership and economic relations, Russian news agencies quoted a Kremlin spokesman as saying. Russia has led international opposition to the U.S. missile defense, with China also objecting and West European countries expressing reservations.

TITLE: IMF Calls Situation In Russia Promising
PUBLISHER: Reuters
TEXT: WASHINGTON - A drive toward a workable, law-based society and economy is prompting new optimism about Russia, a senior official from the International Monetary Fund, or IMF, said on Monday.


John Odling-Smee, responsible for ties between the IMF and countries of the former Soviet Union, also said he hoped Ukraine would soon be able to finish work on a reform program that the IMF could back with cash.

In an interview with an IMF publication, IMF Survey, Odlling-Smee said that the countries across the region needed to build opportunities for investment, liberalize their financial systems, protect property rights and curb corruption.

"We have been very concerned about Russia's fiscal difficulties in the past, which at least up to last year came about largely because enterprises were not willing to pay the full amount of tax and the government did not have the authority to extract the tax from them," he said.

"But I think there are grounds for optimism, including the quality of debate within Russia in the last six or 12 months about what is needed.

"I've been very impressed with the consistent and clear message coming from the current Russian leadership that they have to behave like a civilized country, which is a special expression used in Russia that means a law-based society and economy."

Odling-Smee said reforms had been slow in Russia's neighbor Ukraine, but the authorities had recently made good progress on reforms.

"I am hopeful that they can complete a structural reform package that would really signify a break with the past and would show that Ukraine was now joining the countries that are now moving toward a market economy at a decent pace," he said. "If that is the case, I expect that the IMF would resume funding."

The IMF halted its latest loan to Ukraine last year amid doubts on reforms after an independent audit found the Ukrai ni ans misled the Fund about reserve levels.

Ukraine last month repaid $100 million of IMF money ahead of time and agreed that future IMF cash would be subject to tight controls.

Odling-Smee said that the misreporting found in Ukraine and elsewhere might simply be a case of the continuing a Soviet-era tradition of not telling the center about what was going on at the periphery. He said that there was no evidence that countries had misappropriated IMF cash.

"No evidence has been found so far of any misappropriation of IMF cash in the sense of IMF money falling into the wrong hands," he said.

TITLE: Railways Resume More Orthodox Post-Summer Service
AUTHOR: By Alla Startseva
PUBLISHER: Staff Writer
TEXT: MOSCOW - The sold-out trains and long ticket lines of one of the most frustrating summers for rail passengers in several years are over, as families return to school and the workplace, and the residents of northern Russia prepare to stay home for the long winter.


Instead of long waits for scarce tickets, passengers can now choose their time and class of travel, something that has not been possible for months.

In spite of making losses on its passenger services, the Railways Ministry organized 4,780 extra passenger trains with 15,000 extra wagons in the summer, but even this meant 30 percent of passengers could not travel when they wanted to, said a ministry spokeswoman, who declined to be named.

Ticket sales were 34 percent higher this summer than for the vacation season last year and three times as high as in the summer of 1998. Ticket sales for trains bound for southern resorts were up 100 percent and trains were sold out two months before departure, the ministry reported.

The ministry said the massive rise in demand was due to the improvement in the economy since the 1998 ruble devaluation. Incomes have been rising while railway fares have not changed since 1997, a ministry statement said.

The spokeswoman said some passengers' frustrations could be blamed on travel agencies.

The agencies had booked rail tickets for groups of tourists without naming the tourists, which meant that those tickets were not honored. Some agencies then sold their tickets at twice the price they paid for them, the spokes woman said.

As a result, the Railways Ministry dissolved contracts with 32 travel agencies, she added.

A travel agent with Jeniko Travel, who declined to be named, said booking one-way tickets for tourists had been easy during the summer, but round-trip tickets had been much harder to obtain.

The ministry said travel by train costs a third to a seventh of the cost of travel by air.

That relationship changed Sunday when the ministry increased all passenger fares by 25 percent. Railways Minister Nikolai Aksyonenko has talked of raising them by a total of 90 percent above August prices.

Now the cheapest train trip from Moscow to St. Petersburg is about 80 rubles ($2.87) and a seat in a luxury carriage costs 811 rubles, still much cheaper than a 1,200-ruble airline ticket.

Renada Petrova, a duty administrator at Leningradsky Station, said Monday the price hike will affect passenger volumes only in the first weeks.

Leningradsky Station serves trains plying the Moscow-St. Petersburg and Moscow-Murmansk routes, which had some of the busiest passenger traffic this summer.

"Salaries grow and prices grow," said Sergei Anatolievich, a middle-aged military officer who had just arrived at the station from St. Petersburg.

His ticket cost 125 rubles, but he also paid an "expensive" 24 rubles for linen.

"The correlation is incomprehensible," he said. "People have to buy linen in trains, but a fifth of the price of the ticket is too much: In communist times, when the ticket cost 25 rubles, the linen cost 1 ruble," he said.

"What can we do, those in power make all the decisions," said Raisa Smirnova, a pensioner who travels from Lipetsk, in southern Russia, to visit her children in Pskov, in the Leningrad region. "Travel is very expensive. My pension is very high at 930 rubles, but it all goes on tickets."

The Railways Ministry's spokes woman said, though further price rises are likely this year, they will apply only to first-class and luxury carriages, which make up just 11 percent of carriages.

Even after this year's planned price hike, passenger transportation will not become profitable, she said.

The ministry statement said the price of commuter tickets is 22 percent of their cost, while long-distance tickets cover only 43 percent of the true cost.

Seventy-five million citizens in 165 categories, including members of the armed forces and pensioners, receive discounts on train fares. Travelers in 103 of these categories travel at no charge or half price.

These discounts cost the railways 31.2 billion rubles ($1.1 billion) last year and are expected to increase to 32.7 billion rubles this year.

The spokeswoman said government subsidies cover only 15 percent to 20 percent of the railroads' costs of carrying those entitled to discounts.

Last year's profits on rail cargo operations covered losses on passenger services but this year those resources were exhausted, the Railways Ministry reported.

The spokeswoman also said that a lack of investment had left the ministry with too few trains.

In 1991, the state supplied 2,096 passenger carriages while in 1999 only 297 carriages were supplied. In the first half of 2000 the Railways Ministry was able to buy 157 passenger carriages, but it needs a minimum of 1,000 carriages a year, the spokeswoman said.

TITLE: Northwest Telecom Sector Looking to Consolidation
AUTHOR: By Anna Raff
PUBLISHER: Staff Writer
TEXT: PETROZAVODSK, Karelia Republic - Nestled on the banks of Lake Onega, Petrazavodsk is known more for natural beauty and sturdy birch than setting the standard for telecommunication-industry restructuring.


But when the management of Karelia Elektrosvyaz and Artelecom gathered at Karelia Elektrosvyaz headquarters here last week to present their results for the first half of 2000, the impending consolidation took center stage.

"Consolidation will create good conditions for growth," said Vladimir Belo kaminsky, general director of Artelecom.

"The winners in consolidation are going to be those who invest in new directions."

Belokaminsky added that a consolidated telecommunication company would have an easier time coming to new tariff agreements with the federal government.

Consolidation should begin to pick up in the next year, said Ben Wilkening, managing director of AIG-Brunswick Millennium Fund, which owns 22 percent of outstanding shares in both Artelecom and Karelia Elektrosvyaz.

The unruly Svyazinvest holding, in which the state holds a 75-percent stake minus one share, unites 89 regional and national telecom operators, including Karelia Elektrosvyaz and Artelecom.

A report in July by management consultants Arthur Andersen commissioned by the Communications Ministry and funded by the World Bank said the holdings should be consolidated into a more manageable number and then be partially privatized. The government is still deciding what action to take on the report.

Artelecom registered sales of $10.8 million in the first half of 2000, an increase of $1.7 million from the first half of 2000. A similar trend was visible in the figures for Karelia Elektrosvyaz. Its sales of $6.1 million for the first six months of this year were up by $600,000 for the same period last year.

These numbers signify an upward trend and indicate that the economy is continuing to recover from the 1998 crisis, said Konstantin Belayev, chief accountant for Artelecom.

Even though sales for both Karelia Elektrosvyaz and Artelecom increased, both posted losses for 1999 and the first half of 2000 - that is, if profits are counted according to international accounting standards. According to Russian accounting standards, both companies turned a profit in 1999.

After management became aware of the discrepancy, they began looking at the companies from a shareholder's viewpoint, said Sergei Bratukhin, a manager with Arthur Andersen who helped both Karelia Elektrosvyaz and Artelecom adjust accounting practices to make room for international and Russian standards.

TITLE: Cell Companies Lose Channels
AUTHOR: By Anna Raff
PUBLISHER: Staff Writer
TEXT: MOSCOW - Shock waves rippled through the investment community Wednesday when mobile operators Vimpelcom and MTS said the Communications Ministry had ordered them to give up a combined 52 frequencies.


Analysts said the move probably meant the government was trying to free up airspace to hand over to partially state-owned Sonic Duo, which hopes to leap into the cellular market next year.

Negotiations for the GSM 900 frequency channels with ministry officials were running late into Wednesday night, said representatives from Vimpelcom and Mobile TeleSystems.

"We hope that we will be able to find an appropriate decision to this issue, a fair decision," said Valery Goldin, vice president for foreign relations at Vimpelcom, as reported by Reuters.

Alexei Buyanov, MTS' vice president for investment and securities, said Communications Minister Leonid Reiman would personally review the matter, Reuters reported.

Last week, Vimpelcom and MTS received letters from regulators telling them they would not be able to use some of their channels.

The Communications Ministry canceled its May approval for MTS to use 22 channels that were intended to provide cellular coverage in 13 Moscow metro stations, MTS said in a statement.

Vimpelcom said the ministry demanded 30 of its 45 channels on the 900 Mhz frequency band by Nov. 1.

Both companies' channels on the 1800 Mhz frequency, which are more costly to service, remain untouched.

Calls to the Communications Ministry and Gossvyaznadzor, its oversight arm, went unanswered Wednesday.

It was unclear on what legal grounds the ministry based its decision. From the beginning when the government began to parcel out channels on different frequencies, they seemed to do it on an ad hoc basis without any rules, telecom analysts said.

Federal law allows frequency allocations to be annulled only for defense, law enforcement, security or state administration emergencies.

