Russia - WikiLeaks
Russia 100811
Basic Political Developments
• Former Moldovan president in talks on bilateral relations with Russia - Former Moldovan President and leader of the oppositionist Communist Party Vladimir Voronin met with head of the Russian President's Executive Office Sergei Naryshkin on Sunday in Moscow.
• FAO launches NASA developed fire monitoring system - Will help countries to detect fire hotspots in real time
• U.S. to replace Russia on grain market during export ban - minister: Russia may revise the embargo in October when the losses incurred by the drought become clearer, Skrynnik said.
• Medvedev orders amendments to procurement law - paper: Russian President Dmitry Medvedev has ordered the government to amend the procurement law after a recent overpricing row, business daily Vedomosti said on Wednesday.
• Sungari waters reach Russia’s Amur River after chemical accident in China - Waters of the Sungari River from the area contaminated with chemicals after an accident at a Chinese chemical plant in the province of Jilin have reached Russia’s Amur River in the Far East, a spokesman for the Khabarovsk territorial administration of the Russian Emergencies Ministry told Itar-Tass on Wednesday in comments of laboratory tests.
• 3 Abakan Mining Co miners refuse to leave mine over wage arrears
• Russia against unilateral Iran sanctions - Russian Deputy Foreign Minister Alexey Borodavkin has reiterated Moscow's opposition to US and EU unilateral sanctions against Iran over its peaceful nuclear program. In a meeting with Iranian ambassador in Moscow, Mahmoud Reza Sajjadi, on Tuesday, Borodavkin voiced his country's opposition against such policies.
• Iran Appreciates Moscow's Opposition to Unilateral Sanctions - Iranian Envoy to Russia Mahmoud Reza Sajjadi appreciated Moscow's stance in opposing the unilateral sanctions imposed against Iran by certain countries over Tehran's peaceful nuclear program.
• The first phase of the Vigilant Eagle exercise completed - Russian and U.S. fighter jets, refueling aircraft and civilian air traffic control services are taking part in the first ever Russia-U.S anti-terror exercise, nicknamed the Vigilant Eagle.
• ‘Vigilant Eagle’ Tests NORAD, Russian Response - By Army Maj. Mike Humphreys, North American Aerospace Defense Command
• Groundbreaking US-Russian hijacking drill ends - A groundbreaking training exercise ended late Tuesday after U.S. and Russian fighter jets crisscrossed the Pacific in pursuit of a chartered plane playing the role of a hijacked airliner.
• Nezavisimaya/Russia Today: International virtual anti-terrorism forces - The US and Russia hold first-ever joint exercises for interception of aircraft
Pyotr Veliky cruiser, INS Trishul to hold drills in Arabian Sea
• Venezuela acquiring Russian submarines – He [Chavez] told the audience of his populist Sunday political sermon on Venezuela's state-run radio and television the submarines that are about to join the country's armed forces would be "normal" submersibles with conventional weapons and radar technology.
• Putin wants Russian satnav system in new cars from 2012
• WILDFIRES IN RUSSIA
o Half of Russia’s wildfires contained - The total area of devastating wildfires in Russia has halved in the last 24 hours, the Emergency Ministry said. There are still 612 forest and peat bog fires burning across the country, on a territory of 93,000 hectares, which is almost half of the 174,000 hectares registered on August 10th.
o Russian wildfires raise radiation fears
o Russian food prices spike as hundreds of fires burn on
o Ministry aviation to focus on tackling wildfires in Moscow, Ryazan regions on Aug 11
o Russia reduces wildfire area 'by half'
o Anger grows in Russia press over slack fire response - Anger mounted in Russia's press Wednesday over the official response to the worst wildfires in the country's history, with questions asked even over the PR tactics of Prime Minister Vladimir Putin.
o Wildfire situation improves in Russia
o Goodwill and better weather, but Russia still ablaze
o Damp delight as rain gives Moscow a breather
o Smog leaves Moscow
o Weather experts: Smog expected to return to Moscow
o Muscovites Complain Businesses Raising Prices On Key Goods, Services
o Fires Cause 'Brown Cloud' That May Hit Arctic
o China to donate $1 mln , relief goods to aid fire fighting in Russia
o US allows Moscow embassy families to return home
o U.S. State Department warns against visiting Russia
o Sweden warns against travel to fire-ravaged Russia
o Greece is ready to extend visas for Russian tourists and to assist in extinguishing fires
o Greece ready to dispatch help to Russian Federation regarding wildfires
o UN offers aid to victims of fires in Russia
o Empty Norwegian embassy in Moscow
o Uphill battle for volunteer firefighters in Russia - Muscovites answer villages’ calls for help
o Russian wildfire smoke and carbon monoxide analyzed and imaged by NASA satellite
o Will the Wildfires Stoke Political Change in Russia? - By Simon Shuster / Moscow
• NORTH CAUCASUS
o Medvedev to hold meeting on Dagestan's development
o Major Overhaul of the North Caucasus’ Transit System is Postponed
o Murder on Ramadan: the death of one of the spiritual leaders of the Muslims of Dagestan
o Two Wahabi ideologists hiding in Turkey - Chechen president
o Chechen leader: Azerbaijan not harbouring 'terrorists' - Ramzan Kadyrov, Moscow-backed president of the Chechen Republic, has said that Azerbaijan is not supporting "terrorists and extremists".
o Chechnya: Divisions in the Ranks - Doku Umarov’s attempt to resign has revealed a schism in the leadership of North Caucasus-based insurgency and terrorism networks, but whether he stays or goes will have no long-term impact on the network’s capabilities, Simon Saradzhyan comments for ISN Security Watch.
• Expert speaks on how to save unique Russian fruit, berry crop collection (Update 1) - The Vavilov Institute of Plant Industry and its Pavlovsk station are trying to retain land that has already been given to a housing construction development fund by the Russian State Property Management Agency.
• FIFA inspection visit in Russia expected to go ahead as scheduled - Given the current conditions in and around Moscow as well as in other regions of Russia, the Russian Bid Committee for the 2018/2022 FIFA World Cup is in contact with FIFA regarding the upcoming visit of the FIFA inspection group, due to take place from 16 to 19 August 2010.
• ”Kursk” – 10 years after - This Thursday marks the 10th anniversary of the “Kursk” submarine disaster. Today, Russia and Norway are far better prepared to cooperate on difficult rescue operations in the Barents Sea. Unfortunately, that might be needed, argues the editor of BarentsObserver in this opinion.
National Economic Trends
• Russian government to prevent possible bread price hikes
• Drought may force Russia to import rye for 1st time in 15 years
• Russia needs to introduce a tax on wheat exporters - From Prof Padma Desai
• Heatwave hits Russian growth forecast - By Isabel Gorst and Catherine Belton,
• No halt in Russia heat, winter crop sowing
• Budget deficit at 2.2% of GDP in January-July
• Corporate loan growth excluding Sberbank was only 0.1% m-o-m in July
• Mortgage Lending Doubles - The value of ruble-denominated home loans issued in the six months through June rose to 125.9 billion rubles ($30.1 billion), compared with 52.4 billion rubles during the same period last year, the Central Bank said on its web site Tuesday.
• Monetary base declined in July - According to the data, the broad monetary base reached RUB7.11trn in July, down from RUB7.24trn in June. The monetary base declined for the first month since January, and this decline is unexplained by technical factors. In January, the numbers were distorted by the effects of the New Year holidays: the banks accumulated money in December to get through the long holiday period.
Business, Energy or Environmental regulations or discussions
• Norilsk Nickel, Sberbank, Silvinit: Russia Stock Market Preview
• Drought May Spur Interest in Crop Insurance
• UPDATE 1-Cherkizovo expects more state help on grain
• Russia's Sistema to float public issue for Indian telecom arm
• Norilsk Independent Directors Back Efforts to Probe Board Vote
• Rusal Seeks Arbitration Against Interros for Norilsk (Update1)
• RUSAL files arbitration request against Interros
• Rusal Secures $4.6 Billion Credit Line - The loan was extended to Rusal under an accord to help Russian companies generally as they struggled to survive the global meltdown.
• Norilsk to Review Request - Norilsk Nickel said Tuesday that its board will review a request by shareholder United Company RusAl to hold an extraordinary general meeting.
• Google Launches Traffic Tracker In 2 Russian Cities –Vedomosti
• Malware Infection Hits Russian Android Phones
• Virus sends costly messages from Android phones - Mobile security firm Lookout on Tuesday warned that a booby-trapped Movie Player application is infecting Android phones in Russia with a virus that sends costly text messages.
• A Tiger in the Internet Mall - The private equity firm Tiger Global Management acquired a 50 percent stake in Wikimart, the Russian online mall, according to the Russian newspaper Vedomosti, with a nod to the Quintura blog. The deal took place in May, but only recently surfaced.
• Japanese trio bows out of Uranium One - A consortium of three Japanese companies has agreed to end their investment in Canada-based Uranium One, securing long-term uranium purchasing rights instead. Meanwhile, Uranium One is upping its 2010 production forecast.
• INTERVIEW: Bringing PR to Russia - Peter Necarsulmer was running a PR consultancy in California at that time when he got a call from the White House. "Sid Rovich called me, the senior advisor to President Bush. Gorbachev was in Washington for a summit, but he and his wife Raisa wanted to visit California. Once they left Washington, it was no longer an official visit and Sid asked me if could handle all the media relations," says Necarsulmer.
• Russia imports more Norwegian salmon - Russian import of salmon from Norway continues to rise. Russia is the second largest market for Norwegian salmon outside the EU.
Activity in the Oil and Gas sector (including regulatory)
• Russia May Boost Oil Export Duty in September on Urals Price - Russia may boost its duty on crude exports by 5.1 percent for regular fields and as much as 11.5 percent for deposits with a discounted rate next month after prices for its Urals blend rose.
• EU Seeks to Broker Trans-Caspian Pipeline Deal Between Turkmenistan and Azerbaijan; Russia Finds Project 'Absurd'
• Trebs and Titov fields to be sold in December - Starting price set at $603 mln
• TNK-BP might sell Novosibirskneftegaz; no major implications for production profile and Eurobonds
Gazprom
• Gazprom Finishes Over 750 Kilometers of the Sakhalin-Khabarovsk-Vladivostok Pipeline
• ‘Gazprom’ decides about Southern Stream and not Borisov and Tadic - ‘We do not want to comment what Serbia President Boris Tadic and Bulgarian Prime Minister Bojko Borisov talked about. Those are their wishes. The decision on the ‘Southern Stream’ route shall depend exclusively on the feasibility study presently being worked on’, the comment from Moscow says.
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Full Text Articles
Basic Political Developments
Former Moldovan president in talks on bilateral relations with Russia
RBC, 11.08.2010, Chisinau 10:17:42.Former Moldovan President and leader of the oppositionist Communist Party Vladimir Voronin met with head of the Russian President's Executive Office Sergei Naryshkin on Sunday in Moscow. According to Voronin, the parties discussed matters related to the current situation and development of bilateral relations between Russia and Moldova.
Voronin also met with Deputy Foreign Minister of Russia Grigory Karasin and discussed Moldova's domestic political situation and prospects for development of Moldovan-Russian cooperation.
FAO launches NASA developed fire monitoring system - Will help countries to detect fire hotspots in real time
Date: 11 Aug 2010
Rome, 11 August 2010 - FAO today has launched a new online portal on fire information and real time monitoring to help countries to control fire effectively and protect property and natural resources. The new Global Fire Information Management System (GFIMS) detects fire hotspots from satellites operated by the U.S. National Aeronautics and Space Administration (NASA).
Developed in collaboration with the University of Maryland, GFIMS has an online mapping interface for displaying fire hotspots in "near real" time meaning that there is a lag of approximately 2.5 hours between satellite overpass and the data being available. The new system also allows users to receive email alerts on specific areas of interest, enabling subscribers to react quickly.
"The GFIMS has been launched at a time when the incidence of megafires tends to increase," said Pieter van Lierop, FAO Forestry Officer, who is responsible for the agency's activities in fire management.
"The control of these fires has become an issue of high importance, not only because of the increasing number of casualties and the huge amounts of area burned but also because of the relations with issues of global interest, like climate change."
In Russia alone this year due to the unprecedented heat wave with temperatures soaring to up to 40ºC and winds of up to 20 metres per second the total area burned has reached more than 14 million hectares, according to the data provided by the Sukachev Institute for Forests, based in Krasnoyarsk. Forest fires in Russia have already killed more than 50 people this summer.
Globally, vegetation fires affect an estimated 350 million ha of land each year- about half or more of this area is burnt in Africa. In the Mediterranean, between 700 000 and one million hectares are damaged by vegetation fires every year.
Easy to use
Until recently, natural resource managers have faced considerable challenges in obtaining timely satellite-derived information on vegetation fires.
"The information was very fragmented because it was gathered from various sources making it unsuitable for precise analysis and identifying trends," - said John Latham, FAO Senior Environment Officer in the Natural Resources Management and Environment Department. - "GFIMS is an integrated fire information system which delivers the essential data to its users while the fires are still burning."
GFIMS allows users to download fire information in minimal file sizes and in easy-to-use formats, including text files, ESRI shapefiles, Web Map Services, Google Earth/KML files, and a plug-in for NASA World Wind.
"GFIMS has also provoked strong research interest," added Latham. "Linking the system to land cover shows us what is burning. GFIMS now provides analysis on trends of prevalence of fire by year and month, and will include information on the size of burnt area by land cover type in the future. It will result in improving analytical data and timely response."
The system could be used by forest managers and fire fighters, as well as agencies involved in agricultural and natural resources monitoring. The subscription is free of charge. The system only requires a functioning email address. Initially GFIMS has been launched in three languages - English, French and Spanish. The monitoring system is hosted at the FAO's Natural Resources Management and Environment Department.
Contact:
Irina Utkina
Media Relations (Rome)
(+39) 06 570 52542
irina.utkina@
U.S. to replace Russia on grain market during export ban - minister
10:52 11/08/2010
The United States, the world's largest grain exporter, will act as a substitute for Russia on the world grain market when an export embargo comes into force on August 15, Russian Agriculture Minister Yelena Skrynnik told Ekho Moskvy radio station.
Russia banned the export of grain, including wheat, barley, rye and maize, from August 15 to December 31, following a drought and wildfires that have destroyed 10.8 million hectares of crops. Forecasts for this year's harvest have fallen as low as 60 million tons, 38% less than last year.
Kazakhstan and Ukraine, two other leading grain exporters, have also been affected by drought, Skrynnik said.
It is unlikely that "these countries will take our place on the world grain market," she said. "If any [country] is going to take our export potential, it will be the United States."
Russia is the world's fourth largest wheat exporter. Its biggest customers are Egypt, Turkey, Syria, Pakistan and Iran. Last year, Russia exported a quarter of its grain output.
Russia may revise the embargo in October when the losses incurred by the drought become clearer, Skrynnik said.
She said the ministry does not expect a rise in bread prices - something that most analysts say is nonetheless inevitable after the worst drought and wildfires in decades.
Analysts said on Tuesday the short term losses for the Russian economy from the record-breaking heat wave and accompanying drought and wildfires may amount to 1% of 2010 GDP, or around $15 billion.
MOSCOW, August 11 (RIA Novosti)
Medvedev orders amendments to procurement law - paper
Russian President Dmitry Medvedev has ordered the government to amend the procurement law after a recent overpricing row, business daily Vedomosti said on Wednesday.
Medvedev saw red after presidential aide Konstantin Chuichenko reported on a gross overpricing of medical equipment in the Rostov region, where several x-ray machines, were bought on a government contract for 90.3 million rubles ($3 million) each - almost three times the manufacturer's price, 34.5 million rubles ($1.1 million).
The price soared because the x-ray machines were bought via two intermediaries, one in Britain and the other in Russia, Chuichenko said.
"This is an absolutely cynical and gross theft of government money. This cannot be tolerated anymore," Medvedev said.
"First of all, it attracts wild hatred from our people and, secondly, it creates a negative image of the country," he said.
The amendments will see that medical equipment is bought with regard to manufacturers' prices. The government will also introduce unified requirements for the equipment and price monitoring.
But the overpricing, however gross, was quite legal, a government official said, since the maximum price of a government contract is not stipulated by law and is set by the customer with regard to the budget limit.
The procurement law originally contained mistakes and amendments would be of little help, Alexander Stroganov from the government contract center said. Unless there is a centralized control over purchases, overpricing and corruption will continue to thrive.
The Russian Federal Anti-Monopoly Service official said, however, that medical equipment should be sold in an auction.
MOSCOW, August 11 (RIA Novosti)
Sungari waters reach Russia’s Amur River after chemical accident in China
11.08.2010, 08.52
KHABAROVSK, August 11 (Itar-Tass) -- Waters of the Sungari River from the area contaminated with chemicals after an accident at a Chinese chemical plant in the province of Jilin have reached Russia’s Amur River in the Far East, a spokesman for the Khabarovsk territorial administration of the Russian Emergencies Ministry told Itar-Tass on Wednesday in comments of laboratory tests.
Water samples taken near the village of Nizhneleninsky at the confluence of the Sungari and Amur Rivers have shown no increased levels of chlorides, phenols, ammonites or other hazardous substances. Water acidity also proved normal, the spokesman said.
According to Emergencies Ministry’s experts, the water from the Sungari River will reach Khabarovsk with its 600,000 population on August 14-15. The city gets drinking water from the water intake structure in the Amur River bed, therefore preventive measures were taken to ensure population’s safety at any level of the river waters’ contamination. Additional test collecting stations have been established up the river. Water tests will be collected at several stations along the Amur section from Nizhneleninsky to Khabarovsk till August 20.
Specialists of Khabarovsk’s water supplies company Vodokanal say no contamination with hazardous substances have been registered in the Amur waters as of yet, that is why they employ regular water treatment technologies. In case pollutants concentrations go up, Vodokanal will use charcoal filters.
The accident occurred in the Chinese province Jilin on June 28, when floodwaters washed some 7,000 barrels with poisonous chemicals from the plant’s warehouse into the Wende River and the Sungari River. According to information of the Chinese side, 3,000 170-kilogram barrels were filled with trimethylchlorosilane and other hazardous chemicals, while 4,000 barrels were empty. The Chinese side assured that all barrels were taken out from the Sungari River and the river water was not contaminated. Contacting with water, such chemicals do not form any toxic products.
3 Abakan Mining Co miners refuse to leave mine over wage arrears
11.08.2010, 10.17
KRASNOYARSK, August 11 (Itar-Tass) -- Three miners employed with the Abakan Mining Co (former Yeniseiskaya mine) on Tuesday refused to leave the mine after their shift demanding repayment of wage arrears, Yulia Pavlova, a senior aide to the prosecutor of the town of Chernogorsk, told Itar-Tass on Wednesday.
After the mines owner died in February 2009, bankruptcy administration was instituted, and on September 14, 2009, the Khakassian Court of Arbitration ruled to recognize the Abakan Mining Co as bankrupt.
The mine employs 65 people who are tasked to maintain it in a working condition. If maintenance works are ceased, subterranean waters might flood both the mine and a Chernogorsk suburb adjacent to the mine.
“The total sum of wage arrears amounts to 2.5 million roubles. Administrative proceedings were initiated against the bankruptcy receiver. Pre-trial check is underway. The situation at the mine is under control of the prosecutor’s office,” Pavlova said.
According to Anatoly Petrenko, the mine’s receiver, the company’s property will be auctioned in late September. So far, in his words, it is the only source of possible revenues that might be used to repay delayed wages.
Russia against unilateral Iran sanctions
Wed, 11 Aug 2010 02:11:07 GMT
Russian Deputy Foreign Minister Alexey Borodavkin has reiterated Moscow's opposition to US and EU unilateral sanctions against Iran over its peaceful nuclear program.
In a meeting with Iranian ambassador in Moscow, Mahmoud Reza Sajjadi, on Tuesday, Borodavkin voiced his country's opposition against such policies.
In his turn, Sajjadi appreciated Moscow' stance on unilateral sanctions imposed by the US and EU and hailed Russia for positive policies on Tehran's nuclear program.
