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Russia 110531Basic Political DevelopmentsITAR-TASS news digest of May 31: 1. MINSK - - Belarus will not raise prices for socially important goods and services to July 1 of the current year. The prices should remain at the level of May 28, the governmental press service said on Monday. MOSCOW - - Implementation of joint projects of Russia and Mongolia, and first of all those in mining, will be on the agenda of a meeting on Tuesday between Russia’s President Dmitry Medvedev and Mongolia’s President Tsakhia Elbegdorj. MOSCOW - - Russia’s Prime Minister Vladimir Putin will discuss with teachers problems of russian schools and implementation of education reforms. According to the government’s press service, he will participate in the VI All-Russian pedagogical meeting on Tuesday. MOSCOW - - Russia’s State Duma will discuss on Tuesday in the first reading a bill on security of fuel and energy complex’s objects. MINSK - - Russia’s Foreign Minister Sergei Lavrov will participate in a meeting of Foreign Ministers’ Council of the Collective Security Treaty Organisation /CSTO/ in Minsk on Tuesday. WARSAW - - The Sixth Europe-Russia. Partnership for Modernisation Forum will feature 200 participants from the EU, Russia, neighbouring countries and the USA. They are politicians, parliamentarians, officials, businesses, international and non-governmental organisations, analysts. BERLIN - - Germany’s Vice Chancellor and Economy Minister Philipp Roesler is coming to Russia on a brief visit. NEW YORK - - Russian students got almost half of all medals in team international programming contest in Orlando /Florida/. The competition’s final was on Monday. Out of twelve awards, Russia brings home five, including one gold medal, which was won by students of St. Petersburg’s State University. ASHGABAT - - Turkmenistan’s President Gurbanguly Berdimuhamedov signed on Monday an order on organisation of a National Space Agency to implement scientific achievements in the country’s economy and to establish space activities, the national television reported. KIEV - - The Chernobyl alienation zone has received a complex system for radiation monitoring. VLADIVOSTOK - - Living in the North and environment are on the agenda of the Northern Forum’s 10th General Assembly, which opens on Tuesday in Pyeongchang, Gangwon Province of South Korea. MOSCOW - - The State Duma lower house of the Russian parliament on Tuesday will consider early termination of office for Just Russia faction member Yelena Vtorygina, who is giving up her mandate in favor of Just Russia leader Sergei Mironov. BARNAUL - - Russia’s natural gas giant Gazprom this year will launch the construction of a gas pipeline branch and a gas distribution station in the Nizhnyaya Kayancha settlement of the Altai Territory. The construction of the station will ensure energy resource supply to the Biryuzovaya Katun tourism-recreational special economic zone (SEZ) and the Sibirskaya Moneta (Siberian Coin) gambling zone. MOSCOW - - Russian President Dmitry Medvedev “gave the instructions to Defence Minister Anatoly Serdyukov and Minister of Education and Science Andrei Fursenko to consider a deferment from the military service for people, who reached the military recruitment age and graduated from secondary schools, to grant the right of an attempt to enter higher educational establishments in the year of school graduation and to table their proposals to this effect,” the presidential press service reported on Tuesday. MINSK - - Issues connected with the CSTO zone of responsibility are discussed a regular meeting of the CSTO Council of Foreign Ministers which opened in Minsk on Tuesday. SUKHUM - - Abkhazia is mourning for the late President Sergei Bagapsh. From May 31 to June 2 the republic declared the mourning. ASTANA - - Kazakhstan is considering the possibility of prolonging the ban on export of some oil products, Minister of Oil and Gas of the republic Sauat Mynbayev said here on Tuesday. Dmitry Medvedev will make a working visit to Italy on June 1 and 2, 2011Medvedev to Visit Italy Vice Premier of State Council of China Wang Qishan visits Russia, until June 3 China prepared to reduce prior pricing requirements on Russian oilIsrael hopes to persuade Russia to stop arms deals with Iran, SyriaMedvedev begins talks with Mongolia president in Kremlin - The talks of the heads of state are being held at the Grand Kremlin Palace behind closed doors. Aide of the Russian president, Sergei Prikhodko and Russian Minister of Transport Igor Levitin, who heads the bilateral intergovernmental commission on trade and economic cooperation, take part in the talks. President of Mongolia Elbegdorj Tsakhia visits Russia, until June 3RF, Mongolia presidents to discuss joint projects. German Energy Minister to negotiate in Moscow RF energy supplies. - Besides, Roesler will take part in an economic conference, where he will present suggestions from German companies on modernisation of Russia’s infrastructures. In 2010, Germany’s export to Russia grew by 28 percent to 26.4 billion euros. Lavrov to participate in CSTO meeting in Minsk. Meeting of Council of CSTO FMs opens in MinskUkraine and Russia come back on world grain marketUkraine and Russia come back on the world grain market - You can become acquainted with the current status and prospects of grain markets in Ukraine and Russia in the nearest time - in the period of work of the tenth international conference Grain Forum – 2011, to be held in Yalta on June 23-24 (hotel Palmira Palace). Russia joins NATO in submarine rescue drills - A task force form the Russian Black Sea Fleet, led by diesel submarine Alrosa, is taking part in NATO naval drills off the coast of Spain, the Russian Defense Ministry said.Russia delivers another batch of naval fighters to India - Russia delivers another batch of naval fighters to IndiaRussia snubs India; cancels navy, army war games HYPERLINK ""Russia has snubbed India in the recent months by cancelling two important bilateral war games, usually held under a well-established arrangement, a senior official said on Monday. The move has raised eyebrows in the Indian defence establishment. EU-Russia joint space on agenda of forum in Warsaw. Tighten Kenya-Russia trade links - Two events last week, relating to Africa, show that Moscow is making effort to recover geopolitical standing. First, scholars and diplomats on Africa from North America, Western Europe, Africa, and Russia itself met to discuss “Africa in the Changing World Development Paradigm.” Second, Russian President Dmitry Medvedev, on Africa Day, committed Russia “to expanding fruitful relations with African countries”. The conference venue was at the Institute for African Studies, roughly 30 minutes walking distance to the Kremlin. Russia destroys over half of its chemical weapons resourcesGeorgian TV journalists without accreditation detained in MoscowCorrespondent of Russian TV channel Dozhd deported from Belarus. Russia allocates $3 M to support Kyrgyz public servants in 2010 Will Moscow turn red light on for Kokoity?- by Levan Kiknadze Mir subs to inspect Lake Geneva Russia wins international programming contest in USAMedvedev instructs to consider military deferment for graduatesForest fire area in Yakutia decreases 5 times over weekYouth moved out of blast-rocked Bashkir townPolice seize grenade launchers from Moscow region residentThree servicemen injured in blast in ChechnyaPolice officer killed in Kabardino-BalkariaTerrorist hideout found in DagestanSeven powerful bombs found in Russia's DagestanRussia's Tatarstan warns of radical Islam 'threat'Closure of an important Islamic centre. Moscow seeks control of Islam European Court: Khodorkovsky's Rights Violated Human rights activists have slim hope for Khodorkovsky releaseKhodorkovsky may file for parole, experts note TV attitude changeKhodorkovsky, Lebedev ask for paroleJoseph Brodsky monument opens in MoscowSochi-2014 organizing committee sign coop agreement with Tatarstan. State Duma to consider giving mandate to Sergei Mironov. Vladimir Putin announces massive Russian road-building programmeVladimir Putin claims Dominique Strauss-Khan is the victim of a conspiracy to force him outItar-Tass news outlook for Tuesday, May 31. Reuters PRESS DIGEST - Russia - May 31RIA Russian Press at a Glance, Tuesday, May 31, 2011Interfax Moscow press review for May 31, 2011New ambassador can improve Russian-US relations - And commenting on this will be our guest Dr. Alexey Arbatov, the Head of the Center for International Security of the Institute of World Economy and International Relations of the Russian Academy of Sciences.Resetting the US ambassador - By Viktor Bulavin Obama’s top Russian advisor slated for ambassadorial positionRight Turn on Red - Prokhorov’s Goal to Make the Right Cause into the Second Influential Party in Russia Is Intriguing but Unlikely to Succeed Impudence and Impunity - Russia’s Investment Climate Becomes Murkier as Entrenched State Officials Resist the Fight Against Corruption To Moscow, via Harlem - by James BrookeRussia is still tobacco-friendly - By Polina Potapova National Economic TrendsRussia not to make more foreign borrowings in 2011 Russian Central Bank chairman sees grain exports as only risk of inflationGrain Ban Will Be Lifted in a Month Central bank surprises with a rate hikeRussia’s Central Bank Signals Interest-Rate Pause After Surprise IncreaseBusiness, Energy or Environmental regulations or discussionsRussian markets -- Factors to Watch on May 31Sberbank doubles net profit in Q1 Sberbank Q1 net profit 86.8 bln roubles, beats fcastSberbank Advances to Two-Week High After Profit Beats EstimatesVTB takes over Bank of Moscow Asset Management Company Norilsk to resume Arctic shipments after seasonal haltMostotrest May Build Road With Austria’s Kapsch, Kommersant SaysUPDATE 1-InterRAO swings to 2010 net profit of 290 mln eurosASI Makes Its First Exit From RussiaPPF Group plans IPO of Home Credit in Russia Another potential bidder for Raspadskaya Coal emerges Vedomosti reports PIK founders selling their stakes in the companyGAZ enters into more JVs: Terex and Fritzmeier next in linePolitical risk downs Domodedovo IPO?Activity in the Oil and Gas sector (including regulatory) Russia Raises June Oil Duty to 3-Year High, Extends Gasoline TaxSt Pete’s Gas Forum opens on Tuesday - St. Petersburg’s Gas Forum-2011 will feature over 100 companies from Russia and twelve foreign countries, including Bulgaria, Belarus, Hungary, Germany, Italy, Poland, France and Ukraine. Indian consortium bids for Yamal LNG-Novatek stakeTNK-BP Said To Be Interest In ConocoPhillips Vietnam AssetsNord Stream pipeline moves another step closer to completionGazpromGazprom urges govt to keep subsoil tax unchangedGazprom Neft strikes cooperation deal with Schlumberger Gazprom Neft, Schlumberger Sign Cooperation Agreement European gas drop woes for Gazprom - European gas consumption is falling and creating serious problems for Gazprom, a senior executive at the state-controlled gas export monopoly told a parliamentary hearing today. Europe gas use falling, Gazprom exec tells DumaWhy Russia’s Gazprom is a Buy - What makes Gazprom a buy is its position in the natural gas market, its massive reserves, and regional demand for the only clean burning fossil fuel around.Gazprom to begin gas supply service installation in Altai Krai. ------------------------------------------------------------------------------------------Full Text ArticlesBasic Political Developments11:27?31/05/2011ALL NEWSITAR-TASS news digest of May 31: 1. Tass 111 MINSK - - Belarus will not raise prices for socially important goods and services to July 1 of the current year. The prices should remain at the level of May 28, the governmental press service said on Monday. The list of such goods and services was put together in late April. For example it includes 14 names of food goods: bread, meat /beef and pork/, milk, powdered milk mixes and tinned meat for children, sugar, several cereals, potato, etc. Now the government has added several more positions to the list, including fish, cheese, cucumbers, tomatoes, apples, bananas, lemons, oranges, coffee, tea, salt, detergents. The government allows the Ministry of Economy to use “temporary price regulations for 90 days.” MOSCOW - - Implementation of joint projects of Russia and Mongolia, and first of all those in mining, will be on the agenda of a meeting on Tuesday between Russia’s President Dmitry Medvedev and Mongolia’s President Tsakhia Elbegdorj. MOSCOW - - Russia’s Prime Minister Vladimir Putin will discuss with teachers problems of russian schools and implementation of education reforms. According to the government’s press service, he will participate in the VI All-Russian pedagogical meeting on Tuesday. “The plenary session, where Putin will speak, will become a platform for discussions with the professional community of problems the schools are facing, and implementation of education reforms,” the press service said. MOSCOW - - Russia’s State Duma will discuss on Tuesday in the first reading a bill on security of fuel and energy complex’s objects. The document lists basic approaches to protection of at objects of fuel and energy complex, with the exception for nuclear energy, from illegal actions, including acts of terror. The bill states authorities of state power and rights and responsibilities of owners. MINSK - - Russia’s Foreign Minister Sergei Lavrov will participate in a meeting of Foreign Ministers’ Council of the Collective Security Treaty Organisation /CSTO/ in Minsk on Tuesday. “The agenda covers cooperation in the framework of the CSTO,” Russia’s Foreign Ministry said. “Participants will discuss information of secretary general on state and future of international situation and its influence on security of the member states.” WARSAW - - The Sixth Europe-Russia. Partnership for Modernisation Forum will feature 200 participants from the EU, Russia, neighbouring countries and the USA. They are politicians, parliamentarians, officials, businesses, international and non-governmental organisations, analysts. BERLIN - - Germany’s Vice Chancellor and Economy Minister Philipp Roesler is coming to Russia on a brief visit. He will present Berlin’s plans to refuse gradually from nuclear energy. Following the latest accidents in Japan, most German nuclear power plants will be closed before 2021. The last one is to be stopped in late 2022. The first stage will stop seven oldest nuclear power plants, which had been built before 1980. NEW YORK - - Russian students got almost half of all medals in team international programming contest in Orlando /Florida/. The competition’s final was on Monday. Out of twelve awards, Russia brings home five, including one gold medal, which was won by students of St. Petersburg’s State University. Thus, Russia has been leading in programming contests since 2005, as at least one of four golden medals goes to Russia. ASHGABAT - - Turkmenistan’s President Gurbanguly Berdimuhamedov signed on Monday an order on organisation of a National Space Agency to implement scientific achievements in the country’s economy and to establish space activities, the national television reported. The agency will “control the orbit, establish satellite communications, organise space scientific research and operate the satellite from the territory of Turkmenistan,” the order reads. KIEV - - The Chernobyl alienation zone has received a complex system for radiation monitoring. The system was built at the expense of the European Union. VLADIVOSTOK - - Living in the North and environment are on the agenda of the Northern Forum’s 10th General Assembly, which opens on Tuesday in Pyeongchang, Gangwon Province of South Korea. Russia is represented by Yakutia and the Khanty-Mansi Autonomous District. Participants in the assembly will discuss cooperation of Northern zoos, specific features of high water periods, telemedicine, treatment of various diseases and languages of Northern nations. MOSCOW - - The State Duma lower house of the Russian parliament on Tuesday will consider early termination of office for Just Russia faction member Yelena Vtorygina, who is giving up her mandate in favor of Just Russia leader Sergei Mironov. BARNAUL - - Russia’s natural gas giant Gazprom this year will launch the construction of a gas pipeline branch and a gas distribution station in the Nizhnyaya Kayancha settlement of the Altai Territory. The construction of the station will ensure energy resource supply to the Biryuzovaya Katun tourism-recreational special economic zone (SEZ) and the Sibirskaya Moneta (Siberian Coin) gambling zone. MOSCOW - - Russian President Dmitry Medvedev “gave the instructions to Defence Minister Anatoly Serdyukov and Minister of Education and Science Andrei Fursenko to consider a deferment from the military service for people, who reached the military recruitment age and graduated from secondary schools, to grant the right of an attempt to enter higher educational establishments in the year of school graduation and to table their proposals to this effect,” the presidential press service reported on Tuesday. MINSK - - Issues connected with the CSTO zone of responsibility are discussed a regular meeting of the CSTO Council of Foreign Ministers which opened in Minsk on Tuesday. SUKHUM - - Abkhazia is mourning for the late President Sergei Bagapsh. From May 31 to June 2 the republic declared the mourning. ASTANA - - Kazakhstan is considering the possibility of prolonging the ban on export of some oil products, Minister of Oil and Gas of the republic Sauat Mynbayev said here on Tuesday. The ban on export of some kinds of oil products, in particular light distillates and products, kerosene, except of special kinds of gasoline and domestic stove fuel, was introduced in the republic back in 2010. In late April of 2011, it was prolonged until July 1. Dmitry Medvedev will make a working visit to Italy on June 1 and 2, 2011 30, 2011, 16:00 At the invitation of President of the Republic of Italy Giorgio Napolitano, Mr Medvedev will visit Rome to take part in the celebrations of the 150th anniversary of Italy’s unification as a single state.During his visit Mr Medvedev will hold talks with Mr Napolitano and with Italian Prime Minister Silvio Berlusconi.May 30, 2011, 16:00 Medvedev to Visit Italy May 2011The Moscow TimesPresident Dmitry Medvedev will join 40 world leaders in?Italy this week for?a celebration marking the?150th anniversary of?Italy's unification.Medvedev will arrive in?Rome on?Wednesday for?the two-day working visit, which will include meetings with Italian President Giorgio Napolitano and?Prime Minister Silvio Berlusconi, Interfax reported Monday.The?highlight will be the?anniversary celebrations with a?military parade attended by?dignitaries including Austrian Chancellor Heinz Fischer, King Mohammed VI of?Morocco, Turkish President Abdullah Gul, Chilean President Sebastian Pinera, Israeli President Shimon Peres and?Palestinian Authority President Mahmoud Abbas.Vice Premier of State Council of China Wang Qishan visits Russia, until June 3 31, 2011 11:26China prepared to reduce prior pricing requirements on Russian oil. May 31 (Interfax) - China is prepared to move to a reduction of the initially announced coefficient in a contract for transporting oil, several sources close to the negotiations have told Interfax."Where previously the Chinese wanted to establish the coefficient T at 13%, now they are ready to agree to 9%," one source said.At present, the coefficient T is 0%.CfRT News line, May 31Israel hopes to persuade Russia to stop arms deals with Iran, Syria of Moscow talks, a top Israeli official hopes that he can persuade Russia not to export weapons to Iran and Syria. "The sale of weapons to countries that support terror is a very painful issue to Israel," Israeli Deputy Prime Minister Moshe Ya'alon admitted. "And we will continue explaining our position to the Russian side. I plan to discuss this topic with Russian colleagues during my upcoming visit," he said. Israel claims that Hamas recently used a Russian-made missile for an attack on a school bus.12:33?31/05/2011ALL NEWSMedvedev begins talks with Mongolia president in Kremlin Tass 150 MOSCOW, May 31 (Itar-Tass) —— Russian President Dmitry Medvedev has begun talks with his Mongolian counterpart Tsakhiangiin Elbegdorj. The talks of the heads of state are being held at the Grand Kremlin Palace behind closed doors. Aide of the Russian president, Sergei Prikhodko and Russian Minister of Transport Igor Levitin, who heads the bilateral intergovernmental commission on trade and economic cooperation, take part in the talks. President of Mongolia Elbegdorj Tsakhia visits Russia, until June 3 NEWSRF, Mongolia presidents to discuss joint projects. Tass 2 MOSCOW, May 31 (Itar-Tass) —— Implementation of joint projects of Russia and Mongolia, and first of all those in mining, will be on the agenda of a meeting on Tuesday between Russia’s President Dmitry Medvedev and Mongolia’s President Tsakhia Elbegdorj. “They will exchange views on implementation of key projects in trade and the economy,” a source in the Kremlin’ s administration said. “The leaders will discuss joint investment projects in mining, transport, including those with involvement of Russia’s Railroads Company.” “They will discuss further modernisation of a joint Ulan-Bator Railroad Company, construction of new railroads in Mongolia, where RZD and its affiliated companies will be involved.” The agenda will include formation of a joint company in research, production and processing of Mongolian uranium ores in the context of Russia’s support in development of Mongolia’s mining sector and improvement of Russian-Mongolian joint ventures, where Rostechnologii state-run corporation is a shareholder, the presidential administration said. Cooperation with Mongolia is developing positively. During 2010, the bilateral trade grew by over 40 percent against 2009 to 1,015 million dollars. “In the first quarter of the current year, the trade turnover grew by another 1.5 times against the similar period of the previous year to 328 million dollars, which make us hope this year’s achievements will be at a record level,” the source said. “The international discussions will be focused on the situation in the Asia-Pacific Region, expansion of cooperation in the framework of the Shanghai Cooperation Organisation and of other structures, necessity to settle the inter-Korean relations by means of a dialogue, search of ways to resume the sextet talks on the nuclear problem in the Korean Peninsula,” the source continued. “It is planned that the talks will result in signing of several bilateral documents, including a Russia-Mongolia Joint Statement.” Russia’s presidential administration hopes that “the negotiations will favour development of trustworthy bilateral political dialogue and will give a new impetus to the active promotion of the Russian-Mongolian mutually advantageous cooperation.” 04:23?31/05/2011ALL NEWSGerman Energy Minister to negotiate in Moscow RF energy supplies. Tass 11 BERLIN, May 31 (Itar-Tass) —— Germany’s Vice Chancellor and Economy Minister Philipp Roesler is coming to Russia on a brief visit. It will be his first foreign trip in the new position. Roesler will have meetings with First Deputy Prime Minister Igor Shuvalov, Energy Minister Sergei Shmatko, Minister of Economic Development Elvira Nabiullina, and with Minister of Mass Media and Communications Igor Shchegolev, German’s economy ministry said. He will present Berlin’s plans to refuse gradually from nuclear energy. Following the latest accidents in Japan, most German nuclear power plants will be closed before 2021. The last one is to be stopped in late 2022. The first stage will stop seven oldest nuclear power plants, which had been built before 1980. With the major changes in Berlin’s energy policies, German’s dependence on gas supplies from Russia is growing as Germany will build gas electric plants to replace nuclear power stations. Now, gas supplies from Russia cover 32 percent of Germany’s demand, eleven percent are produced domestically. Another 29 percent are imported from Norway, 22 percent – from the Netherlands. Besides, Roesler will take part in an economic conference, where he will present suggestions from German companies on modernisation of Russia’s infrastructures. In 2010, Germany’s export to Russia grew by 28 percent to 26.4 billion euros. 