The ministry's decision comes after the debut of Sonic Duo onto the cellular-phone market in June. The company is a joint venture between Finland's Soner, which owns 35 percent, and the state-controlled Central Telegraph, which owns the other 65 percent. It announced after receiving Moscow's third GSM license that it would launch a local network in the first half of next year.

Analysts called the ministry's decision a staggering blow to foreign confidence.

"Of course, MTS and Vimpelcom will be hurt," said Igor Semenov, a telecommunications analyst with Chase Flemings UCB. "But this will damage the investment climate in Russia even more so."

The government says it is working to encourage more foreign investment, but its actions aren't backing up those words, Semenov said.

More significantly, it is foreign investment that has accounted for major growth in the local cellular industry, said Tom Adshead, telecom analyst at the Troika Dialog investment house.

Both Vimpelcom and MTS have raised hundreds of millions of dollars by floating stock in New York.

A lot of foreign investment also comes in the form of overseas equipment, Adshead said. Manufacturers sometimes lend money to Russian purchasers to buy the equipment, assuming that the economic and political situation is relatively stable in the cellular industry.

World stock markets already reacted negatively to the news on Tuesday. On the New York Stock Exchange, MTS dropped 9 percent and Vimpelcom fell 4 percent by midday. The NYSE Composite was down only 0.34 percent.

"Concerns about property rights entitlements have resurfaced in the wake of problems facing Vimpelcom and MTS, both of which stand to lose key GSM channels in the 900 Mhz frequency," said Michael Stein, a trader at United Financial Group.

"Reconsidering the decision would be a wise move on the part of the ministry," UFG said in a research note.

TITLE: Aeroflot Results Represent High For Last Decade
AUTHOR: By Lyuba Pronina
PUBLISHER: Staff Writer
TEXT: MOSCOW - In another sign that the economy is picking up after a disastrous post-crisis period, the nation's largest airline, Aeroflot, announced Tuesday higher-than-expected results for the first eight months of 2000.


The carrier said it flew 613,900 passengers in August alone - a decade high - and average seat occupancy, including chartered flights, steadily grew, reaching 74.8 percent last month, also a 10-year high.

"As a whole we can say this year is successful compared to 1999," Nikolai Kuznetsov, Aeroflot's deputy general director, told a news conference.

The number of passengers flying Aeroflot in the period from January to August grew 8.5 percent to 3.4 million over the same period last year; cargo carried rose by 22.4 percent to 66,200 tons; seat occupancy grew to 64.7 percent from 59 percent; and revenue increased 16 percent to $700 million, Kuz net sov said.

"We expect to close this year with $1.050 billion [in revenue]," he said, adding that the growth was due to the optimization of its flight and route schedule.

Earlier this year, for example, Aeroflot dropped such low-demand destinations as Miami and Jakarta.

And the airline will increase from five to seven its Geneva-Moscow passenger service this autumn to raise air cargo capacity significantly on this route, Reuters reported Tuesday.

"We have begun flying more routes popular with our customers and relying on more effective aircraft from our fleet," Kuznetsov said.

TITLE: IN BRIEF
TEXT: Russia in Tobacco Suit


n MOSCOW (Vedomosti) - Russia has filed a claim against major U.S. tobacco companies with the District Court of the State of Florida, which recently ruled they must pay smokers a punitive award of $145 billion.

Barry Meadow, partner with the U.S. law firm Podhurst, Orseck, Josefburg, Eaton, Meadow, Olin & Perwin, confirmed Tuesday that his firm had filed the suit under case number 00 200 918 CA 24.

The claim accuses 20 American tobacco companies of "a conspiracy with the object of deceit," "conscious lies," and "suffering caused."



Ministry: Harvests Up


n MOSCOW (Reuters) - Russia had harvested 58.7 million tons of grain by Sept. 13, up 12.6 million from a year ago, the agriculture ministry said in its weekly harvest progress report Thursday.

The total included 30.2 million tons of wheat, an increase from 22.8 million at the same date last year. Food-quality wheat accounted for 57 percent of that, up from 54 percent last year.

The average yield of all grains including maize was 1.75 tons per hectare, compared with 1.47 on Sept. 13, 1999, while that of wheat rose to 1.84 tons per hectare from 1.71 tons.



Norilsk Holds Off


n MOSCOW (Reuters) - Russia's Norilsk Nickel said on Wednesday it was not clear when it would buy a U.S. subsidiary of the country's sole authorized precious metals and gems exporter, as the deal awaited central bank approval.

Norilsk said it sent the government and the central bank a request to buy Almaz USA company, a U.S.-registered subsidiary of Almazjuvelirexport, and had been waiting for the central bank approval of the deal for nine months.

Norilsk Nickel first deputy director general Dmitry Zelenin said in a statement that the company intended to take part in an Almaz share issue, which aimed to increase its capital considerably and to raise Russia's exports of precious metals in the long term.



Vietnamese Oil Deal


n MOSCOW (AP) - The prime ministers of Russia and Vietnam reached deals Monday on developing Vietnamese oil and gas fields and discussed Vietnam's $11 billion Soviet-era debt to Russia, news reports said.

Vietnamese Prime Minister Phan Van Khai arrived in Moscow on Sunday for a five-day official visit.

At a meeting with Prime Minister Mikhail Kasyanov, officials from Gazprom and PetroVietnam signed an agreement on developing oil and gas fields on Vietnam's continental shelf..

"Our relations are on the rise again, although the pace of their development is not what it should be," Kasyanov said.

Kasyanov said annual trade with Vietnam was $500 million, a slight increase over recent years but well below that of Soviet times, Interfax reported.



Banker Upbeat


n MOSCOW (SPT) - The top economist for one of the country's largest investment banks said Thursday that Russia's economy is healthier now than at any time since post-Soviet reforms started, and that its financial markets are expected to continue to grow.

Philip Poole, chief economist at ING Barings, told a conference on the Russian economy that President Vladimir Putin has successfully set the "new rules of the game," but cautioned that some long-standing problems, such as property rights, need to be clarified.

"You cannot have a full-fledged economy without property rights," he said, singling out the unfolding dispute between cellular providers Vimpelcom and Mobile TeleSystems and the Communications Ministry as an example of the government's hesitance in enforcing such rights.

TITLE: Budget Revenues Underpin Rosy Outlook Budget Revenues Underpin Rosy Outlook
AUTHOR: By Judith Ingram
PUBLISHER: The Associated Press
TEXT: MOSCOW - The Russian government has collected more revenue in the first half of 2000 than in any other six-month period in the past decade, Prime Minister Mikhail Kasyanov said Thursday.


Kasyanov also said that the gross domestic product increased by 7.3 percent and industrial production rose by 10.3 percent during the same period - growth that he called unprecedented in Russia's recent history.

The economy has been steadily recovering from a 1998 crash, when the ruble currency lost two-thirds of its value.

Russia has ridden a wave of high world prices for oil, the nation's top export. Some analysts also attribute the improved economic and investment climate to Russia's increased political stability under President Vla di mir Putin.

But the improved economy has led to a dispute with parliament, which is pressing for more spending than the government has provided for in its 2001 budget - the first balanced budget draft since the 1991 Soviet collapse.

Kasyanov has ruled out any increase in spending, but a top legislator said Wednesday that Putin indicated the government would not rule out any amendments in the budget.

However, Finance Minister Alexei Kudrin told a parliamentary committee on Thursday that any extra revenues next year would be directed to paying off Russia's immense foreign debt.

Russia is looking for a write-off of as much as half of the Soviet-era, $42 billion debt it owes to the so-called Paris Club of creditor nations. But Kudrin said it would be hard to persuade the creditors to take such a step.

"We must be ready for Paris Club creditors not to agree to the restructuring of the debt, and, connected with this, we'd have to pay an extra $3 billion next year," Kudrin told the budget committee of the lower house of parliament, the State Duma.

Tax revenues totaled $18.27 billion, amounting to 63.7 percent of the overall budget revenues the government plans to collect in 2000, said Deputy Finance Minister Alexei Ulyukayev.

"This corroborates the improvement of the general situation in the economy," Kasyanov said, adding that the economy should strengthen further in the second half of this year.

But Ulyukayev offered a note of caution.

"The main revenue source on which the government depends is out of its control and it depends on world market prices, above all on the price of oil," he told reporters.

TITLE: Putin Hints Budget May Be Target For Revision
AUTHOR: By Vladimir Isachenkov
PUBLISHER: The Associated Press
TEXT: MOSCOW - Signaling a possible rift within the government, Russian President Vladimir Putin indicated Wednesday that the 2001 budget could be revised because many lawmakers want to spend more - a proposal that his prime minister had flatly rejected.


Gennady Seleznyov, the speaker of the State Duma said that Putin suggested changes could be made before the budget is debated Oct. 6 by lawmakers.

"The president said he had ordered the government to meet with [Duma] factions and committees to explain the budget concept without brushing away their proposals," Seleznyov said.

Prime Minister Mikhail Kasyanov had ruled out any changes before the budget is taken up, saying the document was realistic. The government has proposed a balanced budget for the first time since Russia emerged from the 1991 Soviet breakup.

If Putin were to order the government to revise the budget, it could dent Kasyanov's authority. Russian news media speculate that the prime minister may be dismissed because of his links with prominent businessmen who had considerable clout under former president Boris Yeltsin, but whom Putin has vowed to cut off.

Kasyanov on Tuesday denied that he might resign or be dismissed, saying negative media reports about him had been planted by companies unhappy with some of his policies.

Lawmakers across the spectrum have criticized the budget as overly cautious. They say the government should raise estimates for industrial growth, inflation and oil prices, increasing revenue projections and permitting more spending.

The budget forecast assumes that the average price for oil - Russia's main export - would be about $21 per barrel. With prices around $32 per barrel, many lawmakers think the government will get more in taxes, and can therefore spend more.

Alexander Zhukov, the head of the Duma's budget committee, said Wed nes day that revising budget assumptions would allow an increase in spending by $8.3 billion to $10 billion.

TITLE: Customs Point Hailed as Window on EU
AUTHOR: By Andrey Musatov
PUBLISHER: Special to The St. Petersburg Times
TEXT: Prime Minister Mikhail Kasyanov was on hand Wednesday for the official opening of the new Saimenskaya customs inspection point at the border of Russia and Finland on the Brusnichnoye shosse, which runs between Vyborg and Lappeenranta, Finland. 