Borodavkin also underlined the importance of commissioning the Bushehr nuclear power plant, saying Russia's nuclear chief will attend the launching ceremony at the end of August.
Iran's first nuclear power plant will come on stream in the southern city of Bushehr by September.
Head of Russia's State Nuclear Energy Corporation (Rosatom), Sergei Kiriyenko, had earlier announced that the construction of the plant will not be affected by sanctions against Iran.
Moscow has repeatedly opposed to unilateral sanctions against Iran. Russian Foreign Minister Sergey Lavrov has recently declared that Russia will not accept the approach taken by the US and regards it contrary to decisions made by the UN Security Council and Group 5+1.
On May, Brazil and Turkey brokered a deal in Tehran where Iran agreed to send 1,200 kg of its low-enriched uranium to Turkey in exchange for fuel for the medical research reactor in Tehran.
The US and its European allies snubbed the declaration and used their influence in the UN Security Council to impose a fourth round of sanctions against Iran which was followed by a series of more sanctions from the US and the EU, targeting Iran's energy and banking sectors.
AS/MGH/MMA
|Iran Appreciates Moscow's Opposition to Unilateral Sanctions | |
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|TEHRAN (FNA)- Iranian Envoy to Russia Mahmoud Reza Sajjadi appreciated Moscow's stance in opposing the unilateral sanctions | |
|imposed against Iran by certain countries over Tehran's peaceful nuclear program. | |
Sajjadi made the remarks in a meeting with Russian First Deputy Foreign Minister Andrei Denisov in Moscow where he praised the country for opposing unilateral sanctions of the US and European governments against Iran and the positive policies of Russia in nuclear issue and confirmation of Tehran Declaration for exchanging nuclear fuel and acceptance of a proposal for joining Brazil and Turkey to nuclear negotiations.
Moscow has repeatedly opposed to unilateral sanctions of the US government against Iran and has declared that in case of imposing such sanctions, it will take decisions to confront it.
Russian Foreign Minister Sergey Lavrov recently declared that the US approach is not acceptable for Russia and Moscow considers it against the UN Security Council and the Group 5+1 decisions.
Also during the meeting, the two sides expressed interest in developing bilateral relations and necessity of more consultations in this concern between senior officials of the two countries.
Sajjadi and Denisov also underlined importance of commissioning Bushehr Nuclear Power Plant and described the event as a positive step toward promotion of bilateral cooperation.
Russia has already declared that the power plant will be commissioned in September 2010 and tests of machines and equipment have been done successfully.
The first phase of the Vigilant Eagle exercise completed
11.08.2010, 08.08
KHABAROVSK, August 11 (Itar-Tass) - Russian and U.S. fighter jets, refueling aircraft and civilian air traffic control services are taking part in the first ever Russia-U.S anti-terror exercise, nicknamed the Vigilant Eagle.
One of the headquarters of the exercise is located in Khabarovsk; the other is at the Elmendorf Air Force Base in the U.S. State of Alaska.
“Representatives of the military agencies of both countries will give a press conference late on Wednesday. They will sum up the preliminary results of the exercises and answer journalists’ questions,” a source at the Far Eastern air force and air defense formation told Itar-Tass. He said that the final phase of the first stage of exercises was under way. Maneuvers over the northern part of the Pacific involve NATO fighter jets, Russian A-50 reconnaissance planes, American AWACS aircraft and refueling aircraft from both countries.
According to the scenario, cooperative actions of combat units dealing with acts of terrorism were simulated. Notional terrorists hijacked a plane with 10 passengers onboard. It took off from an airport in the United States, cut off all radio contacts with the ground and demanded that the plane land in the Far East. The pilots managed to send a signal to the ground that terrorists had hi-jacked the plane.
The F-22 Raptor fighter jets took off to detect it. Then, the monitoring of the hi-jacked aircraft was handed over to Russian MiG and Su-27 planes.
The event is authorized under a cooperative military agreement between the Russian and US presidents.
‘Vigilant Eagle’ Tests NORAD, Russian Response
By Army Maj. Mike Humphreys
North American Aerospace Defense Command
ANCHORAGE, Alaska, Aug. 10, 2010 – An automated female voice commands over onboard speakers, “Traffic! Traffic! Descend! Descend!” as a North American Aerospace Defense Command F-22 fighter approaches the right wing of the track of interest.
Five minutes after take-off from Anchorage en route to the Far East, Fencing 1220 -- a Gulfstream 4 simulating a Boeing 757 commercial jetliner -- squawked an emergency to ground controllers, spurring action from the Federal Aviation Administration and the Defense Department and kicking off exercise Vigilant Eagle, the first joint counter air-terrorism exercise between NORAD and the Russian air force.
“This exercise is very beneficial to North America and to Russia,” said Col. Alexander Vasilyev, deputy director of security and safety for the Russian air force. “There has never been an exercise like this before.
“Terrorism is something that affects all our countries,” he continued, “so it is very important that we work together to develop procedures and bring the relationship between our countries closer together to unite our countries in the fight against terrorism.”
Canadian Forces Col. Todd Balfe, Alaska NORAD Region deputy commander, explained that today's exercise involved practicing communication procedures between NORAD, plus U.S. civilian air traffic control agencies and Russian counterparts. The goals is to be able to pass on information about air terrorism events, thereby allowing them to posture their forces to respond in kind, he said.
Once the FAA was notified of the trouble on Fencing 1220, they requested assistance from NORAD, which assigned an E-3 Sentry airborne warning and control platform to the track of interest and diverted two F-22 fighters to intercept, Balfe said. Because of the aircraft’s planned route, which would take it over Russian airspace, it was necessary to notify Russian air traffic controllers and the Russian military.
At a predetermined location halfway across the Pacific Ocean, the NORAD E-3, in direct communication with its Russian equivalent, an A-50 Mainstay, handed over control. Moments later, a deep Russian baritone bellowed, “Fencing One-Two-Two-Zero,” over the aircraft’s radio, and two SU-27 Russian fighters joined the pursuit close enough to see the sun reflecting off the pilot’s visor.
The feeling on board Fencing 1220 was one of collective awe as former Cold War opponents witnessed the fruit of years of planning and joint effort, but the scenario has all too real implications.
Back in Alaska, members of the 176th Air Control Squadron worked with Russian officers as exercise controllers, making sure all the appropriate processes and procedures were carried out.
Air Force Master Sgt. Doug Patchin, 176th ACS, said he believes Vigilant Eagle is a ground-breaking event that could be emulated by other commands. "This exercise is phenomenal,” he said. “The hope is that everyone walks away from the exercise with a common understanding of what communication procedures would be used in a real-world crisis.”
Balfe described Vigilant Eagle as a momentous exercise and a watershed event.
“We are trying to transition our relationships militarily from a period of confrontation in the Cold War to a period of cooperation, and there is no better mission for NORAD to partner with our Russian counterparts than on the air terrorism mission,” he said. “Regardless of other geopolitical events, we all agree that air terrorism is something we want to prevent, deter and, if necessary, defeat.”
After six hours of tracking by ground controllers in the United States and Russia and aerial surveillance by U.S. and Russian airborne warning and control platforms and fighter aircraft, Fencing 1220 safely landed in the Far East to be handed over to authorities.
After an overnight rest, the exercise was conducted in reverse, allowing Russian forces to turn over responsibility to NORAD and bring Vigilant Eagle 2010 to a successful completion, Balfe said.
“We’ve worked hard on both sides to make this work, and I think it would be logical for this exercise to be a building block for future cooperation between our nations,” Balfe said. “We are building this relationship stronger, which has a real benefit to U.S. and Canadian citizens and obviously Russian citizens too.”
NOTE: A press conference is scheduled for 2 p.m. EDT Aug. 11, at Elmendorf Air Force Base, Alaska, with NORAD and Russian representatives to discuss the recently completed first ever joint anti-terrorism exercise between Russia and the United States.
Groundbreaking US-Russian hijacking drill ends
By DAN ELLIOTT (AP) – 27 minutes ago
ANCHORAGE, Alaska — A groundbreaking training exercise ended late Tuesday after U.S. and Russian fighter jets crisscrossed the Pacific in pursuit of a chartered plane playing the role of a hijacked airliner.
The "hijacked" plane — actually a chartered executive-style Gulfstream — landed in Anchorage after flying across the Pacific and back, monitored all the way by fighters and aerial command posts from both sides.
On board were officers from Russia and from the North American Aerospace Defense Command, a U.S.-Canadian force that patrols the skies over North America.
The exercise was designed to test how well Russia and NORAD could coordinate their efforts in the event of a hijacking, especially during the critical handoff stage when the commandeered plane moves from one side's airspace to the other.
The drill will make it harder for terrorists to pull off a hijacking against the U.S., Canada or Russia by building up the air travel system's defenses, said Canadian Forces Col. Todd Balfe, the deputy commander of NORAD's Alaska region and the senior NORAD observer aboard the Gulfstream.
"I think any time that we increase our cooperation and our coordination, we harden ourselves against further events," Balfe said.
"If, for example, we make it harder for terrorists to do us harm, they'll choose either not to do us harm or will look for other, more difficult manners or other ways of approaching us," Balfe said.
If terrorists do succeed in hijacking a plane, the exercise will help NORAD and the Russians be prepared to respond.
Military commanders and civilian analysts say the threat of terrorism is serious for the U.S. and Russia. On July 29, a man seized a plane with 105 passengers and crew at a Moscow airport. On Christmas Day, a Nigerian man allegedly tried to blow up a jetliner over Detroit.
The joint exercise, called Vigilant Eagle, started Sunday when the Gulfstream, code-named Fencing 1220, left Anchorage and headed west. Along with Balfe, Russian Air Force Col. Alexander Vasiliev, U.S. Army Maj. Michael Humphrey and a U.S. translator were on board.
The Associated Press had exclusive access to the Gulfstream on both the westbound and eastbound flights.
Shortly after takeoff, the Gulfstream's civilian pilots sent a digital distress code to civilian air traffic controllers in Alaska signaling it had been "hijacked."
Civilian controllers notified NORAD, which dispatched two F-22 Raptor fighter jets to shadow Fencing 1220 and an E-3 Sentry airborne surveillance and control plane to track it.
When the Gulfstream entered Russian airspace over the Pacific, commanders in the E-3 handed over responsibility for the plane to their Russian counterparts on an A-50 Mainstay surveillance and control plane. Four Russian Su-27 fighters and one MiG-31 then took turns shadowing the Gulfstream.
On the return trip, the process was reversed, with Russian fighters and surveillance planes shadowing Fencing 1220 for the first portion before handing off responsibility to NORAD.
A detailed evaluation of the exercise is planned in September.
Balfe said the exercise has already succeeded on one of its goals — a smooth handoff from NORAD to the Russians.
"We've already done that," he said.
All three observers aboard Fencing 2012 — Russian, American and Canadian — marveled at the historic nature of the exercise, which demanded a level of cooperation that was unthinkable during the Cold War standoff between the U.S. and its allies and the Soviet Union, Russia's predecessor.
Vasiliev said he always thought the time would come when the two former enemies would work together, but he said he never expected to be Russia's representative. Humphreys said the Russian fighters cruising alongside Fencing 1220 was an incredible sight.
Balfe called the exercise "a watershed moment."
"If I'd been told 20, 25 years ago I'd be sitting on a U.S.-registered airplane with a Russian colonel as my counterpart, going over through Russian airspace on this exercise, I'd have thought you were crazy."
Associated Press photographer Ted Warren contributed to this report.
Nezavisimaya/Russia Today: International virtual anti-terrorism forces
The US and Russia hold first-ever joint exercises for interception of aircraft
Vladimir Mukhin
The active phase of joint anti-terrorism exercises, which is taking place in the Far East with the participation of the Russian, US, and Canadian Air Forces, is nearing completion. The air defense exercises consist of military aircraft following an airplane, which is believed to have been hijacked by terrorists, and transferring control over the airplane to the aviators of the participating countries. This is the first time such exercises are taking place. Meanwhile, the training and the premises raise a number of questions. First, how typical is the situation for which the pilots are training? Second, are these exercises important for Russia? Third, what does the Russian army have to gain from this training?
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The scenario for holding these exercises was developed long ago, almost 10 years ago, after the terrorists had flown the captured US airplanes into skyscrapers. The exercises were scheduled to take place in August of 2008. However, after the war with Georgia, which had attacked South Ossetia, the Pentagon refused holding them. Only now are these exercises, which have been named Vigilant Eagle, taking place.
According to Russian Air Force Spokesman Vladimir Drik, in the scenario that has been set for the exercises terrorists hijacked an American commercial airplane on an international route. After this, the airplane with alleged terrorists, whose role was played by a Gulfstream IV, stops all communications with the outside world. Last Monday, the captured airplane began its flight from Alaska to Russia’s Far East. It was accompanied by two F-22 Raptor fighter jets. Moreover, an E-3 Sentry, a long-range radar detection aircraft, was dispatched. Upon entry into the air borders of Russia, the North American Aerospace Defense Command (NORAD) transferred the responsibility over the captured airplane to Russia’s air services, after which it was accompanied by Su-27SM and MiG-31 fighter jets that have been guided by the long-range radar detection aircraft A-50. Later, the airplane landed on one of the airfields. Yesterday, the Gulfstream headed for Alaska. The airmen worked on the same drills.
According to NORAD Spokesman Maj. Michael Humphreys, these exercises are authorized by the “cooperative military agreement signed by the presidents of the Russian Federation and the United States of America. To be exact, we want to assess all possible scenarios in which the use of jet-fighters may be needed to respond to a terrorist threat”.
“Holding joint air defense exercises with the Americans is a good thing. Especially since the fight against the threat of air-terrorism is real,” an officer of the Lipetsk Combat and Conversion Training Center for Russia’s Air Force personnel, who asked to remain anonymous, told Nezavisimaya Gazeta (NG). “But, why did it take so long before these exercises were held?” The expert says that the training is not so much needed to perfect some specific tasks, as much as it is politically. “Issues concerning cooperation and accompaniment of aircraft that has entered into Russia’s air space – is one of the tasks of our air defense, and it is worked out on a regular basis.”
Director of the Center for the Analysis of Global Arms Trade, Igor Korotchenko, shares a similar opinion. He believes that such exercises are a type of a publicity move, displaying the alleged beginning of development of the US-Russian military relations. However, that is by far not the case. In his opinion, training the US and Russian military to provide assistance to distressed nuclear submarines would have truly been relevant. “It would also have been relevant to jointly work on curtailing drug traffic from Afghanistan. But that is something that’s, unfortunately, currently not being done,” says the expert.
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Pyotr Veliky cruiser, INS Trishul to hold drills in Arabian Sea
Russia's Pyotr Veliky nuclear-powered guided-missile cruiser and Indian Talwar class missile frigate INS Trishul will conduct a joint PASSEX-type naval exercise in the Arabian Sea on Wednesday.
The warships will practice joint maneuvering and carry out several communications drills.
The Pyotr Veliky, the flagship of the Russian Northern Fleet, is returning to its home base in the Barents Sea from large-scale naval drills in the Pacific Ocean. The cruiser called at the port of Mormugao in the Indian state of Goa on August 6. There it replenished water and food supplies.
Mormugao is the only port on India's western coast allowing visits by nuclear-powered ships.
The Russian cruiser already visited Mormugao in January 2009, when it took part in the INDRA-2009 joint anti-piracy naval drills with the Indian Navy.
Russia's largest and most powerful warship, the Pyotr Veliky has a displacement of between 24,000 and 26,000 tons, and a speed of up to 31 knots (almost 57 km/h). The ship is 251 meters in length and has a crew of more than 700 sailors.
The ship's main weapons include 20 SS-N-19 Shipwreck missiles, designed to engage large surface targets, and air defense is provided by 12 SA-NX-20 Gargoyle launchers with 96 missiles and 2 SA-N-4 Gecko with 44 missiles.
NEW DELHI, August 11 (RIA Novosti)
Venezuela acquiring Russian submarines
Published: Aug. 10, 2010 at 4:26 PM
CARACAS, Venezuela, Aug. 10 (UPI) -- Venezuela is close to acquiring Russian submarines but President Hugo Chavez isn't giving anything away -- yet.
He told the audience of his populist Sunday political sermon on Venezuela's state-run radio and television the submarines that are about to join the country's armed forces would be "normal" submersibles with conventional weapons and radar technology.
"They won't have atomic bombs, I'm saying so now, so they don't accuse of us of becoming nuclear," Chavez said in a characteristic reference to Venezuela's unnamed detractors or his personal critics within the opposition.
Venezuela went on an arms shopping spree last year, spurred by a tense standoff with Colombia over what Chavez characterized as that country's covert preparations for war after it joined forces with the U.S. military to fight the drug cartels. Both Colombian and U.S. officials dismissed Venezuelan allegations, pointing out that the narcotics threat to North America justified the collaboration to control the drug cartels.
In the meantime, however, Russian aims to expand the arms market coincided with Chavez's needs and the stage was set for one of the biggest lines of credit for oil-rich Venezuela to buy Russian military hardware. Up to $800 million of credit is available for Venezuelan arms buying in Moscow.
Critics of Chavez say the country, currently in recession, can ill afford that scale of defense spending on cash or credit. Instead, the critics want the government to channel funds or foreign capital into strengthening the economy. A combination of prolonged drought and alleged government inefficiencies plunged Venezuela into crippling power cuts through winter and spring. Substitutes for hydroelectric power generation are in the cards but not implemented yet.
Analysts said the Venezuelan purchases of Russian submarines would also solve a major problem for Russian military manufacturers who have been trying to find customers to phase out older items on their inventories. It's not clear what to make of the submarines involved but Caracas and Moscow have been in discussion over a submarine deal since 2005.
Earlier reports cited Russian interest in transferring to Venezuela at least three diesel-electric powered Project 636 Varshavianka class submarines at a cost that could run over $1 billion.
Included in the deal would be the training of Venezuelan personnel. It isn't clear if Russian experts and trainers will be stationed in Venezuela, though analysts didn't rule out that possibility.
The Project 636 submarines, called the Kilo class by NATO, are already in the services of Chinese and Indian navies, while Russia has been busy marketing a much lighter and quieter Project 677 Lada-class submarine in Southeast Asia. The vessels are built at Admiralteyskie Verfi shipyard, St. Petersburg.
Industry experts say Russia expects to maintain a market lead in what are widely seen as relatively inexpensive submarines. More important, Russia is keen to set aside political considerations while pushing for more customers for its hardware to sustain its defense industries.
The Kilo class submersible is usually equipped with four 533mm torpedo launchers and 10 missile launchers and other equipment. The fighting machine is renowned for being able to resist heavy radio and electronic interference while in operation.
Venezuela has two German built submarines U-209 dating to the 1970s and considered unable to compete with newer rivals on the high seas.
Putin wants Russian satnav system in new cars from 2012
(AFP) – 11 hours ago
MOSCOW — All new Russian cars could come equipped with Moscow's GLONASS satellite navigation system, Prime Minister Vladimir Putin said on Tuesday, with a tax to be levied on the rival GPS system.
"I think that from 2012 all new cars could be sold with the system built in so as to raise the level of road security," Russian news agencies quoted Putin as saying.
Putin said that GLONASS, which was invented by the military in the 1980s to compete with the US Global Positioning System (GPS) and will in the future face competition from Europe's Galileo, was being successfully developed.
Six new satellites are to be launched this year, Putin said, which will add to the network criss-crossing the planet and provide global navigation coverage.
Putin said in April that Russia is to spend 1.7 billion rubles (42.5 million euros, 58 million dollars) developing the system next year compared to 2.0 billion rubles this year and 2.5 billion rubles in 2009.
Deputy Prime Minister Serei Ivanov meanwhile announced that he would seek a 25 percent import tax on GPS systems from 2011, the Ria Novosti news agency reported.