02:06?31/05/2011ALL NEWSLavrov to participate in CSTO meeting in Minsk. Tass 7 MINSK, May 31 (Itar-Tass) —— Russia’s Foreign Minister Sergei Lavrov will participate in a meeting of Foreign Ministers’ Council of the Collective Security Treaty Organisation /CSTO/ in Minsk on Tuesday. “The agenda covers cooperation in the framework of the CSTO,” Russia’s Foreign Ministry said. “Participants will discuss information of secretary general on state and future of international situation and its influence on security of the member states.” Traditionally, participants will discuss cooperation among foreign ministries, including coordination of work with other international organisations, the source said. The ministers will discuss development of peacekeeping activities in the CSTO-UN format in compliance with the Joint Declaration on cooperation of March 2010. Participants in the meeting will discuss improvement of the organisation’s mechanisms to adapt it to new situations, including improvement of effectiveness in reacting to challenges and threats to the member states’ security. “In this context, the ministers will discuss implementation of the decisions of the December /2010/ session of the CSTO’s Council, and the organisation’s coordinating mechanisms,” the source said. “They will discuss certain administrative and organisational issues, too.” The Collective Security Treaty Organization is an international military and political union, which brought together seven countries (Armenia, Belarus, Kazakhstan, Kyrgyzstan, Russia, Tajikistan and Uzbekistan). The CSTO was founded in 1992. The presidents of the CSTO states decided to grant the status of an international regional organization to the CSTO on May 14, 2002, and the UN General Assembly decided to grant an observer status to the CSTO at a UN General Assembly annual session on December 2, 2004. The CSTO should ward off external threats, protect the territorial integrity and sovereignty of the CSTO states without any interference in the domestic political affairs of the CSTO states. Nikolai Bordyuzha has been working as CSTO Secretary General since April 2003. Belarusian President Alexander Lukashenko currently heads the CSTO Collective Security Council, which includes the presidents of the CSTO states. 10:57?31/05/2011ALL NEWSMeeting of Council of CSTO FMs opens in Minsk Tass 95 MINSK, May 31 (Itar-Tass) —— Issues connected with the CSTO zone of responsibility are discussed a regular meeting of the CSTO Council of Foreign Ministers which opened in Minsk on Tuesday. As Foreign Minister of Sergei Martynov of Belarus said at the opening of the meeting, “this meeting affords an opportunity to exchange opinions on issues connected with the CSTO zone of responsibility and around it.” “Preparations for a CSTO session, which is to give impetus to the work in the next few months,” he stressed. Later on, the meeting of the Council of CSTO Foreign Ministers will continue working behind closed doors. Ukraine and Russia come back on world grain market at 11:38 | UNIAN Ukraine and Russia decided to come back on the world grain market, according to . Almost simultaneously the Governments of two countries announced cancellation of grain export limitations in the countries – on May 25, the Cabinet of Ministers of Ukraine canceled the quotas on grain exports, and on May 28, Vladimir Putin, Prime Minister of the Russian Federation, said that Russia would not renew the ban on grain exports after July 1, 2011. Despite imposition of the mechanism of quotas and licensing of grain exports in the season-2010/11, Ukraine managed to keep the place in the TOP-10 of the world leading exporters of grains at three positions: wheat, maize and barley. According to analysts of APK-Inform Agency, to date the export potential of Ukraine in the season-2011/12 is estimated at the level of 18.3 mln tonnes, including wheat, barley and maize volumes.In the season-2009/10, the list of the main countries-importers of Ukrainian wheat included Bangladesh, South Korea, Spain, Tunisia and Egypt. Due to closing of grain exports by Russia in 2010/11 MY, the geography of exports from Ukraine changed, and the main deliveries of wheat came to Turkey, Egypt, Israel, Bangladesh and Libya.Taking into account the export ban for grains, Russia, which is the member of five leading countries in production of wheat and barley, also stayed in the TOP-10 of the world exporters of grains. According to analysts of APK-Inform Agency, after cancellation of the export embargo, Russia will be able to export over 15 mln tonnes of grains in the new season. Before closing of export trading with grains in the season-2009/10, the list of the main countries-importers of Russian wheat included Egypt, Turkey, Syria, Iran and Libya.You can become acquainted with the current status and prospects of grain markets in Ukraine and Russia in the nearest time - in the period of work of the tenth international conference Grain Forum – 2011, to be held in Yalta on June 23-24 (hotel Palmira Palace).You can become acquainted with the conference program and list of participants at the web-site of the conference. Read more: and Russia come back on the world grain market and Russia decided to come back on the world grain market. Almost simultaneously the Governments of two countries announced cancellation of grain export limitations in the countries – on May 25, the Cabinet of Ministers of Ukraine canceled the quotas on grain exports, and on May 28, Vladimir Putin, Prime Minister of the Russian Federation, said that Russia would not renew the ban on grain exports after July 1, 2011. Despite imposition of the mechanism of quotas and licensing of grain exports in the season-2010/11, Ukraine managed to keep the place in the TOP-10 of the world leading exporters of grains at three positions: wheat, maize and barley. According to analysts of APK-Inform Agency, to date the export potential of Ukraine in the season-2011/12 is estimated at the level of 18.3 mln tonnes, including wheat, barley and maize volumes. In the season-2009/10, the list of the main countries-importers of Ukrainian wheat included Bangladesh, South Korea, Spain, Tunisia and Egypt. Due to closing of grain exports by Russia in 2010/11 MY, the geography of exports from Ukraine changed, and the main deliveries of wheat came to Turkey, Egypt, Israel, Bangladesh and Libya. Taking into account the export ban for grains, Russia, which is the member of five leading countries in production of wheat and barley, also stayed in the TOP-10 of the world exporters of grains. According to analysts of APK-Inform Agency, after cancellation of the export embargo, Russia will be able to export over 15 mln tonnes of grains in the new season. Before closing of export trading with grains in the season-2009/10, the list of the main countries-importers of Russian wheat included Egypt, Turkey, Syria, Iran and Libya. You can become acquainted with the current status and prospects of grain markets in Ukraine and Russia in the nearest time - in the period of work of the tenth international conference Grain Forum – 2011, to be held in Yalta on June 23-24 (hotel Palmira Palace). You can become acquainted with the conference program and list of participants at the web-site of the conference.Russia joins NATO in submarine rescue drills 31/05/2011A task force form the Russian Black Sea Fleet, led by diesel submarine Alrosa, is taking part in NATO naval drills off the coast of Spain, the Russian Defense Ministry said.Bold Monarch is the world's largest submarine rescue exercise held every three years. This year's exercise is conducted on May 30-June 10 near the Spanish port of Cartagena, and involves submarines, ships and aircraft from both NATO and non-NATO countries, including Russia."The Russian task force comprises diesel submarine Alrosa, salvage tug Shakhtyor, auxiliary vessel KIL-158, and rescue vessel Epron," a Russian Defense Ministry's spokesman said on Monday.This is the first time a Russian submarine has participated in any NATO exercise.Alrosa, a Kilo class submarine, will play a part of a "vessel in distress", bottomed at the sea floor. Ships equipped with a range of sophisticated debris clearance, diver assisted gear and submarine rescue vehicles will attempt to salvage the sub and rescue its crew.Russian auxiliary vessel KIL-158 carries an advanced Seaeye Panther Plus underwater remotely operated vehicle (ROV), the spokesman said.Panther Plus was adopted by the Russian Navy after an incident with Russian submariners in the Bering Sea in August 2005, when Russia's AS-28 submersible became tangled in a fishing net at a depth of about 190 meters (about 620 feet).The ROV can operate at depths up to 1,000 meters (3,000 feet).?MOSCOW, May 31 (RIA Novosti)Russia delivers another batch of naval fighters to India 31/05/2011Russia's MiG aircraft maker delivered a new batch of five MiG-29K/KUB carrier-based fighters to the Indian navy in May, the company said."A flight training simulator and other technical equipment has also been delivered," MiG said in a statement on Monday.The two countries signed a contract stipulating the supply of 12 single-seat MiG-29Ks and four two-seat MiG-29KUBs to India in January 2004. The contract is part of a $1.5-billion deal to deliver the Admiral Gorshkov aircraft carrier, currently being retrofitted in Russia for the Indian Navy.India's first four MiG-29Ks and MiG-29KUBs officially entered service in February 2010.In March 2010, Russia and India signed a $1.5-billion contract on the supplies of 29 additional MiG-29K Fulcrum-D carrier-based fighter jets to New Delhi. The start of the supplies is scheduled for 2012.The contracts for the jets also stipulate pilot training and aircraft maintenance, including the delivery of flight simulators and interactive ground and sea-based training systems.The Indian Navy has named its MiG-29K squadron the "Black Panthers." The fighters will be based at an airfield in the state of Goa on India's west coast until the Admiral Gorshkov joins the Navy under the name of INS Vikramaditya in early 2013.The Vikramaditya is expected to carry up to 24 MiG-29K/KUB fighters. The future indigenous aircraft carrier Vikrant being built by India may also carry these aircraft.MOSCOW, May 31 (RIA Novosti)Russia snubs India; cancels navy, army war games | May 30, 2011, 11.04pm ISTNEW DELHI: Russia has snubbed India in the recent months by cancelling two important bilateral war games, usually held under a well-established arrangement, a senior official said on Monday. The move has raised eyebrows in the Indian defence establishment. The Russians have called off the Indra series of navy and army war games in the recent weeks, baffling the Indian defence ministry, the official said. Russia had late last month called off the Indra series of exercises with the Indian Navy, despite the latter's warships -- including guided missile destroyers INS Delhi, INS Ranvir and INS Ranvijay -- reaching Vladivostok, an eastern Russian port town on the Pacific Ocean. The reason cited by Russians for the sudden decision to do away with the naval war game was the non-availability of its warships due to their expected deployment in aid of Japan after the Fukushima nuclear disaster, the official said here. But what came as a shocker for the Indians was that the Russian warships later sailed out for an exercise of their own, instead of the cited deployment in aid of Japan. The Indian ships returned to Visakhapatnam last week without the valuable experience that would have been gained if the exercise had taken place. Indian Navy personnel instead had to contend with a face-saver of a tabletop simulation during their stay in Vladivostok, the official said. "The reasons given by the Russian navy are absurd," the official added. But the latest insult to injury was the calling off of an army exercise under the Indra series that was to be held in Russia in June. Moscow conveyed to New Delhi last week that it would not be able to host the exercise as the intimation for the war game was sent very recently without much time for preparation, the official said. Since 2003, the two countries have conducted five exercises between their armies and navies under the Indra series. The latest bilateral army exercise was held in Uttarakhand last October. The Russian moves come in the wake of India choosing two European fighter jets as the top contenders for a $10.4 billion fighter jet contract. In the process, not only Russian but also American and Swedish planes were knocked out of the competition. After being fed-up for long with delays and non-availability of spares for its Soviet-era MiG-series fighter jets, military transports, radars and missile systems, India issued several open global tenders worth several millions of dollars for the same. The two sides also fenced over time and cost overruns in the Admiral Gorshkov aircraft carrier refit, for which India is now paying $2.34 billion instead of the 2004 price of $1.5 billion, which included 16 MiG-29K carrier-borne fighter jets for $526 million. Just over six months ago, India had signed agreements with Russia for the joint development of a fifth generation fighter jet of which Indian Air Force (IAF) is likely to get about 250 to 300 planes. In fact, the IAF chief, Air Chief Marshal PV Naik, has just returned from Russia after inspecting the progress on the fifth generation jet. This apart, India and Russia have also inked a pact on developing a medium transport aircraft, of which IAF would get about 45 planes. Through these agreements, India is likely to invest over $10 billion in the two projects.03:47?31/05/2011ALL NEWSEU-Russia joint space on agenda of forum in Warsaw. Tass 10 WARSAW, May 31 (Itar-Tass) —— The Sixth Europe-Russia. Partnership for Modernisation Forum will feature 200 participants from the EU, Russia, neighbouring countries and the USA. They are politicians, parliamentarians, officials, businesses, international and non-governmental organisations, analysts. “Economies of the European Union and Russia have a special position in the changing global economic situation,” organisers said. “On one hand, they are of high level mutual cooperation and dependence, and, on the other hand, they are highly differentiated.” “Facing challenges, they choose similar joint ways of overcoming crisis and further successful development.” The key aspect of cooperation between major players is modernisation, which includes innovations, investments and high technologies, as well as evolution of society and political systems. The Europe-Russia forum provides a platform to discuss modern state of cooperation in Europe, where Russia’s modernisation programme may become a factor of the EU-Russia joint space, organisers say. The Russia 2010 – Transformation Report will forestall the two-day event. It will be followed by nine panel discussions of various economic and political topics of cooperation between Russia and the EU. The key topics include relations between NATO, EU and Russia, Europe’s energy security, regional partnership. The first Europe-Russia forum was organised in Poland in 2005. Following discussions were in Vilnius, Vienna, Rome and Bucharest. Tighten Kenya-Russia trade links MUNENE? ( HYPERLINK "javascript:void(0);" email the author) Posted? Tuesday, May 31?2011?at?00:00Two events last week, relating to Africa, show that Moscow is making effort to recover geopolitical standing. First, scholars and diplomats on Africa from North America, Western Europe, Africa, and Russia itself met to discuss “Africa in the Changing World Development Paradigm.” Second, Russian President Dmitry Medvedev, on Africa Day, committed Russia “to expanding fruitful relations with African countries”. The conference venue was at the Institute for African Studies, roughly 30 minutes walking distance to the Kremlin. The Kremlin and the Red Square are tourist attractions. Lenin’s Mausoleum is huge and, accompanied by the tombs of other past Soviet leaders, acts as a platform on national days. A light blue/greyish building, next to the Kremlin, used to house the University of the Toilers.While it existed, the university hosted renowned anti-imperialists such as Ho Chi Minh, Antonio Gramsci, George Padmore, and Kenya’s Jomo Kenyatta. The proximity to the Kremlin ensured that the “students” were properly watched while being “educated” although they were not always co-operative. One such student was Kenyatta who reportedly distinguished himself by complaining about bad food, racism, and the habit of referring to people as “petty bourgeois”. Kenyatta wondered why they could not be “big bourgeois”?Moscow is a contrast of side by side architectural elegance and dullness. Today, Kenyatta would notice “big bourgeois” opulence in foreign manufactured flashy cars making u-turns. Statues of famous men spice Moscow: a bust of Karl Marx facing the Bolshoi Theatre, near the Kremlin, and a replica of General Zukov on a horse at the entrance to the Red Square. Pushkin, the Russian poet who reportedly had African blood, has a huge statue. Some buildings are well maintained but others do not reflect the supposed greatness of the Russians. The building housing the African Institute is poorly attended to, which raises the question of whether it reflects Russian attitude towards Africans that should be changed. It probably is, given that African embassies in Moscow are a mixed bag of desperation and relative comfort. Several have problems making a simple 250 dollars contribution to an African Day get-together. Some ambassadors, reportedly going without salaries for months, appear disoriented in such occasions. In addition, they all have to pay rent to Russia’s Ministry of Foreign Affairs because none of them owns the property on which the embassies are located. This probably reflects a power relationship because, with Kenya being an example, Russians own buildings in Nairobi from where they operate but Kenya does not in Moscow. This implies that Africans failed to demand reciprocity while establishing diplomatic relations.Americans own their structures and have roughly 2000 diplomats; the British reportedly have 1,500 officers in Moscow. Kenya has five.Although the commercial potential for Kenya and Russia is big, both appear to be prisoners of their Cold War past. Russians get Kenyan goods mostly through Western Europe. The two countries need to shape up and commercially deal directly. Prof Munene teaches history and international relations at USIU. Russia destroys over half of its chemical weapons resources at 11:25 | Interfax-Ukraine Moscow. May 30 (Interfax-AVN) - Russia has destroyed over half of the almost 40,000 tonnes of chemical weapons it had, Valery Kapashin, the head of the Federal Department for Safe Storage and Destruction of Chemical Weapons, told Interfax-AVN on Monday. "Over 20,000 tonnes of category 1 chemical weapons were destroyed as of May 30, 2011, which is over 50% of the earlier announced amount (39,966 tonnes)," Kapashin said.Kapashin said the fulfillment of the federal program "Chemical Weapons Destruction in the Russian Federation" showed that the use of the new capacities of five Russian chemical weapons destruction facilities and the rates at which chemical weapons are being destroyed have created favorable conditions for successful fulfillment of the Chemical Weapons Convention, he said."The fulfillment of the fourth and the last stage is a strategic task, and all efforts during the fulfillment of this task will focus on the operation of the available objects and the creation and operation of the last chemical weapons destruction facility in the village of Kizner, Udmurtia Republic," Kapashin said."There is no doubt that the Federal Department can achieve this task and fulfill its international obligations in time under the guidance of Viktor Kholstov, director of the Industry and Trade Ministry's department for the implementation of convention obligations," Kapashin said.According to the press service for the Federal Department for Safe Storage and Destruction of Chemical Weapons, 1.14 tonnes of toxic substances were destroyed in the village of Gorny, Saratov region, 6.34 tonnes were destroyed in the city of Kambarka, Udmurtia Republic, 5.04 tonnes were destroyed in the village of Maradyk, Kirov region, 5.5 tonnes were destroyed in the village of Leonidovka, Penza region, and 1.9 tonnes were destroyed in the village of Shchuchye, Kurgan region. Thus, a total of 20 tonnes of toxic substances, including 4,215 tonnes of emergency ammunition, have been destroyed in Russia. Read more: NewsGeorgian TV journalists without accreditation detained in Moscow, May 31 (Itar-Tass) —— Georgian TV journalists, who were working without any accreditation of the Russian Foreign Ministry, were detained in Moscow, a source in the Moscow law enforcement agencies told Itar-Tass on Tuesday.“On Monday afternoon, the FSB agents detained two correspondents of the Georgian television channel PIK (the first news Caucasus television channel) in an identity checkup on the Suvorov Square. The PIK office is situated in Bolshoi Kozikhinsky Bystreet,” the source said.The Georgian journalists were detained near the cultural center of the Russian Defence Ministry, where a farewell ceremony with Abkhazian President Sergei Bagapsh was held, the source said. “They were making the video recording and were interviewing people, who were participating in the event, without any accreditation for news reporting in Russia,” the source said.The detainees were brought to the police, where administrative offence protocols were made up against them. “A cameraman of the news television channel, who is a Russian citizen, was fined 500 roubles, and the case against a female journalist, who is a Georgian citizen, was passed in the court,” the source underlined.12:33?31/05/2011ALL NEWSCorrespondent of Russian TV channel Dozhd deported from Belarus. Tass 140 MOSCOW, May 31 (Itar-Tass) —— A correspondent of the Russian television channel Dozhd Rodion Marinichev must leave Belarus on Tuesday, the journalist said live on the television channel Dozhd on Tuesday. On Monday, the Minsk police detained the Dozhd special correspondent right after an interview with Irina Khalip, who is the wife of the former presidential candidate Andrei Sannikov. The police confiscated a video camera from the journalist and erased the interview record. The journalist claimed that right at the exit from the Minsk Gorky Park the policemen came up to him and asked to show the bag. “They asked me to go to the police station right for 20 minutes to check my identity cards and to learn whether I am a member of any extremist organizations. They said that they check all people with big bags at the children’s park after the Minsk metro blasts. I provoked some suspicions in this respect,” Marinichev said live on the Dozhd television channel on Tuesday. He also claimed that the police “secretly erased all video records” and he cannot visit Belarus for the next five years. The Belarusian president earlier did not rule out that several foreign media, including Russian media, may be shut down in the country for fanning up tensions around a heavy economic situation in the republic. “Russian media outlets are stirring up major hysteria,” Alexander Lukashenko said at a meeting devoted to economic issues. “We should do so that these media are ousted from our country,” he underlined. Russia allocates $3 M to support Kyrgyz public servants in 2010 09:23, Bishkek – 24.kg news agency , by Julia KOSTENKO In 2010, Russia allocated $3 million for the support of public sector employees of Kyrgyzstan, as reported press service of the State Personnel Service of the Kyrgyz Republic. According to it, about 800 employees from 37 ministries and department of 7 provinces and 25 district administrations participated in the advanced training program, which provided for payment of salary supplement to key public sector employees. “505 public servants were allowed to participate in the development of the project,” reads the statement of the press service. “Oversight board of Fund for support of public servants of the Kyrgyz Republic controls the expenditure of the granted funds.” Lecturers of Russian Academy of National Economy and Public Service, as well as Higher School of Economy delivered the lectures, devoted to problems of state administration in conditions of the parliamentary system. URL: Moscow turn red light on for Kokoity? 