Moscow press review for April 29, 2016
MOSCOW. April 29 (Interfax) - The following is a digest of Moscow newspapers published on April 29. Interfax does not accept liability for information in these stories.
POLITICS & ECONOMICS
The Nielsen consumer confidence index fell to an all-time low of 63 points in Russia in the first quarter of 2016, from 72 a year earlier. Some 18% of Russians do not have any available money left over after essentials and nondiscretionary expenses, while others are increasingly economizing on new clothing, electronics and vacations. Almost 70% of respondents do not believe that the situation will improve (Kommersant, p. 1).
Income inequality in Russia remained virtually unchanged in the first quarter of 2016, new Rosstat data show. The wealthiest 10% of Russians accounted for 28.9% of all monetary incomes, while the poorest 10% accounted for 2.2%, compared to 29% and 2.1% a year earlier. Incomes have fallen among both rich and poor Russians, although typically inequality decreases in economic crises (Kommersant, p. 2).
Russia's Economic Development Ministry has drafted its own proposals for reforming the country's pension system. It proposes to reform the pay-as-you-go portion of pensions, and reduce transfers, payments and indexation, while bringing back the funded portion of the pension system and keeping it mandatory. It agrees with the Finance Ministry that the retirement age should be raised (Vedomosti, p. 4).
OIL & GAS
The Russian government has decided that Rosneftegaz will pay out 50% of profit in dividends like other state companies due to the dire situation with the budget. Rosneft president Igor Sechin's letters seeking an exception to let Rosneftegaz pay only 25% of profit did not help, although President Vladimir Putin initially agreed. Rosneftegaz, which held 376 billion rubles in deposits at the end of 2014, will therefore pay 36 billion rubles into the budget for 2015 (Vedomosti, p. 11).
Gazprom has for the first time reported about 53 billion rubles in write-offs on the South Stream gas pipeline project, which was halted in late 2014. Losses could increase in future, since the Russian gas giant signed 4.4 billion euros worth of contracts for the project. But the write-offs were expected, and investors are now far more interested in the prospect of Gazprom paying out record dividends, analysts said (Kommersant, p. 9).
METALS & MINING
Norilsk Nickel will get a stake in Rosa Khutor, the ski resort owned by the Russian mining giant's principal shareholder Interros Group, in exchange for $250.5 million of investment. As a result, the Sochi National Park will get dozens of kilometers of new runs as the resort expands and seeks to transform into a year-round tourist destination (Vedomosti, p. 10).
BANKING, FINANCE & INSURANCE
In order to streamline its audits of banks and other financial services companies, Russia's Federal Tax Service plans to develop a special rating to assess potential risks of tax evasion. The rating, which will flag transactions indicating tax optimization schemes, will be used to decide who should be audited first. The new system will not only make it possible to identify tax evaders among financial companies, but also among their clients (Kommersant, p. 9).
RETAIL & CONSUMER MARKET
Russia might launch a tax free system in 2016 that would enable foreign tourists to get a partial tax refund on purchased goods. Leading luxury retailers want to take part in the pilot project. Negotiations are being held with Global Blue and Premier Tax Free (Fintrax). If the experiment is successful, the system will be open to retailers with sales of at least 100 million rubles who do not have tax debts and operate stores in cities with international airports (Kommersant, p. 1).
TELECOMMUNICATIONS, MEDIA & TECHNOLOGY
MTS, Russia's leading mobile service provider, plans to lease out 5,500 of its 15,000 towers as part of its infrastructure development strategy. The lease rates will be 25-30% lower than average market rates, which could put pressure on the prices of towers being sold by MTS competitors. Vimpelcom, MegaFon and Tele2 are all looking to sell about 10,000 towers each (Vedomosti, p. 11).
TRANSPORTATION & LOGISTICS
The investigator in the criminal case against Domodedovo Airport owner Dmitry Kamenschik, who is facing charges of providing substandard services in connection with a terrorist attack in 2011, is seeking to freeze the Moscow's airport's real estate assets. They might be sold to pay out compensation in civil lawsuits bought by victims of the attack if they are won (Vedomosti, p. 1).
Russia's Audit Chamber has found that a substantial portion of the work planned for the modernization of the Baikal-Amur Mainline and Trans-Siberian Railway, for which Russian Railways has so far received 50 billion rubles from the National Welfare Fund, has been paid for, but not carried out. Contracts have been signed for 73 projects, but no work has been done on about half of them (Vedomosti, p. 10).
AUTOMOTIVE & ENGINEERING
Russia launched the first rocket from its new Vostochny cosmodrome in Amur Region on Thursday, after a one-day delay due to technical problems. The launch was attended by President Vladimir Putin, who gave a harsh dressing down to the whole senior management of the space industry immediately after the successful launch (Kommersant, p. 1).