WILDFIRES IN RUSSIA
Half of Russia’s wildfires contained
Aug 11, 2010 11:41 Moscow Time
The total area of devastating wildfires in Russia has halved in the last 24 hours, the Emergency Ministry said. There are still 612 forest and peat bog fires burning across the country, on a territory of 93,000 hectares, which is almost half of the 174,000 hectares registered on August 10th.
165,000 people are involved in fighting Russia’s wildfires, as well as 26,000 vehicles, including the aircraft. A number of foreign countries offered atheir ssistance in dealing with the disaster and sent over 550 rescue workers to Russia.
Russian wildfires raise radiation fears
(AP) – 38 minutes ago
MOSCOW — Activists are warning that the mroe than 600 wildfires still burning in Russia could move into the areas affected by the Chernobyl nuclear disaster and spread harmful radiation.
Environmental group Greenpeace says the wildfires, sparked by the hottest summer ever registered in Russia, could engulf the regions still affected by radioactive fallout from the 1986 Chernobyl accident.
The Emergency Situations Ministry's branch in the western Bryansk region that suffered worst from the Chernobyl catastrophe in what is now Ukraine said Wednesday it spotted several wildfires in the area over the past few days and quickly put them out. It said it increased patrols to prevent more blazes.
Emergency oficials say that about 165,000 people and 39 firefighting aircraft are battling blazes nationwide.
Russian food prices spike as hundreds of fires burn on
Posted : Wed, 11 Aug 2010 08:04:53 GMT By : dpa
Moscow - Food prices in Russia are registering a spike of 15 to 20 percent, according to newspaper reports Wednesday, as the drought and wildfires start to impact on the economy.
With crops destroyed, and logistics and supply lines affected by the out of control blazes, many foodstuffs are going up in price, according to the Rossiyskaya Gazeta.
That could lead inflation to increase beyond the 6 to 7 per cent expected by the government by year's end, it said.
Firefighters have yet to get the devastating blazes under control. Although they extinguished 300 fires over the previous day, 290 new ones also ignited, the Civil Defence Ministry was quoted as saying by the Interfax news agency on Wednesday.
The ministry reported 600 fires across the country.
The situation eased in the capital Moscow, with toxic smog from nearby peat-bog fires initially clearing.
But scores of fires continue to burn in the area, leading meteorologists to warn that the situation could once again worsen in the coming days.
August 11, 2010 10:53
Ministry aviation to focus on tackling wildfires in Moscow, Ryazan regions on Aug 11
MOSCOW. Aug 11 (Interfax) - The Russian Emergency Situations Ministry will send scores of its airplanes on Wednesday to combat wildfires in the Moscow and Ryazan regions, Vladimir Stepanov, director of the ministry's national crisis management center, told journalists.
"On Wednesday, aircraft of the Emergency Situations Ministry of Russia will conduct large-scale operations to put out forest fires on the territory of the Moscow and Ryazan regions, as well as near the town of Sarov in the Nizhny Novgorod region," Stepanov said.
The situation outside the town of Snezhinsk in the Chelyabinsk region "has fully been stabilized, and we are no longer monitoring it," he sad.
The number of forest and peat bog fires, as well as the number of fire-stricken areas has decreased steadily all over Russia during the past 24 hours, the official said.
"We have achieved the most significant results in the Saratov and Samara regions, the republic of Marii-el, as well as the Tambov and Vladimir regions, where the situation soon will be stabilized completely," Stepanov said.
In the past 24 hours, firefighting forces have been re-deployed to some of the areas hit by the worst wildfires, he said.
"The [firefighting] group has been reinforced in the Moscow and Ryazan regions," Stepanov said.
tm mj
Russia reduces wildfire area 'by half'
• From correspondents in Moscow
• From: AFP
• August 11, 2010 5:06PM
THE total area of the wildfires in central Russia has halved in the last 24 hours but there are still hundreds of wildfires raging, the emergencies ministry said Wednesday.
Fires covering an area of 92,700 hectares (more than 350 square miles) were blazing in Russia, almost half of Tuesday's figure of 174,000 hectares, it said in a statement quoted by Russian news agencies.
But 612 fires were still ablaze, up from 557 reported on Tuesday.
Anger grows in Russia press over slack fire response
(AFP) – 46 minutes ago
MOSCOW — Anger mounted in Russia's press Wednesday over the official response to the worst wildfires in the country's history, with questions asked even over the PR tactics of Prime Minister Vladimir Putin.
In typical strongman style, Putin had the day earlier taken to the air in a water bombing jet to douse fires in one of the worst effected regions, his latest trip to emphasise the authorities were on top of the situation.
"His PR-engineers can think of nothing more other than to yet again sit him behind the controls of an aircraft," leading business daily Vedomosti commented bitterly.
"Or a tractor, or a submarine, or to stroke a bear in the Far North, or save tigers in the Far East," it added, recalling other famous stunts by the prime minister in recent times.
"This is a tunnel vision of the PR-makers who believe that a TV picture of Putin behind the wheel of something is an eternal panacea for a falling rating," it added.
Pollsters have noted a fall in the popularity ratings of President Dmitry Medvedev and Putin in recent weeks, even though it remains to be seen how these figures will be impacted by the fires.
The usually staunchly pro-Kremlin daily Moskovsky Komsomolets said sarcastically that the "Russian authorities are heroically (if you believe the television reports) fighting the forest fires."
"They are fighting the fires, having allowed these fires right from the start to reach a catastrophic magnitude," it said.
Blaming a decision to change Russia's forestry laws for the extent of the crisis, it added: "Is it not in emergency situations that the solidity of the whole system of state management has to show its quality?"
"Otherwise why are we feeding presidents, prime ministers, ministers, governors, deputies, army officials or simply the army?"
Vedomosti outlined a string of failures by regional officials in the worst affected regions.
These included the mayor of Moscow staying on holiday for a "sports injury treatment" and regional bosses who carried on with business as normal like welcoming athletes and opening a greenhouse for roses.
"Forecasters predicted an extraordinarily hot summer at the start of spring. The drought and the unprecedented heat started in some regions at the beginning of July," Vedomosti noted.
"It would seem that governors and local authorities should have prepared populated areas and local people earlier for the possible fires."
The newspaper noted that Medvedev earlier this week warned political opponents not to try and profit from the crisis by carrying out "political PR".
"But Putin's flight shows that the authorities are willingly using this method. The necessity for the premier to put out a fire was nothing other than one of PR," it said.
Wildfire situation improves in Russia
|Aug 11, 2010 09:27 Moscow Time |
The situation around wildfires is improving in Russia. According to the Emergencies Ministry, all fire sources have been extinguished in the past 24 hours in the Yaroslavl, Tula and Penza Regions, and also in the republic of Udmurtia. The Emergencies Ministry has to date given up supervision of 11 of the 14 Russian fire-ravaged regions. But forests and peat-bogs are still ablaze in the Nizhni Novgorod, Ryazan and Moscow Regions. In the Moscow Region the situation is the worst in the Yegoryevsk district where an extra pipeline is being built to pump water from the Oka River. Meanwhile in Moscow, which was covered in smoke for almost two weeks, the air has grown pure, there’s no more smog or a smell of burning around. Last night the city centre residents bore witness to a full-scale thunderstorm, the first one in several weeks. Inhaling air in Moscow is no more a health hazard.
Goodwill and better weather, but Russia still ablaze
11 August, 2010, 08:23
Moscow is breathing more freely after overnight rain washed away much of the suffocating smoke which has been tormenting the Russian capital for days.
But the record-breaking heat-wave still lingers, and hundreds of fires continue to burn across the country.
One of the worst-affected regions is Ryazan, 200 kilometers south of Moscow.
Much of the forests here are still engulfed in flames. The local emergency services have been working around the clock here for three weeks trying to contain the fires, which still show no sign of letting up.
The situation here is critical. That’s why on Tuesday, Prime Minister Vladimir Putin came to the Ryazan Region to do what he can. Although there is a little bit of optimism since a rain is forecast.
Daniel Collier saw the reports of the forest blazes raging in Russia, and felt compelled to offer his help.
A veteran British fire-fighter has written a letter to Vladimir Putin, offering to come and join the unfair battle against the natural disaster.
With that in mind, Daniel is preparing for action – he says he is ready to go to the airport the moment he receives word that his help is welcome.
“Although I’ve retired from the fire service after 30 years, I still feel that burning desire to help people,” Collier confessed. “Russia in particular, because of the problem they’ve got at the moment with the wildfires.”
People from all around the world are offering to join the fight against the force of nature. Volunteers from Belarus, Bulgaria and France are among more than 160,000 people now estimated to be battling the blazes. Daniel started his career in rural firefighting, and says that has prepared him well for tackling the type of blazes sweeping through Russia.
“I started my career in 1978, Surrey. A lot of domestic fires, but a lot of fires in rural areas, including forest and military ranges, and in terms of what’s going on in Russia, they mention the word ‘peat’ – we would spend many a week in hot summers dealing with the same type of fire,” he recalled. “The way that we would have dealt with it in those days was to dig fire breaks – dig a trench underneath the peat to stop the fire spreading underneath the ground.”
Even though Daniel retired two years ago, he says in his mind he is still on the frontline.
“The language of firefighters, no matter where you are in the world, a firefighter is the same – they’re there to help save lives. Full stop. That’s it,” Collier says. “All Russia has to do is to simply ask and then allow the people that care – the paramedics, the firefighters – to come in and do their jobs.”
Daniel Collier is packed and ready to go. The only thing stopping him flying to Russia is red tape. Collier says if Russia temporarily suspended the visa regime for emergency workers, he, and hundreds like him, would flood to Russia to quell he flames.
Damp delight as rain gives Moscow a breather
by Andy Potts at 11/08/2010 10:52
First came the wind, then the hiss of rain on pavements … then finally the whoops of joy as insomniac Muscovites rushed out into the streets to celebrate the smog-busting thunderstorm which arrived shortly after midnight on Wednesday morning.
But such damp jubilation is unlikely to last long, forecasters fear, with blue skies and lower temperatures soon to be replaced by another dose of choking smoke.
Throughout Tuesday a change in wind direction had steadily cleared the polluted air from over the city, allowing Moscow to return to a slightly sweatier version of normality.
Brief breather
Sadly it appears that by the end of the week the clear skies will cloud over again.
Yevgeny Semutnikova, director of Mosekomonitoring, told Rossiiskaya Gazeta that – as on Monday evening – there was no fundamental change in the situation.
He added that by Friday the smog was likely to return, although the levels of pollution and the thickness of the smoke would depend on the success of fire-fighting efforts around the city.
And those efforts are due to be hampered by further hot weather, making it hard for the blazes to be brought under control.
Worse to come?
Moscow’s mayor, Yury Luzhkov, has returned to the city after a storm of criticism that his holiday coincided with the crisis.
And he immediately warned a City Hall meeting that cooling air could unleash a hurricane on the Russian capital – urging officials to be prepared for this.
Smog leaves Moscow
06:55 11/08/2010
Air in Moscow on Wednesday morning is clean, there is no smog, a RIA Novosti correspondent reports.
Moscow was wrapped in a thick layer of smog from the worst wildfires in Russian history for over a week.
Health experts say pollution levels were so high that breathing was as dangerous as smoking several packs of cigarettes a day. Smog eased on Monday evening and continued to ease on Tuesday.
A scorching heat wave has gripped much of western Russia since mid-June, sparking wildfires and causing the worst drought in decades.
Weather experts: Smog expected to return to Moscow
Today at 09:05 | Interfax-Ukraine
A light wind has blown the smog away from Moscow, but smoke from forest fires is likely to return to the city soon, director of the HydroMetCenter weather monitoring agency Roman Vilfand told Interfax on Wednesday.
"A light wind is mixing air masses, pushing the smoke upwards and bringing relief to the city. But the situation has not become any better where fires are burning," Vilfand said.
"Forest fires have not disappeared and smoke will fill Moscow, which is in a high pressure zone now. Smoke is pressed down to the ground and stays there when an anticyclone arrives," the expert said.
"Rains, if they begin, will extinguish fires. The Emergency Situations Ministry is doing an enormous job to put fires out," Vilfand said.
Read more:
Muscovites Complain Businesses Raising Prices On Key Goods, Services
August 11, 2010
MOSCOW -- Muscovites and Russian consumer advocates are complaining that stores have raised the prices on key products such as air conditioners, ventilators, and even cold drinks amid the intense heat and smog that is plaguing Moscow, RFE/RL's Russian Service reports.
While people are upset at the inflated prices, Aleksei Koryagin, a representative of Russia's Consumers Association, told RFE/RL that there is little consumers can do legally.
"Consumers are basically defenseless," he said. "The local government has taken away all methods of regulation and [options for] consumers' defense."
For example, air conditioners that cost 15,000 rubles ($500) two weeks ago in Moscow are currently being sold for 60,000 rubles ($2,000).
Koryagin told RFE/RL that the rise in prices for items like air conditioners is "a tragedy."
"The markets are reflecting the full sickness of [Russian] society," he said. "Our businesses are not able to make money in a civilized way in this situation."
The price of coffins has also risen, as well as the cost of holding funerals, as the city's morgues are full.
Moscow's chief health official, Andrei Seltsovky, said on August 9 that the number of fatalities in the city each day has reached up to 700 people -- about twice the normal rate -- because of intense temperatures and smoke from rampant wildfires in the Moscow region.
Even people trying to escape Moscow have run up against financial obstacles. According to some reports, prices for package tours to resorts have also gone up.
But Irina Turina, a spokeswoman for the Union of Russian Tour Operators, said the prices are always high in August. She told RFE/RL that tour prices are not going up "six to seven times" like the price of air conditioners.
"I have heard that several tour companies have raised the price of plane tickets -- two days ago they cost 200 euros ($262) and now they are 450 euros ($590)," Turina said. "But the thing is, tourism is also a business, and when there is a rush on a product the price goes up."
Political scientist Stanislav Belkovsky says that businesses are openly raising the prices because the business sector doesn't sympathize with society.
"Businesses don't consider themselves as part of 'society.' They don't believe in the prospects of this country, in this society, which until recently seemed healthy," he said.
Belkovsky says that while Russians have attacked the government for the way they have handled the fires, many are not acting responsibly themselves.
Fires Cause 'Brown Cloud' That May Hit Arctic
11 August 2010
Reuters
OSLO — Smoke from forest fires smothering Moscow adds to health problems of "brown clouds" from Asia to the Amazon, and Russian soot may stoke global warming by hastening a thaw of Arctic ice, environmental experts said.
"Health effects of such clouds are huge," said Veerabhadran Ramanathan, chair of a UN Environment Program study of "brown clouds" blamed for dimming sunlight in cities such as Beijing or New Delhi and hitting crop growth in Asia.
The clouds — a haze of pollution from cars or coal-fired power plants, forest fires and wood and other materials burned for cooking and heating — are near-permanent and blamed for causing chronic respiratory and heart diseases.
"In Asia, just the indoor smoke — because people cook with firewood — causes over a million deaths a year," said Ramanathan, of the University of California, San Diego.
Moscow city's top health official said Monday that about 700 people were dying every day, twice as many as in normal weather, as Russia grapples with its worst-ever heat wave.
"The Russian fires are in principle similar to what you see from other brown clouds," said Henning Rodhe of Stockholm University, a vice chairman of the UNEP Atmospheric Brown Cloud study. "The difference is that this only lasts a few weeks."
Asian pollution has been blamed for dusting Himalayan glaciers with black soot that absorbs more heat than reflective snow and ice, and so speeds a thaw. Worldwide, however, the polluting haze blocks out sunlight and therefore slows climate change.
For the climate, "the main concern … is what impact the Russian smoke would have on the Arctic, in terms of black carbon and other [particles] in the smoke settling on the sea ice," Ramanathan said.
In past years, "we have had episodes of biomass burning that have brought clouds in over the Arctic," said Kim Holmen, director of research at the Norwegian Polar Institute.
Holmen, who runs a pollution monitoring station in Svalbard in the high Arctic, said the air over Russia was fairly stable in recent days, concentrating smoke over land. But a shift in winds, easing pollution in Moscow, could sweep smog northward.
Arctic sea ice, which shrinks in mid-September to an annual minimum before the winter freeze, now covers a slightly bigger area than in 2007 and 2008, the smallest extents since satellite measurements began in the 1970s.
The exposure of Arctic Ocean water to sunlight is a threat to the livelihoods of Arctic peoples and creatures such as polar bears. It also accelerates global warming, blamed by the UN panel of climate experts on mankind's use of fossil fuels.
"Such conditions are likely to become more common in the future," Rodhe said of the Russian heat wave and related fires.
Asia is most studied for brown clouds, but they also form over parts of North America, Europe, the Amazon basin and southern Africa. Burning of savannah in Sub-Saharan Africa, to clear land for crops, is a new source.
Forest and peat bog fires are burning over 1,740 square kilometers, the Russian Emergency Situations Ministry said. By contrast, official Brazilian data show that the Amazon rainforest lost 1,810 square kilometers in almost a year to June 2010.
Holmen also echoed Russian authorities' worries that the fires may also release radioactive elements locked in vegetation since the Chernobyl nuclear disaster of 1986.
Radioactive isotopes include strontium-90 and caesium-137. Other industrial pollutants such as PCBs could also be freed.
MOSCOW, August 11 (RIA Novosti)
China to donate $1 mln , relief goods to aid fire fighting in Russia
2010-08-11 14:02:36
BEIJING, Aug. 11 (Xinhua) -- China will donate 1 million U.S. dollars and deliver humanitarian aid goods worth 20 million yuan (2.93 million U.S. dollars) to help Russia fight a series of menacing fires, China's Ministry of Commerce (MOC) announced Wednesday.
China has put into action an emergency humanitarian aid response, with relief goods to be delivered to Russia soon, Yao Jian, a spokesman with the MOC said in a brief statement posted on its website.
Wildfires caused by ongoing heat and drought have been raging in Russia's 17 regions, leaving more than 50 people dead and 3,500 homeless, according to local media reports.
US allows Moscow embassy families to return home
(AFP)
11 August 2010,
WASHINGTON — The United States said on Tuesday it was allowing both family members of its Moscow embassy staff and some personnel to return to the United States because of smog induced by massive forest fires.
The State Department also urged Americans to postpone travel to Russia until the problems caused by the wildfires improve.
“The Department of State has authorized the departure of dependents and non-critical mission personnel from the US Embassy in Moscow,” the department said in a statement.
Authorized departure means embassy personnel and their families can return home to the United States at US government expense.
The smog from the peat and forest fires burning in the countryside around 100 kilometers (60 miles) outside the city has choked Moscow for days and has been seeping into apartments, offices and even underground into the metro.
The State Department said: “Ongoing forest fires and extreme high temperatures in the Moscow region and surrounding areas of central Russia have produced hazardous levels of air pollution and caused numerous flight delays and cancellations in Moscow.
“The hazardous air quality means that persons with heart or lung disease, older adults, and children should seek to relocate to unaffected areas of the country and avoid prolonged or heavy exertion outdoors.”
U.S. State Department warns against visiting Russia
02:39 11/08/2010
The U.S. State Department on Tuesday warned nationals against visiting Russia because of wildfires raging across the country and an unprecedented heat wave, CNN reported.
The department recommended U.S. citizens to postpone travel to Russia because of acrid smog and numerous flight delays.
A scorching heat wave has gripped much of western Russia since mid-June, sparking wildfires and causing the worst drought in decades. More than 50 people died in the fires.
Moscow and a dozen other cities have been wrapped in a thick layer of smog. Health experts say pollution levels are so high that breathing has become as dangerous as smoking several packs of cigarettes a day.
The smog eased on Tuesday but could return should the wind change.
The record-breaking heat wave in Moscow will continue through mid-August, meteorologists say.
The State Department also authorized nonessential staff at the U.S. embassy in Russia and their dependents to leave the area at the U.S. government's expense.
WASHINGTON, August 11 (RIA Novosti)
Sweden warns against travel to fire-ravaged Russia
AFP
Wednesday, 11 August 2010
Sweden advised its citizens against travelling to Moscow and regions in western Russia ravaged by wildfires and sweltering under a heatwave, the foreign ministry said Tuesday.