17:20 Levan Kiknadze The Club of Exsperts In mid-April, before the so-called presidential elections in the Tskhinvali region, Kokoity who counts last days of his term as a chief puppet, decided to present his "successor", so-called prosecutor general of "South Ossetia" Teimuraz Khugaev to his masters in Moscow. After all Khugaev will indeed conceal black deeds of Kokoity better than anyone else. And in case of becoming a president the latter will not forget Kokoity's service and will allow no one to dig into his past. And although they arrived there they were unable to meet Prime Minister Putin for some unknown reasons. We do not know whether they attempted to meet with President Medvedev on this issue or not. But the fact is that evil tongues say that disappointed Kokoity came back with his tail between his legs. On top of this he found out that in the beginning of April his personal enemy Dzambolat (Diki) Tadeev met with Vladimir Putin in Moscow and acquired his permission to participate in the so-called presidential elections and that he even decided to come to the Tskhinvali region to start election campaign. On April 17th as soon as he came back from Moscow Eduard Kokoity met with his supporters in the Tskhinvali theatre where he protested against forthcoming visit of Dzambolat Tedeev to Tskhinvali.On April 18th Dzambolat Tedeev visited Tskhinvali together with president of the federation of freestyle wrestling of the Russian Federation Mikhail Mamiashvili. In order to control movement of supporters of Tedeev and other opposition forces, at the instruction of Kokoity a special unit of the so-called KGB of "South Ossetia" was deployed at the south portal of the Roki tunnel. As we know at the police post in Tskhinvali (near the so-called little bridge) "OMON" of so-called South Ossetia arranged a provocation for Tedeev which became a basis for a case to be instituted against Tedeev on charges of assault of workers of law enforcement agencies. Following Tedeev's visit in Tskhinvali supporters of Kokoity actively started issuing "compromising" materials about Tedeev on TV and internet. Tedeev was mentioned as Tediashvili and as a person close to Georgians. Attention was drawn to the fact of his visit to Tskhinvali together with Mikheil Mamiashvili and the latter was mentioned as a criminal of Georgian origin. At instruction of Kokoity himself workers of the defence ministry led by deputy defence minsiter Gasiev go to homes of Tadeev's supporters and threaten them with physical violence.To prevent Tedeev and at the instruction of Kokoity on April 20th so-called South Ossetian Parliament adopted a resolution according to which a candidate for presidency of "South Ossetia" can become a person that lived in the Tskhinvali region for the last 10 years.Despite this Tedeev continues to strengthen his positions.Opposition of Kokoity established in Vladikavkaz a public movement For Fair Elections that is financed by Tedeev. One of its leaders is former secretary of the security service of so-called South Ossetia Anatoly Barankevich. Members of non-governmental organization XXI Century (head Temur Tskhovrebov) such as Sarmat Parastaev, Liana Tedeeva and member of the opposition Fatima Margieva are also involved in activities of the above-mentioned organization. Starting from this May opposition newspaper Pozitsia will start to be published and it will be financed by Tedeev and headed by Akhsar Kochiev and Fatima Margieva. Anti-Kokoity literature, leaflets and t-shirts with images of Tedeev and other opposition leaders are coming secretly from Vladikavkaz. With his tactic of introducing changes into the registration norms of a presidential candidate Kokoity managed to only partially block Dzambolat Tedeev. As information was issued that allegedly in the middle of May Tedeev again met with Putin who told him that if he were to find a worthy candidate for participation in the so-called South Ossetian presidential elections the government of the Russian Federation would support him. Later J. Tedeev met with a member of the So-called South Ossetian parliament and head of the Tskhinvali bread-baking plant Vadim (Bulki) Tskhovrebov. As it is known in April the latter was physically assaulted by Kokoity bodyguards in the woods near Tskhinvali as he intended to introduce his candidacy in the presidential elections. Tedeev managed to compel him to agree and promised all kind of support. After this Kokoity probably assessed reasonably that he would not be able to get his candidate through, which would practically mean victory, and decided to play to the end. As we know his supporters have already came out with an "initiative" of holding a referendum. An initiative group led by first deputy "defence minister" Ibragim Gasiev was formed (with headquarters in the building of the Tskhinvali central library. The headquarters was headed by head of the Cadet school Artur Tadtaev). On May 14th the first meeting of the initiative group was held which was attended by heads of heads of administrations of the city of Tskhinvali and other districts. At the mpoment the initiative group is collecting signatures in the population to hold referendum. Two issues will be put up for the referendum:1. To declare Russian and Ossetians languages official languages on the territory of the Tskhinvali region;2. To introduce changes into the constitution of the so-called South Ossetia according to which "president of South Ossetia" will be elected for the third term.Collection of signatures in the population is being carried out through threats and compelling. Public workers are threatened with dismissal from work. The election committee will decide a date for the referendum. The only thing left is to wait for the Moscow decision. But we cannot rule out also that following the principle of accustomed evil it will again prefer experienced and well-versed in their dark matters Kokoity. Time will tell.Mir subs to inspect Lake Geneva 31, 2011 07:25 Moscow TimeRussia’s deep-water submersibles “Mir” have been delivered to Switzerland. Russian and Swiss scientists will study the bed of Lake Geneva to check its contamination levels.? The maximum depth of the lake is 300 m. It supplies water to the city of Geneva situated on its banks. At least 50% of Geneva’s 1,5 million-strong population receive their water from the lake.??? 05:11?31/05/2011Top NewsRussia wins international programming contest in USA YORK, May 31 (Itar-Tass) —— Russian students got almost half of all medals in team international programming contest in Orlando /Florida/. The competition’s final was on Monday. Out of twelve awards, Russia brings home five, including one gold medal, which was won by students of St. Petersburg’s State University.Thus, Russia has been leading in programming contests since 2005, as at least one of four golden medals goes to Russia.Russia’s two other universities, from Nizhny Novgorod and Saratov, got silver medals, and two bronze medals were given to the Moscow and the Urals universities.This year, the contest was organised for the 35th time. A team of tree is to solve eight tasks within five hours. The team has only one computer to use. The team which is the first to offer programmes solving most tasks is the winner.The Association for Computing Machinery’s international programming contest began in 1970 at Texas’ A&M University. Since then, 8,305 teams from over 80 countries have taken part in it. Every year, the final is organised in a new country.The contest in Orlando featured over 300 students of 105 teams. Besides the golden medals, winners receive grants and a chance to practice and work with IBM, which has been the general sponsor since 1997.10:30?31/05/2011Top NewsMedvedev instructs to consider military deferment for graduates, May 31 (Itar-Tass) —— Russian President Dmitry Medvedev “gave the instructions to Defence Minister Anatoly Serdyukov and Minister of Education and Science Andrei Fursenko to consider a deferment from the military service for people, who reached the military recruitment age and graduated from secondary schools, to grant the right of an attempt to enter higher educational establishments in the year of school graduation and to table their proposals to this effect,” the presidential press service reported on Tuesday.08:55?31/05/2011ALL NEWSForest fire area in Yakutia decreases 5 times over week, May 31 (Itar-Tass) — The area of forest fires in Yakutia has decreased five times over the past week as a result of fire-fighting efforts. Last Thursday, a total of nine spots of fire were extinguished at an area of over 15,000 hectares, the forest relations department of the Republic of Sakha (Yakutia) reported on Tuesday.The use of aircraft has helped to dramatically reduce the forest fires area. On May 30, planes and helicopters dropped more than 750 tonnes of water on forest fires. Water attacks on the fire spots have been going on for several days.More than 1,000 people are engaged in the efforts to put out wildfires on the ground, and 106 smoke jumpers from Khabarovsk, Krasnoyarsk, Magadan, Arkhangelsk, Murmansk and Petrozavodsk are at the forefront of the efforts. The fire fighters use 92 pieces of equipment, including four Mi-8 helicopters, two Mi-26 helicopters, as well as the Be-200 and Ilyushin Il-76 planes.In order to prevent the occurrence of wildfires the population’s entry to forests of Yakutia is prohibited.The regional state of emergency in connection with forest fires was declared last week in eight districts of Yakutia and in the city of Yakutsk by the republic’s presidential decree, the press service of the head and governments of the region said on May 27.The emergency situation regime was introduced in the territory of the Amginsky, Gorny, Megino-Kangalassky, Namsky, Tattinsky, Ust-Aldansky, Khangalassky, Churapchinsky districts and the city of Yakutsk urban district. President of Yakutia Yegor Borisov instructed heads of municipalities to take measures to extinguish fires and prevent threats to human settlements in an emergency situation regime. According to him, the stay of people that are not involved in the fire extinguishing efforts in the forest zone is banned.There were a total of 34 fires affecting a total area of 86,500 hectares in the forests of Yakutia last week. The city of Yakutsk and a number of settlements were in smoke. As many as 2,978 people and 289 pieces of fire-fighting equipment, including 8 aircraft, including two helicopters Mi-26 and an Ilyushin Il-76 plane from the Ministry of Emergency Situations of Russia (EMERCOM) are engaged in the fire fighting operation. The paratroopers of the specialised aviation fire fighting service of the Krasnoyarsk Territory, Magadan, Murmansk and Arkhangelsk regions, as well as Karelia, have been attracted to the operation within the framework of interregional cooperation in fighting wildfires. The main cause of the fires is agricultural burning in the conditions of dry and windy weather. The law enforcement and regulatory authorities have been able to identify 39 people, through the fault which fires occurred. Criminal proceedings will be instituted against them depending on the damage caused.Earlier, head of the Aerial Forest Protection Service (Avialesookhrana) Andrei Yeritsov said that Yakutia’s leadership should declare the state of emergency in the republic due to big wildfires. “We proposed to move personnel of the Russian Federal Forest Service to the area. Previously the personnel fought fires in the Trans-Baikal region. But the republic’s government has given up assistance,” he said. Now the Federal Forest Service is expected to send its representatives to Yakutia “in order to estimate the situation on the ground.” “Recommendations have been given to declare the state of emergency because the situation remains difficult in the next few days,” Yeritsov said.On May 16, a source from the regional department of the Russian emergencies ministry told Itar-Tass that five major forest fires, each covering the territory of up to 900 hectares, were raging in Russia’s Baikal region.“Three of them have engulfed 1,600 hectares in the Petrovsk-Zabaikalsk district,” they added. Dry weather and gusts of wind up to 24 meters per second contribute to the spread of the blaze in Baikal region’s taiga, where 25 fires have spread to the area of 4,300 hectares. Seven more fires have been localized. Nine fires covering the area of about 240 hectares were put out. A total of 1,200 people, assisted by 215 special vehicles and six aircraft were fighting the blaze. The regional prosecutor’s office has toughened punishment for fires for officials and forest renters.According to the Emergencies Ministry’s statistics, the most difficult fire situation is in the Republic of Yakutia, the Khanty-Mansi Autonomous Area, the Chelyabinsk, Sverdlovsk, and Amur regions. “There is no danger of fire spreading to local settlements. However, means and forces of the Ministry for Emergency Situations remain on high alert,” sources from the regional centre of the emergencies ministry said.Youth moved out of blast-rocked Bashkir town 31, 2011 10:44 Moscow TimeThe authorities of Bashkortostan, in the Cis-Urals, have decided to evacuate all underage residents of the settlement Urman, given that explosions again resounded at the nearby proving range on Monday. The fire at the munitions depot broke out on May 26th . 12 people suffered from the fire, three were hospitalized. More than 50 buildings were destroyed or burnt down. Up to 100 residents were left homeless. A criminal case has been opened to investigate the incident.?Police seize grenade launchers from Moscow region resident 31/05/2011Police have seized two grenade launchers from a resident of a village near Moscow, a police source said on Tuesday.The source said the weapons were taken from a 54-year-old man in the Zhilino village in the Lyubertsy district.One of the grenade launchers was a Russian RPG-18 model, while the other was of a “foreign make.”Police are currently trying to establish where the man obtained the weapons.MOSCOW, May 31 (RIA Novosti)10:42?31/05/2011ALL NEWSThree servicemen injured in blast in Chechnya, May 31 (Itar-Tass) —— Three servicemen got injuries in a blast in Chechnya, ITAR-TASS learnt at the republic’s law enforcement bodies.“On Monday evening, a homemade explosive device went off while conducting a reconnaissance and search operation in a forest four kilometres from the settlement of Shalazhi of the Urus-Martan region,” the source said.As a result, three servicemen of Interior Troops got injuries. They were hospitalized.Investigation is underway.08:42?31/05/2011Top NewsPolice officer killed in Kabardino-Balkaria, May 31 (Itar-Tass) — A police officer has been killed in Kabardino-Balkaria. The republic’s’ investigation department told Itar-Tass on Tuesday that police operative of the local interior department Alim Nakhushev was killed by unknown assailants in the Baksan city of the Baksan district of the republic at about 23:00 MSK Monday.“Nakhushev was returning home after work, the details of the incident are being investigated,” a police official said.Terrorist hideout found in Dagestan 31, 2011 03:41 Moscow TimeA terrorist hideout was found in the woods of Dagestan in the Northern Caucasus.The findings include firearms and ammunition as well as self-made bombs with the total explosive power equivalent to 15 kg of TNT.No terrorists were seized.Seven powerful bombs found in Russia's Dagestan 31 May 2011 05:44 GMT | 7:44 Local TimeAn abandoned militant dugout, where firearms and ammunition were cached, was discovered during an operation in woodland. Seven bombs, each equal to up to 15 kg in TNT equivalent, were discovered during a special operation in the volatile North Caucasus Republic of Dagestan over the weekend, Russia's National Antiterrorism Committee said on Monday.An abandoned militant dugout, where firearms and ammunition were cached, was discovered during an operation in woodland.Law enforcers discovered six huge buckets packed with explosives and steel objects near the base. The seventh bomb was found inside the dugout."By discovering militant bases and deactivating seven improvised explosive devices with a power of about 100 kg in TNT in total, we prevented a series of terrorist attacks in the Republic of Dagestan and avoided human casualties," the antiterrorism committee said in a statement.The bombs were blown up on site.RIA NovostiRussia's Tatarstan warns of radical Islam 'threat' Nicolas Miletitch (AFP) – 1 day agoKAZAN, Russia — Authorities in Tatarstan, a predominantly Muslim region of central Russia, have sounded the alarm about radical Islam spreading to a region previously praised as a model of religious tolerance.In November, three Islamists were killed in an armed clash with police that was unprecedented in the region. This prompted fears of the appearance of an armed insurgency similar to one in Russia's North Caucasus, where Islamist rebels are waging a bloody war with the authorities."These insurgents from radical religious movements have arms, financing and support from foreign protectors," the region's interior minister Asgat Safarov warned after the attack.Tatarstan touts itself as an example of harmonious co-existence of Islam and Orthodox Christianity, with a huge mosque standing beside an Orthodox cathedral in the capital city of Kazan on the banks of the Volga.Despite the warnings by officials, Tatarstan has seen no other violence linked to radical Islam, other than one failed bombing, and has cracked down on those suspected of links to extremism.Four men were convicted in April of "belonging to the extremist organisation" Hizb ut-Tahrir al-Islami, or Islamic Party of Liberation, which was banned in Russia in 2003.They were sentenced to several years in jail, even though they were only accused of distributing radical literature.The authorities say the main threat comes from followers of Salafism and Wahhabism, who practice a radical form of Islam and whose ideology is now preached in some of the mosques in Tatarstan.The insurgency in Russia's North Caucasus -- which is comprised of the regions of Chechnya, Ingushetia, Dagestan, Karachayevo-Cherkessia and Kabardino-Balkaria -- claims to follow this fundamentalist form of Islam."The Salafis and Wahhabis constitute a very great danger. There are no moderates among them. They all finish one day by taking up arms," the newly elected mufti of Tatarstan, Ildus Faizov, said in an interview with AFP.He said he believes the "traditional Islam" of Tatarstan is threatened by these extremist forms, spread first by preachers who came in from Saudi Arabia, Qatar and Egypt after the fall of the Soviet Union, and later by Tatars who have studied abroad."Many students who are trained in the Arab world come back heavily influenced by an ideology that is alien to our Islam," stressed Marat Gatin, an official in charge of relations with religious groups in the administration of the president of Tatarstan.Elected in April after the resignation of his predecessor, who was judged too lenient towards Islamists, mufti Faizov has mounted a crackdown on extremists among the Muslim clergy of this republic of four million inhabitants.From now on, imams are no longer freely elected by parishioners but chosen from a list of candidates picked by the mufti, and numerous imams have already been dismissed.One of the first to be let go was Nail Sakhibzyanov, an imam from the Almetyevsk district, considered a bastion of radical Islam."On April 30, the FSB (security services), police and local administrators gathered the district imams at the town hall and forced them to publicly vote me out," he told AFP in the Rizaetdin Fakhretdin central mosque in Almetyevsk."It was the FSB who sacked me, not the faithful."Sakhibzyanov said he sees nothing wrong with associating with Wahhabis and other fundamentalist followers of Islam, whom he believes are mistakenly accused of being a threat. "We are all Muslims," he stressed.In Kazan, the capital of Tatarstan , where it is rare to see a woman wearing full Muslim dress or even a headscarf, some are sceptical that Islamists could pose any real threat."There are disagreements over doctrine, but there is no growth in extremism. Tatarstan will not become another North Caucasus," said the imam of Kazan's Sultan mosque, Kamil Bikchentayev.Referring to the "tradition of tolerance towards Islam in Tatarstan," he also refused to condemn Wahhabis or the jailed members of Hizb ut-Tahrir, whom he said "were convicted simply for having read books."In Moscow, Alexei Malashenko, an expert at the Carnegie centre, poured scorn on what he dismissed as a witch hunt against a non-existent threat."In Tatarstan, they are getting rid of radicals who in fact do not exist," he said. "It is ridiculous to talk of a threat from Salafis."05/30/2011 11:57RUSSIA - ISLAM Closure of an important Islamic centre. Moscow seeks control of Islam Nina AchmatovaThe Supreme Court ordered the Centre linked to the Council of muftis, to cease all activities. According to analysts and members of the Centre, the Kremlin wants to bring the Muslim community under the control of a single organization loyal to the state.Moscow (AsiaNews) – According to analysts administrative irregularities, but also political motives are behind the Supreme Court decision to close, a popular Islamic organization with offices throughout Russia last week. They also maintain that the closure of the Centre for Islamic culture is linked to the Kremlin's desire to bring the large Muslim community in the country under the control of a single organisation loyal to the state. On 25 May, the Supreme Court upheld the Ministry of Justice decision to close the center for "multiple violations of financial regulations." "This is a bureaucratic order given by people who want a puppet representatives for Muslims," the leader and founder , Abdul-Wahid Niyazov, told Russian media. He explained how documentation submitted by the Ministry for Justice was obtained under pressure from the Security Service (FSB), the notorious Russian secret services. Niyazov added that several directors of the Centre resigned following threatening phone-call by the FSB. The intention now is to take the case to the European Court of Human Rights in Strasbourg. Given the public arm of the Council of muftis - one of four organizations representing Russian Muslims - the Centre for Islamic Culture held exhibitions, press conferences, seminars and conferences with religious authorities. Its closure has been greeted positively by the 'rival' Muftis body of the whole of Russia, established last December with the active support of the Kremlin. According to the president of that organism, Mukhammedgali Khuzin, the Centre was also damaging to the community and interfaith dialogue, but he added no further explanation. Alexander Soldatov, journalist, expert on religion columnist for the site portalcredo.ru, the central government did not appreciate the Centre’s initiative in organizing a mass prayer inside and outside the central mosque in Moscow in November on the feast of Eid al -Adha. "Immediately after that event - Soldatov said - the Kremlin was frightened and established the body of Muftis in direct competition with the Council." Also, the Council is the main promoter of the construction of new mosques in the capital - where there are four - to meet the needs of the growing Muslim community. But both the city administration, the federal government does not seem willing to give up, especially after clashes between ethnic Russian Christians and Caucasians Muslims which erupted in the city in December.MAY 31, 2011, 4:24 A.M. ETEuropean Court: Khodorkovsky's Rights Violated Press PARIS—The European Court of Human Rights has ruled that Russian oil magnate Mikhail Khodorkovsky's rights were violated after his arrest in 2003 and ordered Russia to pay him €24,000 ($34,279) in damages and court costs.The court in Strasbourg, France, said Tuesday it found violations in the conditions Mr. Khodorkovsky faced in court and in a remand prison, the length of time he was held pending investigation and trial, and in procedural flaws related to his detention.However, the court rejected Mr. Khodorkovsky's complaint that the prosecution against him was politically motivated.Mr. Khodorkovsky—once Russia's richest man and seen as a political threat to Vladimir Putin—has been behind bars for nearly eight years. A Moscow appeals court last week upheld his second conviction on charges of stealing oil from his own company.May 31, 2011 11:08Human rights activists have slim hope for Khodorkovsky release. May 31 (Interfax) - The parole petition filed by former Yukos executives Mikhail Khodorkovsky and Platon Lebedev is unlikely to be granted, said Lyudmila Alexeyeva, head of Moscow Helsinki Group, Russia's oldest independent human rights group."This would be great, but it is highly unlikely that the petition will be granted," Alexeyeva told Interfax on Tuesday.The decision by Moscow City Court, which upheld the verdict in the second Yukos case last week, leaves hardly any chance of Khodorkovsky and Lebedev being released any time soon, she said."I would very much like to hope that they will be released," another human rights veteran Svetlana Gannushkina, who chairs the Civil Assistance committee, told Interfax on Tuesday.The result of the parole hearing "will show the configuration of forces in today's Russia," she said.It was reported that Khodorkovsky and Lebedev sent their parole petitions to the Preobrazhensky Court in Moscow.Last week Amnesty International referred to Khodorkovsky and Lebedev as 'prisoners of conscience" after Moscow City Court upheld the second Yukos verdict on May 24.There will be no public danger if Khodorkovsky is released from prison, Russian President Dmitry Medvedev told a press conference in Skolkovo in May.kk(Our editorial staff can be reached at eng.editors@interfax.ru)07:38?31/05/2011RussiaKhodorkovsky may file for parole, experts note TV attitude change Itar-Tass World Service writer Lyudmila AlexandrovaAfter delivering the verdict in the second case against ex-Yukos executives Mikhail Khodorkovsky and Platon Lebedev, according to which they will be released only in 2016, this resonant case still remains in the focus of the Russian public. Two weeks after Russian President Dmitry Medvedev said that the Khodorkovsky’s release poses “absolutely no danger” to the society, a federal TV channel for the first time in many years broadcast a program devoted to the case of the former Yukos head.In an interview with NTV, Mikhail Khodorkovsky, recently sentenced to 13 years in prison within the second criminal case on charges of stealing oil and legalization of illegally obtained income, said Sunday that he intends to use his right to parole. Advocates say that he has the legal right to this, but apprehend reprisals.The question about parole that journalists put to Khodorkovsky in a written form, was: “You have consistently refused to seek parole, and even more so refused to seek clemency. What needs to happen for you to change your mind?” Khodorkovsky’s response was: “I refuse to recognize judgments of the courts, because they will be appealed. But I will certainly try to use my right to parole.”In addition to prospects for parole, the journalists of NTV’s program “Central Television” were interested in how Khodorkovsky assesses the verdict in the second