Kasyanov said that the new facility was vital for transport between the two countries and for shortening lines on both sides of the border. He said that 2,400 vehicles a day are expected to pass through the customs point.

Finnish Prime Minister Paavo Lipponen, who joined Kasyanov at the event, stressed that the new customs installation is located not just on Russia's border with Finland, but also with the European Union, or EU.

"Last year Russia stood in fifth place among Finland's trading partners," Lipponen said. "Meanwhile, over the first five months of 2000, the volume of trade between the two states has grown by 30 percent. In line with this and the general principles of the times, we feel that customs procedures should be simplified."

According to statistics provided by the press service of Russia's State Customs Committee (SCC), about 90 percent of all cargo entering Russia from EU states flows through two customs points on the Russian-Finnish border - on the highways crossing at Brusnichnoye and at Torfyanovka. Both highways run to Vyborg. Officials at the SCC said that the old Brusnichnoye highway facility was built in the '70s and was insufficient to handle properly the volume of transport which presently passes through the point.

"The former customs point on the Brusnichnoye shosse was not technically sufficient to function effectively," Kasyanov said. "The opening of the new facility represents a new chapter in our international relationship."

Construction of the Saimenskaya facility was begun in 1995 by the Finnish company Polar, but was put on hold 1 1/2 years later because funds had run out. The work was resumed in 1997 by the Hartela company - also Finnish. After another funding-related pause in construction, work was resumed again in 1999. The final cost of the project was about $40 million.

While the new facility was welcomed by the Russian Truck Drivers' Association, representatives of the organization said that improvements in the work of customs personnel and simplifications in registration procedures would be more effective in improving the situation than the increase in the number of gates for vehicles.

"Any improvement at border check points is progress, but the impact of the advanced technology could be lost owing to the lack of trained personnel and the muddled nature of inspection procedures," said Konstantin Sharshakov, deputy chief of the Drivers' Association. "Along with the new technologies, we are also waiting for a movement toward rational customs duties, which are unreasonably high, and to clarify the Customs Code, which, if followed to the letter presently, would require the stopping of about half the trucks crossing the border."

Kasyanov said that the reduction of the level of customs taxes and the reduction of the number of different tariffs were priorities for the Russian government. 

Kasyanov's comments were in line with those he made Tuesday at an international transport conference held in St. Petersburg, where he emphasized that developing and realizing the potential of the national transportation system's potential was high up on the government's list of priorities.

"Today we consider the transportation sector to be one of the most important sources of economic growth," Kasyanov said. "This sector alone could bring more than $3 billion a year into the Russian economy."

He also said that the amount of cargo being transported had grown more than 4 percent year-on-year in 1999 and that over the next few years Russia would see even more growth with the completion of several transport corridors throughout the country, including the Saimenskaya customs point.

TITLE: Onako Sale Seen as Litmus Test of Fairness
AUTHOR: By Lyuba Pronina
PUBLISHER: Staff Writer
TEXT: MOSCOW - All investor eyes were set on the government Thursday as it closed the country's first privatization tender under the reform-minded government of President Vladimir Putin.


The sale, for an 85 percent stake in No. 11 oil company Onako, the results of which were as yet unavailable late Thursday evening, is seen by investors as a major test of the government's pledges to distance itself from well-connected tycoons and fairly sell off a prime asset.

"This will be the first big privatization under the new administration," said James Fenker, chief strategist at the Troika Dialog investment house. "We will see whether political connections mean anything."

Moguls with close ties to the previous administration of President Boris Yeltsin snapped up billions of dollars worth of state assets for a fraction of their value in auctions seen as rigged by observers. While those sales have been upheld as valid, speculation ran amok that insider deals had been carried out.

Already lined up to bid for the Onako stake Thursday were the country's largest oil producers- LUKoil, Yukos, Sibneft and Tyumen Oil Co. Companies EvroTEK and Yugraneft, the local subsidiary of British Sibir Energy, had also filed with the Anti-Monopoly Ministry for permission to participate in the tender open only to domestic companies.

While the investors who actually placed bids were expected to be announced late Thursday, the winner will be declared Tuesday.

The starting bid was fixed by organizer Dresdner Kleinwort Benson at $425.25 million plus a $4.5 million fee to cover the costs of the tender.

But analysts said the 85 percent stake could easily fetch $500 million to $600 million since the starting bid is just about $100 million over Onako's 1999 profits. In addition, the bidders walked into the tender with pockets weighted down with cash thanks to this year's heady oil prices.

"If you are being offered assets for a price that could be repaid in roughly two years, any company that has money would show interest in Onako," said Steven Dashevsky, oil analyst at the Aton brokerage.

Onako produced 7.49 million tons of crude in 1999, bringing in net profits of $310 million on revenues of $840 million. This year, revenues are expected to jump to almost $1 billion and profit to $350 million, according to NIKoil.

Onako's prize jewel is its production unit Orenburgneft in the Orenburg region of the Ural Mountains. The unit owns 94.5 percent of the company's proven oil reserves of 295 million tons and exports about 40 percent of what it produces. Those exports account for 70 percent of Onako's revenues.

The winner of the Onako stake would be able to post a hefty boost in export profits, said Steve Allen, oil analyst at Renaissance Capital.

"Taking what the company produced last year, you are getting a pretty decent stream of export revenues, which is probably worth in terms of profits between $100 million and $150 million per year," he said.

The winner will share Onako with a small group of foreign and Russian shareholders who hold the remaining 15 percent stake. About 4.5 percent of that stake is held by Credit Suisse First Boston and Depositary Clearing Co. and is floating on the stock market, according to Aton. Cyprus-based Cougar Investments also holds 2.3 percent. Yukos is thought to own a 2 percent stake acquired from investor Kenneth Dart.

Some analysts are already fretting that the tender will follow in the footsteps of previous auctions, with the winner being picked because of its close ties with government officials.

An alliance said to be initiated by No. 6 oil firm Sibneft is already tipped by industry insiders as being the probable winner. Sibneft, which is controlled by reputed Kremlin insider and tycoon Roman Abramovich, struck a deal on Aug. 9 with No. 2 oil major Yukos and pipeline constructor Stroitransgaz to form an alliance going into the tender.

Sibneft president Eugene Shvidler himself conceded last summer that oil companies develop close contacts in the federal and regional governments in order to keep a competitive edge on rivals.

"I think that these [contacts] are a fair form of competition for the given place and given time," Shvidler told the Vedomosti newspaper in July.

No. 1 oil giant LUKoil is considered a possible wild card in the tender, but it did not declare whether it would place a bid.

LUKoil was in negotiations with three companies - including a foreign firm - to form a joint bid, a company spokesman said. He would not identify the companies.

Sibneft has a lot at stake in the Onako tender because opportunities to expand are few and far between these days, and a missed chance could leave the company in the dust, analysts said.

"[Buying state companies] is an obvious move for Sibneft," said Vladimir Nosov, oil analyst at Chase Flemings UCB. "Otherwise, it will become an outsider unable to compete with the stronger companies."

Yukos, with an estimated 16 percent to 40 percent stake in Orenburgneft, also would have a lot to gain from the stake, analysts said. Yukos, which owns refineries in the area, has been engaged in a control struggle with Orenburgneft management for months and may have teamed up with rival Sibneft to settle the squabble once and for all, they said.

Stroitransgaz, which has ties to gas giant Gazprom, already has some clout in the region and says it wants to strengthen its grip there.

"We are not foreign to the Orenburg region," said Viktor Ott, vice president of Stroitransgaz. "We want to expand our business there."

However, some analysts said the decision to bring Stroitransgaz into the union could be a clever move to take advantage of its political clout with the regional authorities. Orenburg officials strongly oppose Onako's privatization. But Orenburg native Viktor Chernomyrdin, a onetime Gazprom chairman and prime minister, could easily pull some strings with the authorities if need be, they said.

"The financial participation of Stroi transgaz in the Onako tender is probably insignificant, but the company could bring the influence of Gazprom [to the alliance]," said Gennady Kra sov sky, oil analyst from NIKoil. "Gaz prom's opinion cannot be disregarded in the region."

Sibneft, Yukos and Stroitransgaz have not disclosed how they might carve up the Onako stake if they should win.

But the companies appear to be confident that they will take the shares, according to press reports.

Yukos was quoted in Vedomosti on Tuesday as saying that it had called for a board meeting at Orenburgneft for Oct. 12 and was asking that representatives from Sibneft and Profit House, which coordinated the companies' alliance, be given seats on the board. The newspaper report suggested that Yukos made the request because it has insider information that its alliance would win the tender.

The government was getting a chance Thursday to prove that it can sell an asset fair and square, analysts said. Even though the competition was only open to Russians, the foreign community will be watching with open eyes.

"If the privatization of Onako goes normally, it will be the first fair privatization in the oil sector in Russia," said Da shevsky at Aton.

"Russia needs a couple of examples of fair auctions in Russia to woo back foreigners," agreed Troika Dialog's Fenker.

TITLE: What Other Papers Are Saying
TEXT: The government as usual went all euphemistic this week to describe assassination attempts against President Vladimir Putin. It was a week when Prime Minister Mikhail Kasyanov realized he was not immune from kompromat, as rumors were rife that his post was in danger. Meanwhile, Russian television's champion of kompromat's art, Sergei Dorenko, found himself falling into the very trap he helped to create, as the TV program he fronted was taken off the air. 




Assassination Plot


Despite last month's harsh criticisms for concealing the truth on the situation surrounding the Kursk submarine disaster, the government is yet to refrain from its behavior of considering everything "top secret" this week, says Komsomolskaya Pravda.


When Putin's motorcade in Mos cow's city center was intercepted earlier in the week by a Zhiguli car carrying two young men, causing a security escort Mercedes jeep which accelerated to protect the presidential limousine to overturn, the "usual road accident" remark was the clearest answer from those officials who dared to speak to the press, says the paper.

Even this vague reply was only given after the paper's reporter had been catapulted between the spokesmen in the Kremlin, the Presidential security guards, the Federal Security Service, the Traffic Police and even state medical authorities, the paper says.