Moscow and its neighbouring regions have been recommended off limits until further notice "due to the massive fires in the west and central Russia" and the possible effects of the smog on the health, it said in a statement.
On Saturday Denmark also warned against travelling to the Russian capital unless strictly necessary.
Britain and Italy have issued lighter warnings against travelling to the region with children and for anyone who is pregnant, elderly or has health problems.
"There has been disruption to flights to and from Moscow airports in recent days due to poor visibility... This situation may continue for some time," the British foreign ministry said.
After almost two weeks of fires that have claimed over 50 lives and part destroyed a military storage site, the authorities said they were making progress in fighting fires that still covered 174,035 hectares (430,000 acres) of land.
map/emb/br
Greece is ready to extend visas for Russian tourists and to assist in extinguishing fires
|Aug 11, 2010 02:40 Moscow Time |
Greece has extended, until September 10th, the visas of Russian tourists because of fires in Russia, said the Greek Foreign Ministry on Tuesday.
"It is being announced that the Russian citizens who are in our country, may extend their stay in Greece until September 10, irrespective of the period of the visa which they have," reported the Foreign Minister of Greece.
This decision was made jointly by the Foreign Ministry, the Ministry of Culture and Tourism and the Ministry of Citizen’s Rights.
In addition, according to the Ministry of Foreign Affairs, Greece has proposed to send Russia a military transport plane with a group of 40 rescue workers to assist in fighting the fires.
"The Secretary-General of the Ministry of Foreign Affairs, Ambassador Ioannis-Alexios Zepos announced Tuesday to the Russian Ambassador to Greece, that the Greek authorities may send a special Air Force C-130 aircraft with a group of specialists on board to help deal with the disasters," it has also been reported.
There will be at least 40 fully equipped rescue workers to fight fires the Greek Foreign Ministry said. The head Greek diplomat told the Russian ambassador that his country is ready to help, although it will hinder its own ability to deal with the needs of fire protection in its own territory.
The Greek Foreign Ministry also announced that the Greek Embassy in Moscow continues to work as usual, despite several days of smoke in the Russian capital due to fire, RIA Novosti reports.
Greece is faced with forest fires annually. Thus, in 2007 when a devastating fire killed 67 people and burned 250,000 hectares of forest, Russia in that year sent fire fighting aviation to Greece including Be-200 and IL-76 aircraft.
Greece ready to dispatch help to Russian Federation regarding wildfires
Posted on 11 August 2010 by Afroditi Lakkiotis
The secretary-general of the Ministry of Foreign affairs, Mr. Yiannis-Alexis Zepos, announced a few minutes ago, to the Russian ambassador in Greece Mr.Vladimir Chkhikvishvili that the Greek authorities are able to send by air a group of the special EMAK team. The 40 member group will be accompanied by full high-tech equipment in order to help extinguish the wildfires that ravage the country during the last weeks.
Parallel, Mr. Zepos underlined that in agreement with the Ministry of foreign affairs and the Ministry of citizen protection as well as the Ministry of culture and tourism, the Russian citizens who are in Greece on vacation can extend their stay until September the 10th without worrying about the expiry date of their Entrance card.
Finally, we should underline that the Greek embassy in Moscow as well as the Greek consular authorities that are situated in the Russian Federation are open.
UN offers aid to victims of fires in Russia
|Aug 11, 2010 01:50 Moscow Time |
UN Secretary General Ban Ki-moon expressed his deep condolences to the families of those killed as a result of the wildfires in Russia, his spokesman Martin Nesirki said on Tuesday.
"The UN Secretary-General is saddened by the loss of human life as a result of the fires." said Nesirki.
Ban Ki-moon "Is aware of the tremendous efforts being made by the Government of the Russian Federation in order to control the situation." noted the official representative of the general secretary.
"The head of the UN once again confirms the commitment of the United Nations to provide any assistance that may be required." Nisirki said.
Empty Norwegian embassy in Moscow
2010-08-11
Only 5 of 60 employees are left at the Norwegian Embassy in Moscow. The rest have been sent to Norway or to other places in Russia because of the choking smog and extreme heat that is tormenting the city.
One consequence is that the embassy has had to stop issuing tourist visas to Norway and the Schengen area until the situation is better, a note on the embassy’s web site reads.
- We have sent away all non-critical personnel and left only a minimum amount of staff, press spokesman in the Ministry of Foreign Affairs Kjetil Elsebutangen says to newspaper Aftenposten.
Elsebutangen advices people who have planned to visit Moscow to really consider whether they should go or not – There is no doubt it is a great strain to stay in Moscow in the current situation, he says.
Also The US, Denmark, Canada, Germany and Bulgaria have sent embassy employees out of Moscow.
Russia’s extreme summer weather has almost doubled Moscow’s normal death rate.
Uphill battle for volunteer firefighters in Russia
Muscovites answer villages’ calls for help
By David Filipov
Globe Staff / August 11, 2010
GORA, Russia — They dug and piled sand with primitive shovels into thin yellow firebreaks. They sprayed water from hand-pumped plastic spray cans to beat down hissing, seething flames. They coughed and swore in the thick, acrid smoke as they cut away fallen branches to prevent them from exploding into fire. They fought a seemingly one-sided battle with an underground conflagration that threatened a stretch of pine woods precariously close to the village of Gora, about 70 miles southeast of Moscow.
They were a dozen volunteers among a motley army of amateur firefighters who have fanned out across Russia, drawn by desperate calls for help from remote villages. They march into danger armed with the most rudimentary firefighting equipment, no protective gear, and little more than a desire to help.
“We are trying to stop this fire from getting to that village,’’ said Alexei Nekrasov, a Muscovite like all of the volunteers who had come to Gora. “And if it blows, we won’t have time to make it out of here.’’
The Russian government has said that it does not have enough firefighters to battle nearly 600 wildfires fueled by the worst heat wave ever recorded here. Military units dispatched to battle the blazes are underequipped. The blazes have consumed villages, woods, fields, and cottages across western Russia, killed more than 50 people, and blanketed much of the region with a noxious pall that burns the eyes and irritates the throat.
The ultimate toll of the smog and heat may be much greater: A Moscow medical official said that the daily death rate in the city has doubled to 700 in the heat and smog. Fires were nearing the Urals town of Ozyorsk, home of a nuclear facility that in 1957 was the site of an explosion that Greenpeace calls the second-worst in history after Chernobyl. The fear is that the blaze will kick up radioactive particles buried in the dust — nature’s own dirty bomb.
Cries for help, cataloged on websites set up by concerned citizens, sounded from across Western Russia.
“Much of the village has burned,’’ read one.
“Urgent! We need fire extinguishers, pumps, and hoses!’’ came another appeal.
“We need shovels,’’ read an appeal from Polbino, the center of the region that includes Gora. Alexander Bobin and Slava Fomin of Moscow read it. They brought shovels, camouflage pants, boots, and masks to join Nekrasov’s impromptu platoon.
“I saw the pictures and read that people were needed,’’ Bobin said.
The military had sent in a tracked vehicle to plow a path for trucks that also serves as a firebreak. But the peat under the soil smolders, passing on to roots that travel under the firebreaks. The roots burn, the pine trees fall, the exposed wood crackles into flames.
“This is pointless,’’ Nekrasov said as a few volunteers tried to put out a small fire burning in the trunk of a fallen spruce. Covered in ash, exhausted, their masks black from the soot they were trying not to inhale, they squeezed out water from their extinguishers in pathetic little streams to the plaintive honking of the hand pumps.
Years ago, Russia had 70,000 forest rangers, whose job was to look after the woods, making sure there were firebreaks, pruning overgrowth, clearing away debris. But now there are just 12,000. Nekrasov pointed out a few old firebreaks that were overgrown by brush.
State-run media have sought to portray the government’s response to the wildfires as resolute — President Dmitry Medvedev traveling the country, upbraiding local officials; Prime Minister Vladimir Putin promising more than $6,000 to any family that has lost its property; the country’s minister for emergencies, Sergei Shoigu, vowing to extinguish the blazes within the week.
And Muscovites breathed a sigh of relief Monday when health officials announced that the air was only two times more polluted than acceptable levels, down from seven times on Sunday.
Still, the fires burn.
Yulya Borisova, her face black with grime, her T-shirt proclaiming her “100 percent real man,’’ sprayed a fire that spat and sizzled, evaporating the sprinkle before it could cool the blaze.
“It is dangerous,’’ Nekrasov said. “Any minute a tree could fall on your head. “
In a moment everyone saw what he meant. A gust of wind, a sudden whoosh, and a tall birch next to the road exploded into bright streams of red and orange. Followed by a pine. And another.
A firetruck pulled up. The chief firefighter watched the blaze, then decided not to fight it. It was too dangerous, he said. The truck might get caught in the fire.
“No, guys. This is hopeless,’’ Nekrasov said. Then he grabbed his watering can and stalked off into the woods, leading his volunteers back toward the blaze.
David Filipov can be reached at filipov@.
Russian wildfire smoke and carbon monoxide analyzed and imaged by NASA satellite
August 10, 4:44 PM[pic]Natural Disasters Examiner[pic]Tony Hake
With wildfires raging across Russia in the wake of an extreme heat wave, the smoke and smog from the fires and their chemical byproducts have created a health emergency in the nation. NASA satellites have turned not only their cameras but also other sensors on the area to help analyze the dangers presented.
Photographic sensors have documented the number of fires (nearly 600) and the smoke as it covers more than 1,000 miles across the nation. The images taken from a lofty perch 22,300 miles above the surface show the amazing extent of the haze that has blanketed Moscow and many other cities.
NASA also has released a temperature map (image below) showing just how hot it has been in western Russia and eastern Siberia. The temperature anomaly map shows the Russian Federation from July 20 – July 27, 2010 and large areas are seen as having experienced surface temperatures well above normal.
Instruments on board NASA’s Terra spacecraft have also allowed the measurement of carbon monoxide. The colorless and odorless gas is a byproduct of the smoke from the fires and poses a health risk as it limits the amount of oxygen that can be carried by the blood.
Readings taken by the Measurements of Pollution in the Troposphere (MOPITT) sensor on Terra show dangerous levels of the gas above Moscow and much of western Russia – see image below. Yesterday it was reported that the mortality rate in Moscow was double its normal levels, at least in part due to the smog caused by the fires.
Will the Wildfires Stoke Political Change in Russia?
By Simon Shuster / Moscow Wednesday, Aug. 11, 2010
Russians are known to be a long-suffering people, especially when it comes to putting up with leaders who are senile, negligent, or much, much worse. But the government's reaction to the ongoing heat wave may be hard to pass off with the usual shrug. Across much of central and western Russia, more than 500 wildfires continue to burn out of control. The capital is shrouded in a cloud of poisonous smoke, and the morgues are overflowing as the nationwide death rate jumps 50%. President Dmitri Medvedev, meanwhile, has spent much of this month talking about police reforms, and many local officials have simply gone on vacation. Now, as they return, the leaders of Russia — both big and small — are likely to have a political firestorm to deal with.
On a local level, the outrage has already entered the ranks of the United Russia party, the political retinue around Prime Minister Vladimir Putin. A member of the regional legislature in Volgograd, where the heat has scorched much of the harvest, told TIME over the phone on Tuesday that he recently tore up his United Russia membership card, an act that he says will cost him his political career. "I have completely lost faith in the party," Vladimir Dvuzhilov says. "For them it is always about political intrigue and never any good for the people." The fires in his home district of Novaya Anna began on June 24, he says, and destroyed about 1,000 hectares of land within days. When they sent word to the regional capital, Volgograd, authorities there registered it as a fire of 15 hectares and sent no aid to the district. "They didn't want to raise a fuss," Dvuzhilov says. (See pictures of the wildfires burning in Russia.)
Throughout the heat wave, now in its seventh week, head-in-the-sand responses seem to have been the norm. On Monday, for instance, the federal health ministry rebuked local health officials in Moscow for announcing that the death rate in the capital had doubled to 700 people a day. The figure, however, was backed up by reports that the city's morgues were stuffed beyond capacity. But in its statement, the health ministry offered data suggesting the death rate had actually fallen by 9% in the first half of this year. It gave no data for July and August, and added that the "unofficial numbers" from the Moscow officials had "bewildered" the federal ministry.
But perhaps the most blatant attempts to downplay the disaster have come from the Mayor of Moscow, Yuri Luzhkov. As the fires around his city choked the skies with smoke last week, Luzhkov was away on holiday. "What's the problem? What, do we have some kind of emergency situation, some kind of crisis situation? What's the problem in Moscow?" the mayor's spokesman told the LifeNews agency on August 6. Three days later, LifeNews reported that Luzhkov, an avid beekeeper, had ordered his prize-winning hives to be evacuated away from the smog. All the while, he has refused to declare a state of emergency for Moscow's human inhabitants. "The situation is not simple, but it is controllable," Luzhkov told Putin on Tuesday after he finally returned home, looking tanned but very grumpy. In response, Putin praised the mayor for cutting short his holiday and coming back "in good time." (Will Russia's heat wave end its global warming doubts?)
According to opinion polls, however, the Russian public is not nearly so eager to pat its leaders on the back. In the last two weeks of July, state-run pollster VTsIOM reported that approval ratings for both Putin and Luzhkov had fallen to their lowest levels in more than four years, while Medvedev's numbers were at one of their lowest points since he took office in May 2008. At the same time, more Russians have started clamoring for the return of gubernatorial elections, which Putin cancelled in 2004 when he handed the Kremlin the right to appoint regional leaders. In a survey released August 6 by the independent Levada Center, 59% of Russians now want to choose their own governors again, up by 5% since January.
"The problem is that we have never really known the concept of constituencies in Russia, so local officials have never had any real reason to appeal to voters," says Boris Dubin, a sociologist at the Levada Center. "Now, with these fires, people are seeing all the inefficiencies built into that arrangement." Next week, when Levada puts out its own political poll, Dubin expects the approval ratings for both Putin and Medvedev to keep dropping. "The Russian people want to hold someone accountable," he says. "Not just the semi-mythical figures of Putin and Medvedev, whom they only see on television, but someone who might hear out their concerns locally and react locally." (See pictures of Medvedev and Vladimir Putin on vacation.)
The next chance voters will get to express this kind of sentiment is scheduled for Oct. 10, when five regions will hold parliamentary elections and around 40,000 seats in municipal government bodies will also be up for a vote. Andrei Serenko, a political commentator and journalist in Volgograd, says the devastation of crops from the heat wave will be a deciding factor all along the Volga river, where millions of people depend on agriculture for their livelihoods. "That's a huge portion of central Russia, a huge segment of the population that has been suffering with no assistance from ruling elites. So we are expecting new social movements to emerge from this outrage and offer up some kind of competition," he says. One option that local officials are discussing, Serenko says, is to resurrect the Agrarian Party, which was co-opted by Putin's United Russia in 2008.
But given United Russia's reputed skill at engineering elections, many analysts are not sure that change can come from the bottom up. Practically every national vote in Russia is marred by allegations of wholesale fraud, and even during the last nationwide round of balloting in October 2009 — when Russia was on the verge of financial collapse, unemployment was spiking, factories were closing — United Russia still won virtually all of the 7,000 regional elections held that day. "So of course, this calamity has shaken the people's trust in power at all levels," says Yevgeny Volk, a political analyst in Moscow. "But aside from showing the ruling elites that they should do more to manipulate public opinion, give some more handouts, further marginalize the opposition, I don't think that any real change can come of this."
With a deep sigh into the telephone line from Volgograd, Dvuzhilov agrees. He expects to be squeezed out of the local assembly in the next election cycle for abandoning United Russia, so he has already turned his focus to salvaging the 350 hectares of grain on his family farm. "Maybe in 2012, with the presidential vote, something will come through for us then. But that would also take a miracle."
NORTH CAUCASUS
Medvedev to hold meeting on Dagestan's development
01:58 11/08/2010
Russian President Dmitry Medvedev will on Wednesday hold a meeting on the social and economic development of the North Caucasus republic of Dagestan, the presidential press service reported.
The strategy of the North Caucasus Federal District's social and economic development is being drafted now, and a number of Dagestani projects have been included into it. A special working group is being set up. Implementation of the projects will resolve the unemployment problem in the region.
Last week Medvedev spoke by phone to Dagestani president Magomedsalam Magomedov, who informed the Russian leader of the situation in Dagestan's mountainous regions, where a number of villages were affected by wildfires.
Medvedev instructed the government to prepare compensation for residents of the Dagestani village of Anchikh, where 55 houses out of 646 burned down on August 5.
Wildfires, sparked by weeks of abnormally high temperatures in central Russia, are raging across the country. More than 50 people have died in the fires. Some 2,000 houses have burned down, leaving 3,500 Russians without a roof over their heads.
The wildfires have severely damaged the Russian economy, with the estimated short-term loss of $15 billion.
The Russian president holds meetings on the development of North Caucasus and other regions on a regular basis.
SOCHI, August 11 (RIA Novosti)
Major Overhaul of the North Caucasus’ Transit System is Postponed
August 10, 2010
Valery Dzutsev
Russian Transportation Minister, Igor Levitin, toured the North Caucasian republics from July 31 to August 3. During that visit he announced several highway reconstruction projects, and unveiled plans for consolidation of the air transport industry in the North Caucasus.
At the same time, however, he was extremely cautious about entertaining any groundbreaking transportation infrastructure development projects.
On August 3, at a regional meeting of transportation professionals, Levitin urged the regional authorities of the North Caucasus to consider creating a single air carrier that would be based in Mineralnye Vody (aka Minvody), which is located in the predominantly ethnic Russian populated region of Stavropol. According to the minister, Moscow would not be able to create an air carrier company in each territory of the North Caucasus. Levitin tried to reassure the republics that the flights from their airports would not be abolished. But he warned that the current situation –with the airports in the North Caucasus being so atypically close to each other, especially in comparison to the scarcely populated inner Russian territories– was unsustainable and should be optimized (mintrans.ru, August 3). This essentially means that some or all North Caucasian republican airports will become obsolete over time, as Moscow has decided to route the air traffic through the airport in Minvody.
Even though Levitin strived to appear as if he was open for discussion with the local authorities, Kommersant reported that a decision in principle was made to create a united air carrier for the North Caucasus Federal District under the auspices of Aeroflot. Moscow’s envoy to the North Caucasus Federal District, Aleksandr Khloponin, is reportedly pressing the government in Moscow to make Minvody a major regional transportation hub. Air transport analysts, however, caution that Aeroflot may have its own vision of the development of its regional network. The local air carrier based in Minvody is currently a federally owned company that ranks 23rd in size in Russia, having carried 238,000 passengers during the first six months of 2010, but it is losing its air traffic. Some observers say that unless Aeroflot invests in buying new aircraft, the Minvody project will not succeed (Kommersant, August 4).
The structure of the system of airports in the North Caucasus may be far from optimal, but the competing political interests of the regional elites are likely to thwart attempts to rid the republics of their airports. Dagestan, Chechnya, Ingushetia, North Ossetia and Kabardino-Balkaria each have their own civilian airport. Each of these airports only has a couple of regular daily flights. The road distance between the airport in Kabardino-Balkaria and North Ossetia is 100 kilometers (62 miles), the distance between North Ossetia’s airport and the airport in Ingushetia is 20 kilometers (12 miles), and only 85 kilometers (53 miles) separate Ingushetia’s airport from the airport in Grozny. Even the remotest airport in Dagestan is only 170 kilometers (106 miles) from Grozny’s airport.
Apart from the proximity of airports to each other in the North Caucasus, especially when compared to the average inner Russian territories, where the population density is much lower, no good reason was given for Moscow’s decision to concentrate air traffic in Minvody and not, for example, in Makhachkala or some other city of the North Caucasus that is closer to the Russian border than Minvody. The move may indicate Moscow’s desire to build a regional version of the notorious “power vertical” in the North Caucasus, with the most important pieces of infrastructure located safely in the Russian-speaking Stavropol region. This, in turn, is likely to provoke further resentment, even among the pro-Moscow elites of the North Caucasian republics.