Yukos case, taking into account that the amount of thefts he is charged with was decreased three times, but the prison term was reduced by only a year. “I do not care about the cosmetic tricks of judicial bureaucrats,” Khodorkovsky said. “The statement that oil in Siberia should be sold at Rotterdam price is rather insane to comment on it.”According to his lawyer Yury Shmidt, who was quoted by the radio station Ekho Moskvy, Khodorkovsky, under the law, can count on parole, having already served half his term.However, the defense lawyer added that such a petition could cause new repressions against his client. “The denial of the legal right to be released on parole must be somehow motivated,” the lawyer said.The Khamovnichesky District Court in Moscow in December 2010 sentenced Khodorkovsky and Lebedev to 14 years in prison each on charges of embezzling 200 million tons of oil and laundering the proceeds. With taking into account the first sentence of 2004 under which they got eight years in prison each, and the term served, their sentence expires in 2017.The Moscow City Court on May 24 upheld the verdict in the second case of Yukos, at the same time mitigating the punishment for Khodorkovsky and Lebedev by one year.On the same day, Amnesty International recognized Khodorkovsky and Lebedev as prisoners of conscience. The international human rights organization came to this conclusion after the decision of the Moscow City Court. “The fact that the court of appeals failed to understand the significant deficiencies of the district court, the fact that Khodorkovsky and Lebedev had already spent 8 years in prison, and the charges make us believe that these people are in prison only for political reasons,” head of the Russian branch of the organization Sergei Nikitin said.Russian media on Monday particularly noted that for the first time in many years, a story devoted to Mikhail Khodorkovsky was aired by a federal television channel, and even during weekend’s prime time. It was devoted to the history of prosecution of the oligarch as a whole.Before the broadcasting of the program the anchorman of the TV channel said: “The truth is one – the attitude to the person whose name is not pronounced at present, is already changing.”An archive footage of 2003 where Khodorkovsky, commenting on the investigative action, said that the investigation against him is illegal, was shown at the beginning of the program. After that the TV anchorman said that several years after the appearance of the letter of the intelligentsia against Khodorkovsky some of its signatories began to withdraw their signatures.This was followed by the story of a big news conference given by the RF President on May 18, in which, answering a reporter’s question about whether Khodorkovsky is dangerous to the society if released, Medvedev said that he poses “absolutely no danger.”Further, the anchorman recalled the facts set out by Natalya Vasilyeva, the former assistant of Judge Victor Danilkin who delivered a guilty verdict in the second case against Khodorkovsky and Lebedev. She stated, in particular, that the sentence was written by judges of the Moscow City Court and imposed on Viktor Danilkin. The Moscow City Court regarded the statement made by Vasilyeva as a provocation, and the judge called it slander.The signs that the state television’s stance on the former Yukos executives, that was unequivocally pro-prosecutive before, has begun to change, appeared last week.A small story about the review of the appeal by the Moscow City Court was aired in the Vesti Nedeli (News of the Week) programme on the Rossiya One television channel last Tuesday. The Gazeta.Ru Internet publication notes that it somewhat differed from the traditional way of giving coverage of the Khodorkovsky case by this state TV channel. It showed an almost 30-second fragment of the ex-Yukos head’s statement in court where he talked about the “absurdity” and “complete idiocy” of the indictment. Along with the prosecution’s position the story also included a fragment of pleadings made by Khodorkovsky’s lawyers in court.23:48?30/05/2011Top NewsKhodorkovsky, Lebedev ask for parole, May 30 (Itar-Tass) —— Former YUKOS CEO Mikhail Khodorkovsky and his business partner, former MENATEP Director Platon Lebedev, sentenced to 13 years in prison, have asked for parole.According to their appeal, Khodorkovsky submitted his request through the prison administration on May 27.He wrote that the charges brought against him provided for release on parole after half of the term has been served. Khodorkovsky stressed that he was not guilty and would continue to contest the verdict in the European Court of Human Rights.Lebedev submitted a similar appeal to Moscow’s Preobrazhensky court on Monday, May 30. He has also served more than half of the term – almost 8 out of 13.This is Khodorkovsky’s second request for parole. In August 2008, Khodorkovsky, who by that time had served more than four out of eight years given to him by court in the first case in 2005, also asked to be released on parole. However, even if released, he would have remained in custody due to charges brought against him in a second case, in which he was sentenced in late 2010.On May 24, the Moscow City Court commuted the sentence for Khodorkovsky and Lebedev within the second criminal case to 13 years.The court changed the verdict handed down by Moscow's Khamovniki Court on December 30, 2010, which sentenced Khodorkovsky and Lebedev to 14 years in jail for theft of oil and money laundering.The verdict became effective.The Moscow City Court also upheld the prosecutor's petition, cutting the amount of stolen oil by 130 million tonnes and its value by more than 68 billion roubles.Moscow’s Khamovniky Court Judge Viktor Danilkin said at the trial that “the guilt of Khodorkovsky and Lebedev is borne out by the proof examined during the judicial investigation.”The judge proclaimed Khodorkovsky and Lebedev guilty of stealing oil from a producing company and of laundering ill-gotten funds.At the same time, the court dropped certain criminal charged against the defendants due to the statute of limitation. Lebedev’s lawyer Konstantin Rivkin referred particularly to the episode concerning the theft of Eastern Oil Company (VNK) shares.In May 2005, Moscow's Meshchansky Court found Khodorkovsky and Lebedev guilty under several articles of the Russian Criminal Code, including fraud and tax evasion and sentenced them to nine years in prison.Later the Moscow City Court reduced the term to eight years.Since the prison term begins from the time a person has been put in custody, Lebedev’s term will end in July 2011, and Khodorkovsky’s in October 2011.In February 2007, the Prosecutor General's Office brought new charges against Khodorkovsky and Lebedev, accusing them of having legalised 450 billion roubles and 7.5 billion U.S. dollars in 1998-2004 by stealing state-owned shares as well as embezzling oil and legalising earnings from its sale.On January 26, 2009, Khodorkovsky and Lebedev signed protocols confirming that they had finished reading their cases consisting of 168 volumes. Earlier the courts had extended the detention for Khodorkovsky till March 17 and for Lebedev till April 2 to allow them to study the second criminal case.“It was established during the preliminary investigation that the defendants acting in an organised group involving the main shareholders of the YUKOS OJSC and other persons committed a theft by embezzling shares of subsidiaries of the Eastern Oil Company OJSC from November 6 to June 12, 1998 in the amount of 3.6 billion roubles, legalised the stolen shares of the subsidiaries of the Eastern Oil Company OJSC in 1998-2000 in the same amount, committed a theft by misappropriating oil belonging to YUKOS OJSC' s subsidiaries in 1998-2003 and oil belonging to Samaraneftegaz, Yuganskneftegaz and Tomskneft of the Eastern Oil Company OJSC in the amount of more than 892.4 billion roubles, and legalised some of this money in 1998-2004 in the amount of 487.4 billion roubles and 7.5 billion U.S. dollars,” a spokeswoman for the Prosecutor General's Office, Marina Gridneva, said.The court was examining the second case for more than 18 months.Joseph Brodsky monument opens in Moscow 31, 2011 10:19 Moscow TimeA monument to the outstanding Russian poet Joseph Brodsky will be unveiled today in central Moscow, just a week after his 71st birth anniversary.?The full-sized statue of Brodsky was designed by Georgy Frangulyan.Joseph Brodsky, a Nobel-prize winning poet, essayist and translator, was born in Leningrad in 1940. He died in New York in 1986 and was buried in Venice.11:56?31/05/2011ALL NEWSSochi-2014 organizing committee sign coop agreement with Tatarstan. Tass 98 MOSCOW, May 31 (Itar-Tass) — The organizing committee of the Sochi Olympic Games in 2014 and the republic of Tatarstan on Tuesday signed an agreement on cooperation in the preparation for the Student Games in Kazan in 2013 and Olympic and Paralympic Games in Sochi in 2014. The agreement was signed by president of the republic of Tatarstan Rustam Minnikhanov and president of the Sochi-2014 organizing committee Dmitry Chernyshenko. The document provides for cooperation in 15 key directions, such as sports, planning and managing large-scale sports events, protection of intellectual property, sustainable development, education, technologies, etc. “Organizers of the Olympic Games in Sochi and the Universiade in Kazan have together mastered a long way, have learnt much from each other in the process of preparation for big sports events that will be held in these two cities,” Minnikhanov said after the signing ceremony. “Now it is time to fix our relations de jure, which was done today.” According to Chernyshenko, the organizers of the Sochi-2014 Olympics are trying “to catch up” with the Universiade-2013 organizers, who have managed to promptly create a vast infrastructure. “Tatarstan’s experience in building sports facilities belongs to the entire country and we are glad to share it,” he noted. 09:40?31/05/2011ALL NEWSState Duma to consider giving mandate to Sergei Mironov. Tass 6 MOSCOW, May 31 (Itar-Tass) — The State Duma lower house of the Russian parliament on Tuesday will consider early termination of office for Just Russia faction member Yelena Vtorygina, who is giving up her mandate in favor of Just Russia leader Sergei Mironov. Mironov was recently recalled from the post of Federation Council speaker. The house committee on mandate issues has already accepted Vtorygina's resignation statement, and recommended the whole house to pass a similar decision, Commission member Sergei Ivanov (Liberal Democratic Party) told Itar-Tass. The State Duma then will forward its resolution to the Central Election Commission which will issue, on the strength of the decision by the Just Russia Party, a State Duma mandate to Sergei Mironov on a priority basis. "I believe he'll put in an appearance at the State Duma shortly," Ivanov noted. CEC Secretary Nikolai Konkin confirmed that if the State Duma accepted Vtorygina's resignation on Tuesday, it would start a 14-day timeframe for the procedure to submit documents to the CEC on filling a State Duma vacancy. It is the CEC that makes the decision on registration of the new lawmaker, and no special decision on the matter by the State Duma is required, Konkin added. Yelena Vtorygina was a 5th State Duma lawmaker on Sergei Mironov's mandate. He handed it over to her after the parliamentary election. Mironov led Just Russia's federal list and decided to keep his post of Federation Council speaker. Earlier, Vtorygina, a member of the presidium of the Party's Central Council and head of the Party's regional branch in the Arkhangelsk region, stated that "it was a matter of honor for her to give up her mandate for her leader Sergei Mironov," whom she also called "a politician of federal significance." "I take pride in that another four Party colleagues wrote statements offering their mandates," she underlined. Mironov was recalled from the Federation Council by the legislative assembly of St.Petersburg and automatically lost the post of FC speaker on May 18. On May 25, he took leave of his former Federation Council colleagues. Vladimir Putin announces massive Russian road-building programme minister – and possible presidential candidate – addresses worries of World Bank and unhappy motorists? Reuters ? HYPERLINK "" guardian.co.uk, Monday 30 May 2011 18.56 BSTRussia will spend $285bn (?173bn) over the next decade to double the rate of road building, prime minister Vladimir Putin said on Monday, addressing one of the most sensitive issues for Russian voters.Putin, who hinted he may contest the presidential election in March 2012, is keen to appease car owners. Opinion polls suggest Russians are increasingly concerned about road quality; the number of cars has doubled to 40m over the last decade. The figure is expected to reach 60m by 2020.The World Bank said Russia's road infrastructure was restricting economic growth, with only a third of all roads meeting quality standards."The state of our roads is a real problem, constraining business activity, investment and development of the Russian territories," Putin told a local government meeting in Tver, a city 220km (136 miles) north-west of Moscow."Our financial resources allow us to double road construction volumes in the next 10 years."Data published by the World Bank shows spending on Russia's roads fell from 2.8% to 1.5% of GDP in 2009, compared with 3.5% spent by China.During years of economic boom, the road construction industry has become one of the most corrupt in Russia and costs have soared."We need to eliminate factors which lead to artificial increases in cost and construction delays," Putin said.Russia, ranked 124th in the World Economic Forum's road quality rating, has increased road construction spending by 40% to $25bn this year by using revenue from sources such as petrol excise duty and vehicle licensing.In 2010, work was completed on a motorway that links European Russia to its far east.In recent years, car owners have organised rallies to protest against corruption among traffic police and the violation of traffic rules by senior officials.Vladimir Putin claims Dominique Strauss-Khan is the victim of a conspiracy to force him out David GardnerLast updated at 8:24 PM on 30th May 2011Russian Prime Minister Vladimir Putin has claimed that Dominique Strauss-Kahn may be the victim of a shadowy conspiracy to force him out of his job as head of the International Monetary Fund. Mr Putin is the first world leader to throw any serious doubts over the sex charges against the 62-year-old Frenchman.But his remarks will certainly surprise the disgraced former IMF boss, who reportedly said before his arrest that he believed that Mr Putin was actively plotting his downfall.?The prime minister jumped to Mr Strauss-Kahn’s defence in comments posted on the official Kremlin website. He suggested that charges the French presidential candidate sexually assaulted and tried to rape a 32-year-old chambermaid may have been trumped up by the US authorities.?Vladimir Putin said: ‘It’s hard for me to evaluate the hidden political motives but I cannot believe that it looks the way it was initially introduced. It doesn’t sit right in my head.’ American prosecutors put the claims down to mischief making by the Russian premier. Days before his May 14 arrest for the alleged attack at a Times Square, New York, hotel, Mr Strauss-Kahn reportedly told friends that Mr Putin was seeking to oust him from the IMF.‘He said the Russians, notably Putin, allied themselves with France to try to have him fired from the IMF, to stop him running for president,’ claimed French socialist politician Claude Bartolone, according to the EU Times.?Supporters of the beleaguered moneyman are adamant that he is being framed as part of a sinister international conspiracy to sabotage his bid for the French presidency. Mr Strauss-Kahn, who was freed on bail after six days in custody, is facing charges of rape, sexual abuse and false imprisonment. He was arrested as he tried to catch a plane back to Paris hours after the alleged attack and is under house arrest at a luxury (pounds) 30,000-a- month Manhattan townhouse awaiting his trial. Mr Putin’s unexpected support for the embattled former IMF head is likely to be seized upon by his critics who have accused him of being a male chauvinist. He sparked uproar in 2006 when he was overheard joking about rape allegations against then Israeli President Moshe Katsav. Mr Putin was quoted as saying: "What a mighty man he turns out to be! He raped 10 women - I would never have expected this from him. 'He surprised us all - we all envy him!’ His spokesman said the controversial joke had been mistranslated. Mr Katsav was later convicted of rape and is now serving a seven-year prison sentence. Last week, former British Prime Minister Gordon Brown called the scandal a ‘personal tragedy’ for Mr Strauss-Kahn but didn’t suggest there was anything suspicious about the arrest.Read more: NEWSItar-Tass news outlook for Tuesday, May 31. Tass 73 Telephone: 8 (499) 791-00-18 Fax: 8 (499) 791-00-19. TALKS BETWEEN RUSSIAN AND MONGOLIAN PRESIDENTS MOSCOW - - Implementation of joint projects of Russia and Mongolia, and first of all those in mining, will be on the agenda of a meeting on Tuesday between Russia’s President Dmitry Medvedev and Mongolia’s President Tsakhia Elbegdorj. ALL-RUSSIA PEDAGOGICAL MEETING MOSCOW - - Russia’s Prime Minister Vladimir Putin will discuss with teachers problems of Russian schools and implementation of education reforms. According to the government’s press service, he will participate in the VI All-Russian pedagogical meeting on Tuesday. MEETING OF CSTO FOREIGN MINISTERS MINSK - - Russia’s Foreign Minister Sergei Lavrov will participate in a meeting of Foreign Ministers’ Council of the Collective Security Treaty Organisation /CSTO/ in Minsk on Tuesday. SITUATION IN ARAB COUNTRIES PRETORIA - - Muammar Gaddafi is ready for an armistice, SAR President Jacob Zuma said commenting the results of talks in Tripoli. AT STATE DUMA MOSCOW - - The State Duma lower house of the Russian parliament on Tuesday will consider early termination of office for Just Russia faction member Yelena Vtorygina, who is giving up her mandate in favor of Just Russia leader Sergei Mironov. The State Duma will discuss the first reading of a bill on foundations of Russian citizens’ health. Besides, it is to consider the first reading of a bill regarding amendments in a number of legislative acts on ensuring security of facilities of the fuel and energy complex. GERMANY - - RUSSIA BERLIN - - Head of the Russian president's administration Sergei Narushkin will hold a meeting here with leader of the German Chancellory, Federal Minister for Special Affairs Ronald Pofalla. It will be held within the framework of regular working consultations of the head of the Russian president’s administration with his German colleague which are held since 2004. POLAND - - RUSSIA - - FORUM WARSAW - - The Sixth Europe-Russia. Partnership for Modernisation Forum will feature 200 participants from the EU, Russia, neighbouring countries and the USA. SERBIA - - MLADIC - - APPEAL BELGRADE - - The Court of Appeal of Belgrade may adopt a decision regarding a request of former commander the army of Bosnian Serbs Ratko Mladic to put off his extradition to The Hague for health problems. If the request is refused Mladic may be extradited to The Hague Tribunal already on Tuesday. IRAN - - PRESIDENT TEHERAN - - Iranian President Mahmoud Ahmadinejad will speak at a press conference on internal and international issues. ITALY - - TRIAL - - PREMIER ROME - - Hearings on the case of Silvio Berlusconi accused of sexual connections with minors are being resumed in Milan. The meeting will be held in his absence. EUROPEAN COURT - - HODORKOVSKY STRASBOURG - - The European Human Rights Court will make public the decision with regard to former YUKOS head Mikhail Khodorkovsky’ complaint about his illegal arrest and unfounded custody. ST. PETERSBURG’S GAS FORUM ST. PETERSBURG - - St. Petersburg’s Gas Forum-2011 is opening here. Over 100 companies from Russia and twelve foreign countries, including Bulgaria, Belarus, Hungary, Germany, Italy, Poland, France and Ukraine, will take part in it. ABKHAZIA - - MOURNING SUKHUM - - May 31, June 1 and 2 are declared days of mourning for the death of Abkhazian President Sergei Bagapsh. The Abkhazian president, who died in Moscow on May 29, will be buried in the native village of Jgerda of the Ochamchir region on June 2. CULTURE KALININGRAD - - The 8th festival of arts Baltic Seasons will open here. MOSCOW - - The unveiling ceremony of the monument to Iosif Brodsky will be held here. PRESS DIGEST - Russia - May 31 ISTMOSCOW, May 31 (Reuters) - The following are some of the leading stories in Russia's newspapers on Tuesday. Reuters has not verified these stories and does not vouch for their accuracy.KOMMERSANTkommersant.ru- Russia's busiest international airport, Domodedovo, has called off its planned IPO on the London stock exchange as the price of the placement was too low for the company, the newspaper says.- Russian prosecutors say there are no grounds to prosecute an investigator critics blame for the death in custody of Sergei Magnitsky, a lawyer for British-based Hermitage Capital Management.- Russia could resume discussion of a possible increase in the pension age in 5 years, Prime Minister Vladimir Putin is quoted as saying.VEDOMOSTIvedomosti.ru- Russia is planning a radical reconstruction of its roads and to launch additional 18,000 kilometres of new federal highways by 2020, according to Putin.- Sweden-based EOS Russia, one of the first foreign investors in the energy sector, continues to buy shares in local power generating companies, the daily says in connection with an acquisition of a 5.2 percent stake in an energy grid in Urals.IZVESTIAizvestia.ru- The number of cases of sexual violence against children has grown by 30 times in the last eight years, presidential children's rights representative Pavel Astakhov says.- A Nissan plant near St. Petersburg has suspended its work for at least five days because of problems of delivery of spare parts from Japan.- Russia has banned import of vegetables from Spain and Germany.NEZAVISIMAYA GAZETAng.ru- Russia's federal television has shown for the first time over the last several years programmes presenting the point of view of YUKOS former owner Mikhail Khodorkovsky, the daily says.- Almost 80 percent of food and consumer products sold in Russia do not meet safety and quality demands, according to experts.RBK DAILYrbcdaily.ru- Gazprom (GAZP.MM: Quote, Profile, Research) could increase its share on European energy market to as much as 30 percent from the current 21 percent after European countries cut their nuclear power programmes, according to the company's officials.Russian Press at a Glance, Tuesday, May 31, 2011 31/05/2011POLITICSJailed former oil magnate Mikhail Khodorkovsky and his business partner Platon Lebedev have filed an application for parole in a Moscow district court. They continue to their guilt. (Kommersant, Vedomosti)Russian Prime Minister Vladimir Putin confirmed on Monday that the government would not return to a discussion of the increase in retirement age for five years. Experts believe it is a political move on the eve of presidential elections, and the changes should be expected in 2015. ?