Judging by the nature of the accident, the paper suggests there are reasons to believe that the incident was indeed an assassination attempt. Had it not been an such an attempt, the FSB would not have been involved in the probes surrounding the whole affair, the paper argues.

It also questions the fact as to why officials at the where the injured presidential security guards were being treated denied having any knowledge of these patients. But the silence might have been caused by their fears that the saga involved the president and not just usual citizens. Then it follows, according to the paper, that the two young men in the Zhiguli were either too drunk to realize what they were doing, or so insane that they dared overtake the speedy presidential motorcade, coming within close range of Putin's limousine.

Quoting eyewitnesses who also saw the two men from the Lada lying face downward on the ground, the paper says the culprits were hauled off to an unspecified destination, and their whereabouts are still unknown.

The "super-confidential" nature of the incident gives the public sound reason to suspect there was an abortive assassination attempt on the president, the paper suggests.



Not Alone


Kommersant says that if the Moscow incident was an assassination attempt, then it would be the second in three weeks.


A plot to kill Putin in the Crimea three weeks ago was also considered top secret until Tuesday when Uk rai nian security services forced their Russian counterparts to break the news to the public.

Even so, the presidential security guards who were caught off guard by the leak found ways to manipulate the information, insisting that it would be wrong to deduce that Putin was the target in a summit attended by about a dozen CIS leaders, the paper says. Even the fact that the arrested suspected assassins were four Chechens and "a bunch of the Middle-Eastern nationals" does not prove the fact that Putin was their target, the paper quotes the guards as saying. (Arab mercenaries from the Middle East are reportedly siding with the rebels to fight the Russian army in Chechnya.)

The presidential guards back their argument by saying that Muslim fundamentalists are fighting the Kyrgyz and Uzbek armies, adding that the summit's absentees, presidents Askar Akayev and Islam Karimov of the respective republics, were the possible targets.

But Putin himself was there for only a few hours, argues the paper, which makes it look like he was forewarned.



Time To Quit


But if Putin had three weeks of running away from killers, Prime Minister Mikhail Kasyanov for the first time found himself in a kompromat war instigated by foes who are after his post, says Izvestia. The paper says that if Kasyanov thought he could become Russian premier and at the same be free from kompromat, he was mistaken. After all, it was made clear when he was appointed that he would be just a "compromise figure" between various political clans until the fall, and then he would be succeeded by a "reformist prime minister" to make real economic changes, says Izvestia.

Major contenders for Kasyanov's post include Finance Minister Alexei Kudrin, head of the Security Council Sergei Ivanov, and Deputy Prime Minister Ilya Klebanov - all by virtue of their being close to Putin and their alliance with oligarchs, says the paper.


Hence it was no surprise this week that Vladimir Gusinsky's NTV and Segodnya newspaper came up with the revelation that the Finance Ministry under Kasyanov had entrusted a mysterious Cypriot offshore company, Felirio Trading, with the right to claim debt payments from the Transport Ministry, causing losses of $13 million to government coffers, says the paper.

Vlast suggests another reason as to why Kasyanov's days on the premier's throne are numbered, by marking the beginning of his days of facing up to a war of sleaze.

It says the Russian political calendar has dictated his dismissal, judging from past experience that no premier, with the exception of Viktor Chernomyrdin, ever occupied the post for more than nine months.

Moreover, says the paper, his main rivals - Kudrin, Gref and Ivanov - are closer allies to Putin. Another disadvantage for Kasyanov is his allegiance to old Kremlin insider oligarch Roman Abramovich, whom Putin detests

According to Vlast, Putin's tolerance of Alexander Voloshin, head of the presidential administration to which Kasyanov shares allegiance, is merely based on his show of gratitude to the man who helped to finance his election campaign. Hence, with time, Putin is bound to drop Voloshin, and Kasyanov will follow suit.



Biter Bitten


Rumors of Kasyanov's possible dismissal came at a time when the famous champion of kompromat on Russian television, Sergei Dorenko, was away on vacation. He came back to find himself with only one more chance to use his TV program to discredit Putin, whom he had adored ever since the latter broke into high politics, says Vedomosti.

In an indication that Dorenko had shifted allegiance to Boris Berezovsky, the television's private owner who recently broke ties with the Kremlin, ORT boss Konstantin Ernst immediately pulled the plug on Dorenko's program, the paper says.


Smelling a rat, Dorenko was quick to blame Ernst for being taken for a ride by Putin, says the paper. It quotes Dorenko saying it's difficult to distinguish between the Putin who puts on an expensive Swiss Patek Philippe watch and the Putin who projects the image of a KGB agent.

Dorenko has promised to return, regardless of Ernst's wishes, the paper says.

TITLE: Will Kasyanov Lose His Job To Gref Soon?
TEXT: THE burning question these days is whether or not Prime Minister Mikhail Kasyanov will lose his job. Until recently, many thought that Kasyanov would be removed soon and that he would be replaced by Sergei Ivanov, secretary of the Security Council.


But the Kursk tragedy diminished Ivanov's chances, because the Security Council was responsible for keeping President Vla dimir Putin informed about the sub. And it appears that, based on what Ivanov said, the president stayed in Sochi in full confidence that all would be well with the sunken submarine.

What members of the Security Council were thinking when they stuck their heads in the sand is another matter. But during the course of this incident, it became clear that, if the security forces could misinform an opponent of the nation as they can misinform the president, we would long ago have been masters of the world. But since our president has his head on his shoulders, Ivanov's chances of getting the prime minister's post have dropped sharply. And the chances that Kasyanov would retain his post seemed to increase dramatically.

But then Kasyanov got a slap in the face - from the president himself, in the form of production sharing agreements. These are agreements between the government and companies to fix taxes, tariffs and other government-controlled production costs, with the government benefiting by getting part of the production of oil or other raw materials.

Given wildly high taxes in this country, such an agreement is necessary for companies to continue their work at old sites (e.g. the western Siberian Samotlor oil field) and to develop new ones. That's one issue. Another issue is that with production sharing there is a lot more to share. Think about it: An investor gets all of the oil that covers production costs for developing a site, and half again above that. In principle, a company could count its production costs in such a way that the government doesn't get anything. It's all a matter of who will figure production costs and who will give out licenses.

At the beginning of September, the issue of production-sharing agreements was discussed at a government meeting. When the meeting ended, Kasyanov announced that a special interagency commission would deal with production costs and licenses - and that he would head the commission.

But two days later, when Putin flew to Yuzhno-Sakhalinsk, the question of production-sharing agreements arose once again. And when Kasyanov told Putin about the interagency commission, Putin suddenly essentially announced: Guys, why should we split the bureaucracy over this? Let's hand this issue over to the Economic Development and Trade Ministry - in other words, to German Gref.

It was a scene straight out of Nikolai Gogol's "Inspector General." This wasn't just a question of the bureaucracy; it was a question of handing over the keys to the apartment where the funds are kept. The hint was dropped that the funds would be better off in someone else's hands. This is redolent of Napoleon's shouting that Talleyrand was "a pile of shit in a silk stocking." Anyone else in Kasyanov's place would have resigned.

So now the liberals are sitting around and wondering what the chances are that Gref will become the nation's new prime minister.


Yulia Latynina is the creator and host of "The Ruble Zone" on NTV television.

TITLE: Remembering Grandpa's World-Famous Tantrum
AUTHOR: By Nina Khrushcheva
TEXT: KHRUSHCHEV? The one who banged a shoe?" Not again! I wish it had never happened, I thought for the thousandth time when I was asked for the thousandth time if I had seen pictures of the UN shoe incident.


I hadn't and didn't want to. For all these years, I was slightly embarrassed by my grandfather's uncivilized behavior, exposed the world over.

In fact, my whole family was, so we never talked about it. Besides, Nikita Khrushchev's name was not officially mentioned in the Soviet Union for 20 years after he was dismissed as premier in 1964; as far as the authorities were concerned, the incident had never happened, nor had Khrushchev. But after 40 years, during the UN Millennium Summit, I decided it was time to face the truth.

Surprisingly, however, the books I found on international and Soviet politics were inconsistent about the causes and timing of the event. This made me suspicious. Why are the versions so different? Were there pictures? What if it had never happened? What if it was just an anecdote created by public demand, consistent with political needs of the socialist-capitalist division?

A scandalous shoe-banging so conveniently fit the general mode of Khrushchev's behavior. He was well-known for interrupting speakers, banging his fists on the table in protest, pounding his feet, even whistling in disagreement. None of this, however, was enough to be transformed into a physical symbol of the Cold War.

The shoe, on the other hand, fit right in: Its lowly place had boldly been moved up to the table (tough revolutionaries and manners don't go together) in order to "stamp its foot," signifying the oppressive character of socialism. The sound of a shoe pounding the table was a distinctive Cold War feature, as much as the sound of a gun firing denotes a "hot" war.

The shoe-banging incident conveyed, for the West, a convenient ideological message: Our enemy is ridiculous and uncivilized; therefore, he is capable of everything. We, too, then have to be prepared for anything.

Studying old newspapers as the best record of contemporary events, I felt as if I were in New York during that fall of 1960. Fifteen years had elapsed since the end of World War II. Humanity had survived, and East and West were now fighting another war of words and ideologies. Cuba's Fidel Castro was making a big stir. "Hurricane Nikita" used every opportunity to be difficult. President Dwight Eisenhower did not try to defuse tensions.

On Oct. 12, 1960, there it was on the front page of all the newspapers in the United States: the picture I was looking for so persistently and yet so dreaded actually seeing.

The head of the Philippine delegation to the United Nations, Lorenzo Sumulong, was surprised at the Soviet Union's concerns over Western imperialism, since the Soviets had swallowed the whole of Eastern Europe. Khrushchev's reply was angry. He called Sumulong "a jerk, a stooge and a lackey of imperialism," put his shoe on the desk and banged it.

When Khrushchev left the United States the next day, he was done with the incident. And when I read about it, I was done with feeling ashamed.

In trying unsuccessfully to rehabilitate my grandfather in the world's eyes, I rehabilitated him in my own eyes by understanding his behavior. He felt that the Soviet Union was mistreated by the Western powers: Spy planes flew over Russia; the U.S. imposed an embargo on Cuba; the West rejected the Soviet Union's new disarmament plan.

Capitalists thought of him as a vaudeville character. Fine - he would use the United Nations' stage to show them that he should be taken seriously as a worthy opponent.

