Moscow press review for November 3, 2016
MOSCOW. Nov 3 (Interfax) - The following is a digest of Moscow newspapers published on November 3. Interfax does not accept liability for information in these stories.
POLITICS & ECONOMICS
The Russian government is considering transferring responsibility for regulation of government procurements and purchasing by state companies, which total almost 30 trillion rubles per year, from the Economic Development Ministry to the Finance Ministry. This would make it easier to control budget spending and monitor savings, Open Government Minister Mikhail Abyzov said in a letter to First Deputy Prime Minister Igor Shuvalov (Vedomosti, p. 1).
Russian Foreign Minister Sergei Lavrov met with Greek President Prokopis Pavlopoulos in Athens on Wednesday. Judging by the statements of "mutual friendship and sympathy," Greece remains one of Russia's key allies in the European Union. Efforts to develop bilateral relations amid Russia's ongoing standoff with the West will be continued Thursday by Transport Minister Maxim Sokolov, the head of the Russian delegation at a meeting of the intergovernmental commission (Kommersant, p. 1).
OIL & GAS
Gazprom has acknowledged that the TurkStream project might remain on paper. Although the gas pipeline project has been resumed and the parties are discussing various aspects of it, there is no certainty that it will be completed, the Russian gas giant warned investors in a rough draft of a Eurobond prospectus. At this stage, either party could pull out of the project, lawyers confirmed (Vedomosti, p. 10).
METALS & MINING
Polyus Gold International Ltd, which controls top Russian gold miner PJSC Polyus, is in talks to sell a blocking stake in the miner to China's Fosun Group for $2 billion. The deal, which would enable PGIL to reduce its debt to Sberbank, requires government approval. But it would not bar Polyus's joint venture with Rostec, SL Zoloto from bidding in the auction for the huge Sukhoi Log deposit, as Fosun's stake in the venture would only be 12.5% (Kommersant, p. 1).
BANKING, FINANCE & INSURANCE
Investors' concerns about the U.S. presidential elections and the possibility of the Federal Reserve keeping interest rates unchanged for longer weakened the dollar on the world market, with the euro hitting a one-month high of $1.127. But amid weaker appetite for risk, the dollar managed to strengthen against emerging market currencies. The Russian ruble slid to a one-month low of 63.82/$1 before closing down at 63.73 rubles/$1 as oil prices fell further (Kommersant, p. 1).
REAL ESTATE & CONSTRUCTION
The Moscow Region is introducing a property tax on unsold apartments in completed buildings that are on the books of developers, contractors, investment funds and banks as of 2017. The tax, which will amount to 2% of the cadastral value, is intended to encourage developers to sell apartments more quickly. There are now 5,432 residential properties in completed buildings in the region with a cadastral value of almost 21 billion rubles (Vedomosti, p. 4).
TELECOMMUNICATIONS, MEDIA & TECHNOLOGY
Moscow has jumped to second place from eighth in a ranking of Russian regions by affordability of mobile phone services, Content Review reported. Tyumen Region tops the ranking, while Irkutsk Region is third. Moscow made the leap a year after the country's fourth largest mobile provider, Tele2 entered the local market (Vedomosti, p. 11).
TRANSPORTATION & LOGISTICS
Russia might unilaterally suspend flights to and from Tajikistan next week because of Dushanbe's refusal to approve flights by Russian airlines to the Central Asian country from the new Zhukovsky Airport. Tajikistan believes the airport is part of Moscow and allowing flights to Dushanbe requires a revision of an intergovernmental agreement. But now only Tajik airlines are flying the route, so Russia is saying that its airlines' rights are being violated (Kommersant, p. 1).
The board of Transaero, which stopped flying in October 2015 after its operating license was annulled, plans to consider a proposal and program to restore the Russian airline's core activities. Management and European consultants have drafted a plan to launch a new airline based on Transaero and will submit it on November 4. Analysts do not believe that this is possible. Transaero had a debt of 250 billion-260 billion rubles by September 2015 (Vedomosti, p. 12).
AUTOMOTIVE & ENGINEERING
Another 27 items could be added to the list of products on which manufacturers must pay a disposal fee in Russia. The Industry and Trade Ministry is proposing that manufacturers of oil, gas and power equipment, machinery for the processing and food industries, as well as machine tools pay a levy of 7% of the amount of sold product. The more expensive the equipment, the higher the levy will be (Vedomosti, p. 10).
Car dealers are looking to take advantage of Russia's reform of mandatory third-party liability auto insurance, which will make vehicle repairs the main means of compensation for damages. The Russian Automobile Dealers Association has proposed that insurers send vehicles for repairs only to service stations "authorized by the manufacturer or distributor" of a given model. Auto insurers oppose the idea (Vedomosti, p. 11).