(Kommersant) Israeli Deputy Prime Minister Moshe Yaalon will meet in Moscow on Tuesday with Russian Foreign Minister Sergei Lavrov and head of Russia’s Security Council Nikolai Patrushev to discuss the Israeli-Palestinian conflict and bilateral relations. (Kommersant)The expected appointment of Michael McFaul, a current senior director of Russian and Eurasian Affairs at the U.S. National Security Council, as an ambassador to Russia, may improve bilateral ties. (Izvestia)?WORLDGermany may soon become the first industrialized country to abandon the use of nuclear energy. The German government announced on Monday that all its nuclear power plants could be shut down by 2022. (Kommersant, Rossiiskaya Gazeta, Vedomosti)NATO chief Anders Fogh Rasmussen said on Monday that all Balkan countries were welcome to join the alliance. (Kommersant)?ECONOMY & BUSINESSRussia's largest airport, Moscow-based Domodedovo, has postponed an initial public offering (IPO) over weak market. (Kommersant, Vedomosti, Izvestia)The planned lifting of embargo on grain exports in June may help Russian producers, but could lead to high inflation. (Izvestia, Vedomosti)The Russian parliament has held hearing on giving preferred treatment to foreign companies whish would risk investing billions of dollars in the risky development of new natural gas deposits in Siberia and on Russia’s Arctic shelf. (Rossiiskaya Gazeta)The first official batch of new Apple iPad2 was sold in Russia over the weekend. The sales started on Friday and surpassed all expectations. The most expensive models were the first to go. (Kommersant, Vedomosti)Sweden’s IKEA is planning to become the first foreign retailer to set up its own bank in Russia. (Kommersant)Russia has banned imports of vegetables from Germany and Spain due to a deadly E. coli outbreak. Officials say the move would not affect grocery prices. (Izvestia)Rostelecom is planning to become Russia’s largest provider of pay-TV services in the next four years through a network of independent local Internet providers. (Vedomosti)?BANKINGRussian Standard group has entered a high-risk pension insurance business by acquiring a non-state pension fund. (Kommersant)?SOCIETYRussian President Dmitry Medvedev has instructed the government to increase spending for child healthcare in light of the poor demographic situation in the country. (Kommersant, Izvestia)The planned reduction of Moscow’s police force by 10,000 will involve mainly support personnel, while about 64,000 policemen will continue maintaining law and order in the Russian capital. (Kommersant)Prosecutors ruled on Monday that Oleg Silchenko, an investigator in the Magnitsky case, had not violated any federal laws in "pressing criminal charges and arresting" the suspect, as well as extending his custody pending trial. (Kommersant)Moscow courts are currently holding hearings on at least 80 child sex abuse cases. Interview with top Moscow investigator Vadim Yakovenko. (Rossiiskaya Gazeta)More than a third of Russians believe that their work is absolutely worthless for society, expert polls reveal. (Vedomosti) May 31, 2011 10:05Moscow press review for May 31, 2011. May 31 (Interfax) - The following is a digest of Moscow newspapers published on May 31. Interfax does not accept liability for information in these stories.VEDOMOSTIThe new rules for operating on the wholesale energy market could cost not only to Oleg Deripaska's company, but also to state-owned Rosenergoatom which is facing a fine of 1% from electricity sale proceeds. Rosenergoatom might have problems because under the new wholesale market rules, only NPPs with two types of reactors (fast-neutron and RBMK, a type of graphite-moderated nuclear reactor), and not all NPPs, as previously, will be exempt from the General Primary Frequency Regulation (OPRCh). They account for approximately a half of all plants, the second half are the VVR type (pressurized water reactor). Now they have to participate in regulation, but have no technical facilities for that, and the fine for not complying with the rules is 1% from electricity sales, three sources close to the Market Council supervisory board told Vedomosti. ("Atomic fine")On Monday, MRSK Urala (RTS: MRKU) announced its new shareholder - Cyprus' Energyo Solutions Russia with a 5.2% stake. It is a company of Finland's investment fund EOS Russia specializing in the Russian energy sector, whose co-founder and board chairman is Seppo Remes. The fund did not own the company's shares before acquiring papers on a free market. On Monday such a stake cost 1 billion rubles at the MICEX. And that is not Remes' only investment in grid companies recently. Last week MRSK Volgi (RTS: MRKV) said that it has learnt about a new owner - Energyo Solutions Russia with a 7.8% interest. It is unclear when the investment was made. ("Remes throws a net")The Bank of Moscow (RTS: MMBM) board of directors failed on Friday to approve an annual report for its approval at a shareholders' meeting, according to two sources close to the board. All directors abstained, the sources told Vedomosti. The annual shareholders' meeting was scheduled for June 27. Another obstacle for the annual report to be approved by the board of directors was the decision by audit commission chairman Konstantin Popov to withdraw his membership from the commission. Nor has the bank prepared its IFRS reports. Apparently, the bank management, directors and auditors will have to seek help of the Central Bank to reach a consensus. ("Bank without report")KOMMERSANTRussky Standart is set to enter the retirement market which is worth over 1 trillion rubles: Rustam Tariko's Group is buying the non-state pension fund (NPF). Russky Standard "a weighty advantage for working on the market of compulsory pension insurance in the form of the already operating agency networks of the insurance company and the bank. However, given the escalating debate around the scrapping of the accumulative pension insurance, risks in this business are higher than potential profits, experts warned. (page 1, "Russky Standart reaches retirement age")IKEA plans to set up its own bank in Russia. For large foreign groups which have a diversified business, having subsidiary credit institutions in the region of presence is a standard practice because it allows to lock financial flows from various types of business in one place and to rid of the expense of intermediary banks' service. In Russia, this path has so far been treaded only by automotive groups, IKEA will be the first retailer to follow suit. (page 10, "Locally-assembled bank")Vinci and its partner in the consortium, which builds the first section of a toll road between Moscow and St. Petersburg, businessman Arkady Rotenberg are set to file separate bids for operating another toll road, a section of the Don motorway. Vinci and Rotenberg seem to be disappointed with one another after failures on the Khimki motorway, market sources told Kommersant. Vinci is looking for another partner in the Don tender where it is so far bidding alone. Mostotrest, in which Rotenberg owns 25%, has already filed a bid in partnership with Vinci's biggest European rival, Austria's Kapsch. (page 1, "Arkady Rotenberg takes a different road")This year French media conglomerate Lagardere will sell 50% in Russian publishing group Hachette Filipacchi Shkulev - InterMediaGroup (AFS-IMG; Elle, Maxim, Marie Claire, Psychologies, the Antenna-Telesem television guide) to U.S. company Hearst. President and owner of another 49% in AFS-IMG Viktor Shkulev told Kommersant how relations will be built with the new partner, why he is paying extra for 1% in the publishing house and why glamour publications sometimes overstate their circulation. (page 13, "We are not yet among resources involved in political game")New ambassador can improve Russian-US relations 30, 2011 21:10 Moscow TimeNew York Times said on Sunday that US President Barack Obama was planning to appoint Michael McFaul, a current senior director of Russian and Eurasian Affairs at the US National Security Council, as an ambassador to Russia. And commenting on this will be our guest Dr. Alexey Arbatov, the Head of the Center for International Security of the Institute of World Economy and International Relations of the Russian Academy of Sciences.Earlier on Sunday New York Times reported, citing an anonymous White House official, that Obama had decided to appoint McFaul as the next US ambassador to Russia. But White House and U.S. Department of State refused to comment on McFaul's candidacy for the post. So, how do you estimate his chances? Everybody in Russia, or at least in Moscow, knows Michael McFaul very well. He is an old Russian friend, he has been a student of Soviet and Russian politics, he was for many years associated with Russia, he worked here as a first director of Moscow Carnegie Center, his connections in Moscow are very broad in all circles – academic, public, business. So, in principle he is a very knowledgeable person, but he is not a career bureaucrat, he is rather a researcher, he is an intellectual, he is an academic. That may be the reason why the State Department is not in a rush to confirm his candidacy.And when can McFaul replace the current US ambassador to Moscow?I do not know. It depends on President Obama and the State Department.Some experts think that McFaul’s appointment will show that Washington pays serious attention to Russian politics. And what is your opinion?Yes, I think so, because Michael McFaul is not a career diplomat, but he has been a student of Russian domestic politics, human rights, civil society, Russian democratic developments since the early 90s, so he will certainly pay a lot of attention to Russian domestic developments.So, you are agree with the Head of the Institute of Strategic Studies and Analysis, Alexander Konovalov, who believes that Michael McFaul is the best candidate to develop Russian-US relations since he knows Russia well and he is familiar with the problems of national security?It is difficult to say whether he is the best candidate; there are a lot of very good experts in the United States - both in diplomatic structures and in the academic community. Usually the intellectuals find it very difficult to work in the bureaucratic process, because working in the embassy, especially in an important embassy in a very big country, requires a lot of specific skills – administrative skills, personal skills, procedural skills. Intellectuals very often find it boring and difficult to do that; they have to keep in touch with Washington, with their superiors in the State Department, in the National Security Council. This may be a problem for McFaul because he is basically an intellectual. But, on the other hand, he has advantages of his own. Whether he is the best or one of the best - that is a philosophical question, but certainly he is a very good expert. And what about Russian authorities? Is Kremlin positive of McFaul’s candidacy? I do not know. That should be asked in the Kremlin. Of course, there are people in the Russian political elite and in the government who probably have some respect to McFaul since he was here in the 90s and in the previous decade, he was very close with the elite, with the liberal opposition, with liberal intellectuals, and conservative governmental officials, members of the Duma may suspect McFaul at taking sides and associating with more liberal part of Russian political community, – that is quite possible.Once McFaul said that we had to fight with anti-American and anti-Russian stereotypes. So, will he be able to break down these stereotypes?It is a very difficult task, because it is not only stereotypes, it is current politics which generate again and again new stereotypes: something Russia does generates anti-Russian stereotypes, something the Unites States does generates anti-American stereotypes. So, it is not only legacy of the Cold War, it is a complex of complicated and controversial relations of the present times. I think that Michael McFaul has some advantages and resources to fight old stereotypes and affect actual policy of the United States towards Russia. That is one of the principal tasks of the ambassadors: they have to deliver their policy to the country of their ambassadorship and they also have to produce influence on the policy of their native country with respect to the capital where they are positioned. So, are you optimistic that McFaul’s appointment may boost trust between the USA and Russia?I would not exaggerate so much the importance of personalities. I think that much more will depend on the situation in the world, on the relationship between the leaders of Russia and the United States, on the relations between the parliaments, but, of course, ambassadors play their own role, and I wish Michael McFaul a lot of success if and when he comes here to produce positive effect on Russian-American relations.Resetting the US ambassador: 31 May, 2011, 06:54Edited: 31 May, 2011, 06:54 By Viktor Bulavin President Barack Obama wants to personally manage relations with Russia. Michael McFaul, who is being tapped as the new US ambassador to Russia, will have direct access to the president, bypassing the US State Department.???The US administration has not officially confirmed the reports on the imminent appointment of a new ambassador to the Russian capital. White House Press Secretary Jay Carney who, like Michael McFaul, previously worked in Russia, refused to comment on the sensational news and simply noted, jokingly: “I would take the job, but nobody has offered it to me. I would love to go back to Moscow at some point.” McFaul also avoids answering, citing strict rules that prohibit him from making any statements, down to making an official announcement on his appointment.?? “I am well-acquainted with Michael McFaul from Stanford University,” Matthew Rojansky, deputy director of the Russia and Eurasia program at the Carnegie Foundation, told Izvestia. “He is a very educated person. He understands Russia, its people. McFaul represents the new generation of politicians. He told me that some of his best friends live in Russia. I think that he is the best man for the job.”? Indirectly, however, the Kremlin supported McFaul’s possible appointment. An unnamed source said that officials would not be opposed to the appointment of “the architect of the reset” to the post of US ambassador to Russia. They say that the new ambassador may arrive in Russia as soon as this summer. But in order for that to happen, his candidacy needs to be approved by the Senate. Typically this procedure takes at least three months, which pushes back the most-optimistic start date of his business trip abroad in the fall. Recall that the current US ambassador to Moscow, John Byerly, has had this job for only three years. Earlier the US State Department had signaled that he would most likely remain in his current position until the summer of 2012. In other words, he will “survive through” the parliamentary and presidential elections in the Russian capital.???? As for McFaul, he continues serving as a special advisor to the US president and senior director of Russian and Eurasian Affairs at the US National Security Council.“McFaul has an extensive knowledge of Russia and has been researching it his entire life,” Maria Lipman, an expert with the Carnegie Center in Moscow, told Izvestia. “Starting in the 1980s, he studied our country as a scholar, and then became an expert at the analytical center. Michael has a perfect knowledge of the Russian language, is well-versed in the Russian realities, and has numerous informal contacts in the political and economic spheres which he had acquired over 20 years. Sometimes it so happens that a diplomat is well aware of the current situation in a country, but does not have any effective connections in Washington – in this case, all of the recommendations often fail to reach the main destination. However, McFaul is Barack Obama’s advisor. Everything that he says can be heard.”??? McFaul is well known as an ideologist behind Washington’s foreign policy on Russia. If he is appointed, then he will be the first ambassador in Moscow in decades who is not a career diplomat.“This is a serious step on Obama’s behalf – an indicator of the fact that the US president has confidence in McFaul,” commented Rojansky. “No sudden changes in our countries’ relations should be expected. In the event of his appointment, he will continue along the line of further ‘reset.’ McFaul’s candidacy is a sign that the White House wants to invest some serious political capital into the US Embassy in Moscow. That is of utmost importance.”The new ambassador will be forced to deal with a number of critical issues, such as Russia’s accession to the WTO, issues concerning US missile defense in Europe, and the simplification of the visa regime. Another important factor is the US election campaign. Obama will need to have a strong defense against his Republican opponents. They are likely to issue criticism in Russia’s direction. Thus, for the US commander in chief, having “one of his own in Moscow” will clearly be beneficial.Obama’s top Russian advisor slated for ambassadorial position: 30 May, 2011, 16:54Edited: 30 May, 2011, 17:39 A Washington official confirmed on Sunday that Michael A. McFaul will be nominated as the next ambassador to Russia, which could have an interesting effect on bilateral relations in light of upcoming presidential elections in both countries.According to The New York Times, quoting anonymous sources, President Barack Obama plans to nominate Michael McFaul, his top White House adviser on Russia policy, for the post. The article went on to say that Obama informed Russian President Dmitry Medvedev of his choice during their meeting in France last week, the officials said.The current Ambassador to Russia is John Beyrle, who has held the position since July 2008.McFaul, who works for the US National Security Council as Special Assistant to the President on Russian and Eurasian Affairs, helped engineer the so-called “reset” in U.S.-Russia relations alongside US President Barack Obama three years ago.And with the US-Russia relationship currently on the rocks over America’s determination to build a missile defense system in Eastern Europe, analysts say McFaul will try to mollify Russia over the military technology.That will not be an easy sell.Moscow has repeatedly told its western partners that the construction of a missile defense system on its doorstep will be perceived as a national security threat, possibly sparking another arms race.At the G-8 Summit in France last week, President Dmitry Medvedev told the assembled global leaders that without Russia’s direct participation in the ambitious project, which is ostensibly designed to protect the European continent from a “rogue” missile attack, there could be a full-blown arms race by the year 2020.If appointed, McFaul would become the first ambassador to Russia in 30 years who is not a career diplomat, The Times article said. However, the appointment may also indicate a less-than-diplomatic line to Russian policy in the future.McFaul has been a vocal critic of Russia, while having a marked tendency to ignore the double standards of his position.For example, in an article written before his appointment as Washington advisor (“More Stick, Less Carrot,” 2008), McFaul attempts to argue that “integration is no longer a goal of Russian foreign policy.” Instead, Russia is “balancing against the West, and the United States in particular, as the central objective of Russian foreign policy.”McFaul cites as examples of the Kremlin’s newfound “assertiveness” the “resumption of strategic bomber missions, conducting military exercises with the Chinese, and threatening pro-American countries such as Georgia.” The article ignored the Bush administration’s penchant for opening up military operations around the world, not to mention the lawless nature of these adventures. Russia, meanwhile, was merely responding to what many other countries around the world saw as unilateral flexing of power.“The French are so concerned by the dominance of American power—militarily, economically, culturally, and technologically,” explained Slate magazine back in early 2003 when Colin Powell was attempting to sell the Iraq War in the United Nations, “that a former French foreign minister felt the need to coin a new word to describe it: hyperpuissance, or "hyperpower."Hopefully, McFaul’s worldview, which seems to hear no evil, see no evil, speak no evil when it comes to Washington’s predilection for delivering democracy around the globe from the end of a bloody bayonet, will become less conspicuously one-sided should he become the next ambassador to Russia.As of Sunday, citing rules prohibiting US officials from commenting on such topics until the formal announcement of the appointment, McFaul has refused to comment to the media.Robert Bridge, RTRight Turn on Red’s Goal to Make the Right Cause into the Second Influential Party in Russia Is Intriguing but Unlikely to Succeed By Svetlana Kononova Special to Russia Profile 05/30/2011 Mikhail Prokhorov, the third richest man in Russia and the 39th richest man in the world according to Forbes, said he will head the Right Cause party and promised to take it up to second place in terms of representation in the State Duma. But his ambitious plan is questionable: does Russia really have enough voters who support a free-market economy, liberalism and democracy, to try to change the country’s political landscape and compete with United Russia’s monopoly? Can this right-wing electorate be consolidated and will it trust Prokhorov?The Right Cause was established in 2009 by a merger of what was left of the Union of Right Forces, Civilian Power and the Democratic Party of Russia. Although the party claims that liberalism, a free market and protecting the interests of the middle-class are its main objectives, it has a reputation as a pro-Kremlin project. At present, the Right Cause has about 65,000 members and 77 branches. It is not represented in the State Duma but has representatives in the local government establishments. The current leaders of the Right Cause are politician Leonid Gozman, journalist Georgy Bovt and businessman Boris Titov. The most famous members of the party’s High Council are the “father” of liberal reforms in Russia Anatoly Chubais, billionaire David Yakobashvili and the Head of the Institute for Contemporary Development (INSOR) Igor Yurgens.But experts are mostly skeptical of Prokhorov’s political ambitions and the prospects of the Right Cause in the upcoming parliamentary elections in December. “The electorate of right-wing parties – both ‘ideological’ (dedicated liberals) and social (the middle class), is very limited in Russia. It cannot exceed more that ten percent of the voting population. Theoretically, this is enough to get into the Duma, but it would be difficult to consolidate even these voters. Firstly, such people tend to be individualists, which makes it difficult for them to join forces. Secondly, there is no convincing and constructive program that would offer an alternative to the policy pursued by the current authorities. This is why the conservative part of the right-wing electorate votes for the United Russia now,” said Anatoly Vakulenko, an analyst at Finam investment holding.Alexander Zakharov, the president of SuperJob.ru, holds a similar pessimistic view. “There is not a social class in Russia that would support a politician with ideas ‘a la Prokhorov.’ And the authorities do everything for such a class not to appear,” he said. “Some people – entrepreneurs and representatives of innovative sectors of the economy – might share Prokhorov’s ideas. But his opponents are the bureaucrats, the oligarchs whose business is raw material export and the majority of the county’s population, which is addicted to the paternalism of a ‘social state,’” he added. A poll conducted by SuperJob.ru found that 16 percent of respondents would vote for Prokhorov in the parliamentary elections, while 84 percent said they would not.The Public Opinion Research Foundation (VTsIOM), a Russian NGO that conducts sociological research, has published the results of another survey. This one found that eight percent of respondents like Mikhail Prokhorov, nine percent – don’t like him, and 59 percent don’t know anything about him. “The respondents who have a positive attitude toward Prokhorov are well-educated professionals or top and middle-level managers with relatively high incomes. They travel abroad. They are familiar with high tech. They are active users of the Internet. Most of them are aged 25 to 44 and live in the big cities,” said Ekaterina Sedykh, the director of the “Dominants” project at VTsIOM. “This audience describes Prokhorov as a ‘smart, well-educated, energetic and successful businessmen who has achieved a lot.’ These people believe he deserves to be trusted,” she added. “On the other hand, a negative attitude toward Prokhorov might be explained by the misunderstanding of his proposals to reform the Labor Code and the general negative attitude toward wealthy people in Russia.”The poll also found that as the leader of Right Cause, Prokhorov would receive a surprisingly high level of support from those who like him. While three fourths of all the respondents don’t know whether it would be good or bad if Prokhorov led the Right Cause party, 67 percent of those who have a positive attitude toward him supported this idea. “This speaks to the fact that the success of the project greatly depends on Prokhorov’s personality,” Sedykh said. The other unexpected finding of the survey is the relatively high potential of the Right Cause. The respondents believe that ten percent of Russians would vote for the Right Cause if the elections were to be held next Sunday. At the same time, the present real electorate of the party accounts for about one percent of the voting population. Vakulenko believes that the biggest achievement that Prokhorov could hope for would be third place in the State Duma, behind United Russia and the communists, but even this is very unlikely. “It’s possible that this project was initiated by those close to the Kremlin to siphon off votes from the Liberal Democratic Party of Russia (LDPR). Vladimir Zhirinovsky is too old and too boring. Part of his ‘protesting audience’ who used to vote for the LDPR could now vote for the communists. Prokhorov might try to attract this electorate by pretending to be opposed to the authorities,” he said.Ilya Yashin, one of the leaders of the Solidarnost opposition movement, also believes that the Right Cause is a Kremlin project. “But the Kremlin’s and Prokhorov’s plans might differ. Prokhorov may want to create a strong political force under the Kremlin’s auspices, which would protect the interests of big business in the Parliament. And the authorities need a pre-election intrigue to attract voters to the polling stations in December,” he said. “So the Right Cause may have been ‘assigned’ to play the part of the main opponent to the Popular Front created by Vladimir Putin. The party headed by a billionaire Prokhorov is the ideal target for Putin’s Popular Front. The traditional attitude toward billionaires and oligarchs in Russia is skeptical. Moreover, Prokhorov is notorious for his initiative to implement a 60-hour work week and limit workers’ rights. Undoubtedly, this irritates a large number of Russian citizens,” Yashin added.Vakulenko believes that Prokhorov doesn’t have enough time to prepare for the elections properly. “Prokhorov should have started preparing for the elections much earlier. His money can not fully compensate for the lack of time. Even if he flooded the whole country with expensive pre-election leaflets, this is not enough to succeed. But the administrative support might be helpful, especially considering that some regional governors – Alexander Khloponin, Dmitry Zelenin, Nikita Belykh – have similar political views,” he said. Yashin also doubts that the Right Cause will succeed in the upcoming elections. “Currently a third of Russians are in an oppositionist mood. But these people probably won’t come to the polls. Only an independent party could win their votes, not a pro-Kremlin political project,” he said.Impudence and Impunity’s Investment Climate Becomes Murkier as Entrenched State Officials Resist the Fight Against Corruption By Tai Adelaja Russia Profile 05/30/2011 As Russia prepares for this year’s Economic Forum in St. Petersburg, the long-running saga of the Hermitage Capital Management will loom large in the minds of potential investors and could cast a shadow of uncertainty over Russia's shaky investment climate. Last week, one of the individuals accused by the British hedge-fund firm of involvement in a $230 million tax scam, finally broke what looked like a sacred vow of silence.In an interview with the Vedomosti business daily published on Friday, Vladlen Stepanov, the husband of a Russian tax official who allegedly embezzled millions through the tax rebate scam, denied any connection between his wealth and the fraud. He announced that he had filed a lawsuit to protect his honor, dignity and business reputation against the Echo of Moscow radio station, which aired the allegations, and against Jamison Firestone, a managing partner at Firestone Duncan who voiced them.For the third year running, Hermitage Capital's founder William Browder has been campaigning for the prosecution of Russian officials he blames for the death of Sergei Magnitsky, the Hermitage lawyer who died in November 2009 after almost a year in pre-trial detention. Before his death, Magnitsky said he was abused and denied medical care in an effort to force him to drop fraud allegations against two senior detectives, Lieutenant Colonel Artyom Kuznetsov and Major Pavel Karpov, whom he accused of facilitating the largest tax fraud in Russian history. The case generated front-page headlines and shook investor confidence in Russia, even drawing criticism from Western organizations and governments. President Dmitry Medvedev ordered Russia's chief prosecutor and justice minister to investigate the case in November 2009, and since then several officials at Butyrskaya Prison where Magnitsky died have been fired. But Browder says the main culprits remain unpunished. One of the officers Browder named is Lieutenant Colonel Oleg Silchenko, a senior Russian policeman, who Browder claims has been promoted, along with other police officers that Magnitsky accused. Silchenko now leads the investigation into the lawyer's death on the orders of President Dmitry Medvedev, RIA Novosti reported.Chicago-born Browder, who was once Russia’s largest foreign investor, has vowed to continue his one-man crusade to persuade foreign investors to steer clear of Russia. “What we’re doing is we are going around the world and we are putting in place visa sanctions and assets freezes, so that the guys who killed Sergei can’t get away with it,” Browder told Russia Profile. At this year's World Economic Forum in Davos, Browder dealt a blow to Russia’s attempts to present itself as a modernizing force and a good place for business by challenging Russian First Deputy Prime Minister Igor Shuvalov over the Kremlin's mishandling of the Sergei Magnitsky murder. "The president of the country called for an investigation into the people who killed my lawyer," Browder told a panel chaired by Shuvalov and a hall packed with Western executives, Reuters reported. "One year after the investigation people who killed the lawyer have been promoted higher by state orders... My question to you, Igor, is what will prevent other investors to have the same experience after my experience in Russia," he said at the discussion, entitled "Russia's Next Steps to Modernization.”Influential Deputy Prime Minister Igor Sechin has dismissed such calls as unnecessary grandstanding by suggesting that Browder's experience should "attract investors," because of the "fantastic" returns Hermitage made in Russia before its problems arose. Sechin asserted that the controversies involving Yukos, Hermitage Capital Management and BP and its partners actually prove that Russia is a safe bet for investors. "What matters to an investor? That there be an economic result," Sechin told Wall Street Journal in a rare interview. "Among the offerings that are on the market, we satisfy investors fully," he said. While Browder's campaign for justice has not deterred multinationals like Pepsi Co or British Petroleum from doing business with Russia, it is surely undercutting President Medvedev's efforts to attract investors to Russia. Browder, a former Kremlin cheerleader turned its most virulent critic, was banned from Russia as a "threat to national security" in 2005. Last week, U.S. politicians backed new legislation called “The Sergei Magnitsky Rule of Law Accountability Act of 2011” that will freeze the assets of implicated Russian officials in America. “The European Parliament passed a resolution in December 15 to freeze their assets and ban their visas,” Browder said. “The Canadian Parliament is doing the same thing.” Last month, an independent commission investigating Magnitsky's death in Russia found that he was illegally jailed and deprived of medical care. The commission, which was set up by the Kremlin, also found that the 500 million-ruble tax evasion charges were fabricated by officials from the Interior Ministry and the Federal Security Service, the Vedomosti newspaper reported on 16 April, citing a copy of the council’s preliminary findings. Despite such findings and the high-level attention the case attracted, Alexander Bastrykin, who heads the Federal Investigative Committee, said in a September 2010 interview with Rossiskaya Gazeta, the government’s official newspaper, that there was “no reason” to believe Magnitsky’s death was connected to those prosecuting the criminal case against him.Russian law enforcement are also not letting up in their struggle to fight against allegations of corruption and miscarriages of justice. Earlier this month, Moscow’s Tverskoy District Court sanctioned a warrant to arrest Hermitage Capital Management Executive Ivan Cherkasov in absentia in connection with the same tax evasion case that led to Magnitsky’s arrest in 2008. Silchenko, who was implicated in Magnitsky's death,? has asked the court for the warrant claiming that a company called Kameya, which was owned by an unidentified Hermitage client and managed by Cherkasov, underpaid an unspecified amount in taxes in 2006. Silchenko also issued a summons to question Hermitage Capital CEO Bill Browder in Moscow. Browder said the warrant was revenge for a recent online video which showed how top Russian tax officials had conspired with corrupt policemen and judges to defraud the Russian state of $230 million at Hermitage's expense. Some political observers have said that the way the case is being pursued by Russian law enforcers is hurting President Medvedev’s efforts to reform the country. “The president’s resolve to eradicate corruption and change Russia’s investment climate is as real as to be unshakeable,” said Kirill Kabanov, the head of the nongovernmental National Anti-Corruption Committee. “But the determination of Russian bureaucrats who feed at the public trough to hold on to their booty is also unshakeable.” Kabanov said Russia’s Security Service (FSB) has not been cooperating with his committee and cited instances when they have refused to allow implicated employees to be interviewed. “They are afraid to let them reveal crucial information,” Kabanov said. “This is either because there is so much money at stake, or they are simply arrogant.” Even without the likes of Browder, investors curious about the Russian story have a sure enough reference point in Russia's tale of corruption and political arm-twisting, which Kabanov says is both long and sleazy. “To grasp the enormity of the challenges facing President Dmitry Medvedev in his effort to improve Russia’s investment climate, one need look no further than the culture of impudence and impunity by the country's law enforcement agencies,” Kabanov said. Vladimir Nekrasov, the founder and former owner of the decimated cosmetics retailer Arbat Prestige, spent two years behind bars while investigators tried unsuccessfully to find conclusive evidence of his guilt. Like Browder before him, Nekrasov appealed to president Medvedev in 2009 to intervene in the criminal investigation against him, saying investigators are trying to blackmail him into giving evidence against a suspected organized crime boss. Last month, investigators dropped criminal charges against him but not before his cosmetics empire was destroyed. Another recent case is that of telecoms tycoon Yevgeny Chichvarkin, who fled Russia to Britain in 2008 to escape what he called persistent attempts to take over his business. Russia issued an extradition warrant for him in 2009 to face charges of extortion and kidnapping. Russian prosecutors dropped kidnapping charges against him in January but the mobile phone entrepreneur has said that he is unlikely to return to Russia, and might look at setting up a new business in London, where he currently lives. And these are just the tip of the iceberg, Browder said. “For everyone we know about, there are possibly 15 we don’t know about. It is a criminal investment climate out there. There is not a single person that can go there unscathed," he said.Three years into president Medvedev’s reforms, the country’s risk level is so high that the Share Placement Prospectus of major investment banks now routinely includes warnings that prospective buyers of Russian securities are exposed to the risks of expropriation and nationalization of their property, Vedomosti wrote in an opinion piece recently. Investors, the paper says, would rather believe the likes of Bill Browder, Yevgeny Chichvarkin or Vladimir Nekrasov, than president Medvedev’s beautiful presentation at any forum.To Moscow, via Harlem James Brooke at 30/05/2011 20:23Kremlin leaders regularly say they want to increase tourism in order to diversify a Russian economy that is overly dependent on oil and gas. Tourism is labor intensive, geographically dispersed, and carries the potential to promote trade and investment.That may sound like a good plan, but Russia’s bureaucracy doesn’t always cooperate.As an accredited foreign correspondent, I was told that my three sons could come and go as they pleased. In reality, that meant paying $140 for each son’s single entry, eight-day work visa. The fact that my sons are college students and had no intention of working during their week in Moscow this winter was ignored. Then there was the visa form with questions that seem designed to give visitors second thoughts about visiting Russia.Question 30: “Do you have any specialized skills, training or experience related to firearms and explosives or to nuclear matters, biological or chemical substance? If yes, please specify.”Forms filled out, money orders purchased, the boys — James, 20, William, 18, and Alexander, 18 — encountered a new obstacle at the Russian Consulate in New York.Alexander said in a phone call: “To get the Russian visa, they say we have to get AIDS tests.”I checked around. Mike, an American executive here who shares my stinginess, had a suggestion: “No sweat, just send them uptown to get a free AIDS test. Just don’t tell them it’s for a visa or they won’t do it.”Three AIDS tests at a Harlem clinic later, $420 paid to the Russian consulate, and the boys were winging their way toward Moscow.Once here, they briefly joined a community of about 5,000 Americans registered with the American embassy as living in Russia.On the flip side of the coin, there are an estimated 5 million Russian speakers now living in the United States.Echoes of this 1,000-to-one ratio can be seen in Europe.Eager for tourism, France last year gave visas to about 300,000 Russians and Spain gave visas to 445,000. Finland stamped a record 1 million visas for Russians. To pep up the economy of northern Norway, Oslo has started a visa-free regime for residents of neighbouring Russian regions. Last year, 140,000 Russians crossed the border. During Russia’s 10-day New Year holiday, 25,000 Russians swarmed into Arctic Norway and Finland.But while the Finnish and Spanish consular officials stamp Russian passports like whirling dervishes, tourist traffic going the other way is barely a trickle. Carlos, a Spanish television correspondent here, says the Russian visa process in Madrid takes three weeks and 200 euros. He guesses that at best 20,000 Spaniards visited Russia last year.Once here, there is a lot to see and do. My sons skated on Red Square, sat in the captain’s chair of a submarine moored in the Moscow River, walked through the snow-covered grounds of the Tsaritsyno estate, visited the modern art exhibitions at Garazh, and watched men with chainsaws shape sculptures from ice.It was fun. But given the inertia of Russian bureaucracy, I’m not holding my breath for the visa process here to get any easier.For this family reunion, we’re going to Rio de Janeiro, Brazil.In Russia’s neighbourhood, it’s easier to organise a trip to almost any other country than it is to meet up in Moscow.We could have gone to Helsinki or Kiev, which also have direct flights from New York. American tourists don’t need visas for Ukraine or Finland. For that matter, American tourists don’t need visas for most of the rest of Russia’s neighbours, including Japan, Mongolia, Georgia, Poland, Lithuania, Latvia, Estonia, and Norway.This time, instead of spending $420 on Russian visas, I’m putting that money into hotels, restaurants and museums somewhere else. That way, Moscow’s bureaucratic inertia can help diversify another country’s economy.?James Brooke is the Moscow bureau chief for Voice of America. To see all “Russia Watch” posts, go to Russia is still tobacco-friendly: 31 May, 2011, 02:50Edited: 31 May, 2011, 02:50 By Polina Potapova Today, May 31, marks the worldwide “No Tobacco Day.” The list of cities and countries which prohibit smoking in public places is constantly being expanded. Recently, New York City and all of China have joined the list. Russian officials are the only ones to be tolerant of the bad habit.???The dangers of smoking are often talked about, even at the highest level. A month ago, at a conference on healthy lifestyles, Prime Minister Vladimir Putin publicly took a smoking test. The machine showed a negative result – the prime minister does not smoke. Meanwhile, the last decisive step in the fight against tobacco was made in October 2010. Putin approved a plan for a state policy over the next five years to prevent tobacco use. According to the plan, by the year 2015 Russians will be banned from smoking in public places. But before this happens, a number of measures will be implemented: for example, the excise tax on tobacco will be raised to European levels.? It is believed that if cigarettes are expensive, then people will buy them less. However, it should be noted that the concept is not legally binding.? It must provide the basis for a law that has yet to be adopted.???Cheap cigarettes?Doctors continue to release frightening statistics. According to assessments by the World Health Organization, this year addiction will kill 6 million people, including 600,000 from second-hand smoke. According to the organization’s representatives, an effective measure would be to raise the excise tax on tobacco. Statistics support this theory. According to the Association of International Pharmaceutical Manufacturers (AIPM), the rising cost of tobacco products has forced 29% of Russians to consider quitting smoking. But Europe has had better results: there, 45% are ready to quit smoking since prices have been raised.????????Clearly, price is the issue. A pack of cigarettes in Europe costs €14. In Russia, even after the excise taxes are raised, the price will remain significantly lower. In April, the Finance Ministry set forth an initiative to raise the taxes on tobacco and alcohol by 60%, starting in 2012. The idea was criticized by Vladimir Putin. In his opinion, with a sharp rise in prices, people will switch to illegal products.?“The Russian government is taking certain measures, but they are clearly insufficient,” said Natalia Torokolina, coordinator of the anti-smoking program at the World Health Organization. “The country continues having the highest smoking rates. Forty percent of our adult population is addicted to smoking. We need to immediately raise the price of cigarettes. In Russia, the excise tax on tobacco amounts to only 7.2 rubles.”According to the expert, taxes are not only higher in the European Union, but also in Ukraine, where the excise tax is twice as high.?Acting solo?Businesses are also making efforts against smoking. Often, however, workers’ health is not the motivating factor: managers are confident that a lot of time is wasted on smoke breaks.“A year ago, management began taking measures against smoking,” said Aleksandr, a staff member at a major publication. “An order was issued, according to which only non-smokers were hired to work, and smokers were issued electronic cigarettes free of charge. Addicts were even issued prescriptions for needle therapy. But that did not help. Only about five out of 100 people quit smoking. The others are hiding.”?????Universities have a great amount of experience in fighting against the bad habit. For now, they are allocating special places for smoking; others expel students for smoking inside buildings. The Russian State Social University is one of the latter.?????Officials, too, are taking certain steps. Moscow City Duma Deputy Lyudmila Stebenkova advocates for a ban on smoking in public places.“Smoking was prohibited in the Moscow City Duma building 10 years ago,” explained Stebenkova. “But certain deputies smoke on the stairway and in their offices. I am forced to chase them away!” If the law sponsored by the deputy is adopted, then it will soon be illegal to smoke in establishments located on public premises. In order for smoking to be prohibited in private cafes, a federal program is needed. But today it is still in the early stages.National Economic TrendsRussia not to make more foreign borrowings in 2011 , 31.05.2011, Moscow 11:36:11.Russia's Finance Ministry has no plans to make more foreign borrowings this year, including offerings of ruble-denominated Eurobonds, Deputy Finance Minister Sergey Storchak told reporters today. Amid favorable environment on commodities markets the Finance Ministry finds it more difficult to prove the necessity of additional foreign borrowings, he explained. ??????The ministry intends to offer domestic bonds worth RUB 1.7 trillion (approx. USD 61bn) in 2011. By offering domestic bonds, the ministry removes excess liquidity from the market, Storchak added. Russian Central Bank chairman sees grain exports as only risk of inflation, May 31, 2011The upcoming resumption of Russian grain exports is the only serious factor which might fuel higher consumer price inflation in the country, Central Bank Chairman Sergei Ignatyev said on Monday."This is the only serious, significant risk factor," Ignatyev said, adding that the resumption of grain exports would bring an immediate impact on domestic grain and food prices.Local analysts also expressed their concerns over the resumption, saying the lifting of grain exports ban may sharply drive food prices upward in the coming days.On Saturday, Prime Minister Vladimir Putin announced that Russia will lift from July 1 its grain export ban which was imposed last year in the wake of a severe drought, saying the lifting of the export ban is one of the measures to tap the potential of Russian agricultural producers.Earlier on Monday, the Central Bank also raised from Tuesday its deposit rates by 0.25 percent points due to persistently high inflationary expectations and risks for sustainable economic growth.According to the Central Bank, Russia's inflation in April and May was higher than that in the first half of last year.The inflationary pressure remained high, the Central Bank said.Source: XinhuaGrain Ban Will Be Lifted in a Month May 2011By Irina FilatovaPrime Minister Vladimir Putin's decision to?lift a?grain export ban in?a month caught industry players by?surprise, but it is a?welcome move that will return stability to?the market, a?leading grain producer said Sunday."There was much uncertainty on?the market regarding when the?ban would be lifted. Now the?uncertainty is gone," Erik Lystedt, investor relations director at?Sweden-listed Black Earth Farming, said by?telephone.Putin said Saturday that Russia would lift the?grain export embargo July 1, three months ahead of?a previous deadline, because of?optimistic prospects for?this year's harvest.Industry players predicted that the?country could export up to?10 million tons of?grain harvested this fall, capitalizing on?a discrepancy between domestic and?international prices.The government introduced the?grain export embargo last August as grain crops shrank to?60.9 million tons, from?97 million tons in?2009, amid the?worst heatwave in?decades. The?government said in?March that the?ban, which was extended twice, would be lifted no earlier than late September, when prospects for?this year's harvest were clear.The government's measures to?meet domestic grain demand and?keep grain prices stable after the?drought have proved effective, said First Deputy Prime Minister Viktor Zubkov."We have a?stable grain market now," he said at?a meeting at?Putin's Novo-Ogaryovo residence.The country has sown 24 million hectares this year — 10 percent more than in?2010 — and?has 6 million tons grain in?stock, which allows it to?afford some exports, said Zubkov, who oversees agriculture. "Given that we have grain now, the?condition of?the winter crops is good, and?the spring sowing is going at?a good pace, I suppose we can lift the?export [ban]," he said.Igor Vasilyev, head of?Zerno Online, an?industry information agency, said the?decision should have been announced before the?start of?the spring sowing season, but he still welcomed it."Better late than never," he said by?telephone. Lifting the?ban "is good news for?everyone," said Igor Lazarev, a?Krasnodar-based grain trader. The decision will open new opportunities for?Black Earth Farming, which is sowing 235,000 hectares of?grain this spring, an?increase of?30 percent from?last year, Lystedt said.Black Earth, which has fields in?the Kursk, Lipetsk, Tambov and?Voronezh regions, has recently finished construction of?a storage facility enabling it to?sell grain abroad and?is looking forward to?exporting this year, he said. The demand for?Russian grain will be high, Lazarev said, adding that local customers were already "queueing up" to?buy Krasnodar wheat. Vasilyev said Russia was unlikely to?experience any problems returning to?the export market because of?the spread between the?domestic and?global grain prices, which allows the?country to?sell grain at?a lower price than other exporters.But, he said, domestic farmers will face competition with Ukraine, which canceled its grain export quotas last week.Domestic grain prices currently stand at?5,200 rubles to?5,400 rubles ($184 to?