But he would do it in a manner different from the polite hypocrites of the West with their appropriate words, false niceties and calculated deeds. A provokingly dramatic (or tragi-comic) act of shoe-banging was supposed to separate two worlds, not only in terms of their titles and their politics, but also in their means of making diplomacy.

As a good performer, Khrushchev needed a strong, convincing exit from the United Nations and the United States. In the excitement of fist-banging at Sumulong's words, his watch fell off. Meanwhile, his shoes, made of durable Soviet leather, were too new and too tight, and he removed them. He bent down to pick up the watch and saw an empty shoe.

These insights I learned from my family. Since the 40-year spell of embarrassment was broken, we were finally ready to talk about those times.

I still think that, had the shoe-banging not happened, it would have been invented. The best anecdote is always the one that truly reflects the morality and character of certain times. The shoe incident became a real symbol of the Cold War, probably the only war in which fear and humor peacefully coexisted.

Today it is old hat - or old shoe. The old United Nations stage has new leaders and new wars and fears. But I find it comforting to know that, at times, history gives us a chance to replace a horrifying reality with a funny anecdote.


Nina Khrushcheva is senior fellow at the World Policy Institute in New York. She contributed this comment to the Los Angeles Times.

TITLE: bg presents revised akvarium
AUTHOR: by Sergey Chernov
TEXT: Boris Grebenshchikov is getting ready to turn the page over for the millennium - these days the Russian rock guru is putting the finishing touches to his definitive "best-of" album, which will also be Akvarium's first release available worldwide.


Called "Territorium - the Best of Boris Grebenshchikov and Aquarium," the album is a collection of the band's best songs "as viewed by the Akvarium of today."

The recording is split between original tracks, such as "Rock'n'Roll Is Dead" from the 1983 "do it yourself" album "Radio Africa," re-recorded tracks ("Babylon") and songs, which have never previously appear on record ("Gorny Khrustal," "Chkalov," "Novaya Pesnya o Rodine"). 

"To me it's important to leave here all that we did, so that we don't drag it into the future," said Grebenshchikov. "So we'll be able to start the year 2001 afresh."

When deciding on selections, Grebenshchikov admits consulting Akvarium's all-time best song poll, recently conducted among the band's fans by the electronic newsletter, the Empty Spaces of Akvarium.

"It turned out that out of the 17 tracks featured on the record, nine overlapped," he said. "Also, it's obvious that a few songs couldn't get on, because it would be impossible to include "Gorod" or "Serebro Gospoda" [ two of the band's most overplayed tracks] once again. So with the exception of the most obvious songs, the coincidence quotient is not bad."

As to interesting guest musicians and instruments, one song features Theremin played by Lydia Kavina, the great niece of Lev Termen (anglicized to Leon Theremin), who invented the unique electronic instrument in 1919. The theremin is played by waving your hands near two metal antennas: one controlling pitch and the other volume. 

"It's a shame that such an instrument and such a musician have not been used in Russian popular music," said Grebenshchikov. "She has played with Tom Waits and others, but never in Russia. Nobody knows that she exists in this country."

The idea for the album was suggested by long-time Akvarium friend Christof Wachsmuth, who lives in Berlin, during last year's German tour ,which he helped to promote.

A record label called RuBel Records was launched in Berlin exclusively for the release, which is due on Oct. 25, to coincide with the band's impending German tour.

According to Grebenshchikov, the record will be available worldwide via Amazon.com and CDNow.com.

"It's our first step in this direction," he said. "I wanted to close the gap when people write to me from Mongolia or New Zealand, asking 'Where can I buy an Akvarium record,' and I can say nothing in response. Now I'll be able to say, 'Here's the Net address.'"

"When you hear "Khrestomatiya" [the 1997 Akvarium compilation], you get no sense of integrity," he said. "And I'd like to do something like the Soviet white-covered record [Akvarium's first official release in 1987] - I used to rock my son to sleep with it playing, and remember the feeling from it very well." 

"It was so even, from the beginning to the end, and there were different edges of everything at the same time. I want to do a record which will give this feeling of consistency - with no gaps, holes or wayward moves."


Related Web sites:

RuBel Records www.rubel-records.de

Akvarium's German Tour dates http://come.to/aquarium-in-germany

Akvarium's official site www.aquarium.ru


Akvarium in concert at Lensoviet Palace of Culture on Sept. 24.

Territorium is due on Oct. 25.

TITLE: mariinsky gets $24 million donation
AUTHOR: by Gary Gentile
TEXT: High-tech investor Alberto Vilar will give $24 million to St. Petersburg's Mariinsky Opera and the Los Angeles Opera for productions designed to travel the world instead of being dismantled after one season. 


Vilar, a billionaire who has given millions to classical music companies around the world, announced Tuesday that he will give $14 million to the Mariinsky to create two new operas or ballets a year for the next three years. The money will also fund a young-artists program and the opening of a management office in New York.

The gift will also be used for co-productions with the Los Angeles Opera, headed by artistic director Placido Domingo.

The Los Angeles Opera will receive $6 million for new productions over three years, plus $1 million per year over four years for a new young-artists program to find and train young singers, conductors and other artists.

"I am here because of my friendship and respect for Placido Domingo," said Vilar, who will join the Los Angeles Opera board of directors.

Vilar and Domingo appeared at a press conference with Valery Gergiev, director of the Mariinsky Theater, home of the Mariinsky opera and ballet companies. One main purpose for the gift, the three said, was to fund permanent productions that would pay for themselves by traveling throughout the world. 

"When a production is great, is big, it really should go around the world," Domingo said. 

As part of the plan to make traveling productions possible, Domingo said he and Gergiev would work together to bring the Mariinsky ballet and opera productions to Los Angeles. The Mariinsky is currently touring a massive production of Sergei Prokofiev's opera "War and Peace," which premiered in St. Petersburg in March to an audience that included President Vladimir Putin and British Prime Minister Tony Blair. Although no production is scheduled, Domingo said he hopes to bring the opera to Los Angeles within the next few years.

"International opera needs certain areas where the potential for growth is huge," Gergiev said. "I find Los Angeles one of these areas. Los Angeles can grow in quality and bring opera to so many people who didn't think it was important, as important as films."

On Monday, Domingo announced a unique partnership between the world of opera and the film industry. The Los Angeles Opera's 2001-02 season will include the first Los Angeles performance of the Ring Cycle - an epic series of four operas written by Richard Wagner. Production of the lavish operas will be designed by Industrial Light and Magic, the special-effects studio owned by "Star Wars" creator George Lucas.


- AP

TITLE: following trotsky in reverse
AUTHOR: by Thomas Rymer
TEXT: The ties that bind Mexico with Russia are probably tenuous at best. The only one that comes to mind for me is that Leon Trotsky, one of the more renowned leaders of the 1917 Bolshevik revolution and virtual creator of the Red Army, eventually wound up in Mexico after being kicked out of the Soviet Union by Stalin in 1929.


Alas, this Russia-Mexico connection came to an abrupt end when a pickaxe wielded by an NKVD assassin found the back of Trotsky's head in 1940.

What the hell this has to do with what is supposed to be a restaurant review might be a logical question right now, and I'm getting to it.

When my best friend returned to visit St. Petersburg this week, we decided that a trip to that most Russian of places - the banya - was a must. In choosing where to go to fortify ourselves beforehand, we decided to learn from the Trotsky affair and switch things around - we started with Mexico.

This was not our first trip to La Cucaracha on the Fontanka. We had been there a number of times, drawn back on each occasion by the promise of excellent service and some of the most reasonably priced cocktails we've found to date in St. Petersburg.

We dove right in, she opting for a Mai Tai (120 rubles) and I for a Baltika No. 7 (40 rubles) while munching a basket of tortilla chips served with salsa (90 rubles) as we decided what would follow.

Next we piled into a Nachos Grande (140 rubles) - a good-sized plate of the same tortilla chips generously ladled with chili con carne, cheese sauce, tomatoes and black olives.

By the time we rolled around to the main course, I switched to zombies (140 rubles each) - a wonderful combination of different rums and juices that I just can't seem to be able to avoid.

For the main course my companion went with the mixed fajitas (250 rubles). The dish, three flour tortillas in which you can roll the combination of shrimp, beef, chicken, peppers and onion, all topped with cheese sauce and an additional choice of three sauces - salsa, sour cream or guacamole. There's lots there, so you might want to ask for a few extra tortilla wraps.

I opted for the Enchilada con Polo (140 rubles). The three large enchiladas, a mixture of tender strips of grilled chicken breast, onion and peppers, wrapped in a soft tortilla shell and covered with the ubiquitous cheese sauce, come with a side of rice and beans. I also added an order of elote, or corn on the cob (80 rubles).

After dinner, all that was left was the traditional ending (at least for us) to the La Cucaracha experience - a shot each of Sauza Gold Tequila (90 rubles each).

My only complaint about La Cucaracha is that they use cheese sauce rather than melting shredded cheese over the dishes, but I'll keep going back because the portions are generous, the cocktails are great and the service is wonderful - very friendly and very efficient.

And for those of you with a bent for history, I offer some advice: Have a beer, and then a couple of zombies, top it off with some tequila and then head right for the banya. You might not understand exactly how Trotsky felt at the end of it all, but you'll probably feel well on your way.




La Cucaracha, 39 Nab Reki Fontanki. Tel:110-40-06. Dinner for two with a fair bit of alcohol, 1,440 rubles (about $52). Open daily from noon till 1 a.m. (5 a.m. Friday and Saturday). All major credit cards accepted.

TITLE: 'russian revolt': pushkin, but minus the subtlety
AUTHOR: by Tom Masters
TEXT: After last year's skeptical reception of Martha Fiennes' "Onegin," one could not help but wonder how Alexander Proshkin's adaptation of the Pushkin novella "The Captain's Daughter" would be received. Like Fiennes' unspectacular screen transfer, "Russky Bunt," or the "Russian Revolt" suffered noticeably from a lack of directorial subtlety.


The premiere of the long-awaited epic at St. Petersburg's Avrora cinema on Sept. 7 was no small affair. The audience restlessly sat through speeches from the Director and main actor. However, their attention was maintained throughout the film itself, which received warm and enthusiastic applause. 