Levitin announced his support for the idea for increasing from two to four the number of lanes on the Kavkaz highway, which cuts across the North Caucasus from northeast to southwest, from Rostov region to the border with Azerbaijan in Dagestan. The beginning of the project, however, has been delayed until 2013, which in the Russian reality means it may never materialize. Instead of allotting funds for the reconstruction of the airport in Ingushetia, Levitin said he “supported” the decision to provide $30 million for its reconstruction (mintrans.ru, August 2).
Throughout his visit to the North Caucasus Levitin repeatedly emphasized the need to enhance security measures in local transport. For example, he cited the need to use CCTV cameras, GLONASS navigation systems (the Russian equivalent of the GPS) and provide for the installation of effective control over intercity transit systems. Suicide attackers from Dagestan are believed to have travelled from Dagestan to Moscow by bus and blown up themselves in the metro on March 29.
At a conference of the United Russia party in Kislovodsk on July 6, Prime Minister, Vladimir Putin, promised an overhaul of the North Caucasus’ transit system as part of the massive government effort to accelerate regional development. According to Putin, all of the airports of the region would be rebuilt and the airports in Minvody, Magas (in Ingushetia) and Grozny would receive $16 million in 2010. Putin stated that the North Caucasus should become an integral part of the “North-South” transit corridor connecting Russia and Europe with the countries of the Persian Gulf and Central Asia. The Russian prime minister also referred to a specific transit project: building a highway across the Caucasus Mountains from Cherkess in Karachaevo-Cherkessia to the Black Sea coast in Abkhazia (.ru, July 6).
Levitin’s visit to the North Caucasus, which was supposedly meant to add some flesh to the prime minister’s plans, did not live up to Putin’s grand vision. The transportation minister promised minimal investments in building highway bypasses for the big cities in the North Caucasus and a few other projects of local importance. He focused on what Moscow seems to be interested in above all –solidifying its grip over the most important pieces of infrastructure, more control over the transit systems and enhancing security. The project for a highway from Karachaevo-Cherkessia to Abkhazia received a fairly cool reception from Levitin, who said during his visit to Cherkessk that the project could be implemented only through a partnership between the government and private companies, which would envisage the construction of toll roads (mintrans.ru, August 3).
Source:
GOOGLE TRANSLATION
Murder in Ramadan: the death of one of the spiritual leaders of the Muslims of Dagestan
On Wednesday in Makhachkala, the head of the company "Makhachkala-TV and publishing" Nurul-Irshad, former head of Islamic Education Spiritual Administration of Muslims of Dagestan Magomedvagif Sultanmagomedov was wounded. A few hours later in hospital he died.
"Sultanmagomedov died on the operating table from a bullet wound in the chest. The second wounded man is now in serious condition," - reported in the waiting room of the Republican Clinical Hospital, Interfax correspondent.
Earlier, the press service of Dagestan Interior Ministry reported that Sultanmagomedov and another man seriously wounded in the shelling of VAZ-21099, on Wednesday in Makhachkala.
The attack on them was carried out on the first day of the Muslim holy month of Ramadan.
11 August 2010, 10:28
Two Wahabi ideologists hiding in Turkey - Chechen president
Moscow, August 11, Interfax - Two renowned Wahabi ideologists, Isa Umarov and Shamsuddi Batukayev, are hiding in Turkey, the Chechen President Ramzan Kadyrov said.
"Intelligence information indicates that Isa Umarov, one of the main ideologists of Wahhabism, and Shamsuddi Batukayev, the head of the Sharia court of "Ichkeria" and one of the main Wahabis, are hiding in Turkey," Kadyrov said in an interview to Azeri television.
"These people started all this, then escaped and are hiding there and are making efforts to spread Wahhabism and extremism from there," Kadyrov said.
Asked by Azeri journalists whether the leaders of illegal armed groups are receiving aid from Azerbaijan, Kadyrov replied that "this support does not exist today."
"It used to be, that's for sure. Our terrorists hid under the guise of refugees in Azerbaijan, in Turkey, and in other places," he said.
Kadyrov stressed that there is no political agenda in his words. "I don't make political statements. I am talking as a warrior fighting them," he said.
Kadyrov said he had met with the Azeri president while visiting Azerbaijan. "We discussed this issue, and I received answers to all of my questions," he said.
"Terrorists and extremists are not receiving support in Azerbaijan, and we are really grateful to this country's leadership for that," he said.
Chechen leader: Azerbaijan not harbouring 'terrorists'
Wed 11 August 2010 | 07:30 GMT
Ramzan Kadyrov, Moscow-backed president of the Chechen Republic, has said that Azerbaijan is not supporting "terrorists and extremists".
Kadyrov was speaking in an interview with Azerbaijani TV, the text of which has been published on the website of the Chechen president and government.
Asked whether militants in Chechnya were receiving support from Azerbaijan, Kadyrov replied, "Undoubtedly, there has been support. Our terrorists sought refuge in Azerbaijan, in Turkey and other places as refugees. When I speak, I do not make political statements. I speak as a warrior who is fighting them. When I was in Azerbaijan, I met the president of the country, we discussed this issue and I found answers to all my questions.
"Today there is no support for terrorists and extremists in Azerbaijan and we are grateful to the country’s leadership and we want to thank them. May they be healthy and happy, especially my uncle, the mufti of the Caucasus, Sheikh ul-Islam."
Ramzan Kadyrov referred to agreements between the law-enforcement agencies of Azerbaijan and Russia, but did not elaborate on the details. Security was one of the topics of discussion when the Azerbaijani President Ilham Aliyev received the Chechen leader in Baku last November.
In his interview, Kadyrov went on to praise Azerbaijan's spiritual leader, Sheikh ul-Islam Allashukur Pashazade, head of the Caucasus Muslims Department.
"This is a respected person not only in Azerbaijan but also throughout the Caucasus, Russia and even the world community. They know what terrorism and extremism are, they know this threat is real and spare no effort for Islam not to be associated with the concepts of terrorism and extremism. Therefore, today we have a mutual understanding, even the special services of our countries, the law-enforcement structures signed some agreements, they will work in Azerbaijan and Russia.
"Today we have no questions to Azerbaijan and the leadership of this country. According to operational information, Turkey is hiding one Isa Umarov, one of the main ideologists of the Wahabbis, and Shamsuddi Batukayev, head of the Shariah court of Ichkeria and one of the main Wahabbis. These people initiated this; they escaped and are hiding there and working to spread Wahhabism and extremism from there," he said.
The Chechen leader said he was very pleased to have been invited to visit Azerbaijan.
"I have great respect for the leadership of Azerbaijan, not only I but the leadership of the Russian Federation also respects the president of Azerbaijan. It's very important for me that the invitation was conveyed by my uncle, the Sheikh ul-Islam... When Ilham Geydarovich Aliyev has time, I will be happy to visit. I was in Baku not long ago. I liked it very much... I also invite our older brother, Mr President Aliyev, to visit us during his next trip to Russia."
He said that a street in the Chechen capital Grozny would be named after Ilham Aliyev's father, the late president Heydar Aliyev.
"We have decided to name a street in Grozny after Heydar Aliyev, a respected person, state and political figure of the Soviet Union and the Republic of Azerbaijan," Kadyrov said.
He said that his father, whom he described as the first president of Chechnya, Akhmad Haji Kadyrov, had enjoyed a close friendship with Aliyev for many years.
"Heydar Aliyev knew my father well, the first leader of the Chechen Republic Akhmad Haji Kadyrov. They often met. They enjoyed warm, good relations," Kadyrov said.
Asked about the activity of militants in Chechnya and the North Caucasus as a whole, Kadyrov insisted that just some 70 fighters were left in Chechnya.
"We calculate that around 70 people are left. This is including Arabs and other incomers and our so-called Chechens. I call them devils. Why? Because they have sold out the religion of Islam, the whole of humanity," Kadyrov said.
He said that the militants would never be successful.
"I am fighting bandits, extremists and Wahhabis," Kadyrov stated.
News.Az
11 Aug 2010
Chechnya: Divisions in the Ranks
Doku Umarov’s attempt to resign has revealed a schism in the leadership of North Caucasus-based insurgency and terrorism networks, but whether he stays or goes will have no long-term impact on the network’s capabilities, Simon Saradzhyan comments for ISN Security Watch.
By Simon Saradzhyan in Moscow and Boston for ISN Security Watch
[pic]
Two days after the internet release of a video showing the leader of the North Caucasus-based insurgency and terrorism networks, Doku Umarov, querying fellow warlords about his resignation, the self-styled amir of ‘Imarat Kavkaz’ (Emirate “Caucasus”) ordered a new video in which he denied plans to step down.
“In the current situation in the Caucasus I believe it is impossible for me to step down from the post of the amir of Imarat Kavkaz,” Umarov said in a video uploaded on the networks' news portal Kavkaz Center on 3 August. “This statement of mine makes the previous statement void. That previous statement was completely fabricated,” the Chechen warlord claimed, referring to the video of his resignation uploaded two days earlier by the same Kavkaz Center.
That initial 1 August video addressed leaders of networks in the neighboring republics of Dagestan, Ingushetia and Kabardino-Balkaria, with Umarov querying the warlords to support his decision to step down and recognize “commander of the Eastern front of the Imarat” Aslanbek Vadalov as their new amir.
Flanked by this Chechen warlord and an unidentified third man in a forest, Umarov said “we have come to a joint decision today… I am leaving my post” to be replaced by Vadalov, who “is younger… more energetic” and will achieve “different results.”
Vadalov - whom Umarov had earlier picked as his successor in the event of his death - curtly agreed with Umarov's proposal before giving floor to a third man, who said it was 46-year-old Umarov’s “age and aggravating health that do not allow the amir to continue resistance.”
Umarov himself didn’t explain why he was resigning, but urged the emirs of Dagestan, Ingushetia and Kabardino-Balkaria to get back to him “urgently” with their opinion on the proposal.
Confusion in the ranks
The appearance of the two videos apparently created confusion in the insurgents’ ranks, with some members posting open letters to Umarov on the Kavkaz Center’s website to “express alarm” over “contradicting statements.”
Hussein Mailiyev, described as a “plenipotentiary representative of Imarat Kavkaz,” attempted to clarify the situation in a 6 August statement posted by Kavkaz Center. He blamed Movladi Udugov - who controls the news portal - for wrongly publicizing information that had been meant for “internal use only.” Mailiyev said that Udugov had been suspended from his duties as head of the Imarat Kavkaz’s “informational-analytical service” over the incident.
The appearance of two videos clearly illustrates the divisions among the networks’ leaders, regardless of the real reasons behind Umarov’s decision to seek the emirs’ approval for his replacement by Vadalov.
Udugov - who is known to have favored a pan-Caucasian state over a secular Chechnya - may have publicized the first video intentionally in an attempt to prevent the ascent of Vadalov. Vadalov has been seen as more focused on the cause of Chechen independence, and it should come as no surprise that the Chechen separatists’ exiled envoy, Akhmed Zakayev, was quick to praise him as a “non-Wahhabi” and express readiness to work with him as the new “amir.”
Another possibility is that the emirs of Ingushetia, Dagestan and Kabardino-Balkaria were also seeking to prevent the rise of Vadalov, and passed the video to the Kavkaz Center to embarrass Umarov into backtracking on his decision after refusing to support it.
That Umarov ordered the disbanding of the foreign representation office of the Imarat Kavkaz in his second video on 3 August also demonstrates disagreement among those fighting on ground and those representing these networks abroad.
Representative inspiration
As importantly, the very fact that Umarov has floated the possibility of resigning for health reasons could be perceived as a sign of increasing weakness by the networks’ supporters both within and outside the North Caucasus. They are still smarting from the recent killing of two senior leaders and the arrest of Umarov’s previous No 2, the emir of Ingushetia, Magas.
Umarov’s ‘retirement’ would diminish the standing of networks fighting in the North Caucasus in the eyes of foreign financiers and other sponsors, and may result in a decrease of assistance in financing, material support and recruitment.
After all, Umarov is the last well-known warlord who has not only served in the ‘Ichekerian government’ as secretary of the Security Council and director of the National Security Service when Chechnya was de facto independent, but also fought at commanding positions in both Chechen wars.
Umarov’s would-be successor, Vadalov, lacks the same legitimacy, scale, influence and connections, although he has gained notoriety in the past few years for the ruthless killings of Chechen police officers.
However, while internal divisions are bound to weaken the insurgency in the short-tem, the replacement of the amir of the Imarat Kavkaz will be largely irrelevant for the North Caucasus-based networks in the longer-term. Such a reshuffle will not have significant impact on these networks’ overall combat capabilities because they operate autonomously to achieve their tactical objectives, while their overarching goal of a pan-Caucasian caliphate represents an inspiring unifying vision rather than a realistic goal.
While remaining in command of his own unit, Umarov has also avoided major operations that required deployment of many dozens of fighters on the scale of the raids on the Ingush city of Nazran and the Kabardin-Balkar capital of Nalchik, which were co-organized by one of his predecessors - Russia’s most notorious terrorist Shamil Basayev.
Instead, Umarov would come out to publicly claim responsibility for actions organized by the leaders of neighboring networks and call for further attacks. He can certainly be replaced in this representational-inspirational role.
From secular to holy war
As importantly, Umarov has already accomplished the task of completing the long process of re-framing the low-intensity conflict fought in the North Caucasus from a secular war fought for Chechnya’s independence to a holy war fought for the establishment of an Islamist state in the North Caucasus.
This process began years before Umarov was appointed ‘president of the Chechen Republic of Ichkeria’ in 2006, but it was Umarov who accelerated it by proclaiming the Imarat Kavkaz and appointing himself its amir. This decision prompted the 'Icherkian parliament' to fire him from the post of the 'president' in 2007, but didn’t halt the re-framing of the conflict.
Regardless of who is in command of the networks, there are a number of key factors that Russian policy-makers need to keep an eye on in addition to trying to address root causes and contributing factors behind the insurgency.
One is the 2014 Olympic Games in the nearby Black Sea resort area of Sochi, which may require these networks to boost their activities if only to prove that they remain a robust and relevant force. And, here, Russian authorities should be closely watching for further signs that the networks are trying to hijack the grievances of the Adygs and their ethnic cousins, who were expelled from the Sochi area during imperial Russia’s conquest of the North Caucasus.
Another factor is the security dynamics in such hotbeds as Afghanistan, Iraq and the greater Middle East. Sustainable improvement of the situation in these hotspots would free jihadists to turn their eyes back to the North Caucasus.
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Simon Saradzhyan is a research fellow at Harvard Kennedy School's Belfer Center. He is the author of several papers on security and terrorism.
Expert speaks on how to save unique Russian fruit, berry crop collection (Update 1)
The collection of plants of the Pavlovsk Experimental Station near St. Petersburg in northern Russia should not be lost as the station struggles in court to retain two land plots with fruit and berry crops, Biodiversity International research center director general Emile Frison said.
The Vavilov Institute of Plant Industry and its Pavlovsk station are trying to retain land that has already been given to a housing construction development fund by the Russian State Property Management Agency.
The land contains a unique crop collection established by academician Nikolai Vavilov, and the station hopes it will be allowed to continue using the land. A regular court session on the issue will take place on Wednesday.
"The importance of Pavlovsk and all collections of genetic diversity lies not in the past but in the future. How will Russian agriculture cope if this year's heat wave becomes the normal pattern for the future?" Frison told RIA Novosti.
"It is impossible to predict which particular bits of the collection will be needed in future; what is certain is that it will be needed," he said.
A scorching heat wave has gripped much of western Russia since mid-June, sparking wildfires and causing the worst drought in decades.
Acting station director Fyodor Mikhovich said the collection's loss "may become a world tragedy, as many rare specimens of fruit crops that cannot be seen in wildlife will be lost for good."
The housing construction development fund that received the disputed land plots told RIA Novosti that only half of the second plot was planted with "fruit and berry trees and bushes that were in an abandoned state."
But Mikhovich denied the statements, saying he and his colleagues are ready to convince any commission that the land plots were planted with crops.
Frison also said blue honeysuckle, studied as part of a project by Biodiversity International, the Vavilov Institute of Plant Industry (VIR) and the Gabriel Lippman Center for Public Research in Luxemburg, is especially valuable.
"One of the most interesting is blue honeysuckle, also known as honey berry or haskap. Research has shown that the plants, which can withstand considerable frost and drought, produce fruit that is among the richest in the world for a whole range of important health-giving micronutrients," Frison said.
"The Pavlovsk collection conserves varieties and wild relatives that are extinct elsewhere. Almost all of these - more than 90% - are not available in other collections. If they are destroyed at Pavlovsk, they are gone forever," he said.
"The primary difficulty is that fruits and berries do not breed true from seed. It is the individual plants that matter, and that need to be preserved. This means multiplying each of the plants, which would require a purpose-built nursery and could take up to five years," the expert said.
"The plants would have to be tested for diseases and a suitable alternative location found and prepared. Then, once the plants have been established at the new location, each one needs to be compared with the original to ensure that it is genetically identical in all respects. This could take another 5-7 years," he said, adding that the cost of "preserving" the collection could be $0.5 million.
"For these reasons it is probably best not to even consider moving the collection. It gives false hope that the priceless treasures of Pavlovsk can be saved if the forthcoming court decision goes against the VIR. The best way to save the collection is to halt the transfer of the land," Frison said.
MOSCOW, August 11 (RIA Novosti)
FIFA inspection visit in Russia expected to go ahead as scheduled
August 11, 2010
Given the current conditions in and around Moscow as well as in other regions of Russia, the Russian Bid Committee for the 2018/2022 FIFA World Cup is in contact with FIFA regarding the upcoming visit of the FIFA inspection group, due to take place from 16 to 19 August 2010.
Bid CEO Alexey Sorokin said: “We are closely monitoring the developments together with the government of the Russian Federation and are in contact with FIFA.
"The itinerary of the inspection is such that we expect to be able to go ahead with the visit of the FIFA team as planned, with special arrangements being put in place for the part of the visit in Moscow.”
The scheduled itinerary foresees visits to four proposed Host Cities, with three of four, namely St. Petersburg, Kazan and Sochi not being affected by the wildfire situation.
The FIFA inspection team is due to arrive in Saint Petersburg on Monday, 16 August for the first stop on the four day-tour and will visit a number of facilities there. On Tuesday, 17 August, meetings are scheduled with the federal government and visits to a number of buildings foreseen for the FIFA Congress and the Final Draw as well as to Luzhniki stadium in Moscow.
On Wednesday, 18 August the tour will continue to Kazan and Sochi. On Thursday, 19 August, the FIFA inspection group is due to return to Moscow and leave for Switzerland.
”Kursk” – 10 years after
2010-08-11
This Thursday marks the 10th anniversary of the “Kursk” submarine disaster. Today, Russia and Norway are far better prepared to cooperate on difficult rescue operations in the Barents Sea. Unfortunately, that might be needed, argues the editor of BarentsObserver in this opinion.
The entire world could for two weeks in August 2000 watch live on TV how the one rescue effort followed by the other failed. None of the 116 crew members and two weapons experts onboard survived.
Let’s recall what happened before the worst submarine accident in post-Soviet naval history.
Acting President Vladimir Putin won the 2000 Presidential election on March 26. Shortly after, on April 6, Putin went to the Northern fleet’s main base Severomorsk where he embarked the strategic nuclear-powered missiles submarine “Karelia” and set off for the Barents Sea. He spent the night onboard, watched the launching of a Sineva intercontinental missile and praised the submarine fleet as the mainstay of Russia’s nuclear deterrent. Also, he made it clear that Russian submarines again should sail the world’s oceans, after mainly staying in their ports during the 90ties.
Following the April instructions of the President, the Northern fleet started to prepare for the largest naval exercise in years. “Kursk” – the Oscar-II class submarine carrying cruise-missiles and torpedoes, was supposed to have a special role; first to participate in the August Barents Sea exercise; thereafter to sail to the Mediterranean to show the world that the Russian navy no longer stays in port.