$191) per metric ton, which is about 50 percent lower than international prices, Zubkov said.Domestic grain prices started growing several weeks ago and?will continue rising following a?global trend, Vasilyev said. However, this will not affect domestic bread prices, in?which grain costs are only a?minor factor, he added.It remained unclear how much current stock may go for?export in?July, but the?president of?the Russian Grain Union, Arkady Zlochevsky, told Interfax that the?export supplies in?the first months after lifting the?ban could reach 3 million tons.Additionally, Russia could export at?least 10 million tons of?grain sown in?spring, but the?government will only decide on?how much it allows for?export once the?harvest is over in?October, Vasilyev said.The Agriculture Ministry said earlier that it expects from?85 million to?90 million metric tons of?grain to?be harvested this year.Central bank surprises with a rate hike 31, 2011The central bank's (CBR) Board of Directors decided to raise interest rates on central bank deposit facilities by 25bp to 3.50% yesterday. The refinancing and repo rates were left unchanged at 8.25% and 5.50% respectively. The CBR stated that the narrower corridor of policy interest rates should help to reduce volatility of money market rates. At the same time the shortage of liquidity in the banking system (due to budget surpluses and capital outflows in January-April) has already pushed money market rates up by over 100-120bp above the CBR deposit rate, despite the fact that the consensus forecast was for no rate hikes yesterday.The CBR pointed to both elevated inflation expectations and the risks of an economic slowdown, but viewed these risks as balanced over the next few months taking into account tightening measures adopted at the beginning of the year. While growth performance has appeared uneven in January-April, headline inflation accelerated to 9.7%YoY as of 23 May driven by non-monetary factors. The CBR mentioned that moderating growth in money aggregates should help to limit inflationary pressure with some lag. However these lags could be large (up to 9-12 months according to our estimates) and the recent decrease in the savings rate suggests falling demand for money and growing risks of monetary pressures to the price level. We think the CBR may choose to pause with rate hikes for a few months, but will likely resume rate increases towards year-end. According to CBR Chairman Ignatiev, inflation is a priority for the CBR, however it is likely to tighten cautiously to minimise any negative impact on growth. We forecast growth will decelerate during the summer as a result of seasonal factors, stronger ruble and moderate economic growth. Therefore we think the CBR will likely employ a wait-and-see approach. We think when the CBR resumes hikes it will increase the deposit rate by at least 25bp,given the strong injection of liquidity from the budget and the possible pressure on the ruble from low current account surpluses, which could become overwhelmed by pre-election capital outflows and we also do not rule out further increases in reserve requirements. Meanwhile since the beginning of the year the CBR has cancelled some types of refinancing operations and was gradually tightening requirements of collateral it takes in these deals. Credit requirements to collateral are expected to increase further in July.Russia’s Central Bank Signals Interest-Rate Pause After Surprise Increase Scott Rose - May 30, 2011 10:00 PM GMT+0200 Russia signaled it may leave interest rates unchanged for several months after tightening monetary policy since December to balance accelerating inflation with slowing economic growth. Bank Rossii, the central bank, yesterday raised its overnight deposit rate to 3.5 percent from 3.25 percent, surprising 11 of 20 economists in a Bloomberg survey. It left its refinancing rate and overnight repurchase rates unchanged after a quarter-point increase in April, saying in a statement that borrowing costs may be at the level necessary to tackle inflation and promote growth “for the nearest months.” Sergey Ignatiev, chairman of the Moscow-based bank, is trying to limit consumer price growth to 6 percent to 7 percent without stifling credit and undermining an economic recovery in the world’s biggest energy supplier. While inflation will probably ease in the second half of the year, increases in food prices and public-sector salaries may threaten that target. “Most likely, the central bank won’t raise interest rates in the next three months,” Julia Tsepliaeva, head of research at BNP Paribas in Moscow, said by telephone yesterday. “Inflation could still bring a surprise though, requiring more forceful action.” While annual inflation reached an 18-month high of 9.7 percent as of May 23, consumer price growth remains relatively low in monthly terms, the central bank said in its statement yesterday. Food-price growth has slowed as the knock-on effects from last year’s drought, the country’s worst in 50 years, eased, the bank added. ‘Significant Risk Factory’ A ban on grain exports introduced as a result of the drought will be allowed to expire July 1, representing the “only serious, significant risk factor” for inflation, Ignatiev said yesterday, the RIA Novosti news service reported. The removal of the ban may spark a surge in grain exports, pushing up domestic prices, according to BNP’s Tsepliaeva. Russian grain prices are about half global levels, First Deputy Prime Minister Viktor Zubkov told Prime Minister Vladimir Putin in a meeting on May 28, a government statement said. Increased government spending before parliamentary elections at the end of the year and a presidential vote in early 2012 may also boost inflation, said Ivan Tchakarov and Anton Nikitin, economists at Renaissance Capital in Moscow. “A substantial topping up of public sector wages and pensions in the run-up to the parliamentary and presidential elections” is a “key risk,” they wrote in a research note on May 26. Higher oil prices may have created “some fiscal space to loosen the strings of the budget purse.” Consumer prices will rise 9.05 percent in 2011, according to the median estimate of 16 economists surveyed by Bloomberg. Slowest BRIC Growth The slowest-growing economy among the so-called BRIC nations, Russia is relying on revenue from oil to bolster its recovery, while seeking ways to reduce its reliance on energy exports. Oil at more than $100 a barrel is no longer stoking economic expansion, which slowed to 4.1 percent in the first quarter from 4.5 percent in the fourth. Growth slid further in April, to 3.3 percent, the Economy Ministry said May 26. Putin and President Dmitry Medvedev are targeting faster economic expansion. Putin said on May 26 that Russia should boost per capita gross domestic product to $35,000 from about $19,000 and create 25 million “quality” jobs within 15 years. Medvedev said in January that the country needs growth of 8 percent to 10 percent annually within five years to keep up with emerging market peers Brazil, India and China. The economy will expand 4.5 percent next year, compared with 9.1 percent for China and 7.8 percent for India, the International Monetary Fund forecast in April. The Economy Ministry forecasts growth of 4.5 percent this year, a target Ignatiev said on May 26 would probably be met. Risks to Growth The central bank cited high unemployment, slowing industrial production growth and an “extremely low” level of investment as key risks to growth. Consumers are borrowing and spending more while saving less, which could boost economic growth and inflation, it said. Unlike their counterparts in Brazil, China and India, Russian policy makers preferred currency gains and higher reserve requirements for lenders as inflation-fighting tools to help fledgling growth. The ruble has gained almost 9 percent so far this year. To contact the reporter on this story: Scott Rose in Moscow at rrose10@; To contact the editor responsible for this story: Balazs Penz at bpenz@. Business, Energy or Environmental regulations or discussionsRussian markets -- Factors to Watch on May 31 May 31, 2011 11:33am IST MOSCOW, May 31 (Reuters) - Here are events and news storiesthat could move Russian markets on Tuesday. You can reach us on: +7 495 775 1242 STOCKS CALL (Contributions to moscow.newsroom@): Investcafe: The growth on Asian markets will allow forcontinued growth on the Russian markets. Today, investors willbe paying attention to Sberbank (SBER03.MM) as it publishes itsfirst quarter results as well as to statistical data coming outof America. BCS: On Tuesday trade on the Russian market looks like itwill be more active. A large number of macro economic data willbe published in the US and Europe. EVENTS [RU-DIA] (All times GMT): MOSCOW - Economy Minister Elvira Nabiullina attends aRussian-German conference on entrepreneurship and thedevelopments in small and medium-size businesses in Russia. MOSCOW - Sberbank publishes its first quarter financialresults according to international accounting standards. MOSCOW - Mongolia's President Tsakhia Elbegdorj meetsRussian President Dmitry Medvedev and hold a press conference. LONDON - VTB Captial holds its "Russia Calling" investmentforum, through June 2. IN THE PAPERS [PRESS/RU]: The insurance subsidiary of Russia's Russian Standard bankacquired the non-government pension fund Initsiativa, markingthe company's foray into Russia's 1-trillion rouble pensionmarket, business daily Kommersant reports. Sberbank may sell the rights to a 5 billion rouble loan thatit issued to Texinvest, the company that is constructing theEurasia Tower in Moscow City, Vedomosti reported citingdevelopers and sources close to the bank. TOP STORIES IN RUSSIA AND THE CIS [RU-NEWS]: TOP NEWS: Russian ex-tycoon Khodorkovsky pleads parole [ID:nLDE74T1SP] US wheat down after Russia says to start exports[ID:nS9E7EM01T] Putin pledges to spend $285 bln on roads [ID:nLDE74T136] COMPANIES/MARKETS: Russia's Domodedovo airport operator drops IPO [ID:nLDE74T07G] Gazprom cites EU woes in fight against tax hikes[ID:nLDE74T0DK] Indian group bids for Russia's Yamal LNG-Novatek[ID:nLDE74T16W] ECONOMY/POLITICS: Rouble gains after rate hike prove short-lived [ID:nLDE74T0TU] Russia c.bank hikes deposit rate [ID:nLDE74T06G] ENERGY: Russia's econ min proposes refinery spin-offs [ID:nLDE74T1EK] Moody's outlook stable for Russian oil and gas[ID:nLDE74T0PK] COMMODITIES: Buyers cool as Russia eyes record grain exports [ID:nLDE74T0VQ] EU wheat down 5 pct as Russia lifts export ban [ID:nLDE74T1ND] Russia's Gokhran to export palladium in '12 [ID:nLDE74T1A6] Egypt says will be cautious over Russian wheat [ID:nLDE74T0WQ] Russia may export 20 mln t of grain in 2011-12 [ID:nLDE74T0VQ] MARKETS CLOSE/LATEST: RTS .IRTS 1,866.4 +0.4 pct MSCI Russia .MIRU00000PUS 990.3 +0.3 pct MSCI Emerging Markets .MSCIEF 1,159.8 +1.0 pct Russia 30-year EurobondRU011428878= yield: 4.613/4.537 pct EMBI+ Russia 11EMJ 196 basis points over Rouble/dollar RUBUTSTN=MCX 28.0609 Rouble/euro EURRUBTN=MCX 40.1000 NYMEX crude CLc1 $101.08 +$0.47 ICE Brent crude LCOc1 $115.20 +$0.52 For Russian bank balances see CBDEPOS For Russian company news, double click on [E-RU] Treasury news [M-RU] Corporate debt [D-RU] Russian stocks [.ME] Russia country guide RUSSIA All Russian news [RU] Scrolling stocks news [STXNEWS/EU] Emerging markets top news [TOP/EMRG] Top deals [TOP/DEALS] European companies [TOP/EQE]Sberbank doubles net profit in Q1 , 31.05.2011, Moscow 10:27:18.The net profit of Sberbank doubled year-on-year to RUB 86.8bn (approx. USD 3.09bn) in January-March 2011 under IFRS, the bank said in a statement today. ??????The bank's operating income increased 60% year-on-year to RUB 183.98bn (approx. USD 6.55bn) in the reporting period. Assets slightly rose to RUB 8.7 trillion (approx. USD 310bn) as of March 31. Bad loans fell 0.1 percentage point to 7.2%. Liabilities dropped 1.3% to RUB 7.6 trillion (approx. USD 271bn) as of March 31, whereas shareholders' equity went up 2% to RUB 1.08 trillion (approx. USD 38bn). Sberbank Q1 net profit 86.8 bln roubles, beats fcast ISTMOSCOW, May 31 (Reuters) - Russia's biggest lender Sberbank (SBER03.MM: Quote, Profile, Research) said on Tuesday it made a net profit of 86.8 billion roubles ($3.09 billion) in the first quarter of 2011, double its net profit of 43.5 billion roubles in the same period in 2010 .Reuters poll showed Sberbank's net profit in the first three months of the year at 77.4 billion roubles. [ID:nLDE74P0AB]In April Sberbank said its net profit under Russian Accounting Standards (RAS) almost doubled in the first quarter to 83.9 billion roubles.The state-controlled bank sees full-year net profit at 230-250 billion roubles this year after earning 182 billion roubles in 2010 and 24.4 billion roubles in 2009. [ID:nLDE721204] (Reporting by Oksana Kobzeva; Writing by Andrey Ostroukh; editing by Jessica Bachman) Sberbank Advances to Two-Week High After Profit Beats Estimates Jason Corcoran - May 31, 2011 9:00 AM GMT+0200 OAO Sberbank jumped to the highest intraday level in two weeks after the Russian lender’s first- quarter profit beat analysts’ estimates. The shares climbed 1.4 percent to 98.68 rubles, a sixth day of gains and the highest level since May 17. Sberbank’s profit doubled to 86.8 billion rubles ($3.1 billion) under international accounting standards, according to a statement on the website of Russia’s largest bank. That beat the 78.3 billion rubles average estimate for net income from 12 analysts in a Bloomberg survey. To contact the reporter on this story: Jason Corcoran at Jcorcoran13@ To contact the editor responsible for this story: Gavin Serkin at gserkin@ VTB takes over Bank of Moscow Asset Management Company , 31.05.2011, Moscow 10:39:26.VTB has started consolidation of Bank of Moscow Asset Management Company, RBC Daily reported today, citing a source close to VTB.??????Bank of Moscow Asset Management Company will be consolidated with VTB Capital Investment Management. At the initial stage the two companies will operate as separate entities under their own brands. VTB Capital Investment Management will run Bank of Moscow Asset Management Company. Norilsk to resume Arctic shipments after seasonal halt May 31, 2011 7:28am GMTMOSCOW May 31 (Reuters) - Russian metals giant Norilsk Nickel (GMKN.MM) plans to resume shipments from its Arctic port of Dudinka in the next few days after flooding prompted a seasonal halt.The port of Dudinka, its main export outlet, will resume shipments in early June, Norilsk's press office told Reuters on Tuesday.Every year, Norilsk stops loading nickel, copper and cobalt for export when the ice cover breaks and causes flooding at the mouth of the Yenisei River, where Dudinka is located. The closure disrupts the supply of concentrate to Norilsk's refineries on the Kola peninsula.Norilsk is the world's largest nickel miner and the biggest copper producer in Russia. About 4.5 million tonnes of goods, mostly metals from Norilsk, pass through Dudinka every year.(Reporting by Polina Devitt; editing by Jessica Bachman and Jason Neely) Mostotrest May Build Road With Austria’s Kapsch, Kommersant Says Ilya Khrennikov - May 31, 2011 6:44 AM GMT+0200 OAO Mostotrest (MSTT), a Russian infrastructure builder part-owned by Vladimir Putin’s judo partner Arkady Rottenberg, agreed with Austria’s Kapsch TrafficCom AG to bid jointly for construction of a toll road in southern Russia, Kommersant reported. Rottenberg previously partnered with France’s Vinci SA (DG) to build a road from Moscow to St. Petersburg via the Khimki forest, a project which was delayed by a civil environmental protest, the Moscow-based newspaper said. To contact the reporter on this story: Ilya Khrennikov in Moscow at ikhrennikov@ To contact the editors responsible for this story: Amanda Jordan at ajordan11@; Alexei Sumila at asumila@ UPDATE 1-InterRAO swings to 2010 net profit of 290 mln euros, May 30 2011* Helped by rising prices, profitable controlled assets* Revenue up 30 percent to 2 billion euros(Adds details, company quotes, background)MOSCOW, May 30 (Reuters) - Russian state-controlled power group InterRAO (IUES.MM: Quote, Profile, Research) swung to a 2010 net profit of 290 million euro ($414 million), helped by increased sales and higher profits from controlled assets.InterRAO said on Monday the result was also due to profits rising at Russian energy companies OGK-1 (OGK1.MM: Quote, Profile, Research) and TGK-11 (TGKK.MM: Quote, Profile, Research), in which it acquired stakes last year.It made a 282 million euro loss in 2009.Russian electricity producers have been reporting strong profit growth for last year, mostly citing higher power demand following the financial crisis of 2008-09. [ID:nLDE7420DK] [ID:nLDE72R0B2] [ID:nLDE73Q0XQ].InterRAO's 2010 operating profit was 186 million euros and revenue rose 30 percent to 2 billion."The increase in revenue was due to increased economic activity in the electricity market expressed as an increase in selling prices and the simultaneous growth of aggregate demand for electricity in Russia and in foreign markets," it said.InterRAO said last week it was considering a secondary listing in London at the end of 2011 or the beginning of 2012, and was planning to place 10 percent of its shares, worth up to $2 billion, on international markets by 2013. [ID:nLDE74M1D3]. (Reporting by Nastassia Astrasheuskaya; Editing by Lidia Kelly and Dan Lalor) ($1 = 0.7000 euro) ? Thomson Reuters 2011. All rights reserved. Users may download anASI Makes Its First Exit From Russia Antti Vilpponen, May 31, 2011, Leave a CommentAmbient Sound Investments, ASI, has made its first exit from Russia according to Quintura. ASI has sold its stake in SaaS-based inventory management software provider LogneX (Moy Sklad). Interestingly enough, LogneX was also ASI's first investment in Russia. ASI sold its stake to 1C, which is a Russian based ERP service provider. In 2008, ASI invested about $200 000 to LogneX for a 30% stake of the company. According to Margus Uudam's comments in Quintura, the investment house generated return on their investment - how big, it is unknown.1C on the other hand has plans to continue working in co-operation with the founders to further develop the service to be integrated with their solutions. LogneX has some 400 small and medium sized business users. The company was founded in 2007 and is run by CEO Askar Rahimberdiev. PPF Group plans IPO of Home Credit in Russia successful IPO of Nomos bank shares, PPF Group reportedly plans to float Home Credit Finance Bank shares this yearThe PPF Group, owned by Czech billionaire Petr Kellner, is planning to float between 20 percent and 30 percent of shares in its Russian consumer loans company, Home Credit and Finance Bank (HCFB), according to the Russian daily Kommersant. It quotes a source as saying PPF took the decision after negotiations with major Russian banks VTB and Sberbank on a strategic investment into HCFB fell through. PPF, however, claims such an investment deal is still possible.“They are planning on floating no less that 20 percent, but no more than 30 percent of shares. The group is not planning a share issue: the bank has enough surplus capital as it is, but the shareholders intend to float part of their stake,” an unnamed source reportedly well acquainted with HCFB and PPF Group’s operations in Russia told Kommersant. The Netherlands-registered PPF Group holds a 100 percent stake in Home Credit Finance.Failure of negotiations with potential investors?? ????According to the source, the decision to float the shares was taken after negotiations with state-controlled Russian retail banks Sberbank —Russia’s largest — and VTB on a major investment into HCFB failed. Earlier reports emerged in the Russian media that PPF Group wanted to sell a majority stake, if not its 100 percent stake in HCFB, Russia.PPF Group declined to confirm or deny the reports. “As a matter of policy we do not comment on reports from the market,” PPF Group spokesman Alexei Bechtin told Czech Position. However, he said negotiations with a potential strategic investor have not been exhausted and the possibility of an investment deal cannot be ruled out.Kommersant’s source says PPF Group is planning the floatation for the end of this year, which the daily reports should generate considerable investor interest partly because of the lack of other IPOs in the Russian financial sector this year. Emboldened by Nomos IPOThis April, Nomos Bank, in which the PPF Group holds a 29.9 percent stake through its subsidiary Russia Finance Corporation, raised $718 million in what was the largest IPO ever by a private Russian bank and the first by a private Russian bank since the crisis.“The Nomos Bank floatation pleased the owners and probably gave them confidence that there is a market [for the shares] which could have prompted the decision to launch an IPO of HCFB,” Olga Veselova, an analyst with private Russian investment bank Troika Dialog, told Kommersant.HCFB, Russia is the leading provider of point of sale (POS) consumer loans on the Russian market. According to the agency Frank Research, as of March 1, 2011, HCFB had a 27.2 percent share of the POS consumer loans market. At the beginning of this year, HCFB ranked 39th among Russian banks in terms of secured assets, and 20th in terms of capital amounting to 30.5 billion rubles (K? 18.6 billion). ????????Another potential bidder for Raspadskaya Coal emerges DialogMay 30, 2011Businessman Gennady Timchenko (Gunvor, NOVATEK) could be interested in acquiring Raspadskaya Coal, the RBC daily reported at end last week. The media outlet quoted an anonymous source as saying that negotiations are currently underway with respect to the 80% stake. Interest in the sector from Timchenko is possible, we think, since the he recently was reported to be in negotiations to purchase a junior coking coal miner, Kolmar, from Mikhail Prokhorov. We think Timchenko would be unlikely to pay a huge premium for the asset (see our report "Raspadskaya Coal - Wither From Here?" of April 29), and if a deal is struck, it is likely to be concluded below the asking price ($5 bln for an 80% stake, according to various sources). At the same time, $5 bln in cash is huge in absolute terms for any Russian corporate or individual oligarch. If Timchenko is indeed a potential buyer, the deal might be structured as an LBO with some leverage landing on Raspadskaya Coal's balance sheet, and part of the deal might be financed via equity markets (convertible or straight disposal of a 30% stake). Recent media reports have suggested that Raspaskaya Coal's management (40% of equity) wants to exit; Evraz Group (another 40%) may also be willing to exit if there is an external buyer, but it might also consider buying out the management if there are now external bidders. The list of possible external bidders currently being discussed in the local press include Severstal (unlikely, we think) and Timchenko (more likely). The emergence of a willing external buyer for the asset would be quite positive for Evraz Group from a credit standpoint, in our view. Alexey BulgakovVedomosti reports PIK founders selling their stakes in the company CapitalMay 31, 2011Event: Vedomosti reported today (31 May) that Forienst Investments, an offshore company owned by Kirill Pisarev, has decreased its stake in PIK from 10.5% to almost zero, while Maritrade, owned by Yuri Zhukov, has completely sold its 12.5% stake in PIK. PIK will hold a general shareholders meeting on 21 June, during which it plans to elect a new BoD. According to Reuters, members of the newly elected board could include Arkadiy Dvorkovich's wife, five representatives of Nafta-Moskva and three independent directors, while Zhukov and Pisarev may be excluded.Action: We reiterate our BUY rating and $5.75/share TP on PIK.Rationale: This change in ownership has not been confirmed by PIK, but would not come as a surprise to us, with both Pisarev and Zhukov no longer involved in the day-to-day operations of the company. The fact this coincides with media speculation that neither founder will be included in PIK's board adds credibility to the story. In practice, Nafta has been running PIK since 2009 and, if true, today's news is unlikely to have any impact on the company's strategic direction. Shares in PIK are currently trading on 12.5x and 8.5x 2011E and 2012E EV/EBITDA, respectively, while LSR is trading at 10.7x and 8.4x 2011E and 2012E EV/EBITDA, respectively.GAZ enters into more JVs: Terex and Fritzmeier next in line CapitalMay 31, 2011Event: Yesterday (30 May) Reuters reported that GAZ Group had signed an agreement with the American company Terex to establish a JV to manufacture construction and road building equipment in Russia. GAZ's parent company, Russian Machines, has also signed a MoU with the German company Fritzmeier to produce cabins for construction and road building equipment. The total investment of the JVs will reportedly reach $70mn. The JVs are expected to begin production at the beginning of 2012. The GAZ-Terex JV will initially produce 2,000 vehicles pa (subsequently rising to 5,000), and will sell the vehicles in Russia and abroad using the Terex distribution network. The JV with Fritzmeier plans to produce up to 20,000 cabins pa, and will invest up to $50mn.Action: Positive for GAZ group, in our view.Rationale: Production from the newly established JVs is expected to see high demand, since the current infrastructure and construction activity require more construction and road building equipment, in our view. GAZ Group, in particular, will benefit from partnerships with large foreign manufacturers that can share their expertise and technologies. Up to now, GAZ has managed to partner with foreign producers in all its main segments, including partnerships with Volkswagen and GM in the passenger car segment, with Daimler in vans, with FAW to produce trucks, and with FinnvedenBulten and Bosal to produce components.Ivan KimPolitical risk downs Domodedovo IPO? 31, 2011DME Ltd looks to have failed in its bid to brush aside political risk to list its stock, after it announced abruptly on Monday that it is canceling a planned IPO, blaming market conditions. However, it may be that the political pressure caught up with it first.The holding company for Domededovo - Russia's busiest airport - announced on May 18 that it planned to raise up to $1bn in a London listing, with some assuming that the company hoped it may offer some protection from growing pressure from the state, which has been pushing to regain control of the asset now it has become a major air hub. The apparent haste with which DME planned to head to London, with reports suggesting it hoped to close the deal by May 30, only encouraged such conjecture. However, DME said in a statement on Monday: "The company's management and its shareholder believe that in the current market conditions the IPO cannot be priced at a level which reflects a fair value of the company." Aton Capital estimated