Set during the reign of Catherine the Great, the Russian Revolt in question is that of Yemelian Pugachov, a Cossack peasant pretender to the throne claiming to be Catherine's murdered brother Peter III. Pugachov leads a brutal Moscow-bound revolt which destroys everything in its path. The film is in many senses a rite-of-passage affair, centered on ingenue Peter Grinyov, played impressively by Mateusz Damenicki. Grinyov, a teenage provincial aristocrat, is sent by his father to enter military service at a remote fort near Orenburg. Here he falls in love with the captain's daughter, Masha, portrayed as suitably wet behind the ears yet morally sound by Karolina Grushka. Out-and-out baddy Shvabrin (the recently typecast Sergey Makovetsky, who none-the-less delivers), and more seriously the Pugachov rebellion threatens the blossoming romance; the fortress is taken and under the new "tsar" Grinyov has to weigh up loyalty to the empress against pragmatic moves to save Masha.

The film is impressive, if only in budgetary terms, and inevitable comparisons will be made with Nikita Mikhalkov's "The Barber of Siberia." This is a little unfair, as while Proshkin has evidently striven to render Pushkin's tale as exciting as possible, he avoids Mikhalkov's saccharine nostalgia for imperial Russia. Indeed, the film remains almost entirely true to the original portrayal of a brutal and merciless peasant revolt, and herein lies its major flaw. Proshkin's focus on events ignores the more subtle nuances of Grinyov's relationships with father figures, and thus ultimately the subject matter of the novel in which the revolt is of secondary importance.

In box-office terms, The Russian Revolt is assured of success and has much to recommend itself; the cinematography is beautiful and the battle scenes are very exciting. However, those familiar with Pushkin's novella may well be disappointed. Nowhere is the sympathy- with-the-devil theme taken up, and the overall significance of the dream sequence alongside Pushkin's psychological subtlety are buried under a deluge of marauding Cossacks. Definitely not for the Pushkin-declaiming literati, but lots of fun nonetheless.

TITLE: siberian craftsman makes art microscopic
AUTHOR: by Aliona Bocharova
TEXT: Look out for Siberian craftsman Anatoly Konenko in the next edition of the Guinness Book of Records.


He is responsible for the smallest book in the world, Anton Chekhov's story "Chameleon," which is less than a square millimeter in size, and includes three hand-colored illustrations. It is currently on display at the exhibition "Miracles under Microscope" at the Ethnographic Museum.

The book was first presented at the Frankfurt World Book Fair in Leipzig in 1997, and was officially considered to be the smallest book worldwide at the 15th Congress of Micro-books in New York - beating the world record set by Ian McDonald, Scottish publisher, when he released "Old King Cole" in 1985.

Konenko started working with miniature books in 1994 and now has a whole library containing works of numerous famous Russian authors, including Pushkin, Lermontov, Yesenin, and Dostoevsky.

However, it is not only books you will see at the exhibition. There are also such objects as a camel in the eye of a needle, a train on a strand of human hair, and a golden padlock on an ant's horn.

The instruments needed to produce such "miracles" are also made and sharpened by Konenko himself. In fact, at the beginning of his career in the '80s he even contributed to the development of Russian medicine by providing Svyatoslav Fyodorov's eye microsurgery center with micro-instruments.

Such professionalism and commitment certainly bring his works to the level of art. However, "People tend to visit such exhibitions more out of curiosity than because of their passion for art," comments Konstantin Kinol, an organizer of the exhibition. "So we placed Konenko's works both in the DLT shopping center, targeting consumers, and in the Ethnographic museum."

A professional painter, Konenko has copied a number of pictures of famous Russian painters like Vyacheslav Iva nov, Karl Brullov, and Andrei Rub lyov.

Konenko is now back in Omsk at the school of micro-art he organizes for schoolchildren and mature painters, back to his commercial enterprise "Siberian Lefty" named after the story "Lefty" by 19th-century Russian author Nikolai Leskov, about a craftsman who puts boots on a flea. Indeed, Konenko has every right to be compared to Leskov's hero since he himself has also cobbled a flea, and this work can be seen at DLT.

Insects play a great role in his works, and are the "actors" in his compositions illustrating Ivan Krylov's fables. In one of them a grasshopper holds a tiny violin, complete with a tiny label with the author's name, production date, and place of manufacture.

After St. Petersburg, the exhibits are going to travel all around Russia - in cities such as Tyumen, Pskov, Krasnoyarsk, and will be shown in a total of 19 museums.

Konenko's works are also a part of the permanent collection in the Museum of Micro-Miniatures in Paris, as well as private collections all around the world, while an art gallery in Prague which was opened by "Alliance" last year also holds a good number of Konenko's works.

Despite such acknowledgment, Konenko prefers to give out his works as presents. However, as Kinol says, "if you estimated the cost of all 60 items currently on display in Petersburg, it would total up to 1 million dollars."

TITLE: city's theaters gear up for new season
AUTHOR: by Kirill Galetski and Galina Stolyarova
TEXT: The new theatrical season is upon us, with some theaters already operating, and others about to open this month. Kirill Galetski and Galina Stolyarova look at the productions that St. Petersburg theaters have got lined up to help us survive the long winter.




The Maly Drama Theater, or MDT, opens its season by closing a chapter in its history. The latter bears the name of one of its most distinguished actors, Nikolai Lavrov. Lavrov died of pancreatitis on Aug. 12. He was 56.

The burly yet sensitive thespian is mostly known for his lead role in one of the MDT's oldest productions, "The House." Accordingly, the MDT's first show on Sept. 16 will double as the last performance of the production (at least for the time being) and a memorial to Lavrov.

When asked who will play the lead role, the theater staff replied, "Lavrov himself." How is one to understand this? Well, they would not go into detail. However, knowing the resourceful MDT troupe, one can expect a colorful multimedia experience.

This season, the MDT will unveil Lev Dodin's new production of Chek hov's "The Seagull," which is due for a winter release. Preparations will also begin for next year's most important production, "King Lear."

Theater On Liteiny is seeing a rise in activity among its new blood. Part of the reason is the daring, progressive new director Roman Smirnov, who will employ a significant number of the younger members of the theater's troupe in his new production "Capriccio," which will premiere this December.

Smirnov has staged two of the most intriguing productions in Theater On Liteiny's playbill, "Gol" and "Gogolsmarriage." These were small-scale experimental productions based on themes from Gogol. For the current production, Smirnov retains the spirit of experimentation as much of the show will be improvised, and it is even more performing without a net since there are no concrete literary influences. As with Smirnov's other productions, "Capriccio" will feature art direction from highly creative contemporary designer Emil Kapelyush. Kapelyush's latest work at the theater can be seen in the season opener, Vladimir Tumanov's production of Tennessee Williams' "The Night of the Iguana."

One unifying element in the production will be the music of the late experimental musician Sergei Kuryokhin, who created the music especially for Smirnov over 10 years ago. As with Gol, which had music from Yevgeny Fyodorov of Tequilajazzz, a soundtrack CD relating to this production will be released.

Grigory Kozlov's Golden Sofit-winning show "The Forest" will continue at Theater On Liteiny. Its first performance after winning the award will occur on Sept. 21. At this performance, the theater will conduct a celebration in honor of receiving the award.

Alexander Bargman and Alexei Devotchenko, the dynamic duo from "The Forest," will be reunited in new production from one of Kozlov's graduate students from the Theater Arts Academy, Alexander Klodko. This show, entitled the "The Golden Calf," is based on prose by Ilya Ilf and Yevgeny Petrov and is currently rehearsing for a winter release.

The Priyut Komedianta has started its season as a new economic entity. It is now termed a "government enterprise," fully supported by the City Culture Committee, and with a new hierarchy. Founder Yury Tomoshevsky's influence has been significantly diminished, but he has stated he will remain at the theater as an actor and director. The new order will appoint a new, more numbers-minded person as the head of the theater. This person will see to it that the theater has enough resources to operate and stage further productions.

The Priyut's season opener was Tomoshevsky's new production of Henrik Ibsen's "Hedda Gabler." Marina Vo ro ni na plays the lead and has a notable co-star in the form of Komissar zhev skaya regular Stanislav Landgraf.

Pyotr Shereshevsky, who beguiled audiences with his good-looking but sour-tasting production of Leonid Andreyev's "The Dog's Waltz," turns to Do stoevsky in his stage adaptation of the writer's short novel "The Eternal Husband." Shereshevsky is a promising new face on the local scene, with productions at the Komissarzhevskya and Baltiisky Dom to his credit. Here he is playing with fire, as he has cast Oleg Almazov, a well-known radio D.J. from Eldoradio. Almazov just may put a new spin on the proceedings. The show will be designed by Kapelyush, who had worked on "The Dog's Waltz." The production will premiere on Sept. 30.

Venyamin Filshtinsky, director of the MDT's version of "Mumu" and one of the most distinguished acting teachers a the St. Petersburg Theater Arts Aca de my, is working on a production of Karel Chapek's "Mother," along with director Alexander Orlov. This show, which will feature BDT veteran Larisa Malevannaya in her first production on the Priyut stage, will be presented on Dec. 13.

The Komissarzhevskaya Drama Theater opened its new season this Wednesday, with "Soothe My Sorrows." Drama is going to be sweeping over the company for the whole "theatrical year" with Vlad Furman's take on Arthur Miller's "Death of a Salesman," Valery Grishko's interpretation of Max Frisch's "Andorra" and Alexander Isakov's "Chichikov," the director's version of Gogol's "Dead Souls."

But here is perhaps the most promising project of the year: Ulian Panich is expected to pay St. Petersburg a visit to stage the last play of late Moscow dramatist Grigory Gorin, "Jester Balakirev" at the Komissarzhevskaya. 

The Bolshoi Drama Theater which boasts the city's oldest actress - Maria Prizvan-Sokolova, 92, who still makes stage appearances as Voinitskaya in "Uncle Vanya" - has already opened the season with Temur Chkheidze's "Boris Godunov."

While BDT's artistic director Kirill Lavrov, who marks his 75th anniversary this Friday with a tremendous party, looks for a replacement, the theater is preparing for new shows.

The first premiere - Alexei Serov's staging of "Enigmatic Variations," a contemporary French drama with a philosophical bent - is scheduled for the end of October. Andrei Tolubeyev, Valery Degtyar and Sergei Barkovsky are rehearsing for the roles.

