Moscow press review for March 29, 2016
MOSCOW. March 29 (Interfax) - The following is a digest of Moscow newspapers published on March 29. Interfax does not accept liability for information in these stories.
POLITICS & ECONOMICS
Russia's Finance Ministry has drafted the specifics of proposals for small business taxes that were included in general form in the anti-crisis plan for 2016. The bill gives entrepreneurs only part of what they asked for. For example, it would extend the preferential regime of the unified tax on imputed income until 2021, but only for businesses in the personal services sector, leaving out 95% of the users of this regime - retailers and individual entrepreneurs (Kommersant, p. 1).
OIL & GAS
The Russian government is drafting an order that would make Rosneft the only seller of fuel to the Interior Ministry. Independent suppliers are complaining to the prime minister and antitrust regulator, arguing that Rosneft will have to buy fuel on the market to meet all the ministry's needs, which will push up prices and government spending. The regulator has promised to look into the matter (Kommersant, p. 1).
Rosneft is planning to invest 1 trillion rubles annually in 2016-2018, which it expects will set the stage for growth, particularly on the basis of fields in Eastern Siberia. The Russian state oil major will therefore approach gas giant Gazprom in terms of capital expenditures as well as market capitalization. Rosneft increased capex by 19% to 660 billion rubles in 2015 (Vedomosti, p. 12).
UTILITIES
The Russian government might shift part of the electricity costs of consumers in Kurgan Region to its oil-rich neighbors - the Tyumen, Khanty Mansi and Yamalo-Nenets regions. This proposal was made by Kurgan's governor, whose decision to preserve inefficient generation caused an increase in tariffs. This could reduce tariffs in Kurgan by 15.4% while raising rates in donor regions by 1%, Consumers and generators in the latter are opposed (Kommersant, p. 9).
BANKING, FINANCE & INSURANCE
The capital injection of $800 million that Prominvestbank received in February might not be enough to save the Ukrainian subsidiary of Russian state development bank VEB, sources said. VEB puts Prominvestbank's problems with liquidity and capital at $650 million and is looking for money to tackle these issues. Prominvestbank is expected to post a loss of $765 million for this year (Vedomosti, p. 1).
REAL ESTATE & CONSTRUCTION
The Transport Ministry is proposing that state company Russian Highways, rather than the government, be given the right to select toll road projects proposed by investors as private initiatives. This is expected to accelerate road construction. The instrument of private initiatives is commonly used internationally, but it could run into difficulties in Russia, experts believe (Vedomosti, p. 4).
The son of Russia's prosecutor general, Artyom Chaika is a cofounder of 3S Property Development with a stake of 33%. The developer, set up in November 2015, wants to build up to 500,000 square meters of residential real estate in Moscow in the next three to five years. The company's portfolio already includes an office and retail complex of about 200,000 sqm (Vedomosti, p. 10).
TELECOMMUNICATIONS, MEDIA & TECHNOLOGY
Channel One, state broadcaster VGTRK, Gazprom Media and National Media Group, which account for over 80% of TV advertising in Russia, have returned to the idea of former Gazprom Media chief Mikhail Lesin to form a joint company to sell advertising time. CTC Media might also join the alliance. The new player could face scrutiny from the Anti-Monopoly Service (Kommersant, p. 1; Vedomosti, p. 11).
The Russian authorities are considering linking remuneration of board directors at state companies to the share of domestic IT equipment and software products these companies buy. This might be included in the key performance indicators for board directors. For this to work, it would require changes to the law on government purchases to give priority to Russian products (Vedomosti, p. 11).
TRANSPORTATION & LOGISTICS
Russian flag carrier Aeroflot is unable to get 24 of the long-haul airliners it expected to receive from the fleet of bankrupt carrier Transaero, as leasing companies have been unable to get the aircraft into airworthy condition. Aeroflot subsidiary Rossiya had planned to use the planes on new routes for the summer season, but given the weak market its own aircraft should be sufficient (Vedomosti, p. 10).
AUTOMOTIVE & ENGINEERING
The board of state bank VEB might decide on Tuesday to release the first tranche of 27.6 billion rubles from the National Welfare Fund to finance a contract to supply 664 train cars for the Moscow metro. The contract worth 144 billion rubles was won in 2014 by companies controlled by tycoons Iskander Makhmudov and Andrei Bokarev, but it became clear almost immediately that the assumed lending rates were below the market (Kommersant, p. 7).
