Moscow press review for November 23, 2015
MOSCOW. Nov 23 (Interfax) - The following is a digest of Moscow newspapers published on November 23. Interfax does not accept liability for information in these stories.
POLITICS & ECONOMICS
Companies from member countries of the Eurasian Economic Union could get access to domestic government procurement markets in 2016 when competition agencies integrate digital signature systems. In future, a common market for government procurements could be created in the region, Russia's competition chief said. The combined government procurements markets of EEU members totalled $266 billion in 2013 (Kommersant, p. 2).
President Vladimir Putin will attend the Gas Exporting Countries Forum in Teheran on Monday. On his first visit to Iran in eight years, the Russian president will also meet with the country's Supreme Leader Ali Khamenei and President Hasan Ruhani. The talks could be difficult as Moscow cannot deliver S-300 missile systems as quickly as Iran would like, while many joint projects in trade and energy have run into problems with financing (Kommersant, p. 6).
OIL & GAS
Russian gas giant Gazprom has for the first time estimated the cost of building the onshore section of the Nord Stream II gas pipeline to Europe, putting it at 217 billion rubles in 2010 prices. In 2015 prices, the cost would be 242.5 billion rubles, slightly more than the first phase of the pipeline. The pipeline, which is expected to be completed by the end of 2019, will be able to carry 45 bcm of gas annually (Vedomosti, p. 10).
UTILITIES
Ukrainian power supplies to Crimea were completely cut off on Sunday after transmission towers in Ukraine were blown up. Crimea supplies only 20-30% of its own electricity, so the peninsula will see lengthy rolling blackouts, and is having problems with heating and mobile phone services. The Ukrainian power grid has also been hit. The blackout could accelerate construction of a Russian energy bridge, so Ukrainian power companies could soon lose the Crimean market (Kommersant, p. 1; Vedomosti, p. 12).
METALS & MINING
Russian steelmakers, worried about a shortage of raw materials, are opposed to a 26.35% antidumping duty that the Eurasian Economic Commission might soon impose on ferrosilicon manganese from Ukraine's Privat Group. But Russia's biggest ferroalloy maker, ChEMK claims the Eurasian Economic Union has enough ferroalloy capacity to replace Ukrainian products. The EEU imported $200 million worth of Ukrainian ferrosilicon manganese in 2014 (Kommersant, p. 7).
BANKING, FINANCE & INSURANCE
The sale of the Uralsib Nongovernmental Pension Fund to Oleg Tinkov's Tinkoff Bank group, begun under Uralsib Bank's former owner Nikolai Tsvetkov, has been called off. Uralsib Bank's new owner, Vladimir Kogan has decided that the fund is a good asset that he will "happily" keep, a source said. Earlier reports put the price of the planned deal at 1.6 billion rubles (Vedomosti, p. 10).
RETAIL & CONSUMER MARKET
The Eurasian Economic Commission is proposing to tighten regulation of trans-border online retail sales by lowering the threshold for duty-free overseas purchases to 150 euros from the current 1,000 euros and imposing a fixed fee on packages. Russian online retailers believe the proposal, which the EEC council will discuss on Monday, will clean up the market and help them compete with foreign giants such as AliExpress and eBay (Vedomosti, p. 1; Kommersant, p. 10).
President Vladimir Putin has approved the idea of granting a tax deduction to retailers who switch to using online cash registers that can transmit data on all purchases to the tax authorities. A bill to introduce new cash register equipment, which is going through the approval process in the government, calls for completing the switch to new technology, including by small businesses that do not use cash registers, by 2018 (Kommersant, p. 1).
Almost two-thirds of Russians plan to reduce spending on New Year celebrations, a new survey shows. Households intend to save on gifts and delicacies and spend an average of 15,000-17,000 on celebrating the holiday. Retailers do not expect New Year sales to fall year-on-year, but statistics show that Russians' actual holiday spending might be even lower than planned (Kommersant, p. 1).
REAL ESTATE & CONSTRUCTION
Russian Highways has conceded that it might not complete the Moscow-St. Petersburg toll highway in time for the 2018 World Cup championships. In order to entice investors to the last section of the highway for which a contract has not yet been awarded, the state company will increase the share of government financing for the 68.9 billion ruble project from 80% to 90% (Vedomosti, p. 4).
Interview: Marat Khusnullin, Deputy Mayor of Moscow for Construction (Vedomosti, p. 8).
TELECOMMUNICATIONS, MEDIA & TECHNOLOGY
The penetration of smartphones in Russia has risen by 7 percentage points to 73% in 2015, while penetration of regular mobile phones has dropped 8 points to 56%. However, there are only half as many users of Russian LTE networks as users of such networks in Western Europe, although the 4G technology was launched almost at the same time. Analysts attribute this to the popularity of cheap smartphones in Russia that do not support LTE (Kommersant, p. 7).
AUTOMOTIVE & ENGINEERING
The share of foreign automobiles assembled in Russia will drop this year for the first time since 2000, by 4 percentage points to 71.5%, Avtostat forecasts. The share of foreign models fell 5.6 points to 70% in the first nine months of 2015, as production tumbled 32.2%, ASM Holding reported. The steepest drops in production were 56.6% at Kaliningrad's Avtotor, which lost orders from GM, and 50% at the plants of Ford Sollers. The decline could continue in 2016, analysts believe (Vedomosti, p. 11).
AGRICULTURE, FISHING & FORESTRY
Sistema is expanding its agricultural business. The Federal Anti-Monopoly Service has given the Russian conglomerate's subsidiary Krasnodar Agro the green light to buy 85% stakes in fruit grower OJSC Trudovoye and fruit seller LLC Pitomnik Sady Kubani. Thanks to Russia's restrictions on food imports, the business of fruit growers in the southern Kuban region is booming. The two companies could cost Sistema 1 billion-2 billion rubles, by one estimate (Vedomosti, p. 11).