In early September director Grigory Dityatkovsky is going to unveil his interpretation of Jean Racine's "Phedre," with Yelena Popova in the lead role.

The Alexandrinsky Theater opened its new season while on tour in Sevastopol with 16 shows there, but will not open its doors for the local theater crowd until Oct. 10. On the following day audiences are invited to see the premiere "A Pair Of Bay Horses." Director Alexander Belinsky, a regular on the Alexandrinsky stage with shows like the gaudy "Lady Windermere's Fan," produced this vaudeville, which tells the story of Alexandrinsky artistic life behind the scenes last century, a tribute to ancient Russian vaudevilles.

The Alexandrinsky stars of yore will be performed by Natalia Panina, Yulia Rudina, Sergei Parshin, Yury Tsurilo, Gely Sysoyev and Vladimir Lisetsky.

Meanwhile, Gennady Trostynetsky, once artistic director for the Theater on Liteiny, will be preparing to offer his take on Moliere's comedy "Don Giovanni" with Nikolai Burov and Sergei Parshin in the lead roles. The production will mark the 90th anniversary since the premiere of Vsevolod Meyerhold's version of the same piece on the same stage.

The Alexandrinsky is considering yet another tribute to Meyerhold as director Igor Selin, responsible for the Roman Viktyuk-style "Pollianna" show at the St. Petersburg Theater of Young Spectators, will be reviving Meyerhold's 1917 staging of Lermontov's "Mascarade." Stage designer Alexander Orlov will be using the 1917 sets.

The Vasilievsky Ostrov Theater of Satire opens its season on Oct. 6 with last season's hit, Alexei Serov's production of Soviet-era playwright Alexei Arbuzov's "My Lovely Sight". Written in 1969, the ironic piece, which mocks Soviet phraseology, initially met with a furious reaction. Now, the humorous retro-style musical show, pierced with once popular songs and reviving once believed-in ideals, rolls back the years, much to the pleasure of the viewers, and has become one of the theater's most popular productions.

The millennial season at the Satire Theater will be marked by a production by Grigory Dityatkovsky, though the director is yet to confirm the title of the chosen piece. Roman Smirnov, whose "Ornithology" was a triumph at the Alexandrinsky last year, will be bringing a breath of fresh air, as sports will get on stage. Claude Conforde's "Marathon," on which Smirnov's production will be based, tells a story of human values via the sports environment.

Meanwhile, Svetlana Svirko is going to redesign a second version of her extremely successful "Zaklikukhi" - which is now being performed by youngsters - for theater stars like Antonina Shuranova and Tatiana Kutasova. It is intended that the two versions of "Zaklikukhi," shown during this year's Avignon festival to the greatest acclaim, and which received invitations to Slovakia, Strasburg and Mexico, will co-exist in the repertoire.

TITLE: chernov's choice
TEXT: Last Saturday saw the much-hyped Moscow stadium concert to promote the follow-up to the soundtrack to "Brat-2," the movie criticized for violence and extreme nationalism - but popular with youth not only for pure action but also for its music. The soundtrack features almost all currently popular acts- all in heavy rotation on the radio and music television.


Performances were augmented by theatrical effects, which gave the impression of a Nazi gathering, according to the reviewer of Vesti.ru, a daily online publication, who compared the spectacle with the notorious sequence in "Pink Floyd: The Wall," with Bob Geldof posing as a Fuhrer.

While there were few illusions about younger acts, the participation of Akvarium caused the most discussion - Boris Gre benshchikov, who prefers to be associated with peace and wisdom, must have been an unlikely sight opposite flag-waving rock fans and patriotic sentiments uttered from the stage.

It turned out that Akvariumagreed to take part in the event because Real Records, the record label which promoted the event, was the one that released Akvarium's last album, last year's "Y" Grebenshchikov, who said he had not seen the Pink Floyd movie, commented rather cryptically.

"Everybody started to wave flags with such joy, that we wanted to strike some contrast," he said in an interview with this reporter on the eve of the show. "It's very embarrassing to me that no contemporary musicians have any brains left. Everybody's all too ready to jump on any bandwagon they can and dance on graves."

No graves, luckily - but 19 wounded, two in a critical condition - were the result of a Zemfira concert in Yakutsk on Tuesday. The chart-topping pop/rock singer rocketed to fame last year and soon developed a taste for scandals and wild behavior - she is reported to have urged the stadium audience in Yakutsk to get closer to the stage, causing a squeeze.

Certainly, rock performers can't be moral authorities.

Now the "Brat-2" concert team, including Chicherina, Tantsy Minus, Naik Borzov and Okean Elzi, come to St. Petersburg to take part in "Modernization," the new festival of Russian rock. Held at the Yubileiny Sports Palace on Saturday, the festival also features Zdob Si Zdub and local acts Leningrad, S.P.O.R.T., Multfilmy and Tequilajazzz, all of which have appeared over the past few years, but is headlined by the veteran band Chaif.

With some exceptions, it is the best of what contemporary Russian rock can offer, but there is already a real need for something different.



- by Sergey Chernov

TITLE: Palestine, Israel Face Pressure for Progress
AUTHOR: By Edith M. Lederer
PUBLISHER: The Associated Press
TEXT: UNITED NATIONS - France, the current head of the European Union, is calling on Israel and the Palestinians to show maximum "political courage" to reach a settlement in the next few weeks, warning that failure will inevitably trigger a backlash.


The French comments came Wednesday, shortly before a Palestinian cabinet minister announced that Israel-Palestinian talks would resume Thursday in New York. The sides are coming at the invitation of Secretary of State Madeleine Albright for a round of negotiations that Israeli Foreign Minister Shlomo Ben-Ami called "incredibly difficult but also promising."

Israeli Prime Minister Ehud Barak and Palestinian leader Yasser Arafat held separate talks with President Clinton and Albright at last week's UN Millennium Summit. But talks stalled again over the critical issue of East Jerusalem, which both sides claim.

"We simply must leave no stone unturned to take advantage of the short time we have ahead of us," French Foreign Minister Hubert Vedrine told a news conference. "To pull this off, we will have to be extremely inventive when it comes to Jerusalem."

U.S. officials, who have been trying to broker an agreement, said only a few weeks remain to secure a peace treaty-first because the U.S. Congress, which would have to fund a treaty, adjourns in early October, and second because Israel's parliament reconvenes in late October and could vote to topple Barak.

If there is no agreement, Vedrine said, both sides will have to "wait for a better moment" and try again.

"But I do feel that in the absence of an agreement, the backlash will be almost inevitable - so we [have to] do everything we can to avoid that happening," he said.

A main crux of the problem is the Temple Mount, a holy site known to Muslims as Haram as-Sharif, the Noble Sanctuary. It is built on the remains of the second Jewish Temple, sacked by the Romans in 70 A.D.

Barak has said no Israeli leader would ever accept Palestinian sovereignty over the Temple Mount - "a cornerstone of our identity" - but suggested he would not necessarily insist on full Israeli control over the sacred compound.

Arafat has said anything less than full Palestinian sovereignty over all of traditionally Arab East Jerusalem, including Jerusalem's walled Old City and its Muslim, Jewish and Christian holy sites, is out of the question.

At this week's UN General Assembly debate following up on the Millennium Summit, Arab ministers have backed the current effort but insisted that Israel withdraw from Arab territories - including East Jerusa lem. In return, Egyptian Foreign Minister Amr Moussa said, Israel will "be integrated as a partner in the Middle East, enjoying rights to security, peace and cooperation."

But Moussa warned that if any Arab territory remains under occupation or if any settlement is "inconsistent with the principles of right and justice, then that would constitute a time bomb ready to explode at any time."

Moussa said flexibility over Jerusalem "cannot by any means mean accepting Israeli sovereignty over the Holy Mosque-Haram as-Sharif - but could instead mean arrangements for the new Palestinian state to respect the holy sites, and guaranteeing free access to them, and their protection."

TITLE: South-East Asia Hit by Flooding
AUTHOR: By Tini Tran
PUBLISHER: The Associated Press
TEXT: HANOI, Vietnam - Rescue workers distributed noodles, drinking water and mosquito nets Thursday to people stranded by unprecedented floods that have left about 600,000 people homeless in Vietnam, Cambodia and Laos.


At least 88 people have died in Cambodia and eight in Vietnam in the floods and tropical storms since July, when seasonal rains came, officials said. In Cambodia, Prime Minister Hun Sen said Thursday that the level of the Mekong River where it runs through the capital, Phnom Penh, is higher than at any time in the past 70 years.

In Vietnam, state television showed thousands of houses flooded in Dong Thap and Long An provinces bordering Cambodia after the mighty Mekong overflowed its banks, turning vast areas of surrounding rice fields into huge lakes. Rescuers, including soldiers and naval personnel, used boats to pick up stranded villagers from houses built on stilts.

"I have participated to stop the killing fields, the genocide of Pol Pot ... but it is impossible for me to stop the natural disaster," Hun Sen told reporters.

He warned merchants against profiteering from the floods by increasing prices. "When newspapers write stories to scare the people, it helps merchants sell goods at higher prices," he said while touring the Lvea Em district, about 40 kilometers from the capital.

The water level at the meeting point of Mekong and two other rivers in Phnom Penh reached nearly 11 meters Wednesday and is expected to climb higher Friday. Officials say Phnom Penh could flood if it reaches 11.5 meters.

One day after the Cambodian government told residents of the capital to brace themselves for major disaster, Peou Samy, the secretary general of the National Committee for Disaster Relief, said river dikes around the city had been strengthened and Phnom Penh was not in immediate danger.

In Geneva, the International Federation of Red Cross and Red Crescent Societies appealed for $1.13 million in international aid to help some 600,000 people left without homes or land by the floods.

In a statement, the group said unusually widespread monsoon floods also are affecting major rice-producing areas of central and southern Laos, where at least four provinces have been badly affected and face food shortages.

TITLE: Austria Off Hook as EU Rescinds Sanctions
AUTHOR: By Richard Murphy
PUBLISHER: Reuters
TEXT: VIENNA, Austria - European Union countries have unconditionally lifted diplomatic sanctions they imposed on Austria, but they say they will keep a wary eye on future activities of the far-right Freedom Party in its government.