DME's enterprise value at $3.5-4.3bn on May 18.The picture became even less clear last week. On May 23, Vedomosti reported that Igor Yusufov - a former energy minister and presidential envoy for energy - was discussing the purchase of a blocking stake for $1bn. The report suggested Yusufov was casting himself as a 'peacemaker' between the company and the state.The authorities have been pushing to merge Domodedovo with the capital's other major airports: Sheremetyovo and Vnukovo, and raised the pressure after the bombing in January which killed 36 people. Whilst the markets have been weak, there have been no major eruptions since the IPO was announced thirteen days ago, although an unnamed source from amongst the bookrunners - Goldman Sachs, Morgan Stanley, JPMorgan and Citigroup - played along, telling The Moscow Times that: "The market conditions suck." Meanwhile, internet company Yandex - which had raised a red flag on possible political pressure during marketing - enjoyed a hugely successful IPO on May 24. Whilst the offer was boosted by an upswing for the sector in New York, investors were clearly happy to bet that the risks are actually manageable. Alexander Merzlenko, head of investment banking for Renaissance Capital suggested there's little debate over the value of Domodedovo. "A lot of people would dream of owning that business," he said. Yelena Sakhnova at VTB Capital speculates that that investors could have demanded a 30% discount for the political risk and an additional 20% for market volatility. Certainly the analyst appears to think that DME got their strategy wrong: "You should first settle all your problems with the government and then bring investors on board," she said.Investor appetite for Russian companies is limited, said Nikita Melnikov, a transportation analyst at Aton brokerage. "Why should you go and buy Domodedovo at this price with a political risk when it is operating in a rather negative investment climate when you could go to China, for example, and buy a very quickly growing company without these risks and for the same price?"A source at DME said that the company might consider another attempt to list when market conditions improve, but pointed out: "We are not saying 100% that we will do that, just that we will consider it."Activity in the Oil and Gas sector (including regulatory)Russia Raises June Oil Duty to 3-Year High, Extends Gasoline Tax Stephen Bierman - May 30, 2011 9:21 AM GMT+0200 Russia will raise its export duty on most crude shipments by 1.9 percent on June 1 to the highest level since 2008, and extend a special tax on gasoline. The standard tax rate will rise to $462.10 a metric ton ($63.04 a barrel) from $453.70 a ton in May, according to an order signed by Prime Minister Vladimir Putin on the government website. Oil taxes reached a high of $495.90 a ton in August and September 2008. OAO Rosneft’s Vankor field, OAO Surgutneftegas’s Talakan and TNK-BP’s Verkhnechonsk, which ship oil to Asia via the East Siberia Pacific Ocean pipeline must pay the standard rate, according to the order. Before May the fields paid a lower rate. The discounted rate for some Caspian Sea deposits and oil with certain characteristics will rise to $217.50 a ton from $211.70 last month. A gasoline tax imposed in May to fight domestic shortages will be raised to $415.80 a ton, according to the order. The export tax on light oil products will climb to $309.60 a ton from $304. The duty on heavy products will rise to $215.80 a ton from $211.80 a ton. The tax on liquefied petroleum gases such as propane and butane will increase to $189.80 a ton compared with $130.20 in the previous month. Russia sets its export duties based on the average Urals price from the 15th day of one month to the 14th day of the next. Russia’s Urals export blend rose to average $116.23 a barrel during the latest period the most recent monitoring period, Alexander Sakovich, a Finance Ministry adviser, said by phone on May 16. To contact the reporter on this story: Stephen Bierman in Moscow sbierman1@. To contact the editor responsible for this story: Will Kennedy at wkennedy3@. 03:05?31/05/2011ALL NEWSSt Pete’s Gas Forum opens on Tuesday. Tass 9 ST PETERSBURG, May 31 (Itar-Tass) —— St. Petersburg’s Gas Forum-2011 will feature over 100 companies from Russia and twelve foreign countries, including Bulgaria, Belarus, Hungary, Germany, Italy, Poland, France and Ukraine. The event is organised with the support of Russia’s Ministries of Energy and Regional Development, of the presidential envoy’s office in the North-Western Federal District. Farexpo, an organiser, said that the forum will have three specialised industrial exhibitions: “Ros-Gas-Expo”, “Boiler and Burner”, and “Energy Saving and Efficiency. Innovative technologies and equipment.” “The regional and international experience in energy saving programmes” congress will discuss optimal solutions, newest designs. The Ros-Gas-Expo exhibition is dedicated to the 200-years’ jubilee of Russia’s use of gas. Major aspects for discussions will be – state4 programme on energy saving and improvement of energy effectiveness for the period to 2020, formation of its legal base, raise of energy effectiveness of Russia’s economy, management of energy saving and staff policies. Indian consortium bids for Yamal LNG-Novatek stake, May 30 2011By Vladimir SoldatkinMOSCOW (Reuters) - A consortium led by Indian group ONGC (ONGC.BO: Quote, Profile, Research) has bid for a stake in Novatek's (NOTK.MM: Quote, Profile, Research) liquefied natural gas project in the Russian Arctic, a Novatek spokesman told Reuters on Monday."We received a bid from a consortium of ONGC, Petronet (PLNG.NS: Quote, Profile, Research) and GAIL (GAIL.NS: Quote, Profile, Research) for a stake in Yamal LNG," he said.Indian newspaper The Hindustan Times reported the consortium was willing to commit as much as $3.4 billion for a 15 percent stake.Analysts said participation of Indian companies in the project was a positive development for Novatek, Russia's second-largest natural gas producer and which could get access to the LNG market in India through a deal.A fifth of the project has already been assigned to French company Total (TOTF.PA: Quote, Profile, Research)."(India) could see LNG demand rise to 50 million tonnes by 2020 (Wood Mackenzie estimates), while direct access to the market could allow for the employment of swap schemes with the traditional suppliers of LNG to Asia," Alfa Bank said in a note.Yamal LNG was slated to start production of up to 16 million tonnes of frozen gas a year in 2015-17.(Reporting by Vladimir Soldatkin; Editing by Melissa Akin and Dan Lalor)TNK-BP Said To Be Interest In ConocoPhillips Vietnam Assets Gordon Wilcox May 30, 2011 10:32 PMTNK-BP, BP's (NYSE: BP) joint Russian venture with billionaire investors, is reportedly interested in acquiring the Vietnam assets of ConocoPhillips (NYSE: COP), the third-largest U.S. oil company. Those assets could be valued at as much as $1.5 billion, according to the London daily The Independent.Conoco is looking to sell its Vietnamese assets as part of a previously announced $17 billion asset divesture program. TNK-BP is Russia's third-largest oil company and already has a presence in Vietnam after purchasing assets in that country from BP last year for $1.8 billion.Texas-based Conoco hired HSBC to sell the company's Vietnamese assets. Read more: Stream pipeline moves another step closer to completion and Operations - May 31, 2011The Nord Stream pipeline has taken?another important step towards its target of starting to deliver gas directly from Russia to the European Union by the end of 2011.Preparations for welding together two of the three sections of the 1,224km?pipeline through the Baltic Sea have now started. They will be welded together on the seabed off the coast of Finland in a complex process expected to take about two weeks. The technical completion of the first of the twin pipelines will be achieved in June, when the final section is welded onto the pipeline off the Swedish island of Gotland.Construction of the second of the twin pipelines is scheduled for completion in 2012.Nord Stream was able to design its offshore pipeline to operate without an intermediate compressor station, but with three different design pressures and pipe wall thicknesses as the gas pressure drops over its long journey from Russia to landfall in Germany.The connection of these three pipeline sections will be carried out at the two offshore locations where the design pressure changes from 220 to 200 bar and from 200 to 177.5 bar respectively. Mid-May saw?the start of the connection of the Gulf of Finland section and the Central section at a sea depth of approximately 80m. The connection of the Central and South Western sections off Gotland will take place at a depth of approximately 110m.Each of the three sections is gauged and thoroughly pressure-tested before being joined together by hyperbaric tie-ins and subsequently linked to the landfalls in Russia and Germany. Pre-commissioning activities are already underway: for the Gulf of Finland and Central section cleaning, gauging and pressure-testing have been successfully completed, and the pressure test for South Western section now follows. On the site of the German landfall all piping has been completed and successfully pressure tested. For the Russian landfall site pressure testing is expected by the end of May after completion of all welding works. Further rigorous testing will be carried out on the whole system before it becomes operational in the last quarter of 2011. GazpromGazprom urges govt to keep subsoil tax unchanged 30/05/2011Russian energy giant Gazprom has asked the government to keep the subsoil tax unchanged to implement its large-scale investment program, Gazprom Deputy CEO Valery Golubev said on Monday.The Russian government is discussing measures to raise the subsoil tax on gas production from next year and double it for the gas monopoly to 536 rubles per 1,000 cubic meters from the current 237 rubles to replenish state coffers. The minerals extraction tax for independent gas producers will rise to only 251 rubles in 2012 and 265 rubles in 2013 under the formula prescribed in the Tax Code."The budget may lose something this year and in the short term but this will pay off handsomely in the future. Gazprom will be able to implement a broader investment program and, correspondingly, the budget will receive tax revenues not from Gazprom but from equipment manufacturers," Golubev said.The government has already taken some stimulating measures of tax and customs regulation for the oil industry while no such incentives have been offered for the gas sector, although Gazprom is implementing a number of complex projects on the continental shelf, he said.Russian Finance Minister Alexei Kudrin has said that a final decision on the minerals extraction tax will be made this week.MOSCOW, May 30 (RIA Novosti)?Gazprom Neft strikes cooperation deal with Schlumberger , 30.05.2011, Moscow 17:46:29.Russian oil company Gazprom Neft and U.S. oilfield service company Schlumberger have concluded an agreement on technological cooperation to enhance the efficiency of Gazprom Neft's upstream operations in Russia and abroad, the Russian company said today.??????Cooperation with Schlumberger is intended to help Gazprom Neft cut costs on developing fields and ramp up output by ensuring the technological integrity of upstream projects in Russia and abroad, Gazprom Neft Deputy CEO for Upstream Operations Boris Zilbermints commented on the transaction. MAY 30, 2011, 11:27 A.M. ETGazprom Neft, Schlumberger Sign Cooperation Agreement (Dow Jones)--OAO Gapzrom Neft (SIBN.RS), the oil arm of natural gas giant OAO Gazprom (GAZP.RS), said Monday it has signed a technological cooperation agreement with oil service giant Schlumberger Ltd. (SLB) to increase efficiency of hydrocarbon exploration and production at the company's deposits both in Russia and abroad. "Our joint efforts are aimed at establishing a productive business relationship and adapting Schlumberger's cutting edge technology to Gazprom Neft's needs in order to achieve the best results," Gazprom Neft's Deputy Chief Executive for Exploration and Production Boris Zilbermints said. The co-operation will allow Gazprom Neft to make more effective choices with regard to the new technologies offered by Schlumberger as well as to expand opportunities for executive staff training, the company said. -By Alexander Kolyandr, Dow Jones Newswires; alexander.kolyandr@ European gas drop woes for Gazprom gas consumption is falling and creating serious problems for Gazprom, a senior executive at the state-controlled gas export monopoly told a parliamentary hearing today. News wires ?30 May 2011 09:21 GMT "The world market is not as favourable as it could be," Reuters quoted Gazprom deputy chief executive Valery Golubev told the energy committee of the State Duma, Russia's lower house of parliament. "We note significant declines on the European market. It creates very serious problems for us." The hearings come as Gazprom pushes back against a Finance Ministry proposal to hike mineral extraction tax on gas as part of measures intended to raise revenues from the sector by around $5 billion next year. The ministry has proposed more than doubling the tax in 2012 to 536 roubles ($19) per thousand cubic metres for Gazprom, but not for independent gas producers. Published:?30 May 2011 09:21 GMT ?|?Last updated:?30 May 2011 09:21 GMT Europe gas use falling, Gazprom exec tells Duma May 30, 2011 7:35am GMTMOSCOW May 30 (Reuters) - European gas consumption is falling and creating serious problems for Gazprom (GAZP.MM), a senior executive at the state-controlled gas export monopoly told a parliamentary hearing on Monday."The world market is not as favourable as it could be," Gazprom Deputy Chief Executive Valery Golubev told the energy committee of the State Duma, Russia's lower house of parliament."We note significant declines on the European market. It creates very serious problems for us."The hearings come as Gazprom pushes back against a Finance Ministry proposal to hike mineral extraction tax on gas as part of measures intended to raise revenues from the sector by around $5 billion next year. (Reporting by Olesya Astakhova; writing by Melissa Akin; editing by Douglas Busvine) Why Russia’s Gazprom is a Buy. 29 2011 - 8:53 pm | 1,062 views | 0 recommendations | 0 comments Gazprom Headquarters in Moscow, RussiaGazprom is the one Russian company investors cannot ignore, especially managers of energy and emerging market funds. The Russian government owned company sits on the biggest natural gas reserves in the world and is right next door to two energy intensive neighbors: Europe and China.?It is a drama free supplier of gas to these markets, and has become a more reliable energy partner than the state run companies in the Middle East, many mired in political turmoil.The stock sits on the top of the heap of emerging market stocks in the $15.38 billion DFA Emerging Markets Value (DFEVX) and the $12 billion GMO Emerging Markets (GEMMX) mutual funds, surpassing other energy companies like Brazil oil giant Petrobras (PBR).What makes Gazprom a buy is its position in the natural gas market, its massive reserves, and regional demand for the only clean burning fossil fuel around.In the volatile global energy markets, Gazprom increased its gas exports 30% this month compared to May 2010 as unrest in the Middle East and a nuclear crisis in Japan boosted demand for Russian natural gas abroad, the company’s chief executive officer, Alexei Miller, said in a transcript posted on the Kremlin’s website on May 28. Miller said that the company’s natural gas exports were 12% more in the first quarter compared to 1Q10, and 20% more in April compared to April 2010.“Any manager of a global fund would have an energy sector and I would make the case for such a fund to own Gazprom,” says John Connor, manager of the Third Millennium Russia (TMRFX) mutual fund. “It’s got great market share, no monopoly purchasers, great cash flows and strong projected pricing dynamics. I run a Russia fund so it would be absurd for me not to own Gazprom. But, I have underweighted it for years. Not anymore. I’ve increased the fund’s holding from 4% to 6% this year and plan to continue slowly on up 8%,” Connor says.Gazprom has been between 40% and 50% of the Russian MICEX exchange’s market cap for? years.? It did not performed as well as other commodities last year because the government has put high taxes on Gazprom at home, and capped natural gas prices. That’s changing. The new and ongoing domestic tax adjustments are part of the Russian government’s decision to bring the domestic price up to world market levels.? Gazprom is going to see higher natural gas revenues going forward as a result.“The bulk of Gazprom’s sales are in the domestic market. When the government says it wants to close the pricing gap between national and international natural gas prices by allowing prices to converge, you are automatically looking at about a 15% price change for Gazprom. It’s not going to happen all at once, but Gazprom is going to start see a revenue boost,” says Mike Reynal, fund manager of the $1.79 billion Principal International Emerging Markets (PIEIX) fund.There are some fundamental tail winds that are good for Gazprom, too. After Japan’s near-nuclear meltdown in March at the Tokyo Electric Power Company Fukushima nuclear power facilitiy, both Japan and Europe are less gung-ho about nukkes. Natural gas is the most readily available alternative for countries that have strict environmental standards with limits on the amount of CO2 they can release into the atomosphere each year. Natural gas is as clean as hydrocarbons get, and Russia is a friend next door.“Gazprom shares have gotten whip-sawed because investors are not sure how the price gap reduction is going to play out, but we like the stock,” says Reynal. “Long term, if you want safe, fast access to natural gas, Russia is a lot more attractive than North Africa. Gazprom suddenly becomes a lot more valuable to a lot of people, not just to the shareholders,” he says.Gazprom’s history dates back to the old Soviet Union in 1946 upon commissioning of the Saratov–Moscow gas pipeline. Gazprom State Gas Concern was established in 1989. In 1993 the Concern laid the foundation for setting up Gazprom Russian Joint Stock Company, which was renamed in 1998 as Gazprom Open Joint Stock Company, now listed on the London Stock Exchange.Gazprom has over 33 trillion cubic meters of natural gas reserves, according to the company.?It produced over 461 billion cubic meters of natural gas in 2009.Russia is often considered the Wild East to Western investors. Plagued with corruption and a lack of transparency, Russia is rarely considered a top pick within the universe of big emerging market equity. But that is changing. The government of Dimitry Medvedev is forcing all government officials out of the boards of state-run, and mixed-capital corporations like Gazprom. The government wants to become a safer haven for foreign investors, and has addressed corruption issues over the past several years. A new Russia is trying to emerge again,?says Connor.? Gazprom is a big part of the changes taking place in corporate governance.? Anyone who believes Russia might become more shareholder friendly in the mid- to long term, and thinks that natural gas prices are going to trend higher in the years ahead, might want to give Gazprom’s London listed shares a look.World’s Proven Natural Gas Reserves as of Jan. 20101. Russia: 47,570,000,000,000 cubic meters, accounts for 25.02% of world’s total.2. Iran: 29,610,000,000,000, 15.57%3. Qatar 25,470,000,000,000, 13.39%4. Turkmenistan: 7,504,000,000,000, 3.95%5. Saudi Arabia: 7,461,000,000,000, 3.92%6. United States: 6,928,000,000,000, 3.64%7. United Arab Emirates: 6,071,000,000,000, 3.19%8. Nigeria: 5,246,000,000,000, 2.76%9. Venezuela: 4,983,000,000,000, 2.62%10. Algeria: 4,502,000,000,000, 2.37%Source: HYPERLINK "" CIA World Factbook10:01?31/05/2011ALL NEWSGazprom to begin gas supply service installation in Altai Krai. Tass 57 BARNAUL, May 31 (Itar-Tass) — Russia’s natural gas giant Gazprom this year will launch the construction of a gas pipeline branch and a gas distribution station in the Nizhnyaya Kayancha settlement of the Altai Territory. The construction of the station will ensure energy resource supply to the Biryuzovaya Katun tourism-recreational special economic zone (SEZ) and the Sibirskaya Moneta (Siberian Coin) gambling zone. The regional administration told Itar-Tass on Tuesday that issues related to the construction of this facility were discussed at a working meeting between the Gazprom CEO, Alexei Miller and governor of the Altai Territory Alexander Karlin. Gazprom will also consider the possibility of building an inter-settlement gas pipeline from the village Berezovka of the Krasnogorsk district to the city of Biysk, which will allow the company to install gas supply service in 15 settlements, as well as to build a branch gas pipeline and a gas distribution station in the Rebrikha village,” the territorial administration said after the meeting. The construction of the gas distribution station in Rebrikha means for the Altai Territory the beginning of gas service installation in the southwest of the region. The cost of the gas service installation projects in Rebrikha and Nizhnyaya Kayancha is estimated at 2.1 billion roubles. For the gas service installation in these two major localities it is necessary to build a 58-kilometre branch from the Novosibirsk – Barnaul - Gorno-Altaisk main pipeline. This will allow to increase natural gas consumption in the region up to 4.3 billion cubic metres a year, to install gas supply services in 493 populated localities in 37 districts of the territory and in six cities. The gas pipeline mains’ loading will increase to 60-70 percent. According to vice governor of the Altai Territory Mikhail Shchetinin, when Biryuzovaya Katun tourism SEZ construction is completed, it will significantly increase the contribution of this industry to Altai’s GRP. To draw investors’ attention to Biruzovaya Katun and to the Sibirskaya Moneta gambling zone, the regional administration showcased these projects at federal and international exhibitions. Altai took part in the 18th International Commercial Property InvestmentFair (Cannes, France) and the 11th St. Petersburg International Economic Forum. The total investment goal is $1.6 billion. Russian companies and potential foreign investors are increasingly interested in participating in the Biryuzovaya Katun SEZ project. To develop the infrastructure outside the SEZ, the expected investment will be over $410 million. For the zone development itself, the goal is $1.2 billion of investment. “We expect the funds to come from both Russian and foreign investors,” the official noted. The infrastructure development will include new motor ways, a new bridge over the Katun River, a new high-voltage electric power line, gas pipelines and reconstruction of the Biysk airfield. All of these will be financed from the budget and non-budgetary sources and will be completed in 2011. When the Biysk airport is granted international airport status, it will be ready to receive 1st and 2nd category aircraft, as well as become a gateway to the Altai tourism zone for CIS and foreign tourists. The adjacent gambling zone is a big plus. The Sibirskaya Moneta gambling zone will also help the territory attract more foreign and Russian investment and create more jobs, Shchetinin noted. Biryuzovaya Katun is set on 3,200 hectares. The Biryuzovaya Katun SEZ is the largest of seven Russian tourism zones in terms of the territory it occupies. The site has already been partially developed with artificial swimming and fishing reservoirs, two downhill ski runs and three all-year-round hotel complexes. These attractions are already drawing enthusiastic fans. The SEZ development requires a daunting array of new infrastructure – from building roads and bridges to reconstructing airports, upgrading the power grid, to preparing new engineering networks for the forthcoming construction. To insure a regular flow of tourists into the Altai recreation zone, officials are also planning to build an international terminal at Biysk. In 2004, Gazprom and the Altai Territory administration signed the Cooperation Agreement that was extended in 2009. The gas service installation accord was inked in 2004. Natural gas penetration in the Altai Territory is at 7.2 percent, including 11.4 percent in cities and towns and 2.6 percent in the rural area. The respective gas service installation levels throughout Russia average 63.2, 67.5, and 45.5 percent, according to Gazprom. In 2005-2009 Gazprom allocated 1.6 billion roubles for the gas service installation in the Altai Territory. The funds were used to construct 19 inter-settlement gas pipelines. In 2010 Gazprom allocated 95 million roubles for the regional gas service installation to finalise the construction of an inter-settlement gas pipeline to the village of Larchikha. In 2005-2010 the Altai Territory administration sponsored gas service installation in 11,886 households and apartments, construction of 288 kilometres of street-level networks and conversion of 100 boiler houses to gas. ................
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