“Kursk” never made it to the Mediterranean. She sank northeast of Murmansk in the Barents Sea after torpedo explosions onboard. First 48 hours later, in the morning on August 14th, the first news about the ill fated submarine was released. First, the Russian Northern fleet didn’t want any rescue assistance from abroad. When it became clear that their mini-rescue submarine was not able to operate properly, assistance from Norway and Great Britain was accepted. The following Russian, Norwegian, British rescue operation became ad-hoc, learning by doing while fighting against the clock.
Putin himself didn’t return from his summer residence by the Black Sea before it became clear that there were no survivors. When he first appeared in Vidyayevo, the homeport of “Kursk” on the Kola Peninsula, he was bashed for his alleged mishandling of the disaster. Putin learned something about live TV-broadcast that day in Vidyayevo.
The “Kursk” rescue co-operation with Norway and Great Britain could little do to save the crew members life. However, it represented an historic change in military-to-military contacts cross the former Cold War barrier between East and West in the Barents Region. Another submarine disaster, just 11 years before “Kursk” sank, represented the grim example of how bad it could become with a non-cooperative approach. When the Soviet submarine “Komsomolets” sank in April 1989 south of the Bear Island, a Norwegian Orion surveillance plane circled over the life raft holding the crew partly afloat in the ice-cold Arctic water.
Three years after the "Komsomolets" accident, I met with a few of the survivors. For me, as a Norwegian, it was not easy to listen to their words on how it was to see the submarine go down, jump over to the just partly floating life raft, see one after the other of their fellow crew members giving up and disappearing in the cold dark water. Simultaneously they could see the Norwegian aircraft circle over their heads. I couldn’t answer their obvious question about the existence of any life raft onboard the Norwegian Orion plane that could have been dropped down in an attempt to assistance. 1989 was Cold War, 42 of the crew died.
That was 11 years before the “Kursk” disaster. Today, 10 years after, Russian and Norway are much better prepared for rescue cooperation in the Barents Sea. Over the latest decade, the head command of the Russian Northern fleet has built good relations with the Norwegian military operational headquarters. Especially, the joint bi-annual exercises named Barents Rescue have been successfully. Last fall, Barents Rescue 2009 took place in Murmansk. This are exercises with practical approaches, where civilian and military personnel on both sides of the border learn to cooperate across different languages, culture, structures and history. Sweden and Finland also participate in the Barents Rescue exercises.
Also, in 2008 the Royal Norwegian Navy and the Russian Navy created history by completing a simulated rescue of submariners from a Norwegian submarine by a Russian rescue vehicle. The submarine rescue exercise took place outside the southern coast of Norway.
We in BarentsObserver can only praise all such joint military and civilian rescue exercises. This is not only with focus on the submarine activities in the Barents Sea. Both Norway and Russia are key players in the increasing shipping activities in the Arctic. With the ongoing climate changes and the retreating of the Arctic sea ice, we just don’t have time not to join rescue forces in the north.
Another disturbing fact that we need to mention ten years after the “Kursk” disaster is the increasing numbers of Russian nuclear powered submarines that are in line to be put on sea over the next two decades. Last year, ”Yury Dolgoruky” started its first sea trails. She is the first new nuclear-powered submarine designed to carry intercontinental missiles put on sea since the last Delta-IV class submarine was taken into use by the Northern fleet in 1992. Several others of the same Borey-class are under construction at the Sevmash yard in Severodvinsk.
Also at this White Sea naval yard, a new generation of multi-purpose submarines is under construction. Like “Kursk”, they will carry long-range cruise missiles. The first one was launched in mid-June this year. President Dmitri Medvedev was present in Severodvinsk when the submarine was put on water. Also last summer, Medvedev visited Severodvinsk when “Yury Dolgoruky” sailed out in the White Sea for the first time. The President then said:
“ Whitin 2020 we will have obtain building the core of Russia’s new naval forces [...] Our new submarines will be equipped with modern weapons, they will be able to meet competition and they have to match or exceed their foreign counterparts. ”
Yes, we have heard it before. In 1989, “Komsomolets” was sent to sea from its base on the Kola Peninsula after Moscow’s need to show the Americans that they had a weapon that could go deep enough to sail undetected all cross the Atlantic to the east coast of the US. Several high-ranking officers in the Northern fleet then said “Komsomolets” was not seaworthy, but couldn’t resist the words from Moscow. And then, in 2000 we do remember the words of Vladimir Putin making it clear that Russian submarines again should sail the world’s oceans. Then “Kursk” sank.
Let’s hope that the naval engineers, not least to talk about the missile engineers, are clear about one thing: A submarine, or a missile, is nothing you put to sea following some high-ranking political words from Moscow. A nuclear powered submarine is the most advanced weapon humans ever have created. BarentsObserver underlines that the ultimate goal is a Barents Sea without nuclear weapons and nuclear-powered submarines. Until then, make sure it works before sailing it. One of the reasons why we raise this warning is the on-going test program with the ill-fated Bulava intercontinental missile. So far, seven out of 13 missile tests have failed. The last one, in December 2009, was visible in the horizon over large parts of Northern Norway.
How big pressure isn’t there on the missile engineers, when knowing that the submarine “Yury Dolgoruky” to carry the Bulava has been waiting for its weapons since last year? Knowing that Moscow puts most of its nuclear deterrent prestige into the Bulava missile, because it can (when it works) carry multiple warheads not possible to take down by any kind of anti-missile defense systems?
Let us see no more catastrophes with nuclear powered submarines.
Thomas Nilsen
Editor – BarentsObserver
National Economic Trends
Russian government to prevent possible bread price hikes
|Aug 11, 2010 09:55 Moscow Time |
With grain price hikes being in place in Russia, bread prices are unlikely to skyrocket there in the next several months, Agriculture Minister Yelena Skrynnik told reporters on Wednesday.
She signalled her Ministry’s readiness to hammer out “a range of steps” aimed at containing a possible surge in bread prices in Russia in the months ahead.
Drought may force Russia to import rye for 1st time in 15 years
RBC, 11.08.2010, Moscow 11:22:50.For the first time in 15 years, Russia may be forced to import rye for flour production due to the drought, the Russian union of milling and groats enterprises indicated in an announcement today.
According to the union's statement, gross production of rye is estimated at 2m-2.2m tonnes, including non-food crops that account for about 15-20 percent of the overall amount. At the same time, the country requires nearly 1.8m tonnes of rye for flour production each year.
The millers also expect a deficit of another vital crop - buckwheat - in 2010. The union revealed its forecast for grain harvest this year - 68m tonnes (according to an optimistic forecast). It also revised Russia's grain reserves, indicating that the amount of grain reserves cited by the Russian Federal Statistics Service (Rosstat) was accurate for the beginning of June. However, some 6.3m tonnes of grain were used for domestic consumption in June and another 1.6m tonnes exported. Consequently, as of July 1, 2010, a mere 6m tonnes of grain were held by companies and agricultural enterprises.
Russia needs to introduce a tax on wheat exporters
Published: August 11 2010 04:12 | Last updated: August 11 2010 06:02
From Prof Padma Desai.
Sir, Your editorial (“Russia’s grain ban is the wrong response”, August 9) correctly suggests that the ban on grain exports announced by Vladimir Putin, the prime minister, is counterproductive. Your suggestions asking countries to invest more in irrigation projects and build bigger strategic grain reserves are also necessary for warding off future grain crises.
Here and now, the Russian government needs to remove the export ban as soon as the forest fires are brought under control and an estimate of the grain harvest is in place. The ban discriminates against Russian wheat exporters to the advantage of foreign suppliers in world markets.
Instead, an appropriate tax on exports of wheat by domestic Russian companies will keep them free to export it at the tax-inclusive price.
The tax will bring revenues in the budget which can be used for providing income subsidies to pensioners and the unemployed with which they can pay for higher bread prices.
The distribution network for the purpose has been in place for giving these groups economic relief during the current financial crisis.
Mr Putin’s suggestion that the ban will help the government build stocks is also misplaced. The government needs to draw down the current stocks for softening the impact of the wheat shortage on bread prices.
Padma Desai,
Gladys and Roland Harriman Professor of Comparative Economic Systems, and Director, Center for Transition Economies,
Department of Economics, Columbia University,
New York, NY, US
Heatwave hits Russian growth forecast
By Isabel Gorst and Catherine Belton,
August 11, 2010 -- Updated 0517 GMT (1317 HKT)
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(FT) -- Russia has begun counting the economic toll of the worst heatwave since records began as economists warned that the wildfires and disastrous summer harvest could wipe as much as 1 per cent off the country's economic growth.
The record-breaking heatwave has destroyed grain crops across Russia, ruining close to a third of the country's forecast harvest, while wildfires raging in the Moscow region have spread noxious smog over the capital, forcing businesses to close and many to flee the city.
Alexander Morozov, chief economist at HSBC, said the combined impact of the heatwave on agriculture and general economic activity could reduce Russia's gross domestic product growth by about 1 per cent this year, a cost to the economy of about $15bn (€11bn, £9.5bn).
An estimated 10 to 13 per cent decline in Russian agricultural output this year would cost about 0.6 per cent of GDP, Mr Morozov said. Weather-related disruption to industrial production and the retail and services sector could account for a further 0.4 per cent decline.
Economists have predicted that Russia's economy will grow by about 4 per cent this year as the country starts to recover from its steepest recession in more than a decade. But Mr Morozov said the impact of the drought and fires could halt the recovery in the third quarter.
Industrial enterprises, including Avtovaz and GAZ, Russia's biggest carmakers, closed assembly lines this month, claiming high temperatures made working conditions unbearable on factory floors.
Many Russians fled heat and smog in big cities as officials warned that the heatwave carried health hazards. After carbon monoxide carried by the smog in Moscow surged to levels nearly seven times higher than acceptable norms over the weekend, a senior Moscow health official said death rates had almost doubled in the city. On Tuesday, a regional health official said death rates in the region surrounding the capital were up by a quarter.
Officials urged residents to stay at home to reduce exposure to the smog and a quarter of Moscow offices cut working hours, according to a survey by superjob.ru. Many investment banks and embassies were working on skeleton staff on Monday after many were evacuated from the capital.
"The heatwave is good news for ice-cream producers but otherwise it is difficult to find winners," Mr Morozov said.
However, Troika Dialog, the investment bank, warned against exaggerating the impact on Russia's economy. "It is tragic. It is debilitating and unpleasant. But we do not believe it is going to knock economic recovery off course," said Kingsmill Bond, the bank's chief strategist.
Although crucial as a source of employment, agriculture accounts for only 4 per cent of Russia's gross domestic product and just over 2 per cent of its export revenues.
But surging grain prices due to the drought-ravaged harvest are likely to stoke inflation in Russia, economists say, undermining the government's success in driving down inflation to post-Soviet record levels.
Renaissance Capital, the Moscow investment bank, recently raised its inflation forecast from 6.3 per cent to between 7 and 7.5 per cent.
No halt in Russia heat, winter crop sowing
Wed Aug 11, 2010 1:22am EDT
By Aleksandras Budrys
MOSCOW (Reuters) - Scorching heat will keep hammering Russia for the next 10 days, a top weather official said on Tuesday, and seeding for the winter grain crops is in danger if there is no rain after that.
Russia's worst heatwave on record has stoked wildfires and parched crops in last year's No. 3 global wheat exporter, leading to a grain export ban, sending prices of wheat to two-year highs at one point and prompting the World Bank to warn against hasty restrictions on exports.
"The situation is not changing radically," Dmitry Kiktyov, deputy director of Hydrometcentre, the government weather forecasting unit, said of the heatwave that has cost 54 lives in fires and, economists said, could wipe $14 billion off economic growth.
"The temperature will change insignificantly, and there will be only local rains. They will be insufficient to cushion the current situation," he said.
The drought could slash Russia's 2010 grain output by nearly 40 percent to 60 million tonnes, and the winter wheat sowing campaign could begin to be in jeopardy if there is no rain during or right after the next 10 days.
"Our investigations show that the sowing may be delayed by some 10 days without losses. But only in case of rains," agricultural forecasting official Anna Strashnaya told Reuters.
Prime Minister Vladimir Putin, who said Russia's ban on grain exports could extend into next year, noted the drought could prevent some regions from starting the sowing campaign for the 2011 winter grain crop, which normally accounts for roughly 40 percent of the total.
The majority of Russia's grain crops are not planted until the spring, allowing much more time for conditions to improve.
WORLD BANK
On Tuesday, World Bank President Robert Zoellick cautioned against countries taking any action that could add to market uncertainty, in particular widespread export bans like Russia's.
"The situation in world grain markets is very uncertain and therefore somewhat volatile," Zoellick told reporters in Sofia.
"What is better this time is that the buffer stock is a little higher than a couple of years ago," he said, referring to tightness in global grains markets in 2008.
"We are cautioning countries about taking actions that might be appealing domestically but could add uncertainty on markets such as bans on exports," Zoellick said, echoing comments by World Bank Managing Director Ngozi Okonjo-Iweala.
Economists say the heatwave could knock 1 percentage point off Russia's gross domestic product, weakening an economic recovery from a 2009 slump due to the global financial crisis.
The crop failures will hit Russian farmers particularly hard. Only around 25 percent of Russia's crops are insured, compared with 80 percent in the United States, Swiss Re, the world's second-biggest reinsurer said on Tuesday.
Wheat markets slid further on Tuesday from last week's two-year highs, as traders assessed the damage to grains production across the Black Sea region that also includes major grains producer Ukraine, and pointed to ample stocks after two years of good harvests.
"With these bull runs you need to keep feeding the rally and we've seen most of the bad news now," said Rabobank analyst Luke Chandler.
Wheat prices on the Chicago Board of Trade traded as low as $6.90 a bushel on Tuesday, around 18 percent below last week's peak of $8.41, before rebounding to $7.10-1/4 by 1559 GMT.
Prices remain far below the peaks set during early 2008 when shrinking inventories and rising energy markets saw CBOT wheat futures rise as high as $13.34-1/2.
The two largest global wheat crops in history in 2008 and 2009 have resulted in much higher stock levels now and a return to the prices seen two years ago is considered unlikely.
Still, prices remain more than 50 percent higher than June lows, and importers are reluctant to commit to deals at current prices.
Turkey's state grain office said on Tuesday it had sufficient wheat stocks while Jordan said it had enough wheat stocks to cover its needs for six months but would be forced to switch to more expensive U.S. or European grains.
(Additional reporting by Naveen Thukral in Singapore, and Nigel Hunt in London; writing by Sue Thomas; editing by Anthony Barker)
Budget deficit at 2.2% of GDP in January-July
Renaissance Capital
August 11, 2010
Yesterday (10 Aug), the Ministry of Finance released monthly budget statistics for July. The key implications are listed below:
• The budget deficit in January-July came out at 2.2% of GDP, below the official forecast of 5.4% of GDP for 2010. The deficit's nominal value is RUB540bn. The deficit rose in July from the previous month's level of 1.9% of GDP. However, this does not mean that fiscal performance deteriorated, in our view, as the January-June figures were influenced more by one-off sources of income.
• Collected revenues amounted to 59.9% of the budget plan for 2010, with a nominal value of RUB4.7trn. The revenues exceeded estimates due to greater-than-expected oil and gas revenues and significant one-off income from the Central Bank of Russia and sovereign fund management.
• Expenditures reached 50.9% of the budget plan for 2010, with a nominal value of RUB5.2trn. Traditionally, a large share of budget funds is spent at the end of the year; so that expenditures usually lag the planned schedule. However, in 2010 the distribution of funds in the year seems to be more even than in previous years.
• No money from the Reserve Fund was used in July to cover the deficit. Other sources were used: domestic borrowing and federal budget accounts.
• Net borrowing in the domestic market was very stable at RUB60bn in July. The Ministry of Finance borrowed RUB60-70bn in June, which was the first month when it actively tapped the market.
• The government remains a net lender to the regions and has provided RUB70bn in inter-budget loans YtD.
• The government has started to execute its privatisation programme - about RUB2bn of assets were sold in July. The initial estimate of the programme is RUB18bn in 2010. There is more to come, as airports and seaports are included in the plan.
Budget performance seems to be better-than-expected YtD; however, we estimate that the budget deficit will reach 4.8- 5.1% of GDP, as a high share of government spending is usually allocated to the end of the year.
Anton Nikitin
Corporate loan growth excluding Sberbank was only 0.1% m-o-m in July
Alfa Bank
August 11, 2010
According to the CBR, corporate loans excluding Sberbank grew only 0.1% m- o-m in July. Even adjusted for ruble appreciation, this figure was equivalent to only 1.1% m-o-m, which is weak.
Taking into account preliminary figures that Sberbank's corporate loans increased 1.5% m-o-m in July, corporate loan growth for the overall sector in July is very likely to be around 0.5% m-o-m. This growth is as weak as in March: as of April, the growth rate was in the range of 0.9-2.1% m-o-m. Even if the CBR explains this slowdown in lending activity as a seasonal slowdown in economic activity, we believe the size of the slowdown in lending growth is too large. We previously expected loan growth of around 2.0% m-o-m in July- August.
Nevertheless, Sberbank's corporate loan growth is still relatively high, suggesting that demand for loans is good. Furthermore, we believe that the drought will fuel cost inflation in Russia and therefore create additional demand for loans. This might create an opportunity for banks to generate additional corporate lending growth; however, this would be at the price of taking additional credit risks. Thus, we will be looking for 1.0% m-o-m loan growth in August.
Natalia Orlova
Mortgage Lending Doubles
11 August 2010
Mortgage lending more than doubled in the first half as record-low interest rates and growing incomes boosted demand, Central Bank data show.
The value of ruble-denominated home loans issued in the six months through June rose to 125.9 billion rubles ($30.1 billion), compared with 52.4 billion rubles during the same period last year, the Central Bank said on its web site Tuesday.
A total of 105,609 mortgages were made in the first half at an average rate of 13.5 percent, a decline of 1.1 percentage points from 2009, the Central Bank said.
(Bloomberg)
Monetary base declined in July
Renaissance Capital
August 11, 2010
Yesterday (10 Aug), the Central Bank of Russia (CBR) published data on the broad monetary base for July. According to the data, the broad monetary base reached RUB7.11trn in July, down from RUB7.24trn in June. The monetary base declined for the first month since January, and this decline is unexplained by technical factors. In January, the numbers were distorted by the effects of the New Year holidays: the banks accumulated money in December to get through the long holiday period.
In July, the movement was driven by a change in commercial banks' deposits with the CBR. Bank deposits fell almost 50%, to RUB350bn in July from RUB637bn in June. Other monetary base components expanded again: cash surged 2.4% MoM to RUB4.95trn; and OBR holdings rose to RUB1.04trn in July, from RUB1.00trn in June; meanwhile, correspondent accounts were unchanged at RUB605bn.
We explain this movement in the monetary base by a couple of factors. First, the previous monthly increases in the monetary base were strongly correlated with the volume of the CBR's interventions in the FX market. In July, they were only $0.46bn. Second, budget spending traditionally accelerates at the end of the year; thus, the use of the Reserve Fund for deficit financing is low in the early part of the year, and only RUB520bn has been withdrawn YtD. In July, the Ministry of Finance tapped neither the Reserve Fund nor the external market. As changes in the total amount of commercial bank liabilities to the CBR were immaterial, we estimate that money creation was close to zero in July. Therefore, the tax payment period negatively affected Russian liquidity in the banking system. As such, we think this event may signal that without FX interventions and budget-related monetary emission, the liquidity in the banking system may be volatile.
Anton Nikitin
Business, Energy or Environmental regulations or discussions
Norilsk Nickel, Sberbank, Silvinit: Russia Stock Market Preview
By Yuriy Humber
Aug. 11 (Bloomberg) -- The following companies may have unusual price changes in Russian trading. Stock symbols are in parentheses and share prices are from the previous close.
Russia’s 30-stock Micex Index fell 1.5 percent to 1,397.66. The dollar-denominated RTS Index fell 1.8 percent to 1,494.90.