Austria's 14 EU partners, ending Chancellor Wolfgang Schuessel's seven-month diplomatic quarantine on Tuesday evening, said they still had deep reservations about Joerg Haider's Freedom Party and vowed to monitor the group carefully.

Relieved but bruised, Schuessel said that although he did not expect the 14 to apologize for what he described as "this nonsense," their statement represented a tacit acknowledgement that their action had been a mistake.

In a joint statement released by France, current holder of the rotating EU presidency, the 14 countries said: "The measures implemented by the 14 have been effective. They can now be lifted."

The statement acknowledged that Schuessel's government "had not failed in its commitment to uphold European common values" but it made clear the 14 remained unconvinced of the Freedom Party's democratic credentials.

"The nature of the Freedom Party and its uncertain evolution are still grounds for grave concern. The 14 consider that the party and its influence on the government in which it participates require particular vigilance," the statement said.

Austria's partners broke off bilateral political contacts with Vienna when the new government was sworn in February because they regard the Freedom Party as racist and xenophobic.

The party has campaigned fiercely against immigration and Haider was best known for remarks playing down the crimes of the Nazis, for which he later apologized, and intemperate attacks on foreign leaders such as French President Jacques Chirac.

Despite widespread antipathy to the rightist leader, the sanctions caused unease in diplomatic circles and led to accusations that larger EU countries had ganged up to interfere in the democratic processes of a weaker partner.

Diplomats said the 14 were forced into ending the ban sooner than many countries had intended because of clear signs that it was alienating Danish voters ahead of a Sept. 28 referendum on joining the euro single currency.

While clearly relieved that the sanctions were now over, Schuessel, who is passionately pro-European, did not hide his resentment at what he felt was the injustice done to Austria.

Noting the 14 countries now wanted to develop proper mechanisms for handling similar situations in future, he said: "That is actually an admission by the 14 that this was not right and should not be repeated."

Nevertheless, he expressed delight that "The European Union has become a family again today."

A dark veil has been lifted from the face of Europe," he added.

European Commission President Romano Prodi also praised the long-awaited decision, saying: "The Commission never wanted Austria to be isolated and I am glad to see sanctions lifted. But the Union must remain vigilant about extremism and xenophobia, wherever they arise in Europe."

TITLE: IN BRIEF
TEXT: Croatia Crackdown


n ZAGREB, Croatia (Reuters) - Croatia arrested a dozen people, including two army generals, on Tuesday in what appeared to be a major crackdown against those allegedly involved in wartime atrocities in Bosnia and Croatia.

Gen. Ivan Andabak and Major-Gen. Ignac Kostroman were apprehended earlier in the day in two different towns at the request of the Hague-based International Criminal Tribunal for former Yugoslavia, the state TV said in its main news program.

Both are suspected of taking part in crimes against Bosnian Muslims during the 1993-94 conflict in the neighboring country.



German Group Banned


n BERLIN (Reuters) - The German government, under pressure to react to racist violence, said Thursday it was outlawing a far-right group for spreading neo-Nazi propaganda.

Interior Minister Otto Schily said he was banning the German branch of "Blood and Honor," which has about 200 members, for activities which breached the constitution.

Eager to prevent a repeat of the country's Nazi past, Germany framed its post-war constitution to give the government sweeping powers to limit free speech in order to counter extremist groups.



Clinton to Vietnam


n WASHINGTON (AP) - U.S. President Clinton will visit Vietnam as one of his final foreign tours as president, but will make the politically sensitive trip only after the November elections.

The White House announced Thurs day that Clinton would tack the Vietnam trip to the end of a scheduled visit to Brunei. Clinton is to attend the annual Asia-Pacific Economic Cooperation forum in Bandar Seri Begawan, Brunei, on Nov. 15 and 16 and then go to Vietnam.

"He will address the range of issues we hope to advance with the people and government of Vietnam following the normalization of our ties with their country," a White House statement said.



Attack on Milosevic Rival


n KOSOVSKA MITROVICA, Yugoslavia (Reuters) - Supporters of Yugoslav President Slobodan Milosevic attacked his main presidential election rival in the flashpoint city of Kosovska Mitrovica on Thursday, slightly injuring him.

A Reuters reporter at the scene said opposition candidate Vojislav Kostunica was slightly cut under his right eye and the deputy head of his party was bruised in the leg. Several cars in their convoy were damaged.

Supporters of Milosevic's ruling Socialist Party waited for Kostunica's convoy in a central square where the opposition was due to hold a campaign rally.

They blocked the cars and started hitting and kicking them, shouting "Slobo, Slobo!" and "Traitors" at Kostunica and his supporters. One vehicle was almost completely smashed and several were damaged.



Opposition Leaders Free


n YANGON, Myanmar (AP) - Myanmar's military government lifted security restrictions Thursday on democracy leader Aung San Suu Kyi and eight other opposition leaders who had been confined to their homes for the last two weeks.

The opposition leaders "are no longer required to stay at their respective residences" and have been allowed to resume "their daily activities as usual," a government statement said.

TITLE: Protest Mounts Against Pro-Suharto Bombing
AUTHOR: By Geoff Spencer
PUBLISHER: The Associated Press
TEXT: JAKARTA, Indonesia - Rock-throwing protesters took to the streets Thursday as speculation mounted that supporters of ex-dictator Suharto might be responsible for a car bombing and fire that killed 15 people at the Jakarta Stock Exchange.


Frustrated that escalating violence is destabilizing his year-old reformist administration, President Abdurrahman Wahid demanded quick arrests for in Wednesday's attack.

"I want the police chief and the attorney general not to hesitate to act against suspects regardless of their position or status," cabinet Secretary Marsilam Simanjuntak quoted Wahid as saying during an emergency cabinet meeting.

The blast rocked the capital's downtown financial district - the day before a court resumed its hearing into charges of corruption against the former president. Bombings have also coincided with every major stage of a state investigation against Suharto, who ruled Indonesia for 32 years until violent demonstrations forced him to quit in 1998.

The latest bombing "could be a terrorist act because the way it went off was similar to other bombs that exploded moments before or after the former president's investigation and trial," National Police Chief Gen. Rusdihardjo was quoted as saying by The Jakarta Post.

Police said the bomber used a military-type explosive identical to one used in another car bombing at the Philippine ambassador's house in Jakarta last month. Two people died in that attack and dozens were hurt, including the ambassador. Indonesian officials blamed Philippine Muslim rebels, but made no arrests.

Meanwhile, the proceedings in Suharto's case resumed Thursday in a south Jakarta court. The court ordered an independent medical team to determine whether Suharto, who has had three strokes, is fit to stand trial. Chief judge Lalu Mariyun also ordered the disgraced 79-year-old former despot to attend the next hearing, set for Sept. 28.

Three members of Suharto's 23-doctor medical team - all of whom were in the courtroom, in white hospital coats - testified that the strokes had damaged the former autocrat's brain. Government physicians say Suharto is healthy enough to face trial.

Outside, several dozen anti-Suharto demonstrators threw stones at buses carrying about 100 supporters of the old strongman. The groups gathered later near Suharto's residence, and riot police to eventually fired tear gas to disperse them.

Across town, Jakarta police spokes man Lt. Col. Nur Usman said rescuers had recovered all the bodies from the stock exchange building's burned-out underground garage.

The death toll from the attack rose to 15 Thursday. At least 27 people were injured, some critically. The blast damaged or destroyed 400 vehicles in the three-level garage filled with cars and drivers.

No one has claimed responsibility, and Wahid ordered Indonesia's military commander to join in the police investigation.

TITLE: Governments Stay Firm on Fuel Tax Issues
AUTHOR: By Mike Collett-White
PUBLISHER: Reuters
TEXT: LONDON - Angry farmers staged a short-lived blockade of an oil refinery in Germany Thursday as fuel price protests in Britain began to crumble over concern that the nationwide action could endanger lives and jobs.


German police said the farmers, who had used up to 50 tractors to block off the refinery in the northwestern town of Lingen, agreed to end the action after little over an hour.

Meanwhile in Belgium, Prime Minister Guy Verhofstadt told striking truck drivers, who have blockaded the country's main roads since Sunday, to respond within hours to a government package of proposals to compensate them for high fuel costs.

German Chancellor Gerhard Schroe der, back in Berlin after a stormy reception in the northeast town of Schwerin, said he would not surrender to demands for fuel tax cuts.

The farmers' blockade of the refinery owned by the firm Wintershall had been the first picket in Germany, where such unauthorized action is punishable by fines.

Hundreds of German truckers, farmers and taxi drivers jammed traffic in the northern city of Hanover.

"We've reached the limit," said Hanover protester Jens Koenig, 32, saying fuel price increases had added $1,000 a year to the cost of running each of his three trucks. "We are being strangled by the politicians and the oil companies."

Despite several days of protests, the German government, which includes the environmentalist Greens party, has ruled out scrapping its "eco-tax," designed to discourage use of polluting fuels, but has said it will consider helping welfare recipients hurt by higher petrol and heating oil costs.

Along with Schroeder, British Prime Minister Tony Blair continued to reject protesters' demands for instant cuts in energy levies.

He placed the British Army on standby, telling hauliers and farmers they were putting people's lives and jobs at risk.

"There is a real danger now for the national health service and other essential services," he said in his second address to the nation in 24 hours. "Lives are at risk if these people cannot get to work."

Many protestors heeded Blair's call and halted their blockade. But others picketing fuel distribution points refused to budge, and industry warned it would be several days before the country returned to normal.

Britain's national health service was on red alert with nursing staff working double shifts and some hospitals canceling all but emergency surgery.

Supermarket shelves were emptied by panic buying and two-thirds of British petrol stations were still dry.

The Confederation of British Industry said firms had begun to scale back production and lay off workers, while the London Chamber of Commerce said the crisis was draining 50 million pounds ($71 million) a day from firms in the capital and five times that from businesses across the country.

"Some of the [petrol] stations that are now dry may not have their first delivery for several days," said Ray Holloway of the Petrol Retailers Association.

Britons pay more for their petrol than other Europeans, with tax accounting for three quarters of the price of $1.21 a liter.

"Our proposals are [that the government] cut tax on fuel within 60 days," said Brynle Williams, spokesman for protesters at the Stanlow refinery in Cheshire, northwest England - the first to picket a week ago and the first to call off the protest.

"Some of the drivers have said they could come back [to protest] if deemed necessary," he added.