OAO GMK Norilsk Nickel (GMKN RX): The nickel maker sold the metal at $341 a metric ton above the London Metal Exchange price in the first half, according to Deputy Chief Executive Officer Viktor Sprogis. Norilsk sold copper at $86 a ton above the average global price, Sprogis said to reporters in Moscow. Norilsk fell 0.5 percent to 5,158.29 rubles.
OAO Sberbank (SBER03 RX): Russian mortgage lending more than doubled in the first half as record-low interest rates and growing incomes boosted demand, central bank data show. The value of ruble-denominated home loans issued in the six months through June rose to 125.9 billion rubles ($30.1 billion), compared with 52.4 billion rubles during the same period last year, Bank Rossii said on its website today. Russia’s largest bank fell 1.1 percent to 82.66 rubles.
OAO Silvinit (SILV RX): OAO PhosAgro, the second-largest producer of phosphate-based fertilizers, has offered the state a stake in the entity that will be created should it merge with potash maker Silvinit, Interfax reported, citing unidentified people in the industry. Silvinit fell 3.9 percent to 18,693.42 rubles.
To contact the reporter on this story: Yuriy Humber in Moscow at yhumber@.
Last Updated: August 10, 2010 22:01 EDT
Drought May Spur Interest in Crop Insurance
11 August 2010
Reuters
Swiss Re, the world's second biggest reinsurer, expects the current drought to spur interest in the nascent Russian crop insurance market as farmers re-evaluate the risk of crop failure.
"Nobody knows if the weather pattern that we see at the moment can repeat itself next year or just in 20 years, and I think this helps to raise awareness for financial risk management measures," Swiss Re director Reto J. Schneider said in an interview.
The Zurich-based company estimates that 25 percent of Russian crops are insured, well below the 80 percent level seen in the heavily subsidized U.S. market.
In lieu of insurance, many farmers continue to rely on government bailouts when crops fail, although the market has grown considerably since 2003, when insurance penetration was in the single-digits according to Swiss Re estimates.
Most farmers in the hard-hit Black Earth region say they had never used insurance but would consider it if the drought continues.
The government has sought to encourage the development of the crop insurance sector by providing a 50 percent subsidy on the premium for multi-peril crop insurance since 2003.
"They are promoting it and showing their positive intentions with the subsidy program," Schneider said.
However, farmers questioned in the Swiss Re report viewed insurance negatively, citing high costs and concerns about receiving payments on claims filed to insurers.
Independent and state-owned Russian forecasters have sharply reduced their 2010 wheat and overall grain crop estimates, but Schneider said it was too early to calculate the total losses.
"At this time it's not possible to make any type of clear forecast in terms of expected results because not all of Russia's territory is consumed by the drought," he said.
Swiss Re's 2010 results will only be affected marginally by the drought because reinsuring Russian agricultural insurers makes up only a small part of the company's premiums, which totaled 24.6 billion Swiss francs ($23.3 billion) last year.
Nonetheless, the company is confident that its business in Russia, as well as neighboring Ukraine and Kazakhstan, will grow as the agricultural sector expands.
Russia was the world's third largest wheat exporter last year, although its goal of remaining a top exporter was put on hold earlier this month when it banned exports until the end of the year.
"We very much believe in this market. This is soon going to be the breadbasket of the world because it's where the land is available," Schneider said.
Swiss Re has been active in the Russian agricultural reinsurance sector since 2005.
The company competes with "a handful" of the world's top-10 reinsurers in Russia, Schneider added.
"It's a challenge because it's a relatively young market," Schneider said. "Structures, processes and strategies must be developed and worked on."
UPDATE 1-Cherkizovo expects more state help on grain
Wed Aug 11, 2010 6:55am GMT
* Meat producer says state helping farmers amid drought
* Expects further subsidies if grain prices continue to rise
* Maintains production targets for 2010
(Adds CEO comment, detail)
MOSCOW, Aug 11 (Reuters) - Russia's biggest meat producer Cherkizovo (GCHE.MM) said the government should do more to help farmers if grain prices continue to rise, although it welcomed measures to mitigate the impact of the drought to date.
The company, which owns poultry and pig farms, said aggressive grain price increases caused by a heatwave-induced poor harvest were likely to lead to meat price inflation, but that it was counting on the state for further aid.
"In the event of sustained extraordinary grain price increases, we reasonably anticipate that the government will intervene with additional subsidy measures," Chief Executive Sergei Mikhailov said on Wednesday.
Russia has imposed a grain export ban amid other measures to help local producers, who have seen crops destroyed by the country's worst heatwave on record. [ID:nN10151347]
Mikhailov added that the heatwave and subsequent fires in Central Russia had not affected any of its farms to date, while the group remained on track to hit 2010 production targets.
Cherkizovo said poultry sales rose 8 percent in the first half of the year, while pork soared 75 percent as new farms reached full target levels. (Reporting by John Bowker; Editing by David Cowell)
Russia's Sistema to float public issue for Indian telecom arm
Submitted by Bhuvan Kala on Wed, 08/11/2010 - 06:04.
New Delhi, Aug 11 - Sistema, one of Russia's largest listed companies with annual revenues of $19 billion, will soon float a public issue for its Indian telecom services venture after Moscow concludes its funds infusion programme of around $675 million.
"We are ready for a public issue. In principle, this has been approved. But there are some procedural issues. We are all hoping it concludes it soon," said Vsevolod Rozanov, president and chief executive of Sistema Shyam TeleServices, their India joint venture.
"The Russian government will also be investing. But the guidelines of the Indian markets regulator want us to freeze the promoter-investment before the public issue. I think this could take around three-four months," Rozanov told IANS in an interview.
The top company executive said both the Russian investment and the public issue will be made by way of issuing fresh equity shares. This means the money, upwards of $1 billion, will accrue to the company for its future plans.
The Russian company has already invested over $1.5 billion in India.
Sistema -- which offers mobile voice and data services in India under the MTS brand -- currently holds 73.71 percent share in the Indian venture, 23.79 percent is held by the Shyam Group and the remaining 2.5 percent is with the public.
During Prime Minister Vadimir Putin's visit here in March this year, Russian officials had told IANS that their government had approved a state investment to the tune of $676 million into Sistema Shyam TeleServices.
"We are ready to contribute funds in your joint activity," Putin himself had said during an interactive session with Indian business leaders during the visit, when queried about his government's proposed investment in Sistema's Indian venture.
Incidentally, the interaction was by way of a live web cast organised from Sistema's office in Gurgaon, on the outskirts of Delhi, with a live audience in cities including the national capital, Mumbai, Chennai and Kolkata.
India's Foreign Investment Promotion Board (FIPB) has already approved the investment under the unified access service norm, which allows telecom companies to offer fixed, mobile and data services all under one licence.
Speaking about the future plans of the company, Rozanov said despite being late entrants in India, there were already some six million subscribers in the country in 12 out of 22 circles in which the company was operating.
"The target of 10 million subscribers by the yearend is very much in sight."
Rozanov said the decision not to participate in the auction of broadband airwaves in India was taken because the technology they have opted for was already delivering very high speeds, which will accelerate further by migrating to next generation technology.
"We launched our high-speed mobile broadband service under the Mblaze brand only in November 2009 but we already have more than 150,000 customers. Our network speed and quality also helped us to successfully launch MTS TV in April," he said.
"What I can also say is our EVDO technology, which is on the CDMA platform, is at par with 3G services under the GSM platform, which are yet to be rolled out by private telecom operators in India. So we have no cause for worry." (IANS)
Norilsk Independent Directors Back Efforts to Probe Board Vote
By Amanda Jordan
Aug. 11 (Bloomberg) -- OAO GMK Norilsk Nickel independent directors Gerard Holden and Brad Mills supported a request from shareholder United Co. Rusal for an external investigation into a board election in June.
“Further urgent consideration should be given to requesting the company’s IFRS auditor in combination with an independent international law firm to prepare a review of the results of the AGM voting,” Holden and Mills said Aug. 9 in a letter to Norilsk’s chairman obtained by Bloomberg News.
The two directors also called for a reconfiguration of the board, indicating that it should include three representatives of shareholder Interros Holding Co. rather than four, giving it the same number of seats as Rusal, and at least four independent non-executive directors instead of three.
Rusal claims the June 28 vote was manipulated and yesterday filed a request for arbitration to resolve the dispute. Rusal’s billionaire owner Oleg Deripaska has voiced concern that Interros has enough influence to pass a share buyback, which he says wouldn’t favor all shareholders, after the board approved dividends of $1.33 billion.
Maria Uvarova, a spokeswoman for Norilsk in Moscow, couldn’t immediately comment when contacted by Bloomberg News.
To contact the reporter on this story: Amanda Jordan in London at ajordan11@
Last Updated: August 11, 2010 02:40 EDT
Rusal Seeks Arbitration Against Interros for Norilsk (Update1)
By Rebecca Keenan
Aug. 11 (Bloomberg) -- United Co. Rusal, battling with billionaire Vladimir Potanin’s Interros Holding Co. for control of OAO GMK Norilsk Nickel, said it filed a request for arbitration about the dispute.
No hearing date has been set in the London Court of International Arbitration, the Moscow-based company controlled by billionaire Oleg Deripaska said today in a statement to the Hong Kong stock exchange. The filing was made on Aug. 10 against Interros International Investments Ltd., Rusal said.
Deripaska and Potanin, which both own 25 percent of the world’s biggest nickel supplier through their companies, have offered to buy each other out after disagreeing on dividend and investment plans. Rusal is seeking arbitration after winning one less board seat than Interros in a June election.
“The company seeks the speedy determination of this dispute in order that the parties’ rights and obligations are established by arbitral award as quickly as possible,” Rusal said in the statement.
Rusal, the world’s largest aluminum supplier, fell 0.7 percent to HK$8.44 at 10:00 a.m. in Hong Kong trading. Rusal, which raised $2.24 billion in its Hong Kong initial public offering this year, wants dividends from Norilsk to cut debt.
Breach Agreement
Interros breached a 2008 agreement by failing to vote its shares to ensure the election of four directors nominated by Rusal and also to ensure the election of Alexander Voloshin as a director and chairman, Rusal said today.
Rusal this month sent a letter to Norilsk requesting an extraordinary general meeting to elect a new board, after winning one less board seat than Interros in the June 28 annual election. The aluminum producer said it wants to increase the number of independent board members at Norilsk, and also wants the nickel miner to sell its stake in Stillwater Mining Co., cut spending on non-mining operations and lower equipment and raw material costs.
Deripaska in July said he’s concerned Interros has enough influence on Norilsk’s board to approve a share buyback, after the board approved payment of $1.33 billion in dividends. He said he opposed a buyback and sought dividends of $3 billion for last year during discussions with Interros in April.
Rusal previously sought to combine with Norilsk. Deripaska and Potanin agreed in November 2008 to put merger plans on hold for three years.
Norilsk and Interros couldn’t be reached after office hours.
To contact the reporter on this story: Rebecca Keenan in Melbourne at rkeenan5@
Last Updated: August 10, 2010 22:22 EDT
RUSAL files arbitration request against Interros
Wed Aug 11, 2010 1:56am GMT
HONG KONG Aug 11 (Reuters) - Russian aluminium giant UC RUSAL (0486.HK) said on Wednesday it had filed an arbitration request to the London Court of International Arbitration against Interros International Investments Ltd.
In a filing to the Hong Kong bourse, RUSAL said it filed the request in relation to a dispute regarding a cooperation agreement for the election of directors for Russian company Norilsk Nickel (GMKN.MM), in which RUSAL and Interros each hold a 25 percent stake.
Last week, RUSAL said it wanted to hold board elections for Norilsk Nickel and tighten financial controls at the miner, in an ongoing power struggle for the world's largest nickel and palladium producer. [ID:nLDE6751PZ]
No hearing date has been fixed for the arbitration.
RUSAL said it hoped for a speedy determination to the dispute that established parties' rights and obligations as soon as possible. (Reporting by Donny Kwok; Editing by Jonathan Hopfner)
Rusal Secures $4.6 Billion Credit Line
The loan was extended to Rusal under an accord to help Russian companies generally as they struggled to survive the global meltdown.
By . Agence France-Presse
Aug. 10, 2010
The world's largest aluminum producer Rusal said on August 10 that it has secured a credit line of $4.6 billion from Russia's largest bank Sberbank to cover debt repayments.
"The proposed credit covers the debt and interest due to VEB" for a bank loan taken out in 2008, Rusal said.
The Sberbank credit runs until December 2013 and can be extended for 18 months.
Rusal has been buffeted by the global economic slump which slashed demand for its products but it returned to profit in the first quarter with earnings of $247 million after what it said was "one of the toughest years" on record for the aluminum industry.
The VEB loan was extended to Rusal under an accord to help Russian companies generally as they struggled to survive the global meltdown, with the money used in turn to cover its purchase of a 25% stake in mining giant Norilsk Nickel.
In December last year, Rusal reached agreement with its creditors on restructuring massive debts of $16.8 billion, clearing the way for a listing of its shares in Hong Kong.
Copyright Agence France-Presse, 2010
Norilsk to Review Request
11 August 2010
Norilsk Nickel said Tuesday that its board will review a request by shareholder United Company RusAl to hold an extraordinary general meeting.
The board will study the request tomorrow, Norilsk said.
(Bloomberg)
Google Launches Traffic Tracker In 2 Russian Cities –Vedomosti
Aug 10, 2010
DOW JONES NEWSWIRES
Google Inc. (GOOG) in Russia has launched a service that lets users monitor traffic through the streets of Moscow and St. Petersburg, business daily Vedomosti reports Wednesday.
A test version of the service went online Tuesday, said Google spokeswoman Alla Zabrovskaya. The mobile version uses an application that must be downloaded to a smartphone or other device. Both it and the desktop program are free, she said.
Google doesn't plan to monetize the service, Zabrovskaya said. The company will gather traffic information for the service mainly from drivers who use it.
Vedomosti also cites data from the company behind social networking site LiveInternet, showing that Google accounted for 22% of Web search queries in Russia in July, down from 23% a year earlier. That's far behind the country's No. 1 search engine, Yandex, which handled 65%, up from a year-earlier 57%. Google is the leading search provider in its U.S. home base and other countries but has lagged Yandex in Russia for years. Yandex already offers its own traffic-tracking service.
Newspaper website: vedomosti.ru
-Dow Jones Newswires; 212-416-2900
August 10, 2010, 7:34 pm
Malware Infection Hits Russian Android Phones
By NICK BILTON
The adage “Be careful what you wish for” has a modern-day counterpart: “Be careful what you download.” Especially on your mobile phone.
On Tuesday several mobile security companies were analyzing a Trojan horse that appeared on phones running Google’s Android software in Russia.
The malicious software, which was discovered by Kaspersky Lab, an antivirus software company, is said to take advantage of Android phones after users install what appears to be a “harmless media player.” Once the file is installed the Trojan horse begins sending text messages to premium-rate phone numbers “without the owner’s knowledge or consent, resulting in money passing from a user’s account to that of the cybercriminals.”
Lookout, a security company specializing in mobile antivirus software, said in a blog post that the malicious program was the first Trojan horse developed exclusively for the Android platform. But it said the program would not affect Android phone users outside of Russian cell networks.
Security experts also noted that the infected application was not available in the Android Marketplace, the store used to download applications for the Android platform. Phone owners must explicitly change a setting on their phone to permit the installation of non-Marketplace applications.
Jay Nancarrow, a Google spokesman, said Android applications must get permission from the user before doing things like sending text messages or making phone calls.
“We consistently advise users to only install apps they trust,” Mr. Nancarrow said in a statement. “In particular, users should exercise caution when installing applications outside of Android Market.”
Virus sends costly messages from Android phones
(AFP) – 4 hours ago
SAN FRANCISCO — Mobile security firm Lookout on Tuesday warned that a booby-trapped Movie Player application is infecting Android phones in Russia with a virus that sends costly text messages.
Russia-based Kaspersky Lab discovered the malicious "Trojan" code hidden in a media player application people are enticed to download onto smartphones.
"The new malicious program penetrates smartphones running Android in the guise of a harmless media player application," Kaspersky said in a blog post.
"The Trojan uses the system to begin sending SMSs to premium rate numbers without the owner?s knowledge or consent, resulting in money passing from a user's account to that of the cybercriminals."
The Trojan has apparently only affected handsets operating on Google-backed Android software in Russia.
The Media Player program does ask users to authorize "services that cost you money" prior to installation, according to Lookout, which advised people to protect themselves by refusing to grant such permission.
"With the discovery of this new Android Trojan, it is more important than ever to pay attention to what you're downloading," Lookout said.
"Stay alert to ensure that you trust every app you download".
A Tiger in the Internet Mall
on 10 August 2010, 14:54
by Matt Gallagher
The private equity firm Tiger Global Management acquired a 50 percent stake in Wikimart, the Russian online mall, according to the Russian newspaper Vedomosti, with a nod to the Quintura blog. The deal took place in May, but only recently surfaced.
The New York investment firm bought 50 percent of the shares of the online mall for $5 million.
Targeting countries from the former Soviet Union, Wikimart provides the infrastructure to allow individuals and small retailers to set up shop online and enjoy accounting and legal support, ecommerce marketing tools and an order fullfillment interface. In exchange for the free store, Wikimart charges a 3 percent per transaction sales fee from its 150,000 monthly users. The company claims over 2,000 merchants selling over 410,000 products with 35,000 visitors a day. Founded in 2008 by Russian Stanford MBA grads Kamil Kurmakayev and Maxim Faldin and launched in 2009, Wikimart has generated a $1.5 million turnover.
In 2009, Wikimart also raised $.7 million from several Western angel investors. Based in Moscow, Wikimart employs 50 people.
This is the second major online investment in Russia by the Tiger Global Group, following the $10 million it cashed in to Anywayanyday, an online Russian travel site. The investment firm has also previously invested in Mail.ru, an online Russian portal.
The Russian ecommerce market is expected to reach $6 billion this year as venture capitalists continue to cash in at the investment table.
Japanese trio bows out of Uranium One
Wednesday, Aug 11, 2010
A consortium of three Japanese companies has agreed to end their investment in Canada-based Uranium One, securing long-term uranium purchasing rights instead. Meanwhile, Uranium One is upping its 2010 production forecast.
Tokyo Electric Power Company (Tepco), Toshiba Corporation, and the Japan Bank for International Cooperation (JBIC) have signed a new agreement with Uranium One which will see them receive purchase rights for up to 2.5 million pounds U3O8 (962 tU) per year from 2014 to 2025, at a market-related price at the time of delivery.
Uranium One has agreed to buy back the convertible debentures it sold to the trio's Japan Uranium Management Inc (JUMI) for C$271.79 million ($264.42 million), equivalent to 101% of the amount originally paid by the three companies when they agreed to buy 117 million shares in the company in 2009. The Japanese companies subsequently agreed to take up convertible debentures instead of common shares in a transaction completed in January 2010.
The latest agreement is subject to the completion of the acquisition of a controlling share of Uranium One by Russia's AtomRedMetZoloto (ARMZ), and is expected to be effective by December 2010.
Uranium One ups guidance
Uranium One says it expects to produce 7.0 million pounds U3O8 (2693 tU) in 2010, up from its earlier predictions of 6.8 million pounds U3O8 (2616 tU), because of better-than-expected performance at its South Inkai deposit in Kazakhstan. The company's second quarter figures boast attributable production of 1.826 million pounds U3O8 (716 tU), more than double the figure for the same period in 2010, primarily due to the acquisition of a 50% interest in the Karatau uranium mine and the continued ramp up at South Inkai.
INTERVIEW: Bringing PR to Russia
Ben Aris in Moscow
August 11, 2010
Communism didn't incorporate the concept of press relations, so when the former Soviet premier Mikhail Gorbachev decided to visit California with his wife Raisa after a summit in Washington with then-president George Bush senior in 1990, his KGB minders were at a loss. Who would organise the press and handle the Politburo chief's interaction with the ravenous running dogs of the western media?
Peter Necarsulmer was running a PR consultancy in California at that time when he got a call from the White House. "Sid Rovich called me, the senior advisor to President Bush. Gorbachev was in Washington for a summit, but he and his wife Raisa wanted to visit California. Once they left Washington, it was no longer an official visit and Sid asked me if could handle all the media relations," says Necarsulmer.
Ten days later and a full-blown media frenzy descended on Los Angeles. Gorby, as he had already been dubbed, was already an icon in the West and more than 2,000 journalists followed the Soviet premier to LA. Necarsulmer worked hand in glove with the Kremlin handlers to organise over 40 events as well as a major detente speech that Gorby gave to students of Necarsulmer's old alma mater at Stanford. Gorbachev also wanted to meet business leaders (a bit like Russian President Dmitry Medvedev who repeated much of the same trip in July). The South Korean president was in town and Necarsulmer set up the first ever meeting between the leaders of the two states. Raisa spent her time shopping. And there was even a sleepover with Ronald and Nancy Reagan. "It was a very jolly evening. It was Reagan's swan song, as he had done a lot of the work of restarting relations with Russia," says Necarsulmer who was present for part of the evening.
Necarsulmer filled in as the de facto press service for Gorbachev and did so well that after the Russians had returned to Moscow, he got a another call, this time from the Russians, who asked him to handle all the PR for a trip by 50 leading business from the Fortune 500 list to Russia that autumn.
By September, Necarsulmer was in Moscow for the first time with the delegation. Working on the fly, Necarsulmer went to see Paul Tatum, the pioneering American businessman, and persuaded him to open the doors of the Radison Slavenskaya hotel that he part-owned for a lunch for his delegation and a press conference for more than 400 journalists. "The Radisson was not officially supposed to open for another year and a half, but they cleaned out some space and held a lunch there for the visiting businessmen, which is when I got to know Tatum," says Necarsulmer.
The flamboyant Tatum was one of the first foreign investors in Russia after the thaw between east and west began, but epitomises the difficulties of doing business in Russia during the 1990s; he ran foul of his Russian partners and was brutally gunned down on November 3, 1996, taking five shots to the neck, just above the bullet proof vest he habitually wore under his suit.
Still, the press conference went so well and the KGB was so impressed with Necarsulmer that they asked him to move to Russia permanently. With American corporates like Coca-Cola also drifting into Russia, Necarsulmer opened the first PR agency in Russia, The PBN Company, in January 1991. It was the start of a rollercoaster ride that has yet to end.
PRatfalls
That autumn Gorbachev was deposed and the Soviet Union collapsed. The daily fax that Necarsulmer sent out summing up news and reports from the city became a major source of news during the August coup and Necarsulmer went on to organise the foriegn correspondents club.
Even during the 1998 crash, when many foreign investors left, Necarsulmer decided to "tough it out." This paid off, as within 18 months Russia was booming again after Vladimir Putin took over in early 2000 and oil prices began their inexorable climb towards $150 a barrel.
Necarsulmer has always stuck to his guns and famously said in a speech to the American Chamber of Commerce in the autumn of 1998: "There is an opportunity for turning the lemon which is Russia today into lemonade. And nowhere is this more true than in governmental policymaking. The message to each and every operating company represented here today is, do not become so pre-occupied with day-to-day operational matters that you miss this unique opportunity."
Current President Dmitry Medvedev has been very active pumping out this message and seems to be bringing home the bacon; following the St Petersburg Economic Summit in June and the president's trip to the US shortly afterwards in July, the Kremlin crowed it had done billions of dollars in deals. However, Necarsulmer says that much of these promises are probably empty. "Typically, the talk of investment is more of a government-relations exercise. The promises are designed to shore up the other aspects of business and state contracts," says Necarsulmer. "The whole [procurement] process remains non-transparent and works on the basis of who you know."
Despite his obvious commitment to the Russian story, Necarsulmer remains a pragmatist. From a PR perspective, he believes the government's new "investor friendly" campaign is long overdue. "Compared to the Bric countries, Mexico or other emerging markets, Russia pales by comparison when it comes to selling itself. The events like the [Kremlin-sponsored Russian Economic Forum in] St Petersburg, [or hosting the 2014 Winter Olympic games in] Sochi are good, but they need to do a lot more than just hold these house parties," says Necarsulmer. "The competition for foreign investment has never been higher than now and if you look at the risk/reward returns in Russia, even though the returns are very high, the risks remain too high for most. The government policies to do something about this are not yet effective."
Russia imports more Norwegian salmon
2010-08-11
Russian import of salmon from Norway continues to rise. Russia is the second largest market for Norwegian salmon outside the EU.
In July Russia imported Norwegian salmon for 259 million NOK (app. 32,8 mill EUR), web site Fishonline.ru writes, referring to the Norwegian Seafood Export Council. This up 46 percent compared to the same period in 2009. The largest export market for Norwegian salmon is France, with 14 percent of the export value.
Russia is still Norway’s largest market for fjord trout, with more than 50 percent of the total export value.
The export price for one kilo fresh whole Norwegian salmon was nearly 5 EUR in July. Consumers in Murmansk had to pay 8,45 EUR for the same commodity.
Activity in the Oil and Gas sector (including regulatory)
Russia May Boost Oil Export Duty in September on Urals Price
By Anna Ulaeva
Aug. 11 (Bloomberg) -- Russia may boost its duty on crude exports by 5.1 percent for regular fields and as much as 11.5 percent for deposits with a discounted rate next month after prices for its Urals blend rose.
The standard tax rate may rise to $273.80 to $277.10 a metric ton, while the discounted rate may increase to $87.20 to $89.50 a ton, according to Bloomberg calculations based on Finance Ministry data.
Russia sets the duty based on the average Urals price from the 15th day of each month to the 14th day of the next. Urals, Russia’s benchmark export blend, may average from $76.57 to $77.26 a barrel during this monitoring period, Alexander Sakovich, head of the Finance Ministry’s analysis department, said by phone today. The regular tax was set at $263.80 a ton in August and the discounted tax on flows through the East Siberia- Pacific Ocean pipeline was $80.30.
To contact the reporter on this story: Anna Ulaeva at aulaeva@
Last Updated: August 11, 2010 03:06 EDT
EU Seeks to Broker Trans-Caspian Pipeline Deal Between Turkmenistan and Azerbaijan; Russia Finds Project 'Absurd'
August 10, 2010 - 11:08pm, by Catherine A. Fitzpatrick
The European Union is attempting to broker a deal between Azerbaijan and Turkmenistan to enable Turkmen gas ultimately to flow to Europe, Bloomberg reported August 3, citing a draft document of the EU regulator's energy unit. The EU is hoping to re-boot the long-stalled Trans-Caspian pipeline project across the Caspian Sea bed, envisioned to support the Nabucco pipeline.
In a speech July 27 at the International Odessa Forum published on the EU's website europa.eu, Günther Oettinger, EU Commissioner for Energy, indicated the EU would find a way to end dependency on Russia's energy transit corridors. He outlined a number of projects to achieve the EU's goals and acknowledged that the Southern corridor required an "extraordinary effort" and that the energy industry has said "no institution, the European Union included, had the muscle to open the Corridor" given the many difficult bilateral and multilateral relations among Caspian states.
However, "the European Commission is showing that a way can be navigated through this tangle of countries," said Oettinger, admitting that the EU "may need extraordinary measures" to build the Trans-Caspian pipeline.
Azerbaijan recently attended an EU-hosted meeting in Brussels with Turkmenistan but no agreements were signed, Vagif Aliyev, head of investment at Azerbaijan's State Oil Company, told Bloomberg. Azerbaijan has yet to receive a concrete proposal from Turkmenistan, he said, although Baku is ready to provide transit for Turkmen gas.
The 1,600 kilometer Trans-Caspian pipeline has been stalled due to the failure of Baku and Ashgabat to agree on a demarcation of their border in the oil fields known as Serdar by Turkmenistan and Kyapaz by Azerbaijan in the Caspian Sea. Last year Ashgabat even threatened to take Baku to court over the issue, but eventually dropped plans to force arbitration, and has continued to pursue the dispute through diplomatic negotiations.
A high-ranking Russian Foreign Ministry official told Kommersant, the Russian business daily that the EU was trying to resolve the conflict between the two neighbors. The U.S. also unsuccessfully tried its hand at this, the same source claimed. In a speech in Ashgabat last week, Richard Morningstar, U.S. Special Envoy for Eurasian Energy, said the U.S. had no plans to serve as mediator in the bilateral dispute.
Last year, regional media reported that Daniel Stein, a senior assistant to Morningstar had indicated Washington was willing to mediate the Azeri-Turkmen territorial dispute for the sake of the Trans-Caspian pipeline.
Now the EU believes it can lobby the construction of the Trans-Caspian pipeline needed for Nabucco by making an offer to Turkmenistan and Azerbaijan that does not involve delimitation of the Caspian Sea shelf. Sources within the Russian government told Kommersant they find the proposal "absurd" and vow to oppose it.
That's not surprising, given that Russia's energy monopoly Gazprom buys most of Azerbaijan's gas. In an interview with Rafael Mustafayev of regnum.ru, Ilkham Shaban, head of the Center for Oil Research in Azerbaijan, said he was skeptical of the Trans-Caspian project.
"Why should Azerbaijan ruin its ecology for the sake of somebody in Brussels getting Turkmen gas? Or will this new pipeline provide a perceptible impetus to the development of Azerbaijan's economy?" he asked.
Shaban also believes there are commercial, political and even military risks involved in laying the pipeline. He also invoked an agreement signed in Teheran in 2007 by all the Caspian littoral states, whereby no major pipelines would be built on the Caspian Sea bed without the consent of all parties.
Currently, Azerbaijan is not able to sell all of its excess gas remaining after it satisfies its own needs, says Shaban; other than some gas going to Turkey from the Shah- Deniz field, Russia's Gazprom is currently the main buyer of Azerbaijan's gas, he said. As for Azerbaijan's agreement with Iran to purchase at least 500 million cubic meters per year, Shaban said the purchase had not yet been made. Turkey, which agreed to buy 6.3 billion cubic meters (bcm) a year, was buying only 5 bcm.
Shaban also stressed the internal inconsistency within the EU. When Paolo Scaroni, the CEO of the Italian energy company ENI was in Baku on July 20, he did not even mention the Trans-Caspian pipeline. Instead, he made a proposal for transporting Turkmen gas on four tanks where liquefied natural gas would be produced. The budget for that project was $700 million -- $600 million for the tankers and $100 for the initial infrastructure, in order to transport 4-5 bcm a year. Meanwhile the Trans-Caspian has been estimated to cost $5 billion or more.
At a press conference following his meeting with President Gurbanguly Berdymukhamedov in Ashgabat last week, Morningstar said he discussed various projects in a "multipronged strategy" where the U.S. could work with Turkmenistan. The Turkmenistan-Afghanistan-Pakistan-India Pipeline (TAPI) was discussed as well as the potentials for Turkmen gas going west into the Southern Corridor.
Asked about the feasibility of Nabucco, Morningstar said that the recent agreement between Turkey and Azerbaijan on the price of Azerbaijan's gas as well as transit fees would allow for progress on the Southern Corridor:
The Shah Deniz Consortium and SOCAR have requested proposals from the various potential projects to go through the Southern Corridor. It will now be a commercial decision as to which project or projects will go forward whether it be Nabucco or some other project in the Southern Corridor.
From the stand point of Nabucco, Turkmen gas is important. There are other sources of gas from such places as Iraq and other places in the Middle East, and we hope that Turkmenistan gas will be part of the project. But now it is up to commercial interests to determine which specific project makes the most sense.
Regarding the Chinese presence in Central Asia and its increasing dominance in the Turkmen market, Morningstar said it was good China was using gas, a cleaner form of energy than coal. "Gas that goes to China helps to open supplies of gas from other sources that otherwise might go to China," he said. Meanwhile Alexander Rahr, a Russia and Eurasia expert at the German Council on Foreign Relations says the EU is running out of time as Turkmen pumps more gas to China, Bloomberg reported.
In Ashgabat, Morningstar was quizzed by a reporter about recent implied criticism of the EU by Kazakhstan's President Nursultan Nazarbayev.
"In Europe there is a lot of talk on Nabucco [...] but in reality little gets done," Nazarbayev said at a joint news briefing with German Chancellor Angela Merkel in Astana, Reuters and reported.
Morningstar said he felt Europe "has been making a very strong and concerted effort in regards to Nabucco". As for U.S. involvement, Morningstar said that in his meetings the U.S. indicated that "American companies would like very much to participate in Turkmenistan in respect to all sorts of projects both on shore and off shore.," although declined to discuss any specifics as they were still under negotiation.
Two Turkmen officials headed to New York this week for talks at the UN on setting up an ad-hoc panel of experts that would draft an agreement on international pipeline security. Turkmenistan has been pushing for such an international pact since a resolution it sponsored passed at the General Assembly in 2008. While obviously referring to the insecure regions of Afghanistan and Pakistan, Turkmenistan's effort at the UN is also a tacit effort to enlist the help of the UN secretariat and other UN member states to withstand Russia's pressure on energy corridors in its sphere of influence.
It's hard to know what Russia might do to stop the plans for the Trans-Caspian pipeline. When an explosion occurred on the Turkmenistan pipeline in April 2009, disrupting deliveries for 9 months, Turkmenistan blamed Gazprom for sharply reducing flows, creating conditions for the blast. Gazprom blamed Turkmenistan's aging infrastructure. Either reason explains why pipelines trying to bypass Russia are expensive.
"Without Russia, these issues cannot be resolved, and that means there won't be a pipeline," the Foreign Ministry official told Kommersant regarding Caspian disputes. Another Russian government official said that without the border agreement, Russia would not give its consent to the laying of the Trans-Caspian pipeline.
Morningstar said he couldn't comment on the Turkmen-sponsored effort at the UN because he has not seen a specific text. He noted that security of transit routes would be "critical to the success of a possible TAPI pipeline."
Trebs and Titov fields to be sold in December
UralSib
August 11, 2010
Starting price set at $603 mln. The Natural Resources Ministry has set a final price of RUB18.2 bln ($603 mln) for the Trebs and Titov oilfields in the Nenets region, the largest un-allotted fields remaining in state reserves. The fields are to be sold via an auction on 2 December as a single lot. Foreign companies will be allowed to participate in consortiums or form JVs with Russian state companies. The auction terms state that the winner will have to sell at least 15% of the crude produced at the fields via a Russian commodity exchange (which does not currently exist) and refine at least 42% at Russian refineries (swap operations are not allowed). Thus far, Rosneft, LUKOIL, TNK-BP, Gazprom Neft, Bashneft, and India's state-run ONCG have expressed interest in these fields.
Tough conditions decrease attractiveness. The Trebs and Titov fields are very tempting for oil companies. Recoverable C1+C2 oil reserves are estimated at 140.06 mln tons, with peak production possibly reaching 10 mln tons per annum. The fields are located in the Nenets region, 60 km from Varandey village, where LUKOIL has a marine loading facility with a tanker terminal. However, the conditions imposed decrease the attractiveness. If swaps are not allowed, a direct pipeline from the fields could be constructed to LUKOIL and Surgutneftegaz refineries in Ukhta and Kirishi. Otherwise the high quality crude from the fields would have to be blended in the Transneft system.
Rosneft the likely winner. Previously, the energy ministry had estimated the starting price at RUB60 bln ($2 bln). Although there is no infrastructure at the fields in place, the final price of RUB18.2 bln ($603 mln) set by the Natural Resources Ministry makes it possible for smaller bidders to participate in the auction. We believe that despite the conditions imposed, Rosneft still has a high chance to be successful, while other bidders may need to create a consortium to participate in the auction.
Victor Mishnyakov
TNK-BP might sell Novosibirskneftegaz; no major implications for production profile and Eurobonds
VTB Capital
August 10, 2010
News: According to RBC Daily, TNK-BP might sell one of its producing assets, Novosibirskneftegaz. The subsidiary accounts for roughly 3% of TNK-BP's production and in our view could be worth around USD 500-800mn. The newspaper speculates that the reason for the divestment is to raise money for a possible acquisition of assets in Venezuela from its shareholder, BP.
Our View: In the past, TNK-BP has sold some of its low-productive assets. Should the sale of Novosibirskneftegaz occur, it would not have any material effect on TNK-BP's production profile, given that Novosibirskneftegaz's output is likely to be declining in the coming years.
We believe that TNK-BP Eurobonds (YTM - 3.5-6.0%, 260-330bp to swaps), are trading at roughly Gazprom's levels, and will not react to the news. However, investors might not welcome the idea, if the ultimate purpose of this sale is to raise funds for a potential acquisition of BP's assets in Venezuela
Gazprom
11.08.2010
Gazprom Finishes Over 750 Kilometers of the Sakhalin-Khabarovsk-Vladivostok Pipeline
750 kilometers of the Sakhalin-Khabarovsk-Vladivostok Pipeline has been laid, welded and covered, Deputy Gazprom Chair Aleksandr Ananenkov said during a meeting in Khabarovsk. The line segment of the pipeline is being synchronized with the main compressor station on Sakhalin island. Mid-range pipeline barnches are also being built, including a branch from Vladivostok to Russkoye island, the Gazprom press office reported.
Copyright 2010, Oil and Gas Information Agency. All rights reserved.
‘Gazprom’ decides about Southern Stream and not Borisov and Tadic
T.Trikić - B. Stamenković - Z. Panić | 11. 08. 2010. - 00:02h | Foto: Reuters
Serbia and Bulgaria may speak about their wishes regarding the ‘Southern Stream’ route but the final say over it shall have the ‘Gazprom’ as the press service of the Russian concern told the ‘Blic’ referring to information that Belgrade is trying via Bulgaria to push its idea that the gas pipeline enters Serbia at Dimitrovgrad and not Zajecar as was agreed with the Russians the last time.
The future chief gas pipeline the ‘Southern Stream’ is a mutual project by the Russian ‘Gazprom’ and Italian ‘Eni’. It is to transport the Russian gas below the Black Sea through a pipeline 900 kilometers long to Bulgaria and via Serbia to other European countries. The value of the investment is estimated to EUR 20 billions. The capacity of the gas pipeline should be 63 billions of cubic meters per year. Its construction should begin in 2011 and be finished in 2015. The inter-state agreement on construction of the ‘Southern Stream’ has been signed with Bulgaria, Serbia, Hungary, Greece, Slovenia, Croatia and Austria.
Serbia was the first to set up a joint venture with the ‘Gazprom’ for realization of the ‘Southern Stream’ in which the Russian company has a 51 percent stake.
In Moscow yesterday nobody wanted to comment the meeting between Tadic and Borisov.
‘We do not want to comment what Serbia President Boris Tadic and Bulgarian Prime Minister Bojko Borisov talked about. Those are their wishes. The decision on the ‘Southern Stream’ route shall depend exclusively on the feasibility study presently being worked on’, the comment from Moscow says.
At the ‘Gazprom’ they explain that ‘exchange of opinions’ with all sides involved are being continued and that all suggestions of interest shall be taken into consideration.
‘Of course, the opinion by Serbia shall also be taken into consideration but the final proposal shall be given by the ‘Gazprom’’, the press release of the Russian monopolist says.
Press in Moscow reports that Belgrade ‘has been from the very beginning interested that the ‘Southern Stream’ enters Serbia at Dimitrovgrad what was opposed and still is being opposed by the ‘Gazprom’’ and that ‘now Belgrade tried to impose its wish via Sofia which until recently has been blackmailing Moscow threatening to stay out of the project’.
The ‘Gazprom’ insisted on Zajecar because that variant is cheaper. Belgrade on the other side was for the pipeline to enter the country at Dimitrovgrad because in that case it would run along the whole territory of Serbia. By ‘Zajecar variant’ the whole south of Serbia together with Nis would be cut off.
Serbia President Boris Tadic confirmed to have talked with Borisov about the gas pipeline route.
‘I said that it would be very useful for Serbia that the pipeline enters our country at Dimitrovgrad because in that case we would be able to supply gas to the major part of the country and that is in our national interest’, Tadic said.
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