Moscow press review for August 12, 2015
MOSCOW. Aug 12 (Interfax) - The following is a digest of Moscow newspapers published on August 12. Interfax does not accept liability for information in these stories.
POLITICS & ECONOMICS
The Russian economy may have hit bottom and even started growing month-on-month. Seasonally adjusted growth amounted to 0-0.1% in July compared to the previous month, the Economic Development Ministry estimates based on preliminary data. The ministry still thinks Russia will emerge from recession in the third quarter. But analysts do not see any reasons for a rapid recovery (Vedomosti, p. 1).
Russia's prime minister held the first meeting of the state commission for import substitution on Tuesday. Despite showing interest in the food market at the meeting, the commission will actually seek to actively manage major purchases of engineering products by 4,500 state companies and private businesses that get state support. The objective appears so ambitious that the commission is not prepared to make any specific decisions until January 10, 2016 (Kommersant, p. 1).
President Vladimir Putin will soon sign an order to establish a government award for outstanding rights advocates and philanthropists. The first awards will be handed out in 2016. The endowment fund will total 6 million rubles. The awards are expected to increase the prestige of such activities and eliminate the suspicions that part of the public has against rights advocates. It is also seen as a sign to businesses that rights advocates can and should be supported (Kommersant, p. 1; Vedomosti, p. 2).
OIL & GAS
While other oil companies around the world are putting off projects due to the drop in oil prices, Independent Petroleum Company, which is owned and headed by former Rosneft president Eduard Khudainatov, plans to rapidly increase production of difficult oil. IPC intends to ramp up production from 2.4 million tonnes this year to 4.8 million tonnes in 2018 and to 15.2 million tonnes by 2023 (Vedomosti, p. 11).
Lukoil won the tender for the onshore section of the East Taimyr block, beating out state major Rosneft to acquire its first asset in Eastern Siberia. Lukoil paid 1.9 billion rubles for the rights to the field, 600 times the starting price. Analysts believe Lukoil needs the license in this remote region in order to lobby for permission to operate offshore, which the company hopes to secure as early as the fall (Kommersant, p. 9; Vedomosti, p. 12).
BANKING, FINANCE & INSURANCE
The unprecedented attempts to steal money from Russia's Deposit Insurance Fund made by three Dagestan banks remain unpunished three years after they were committed. Nothing is known about the results of the criminal investigations or if these investigations are still ongoing. All that is left in this situation is for the honest clients of these banks to hope the owners will pay them, which is unlikely, and for the Deposit Insurance Agency to hope this will not be repeated in other regions (Kommersant, p. 1).
Russia's Central Bank has begun to actively exercise its right to inspect counting and sorting equipment for identifying counterfeit bills. Inspections have found that not all machines included in the official list of recommended equipment passed the test. Banks cannot use such machines until software is updated or the developer is recertified, which will entail additional costs (Kommersant, p. 1).
The ruble continues to depreciate. As oil prices dropped below $50 per barrel again on Tuesday, the ruble fell 2% against the U.S. dollar and the euro, which topped 71 rubles. The determining factor for the ruble in the medium term will be oil prices, while pressure from foreign debt payments will not be as significant. If the oil price does not firm up above $50, the currency could drop another 2-3 rubles against the dollar, analysts reckon (Vedomosti, p. 11).
RETAIL & CONSUMER MARKET
The restrictions that Russia has imposed on food imports from certain countries have had an "extremely negative" impact on competition, the government's analytical center acknowledges in a new report. The quality of Russian products has deteriorated while prices for them have risen. The extension of the countersanctions by a year will give Russian producers an extra chance to adapt and implement import substitution projects, the center reckons (Vedomosti, p. 10).
REAL ESTATE & CONSTRUCTION
Russia's Construction Ministry has drafted amendments to the Urban Planning Code aimed at improving regulation of the construction sector. The main idea is that all construction projects should be carried out on the basis of a general plan as the main document for urban development. Developers and Russia's regions are opposed to the proposed changes (Vedomosti, p. 1).
Russian Highways will help raise private investment for regional projects through public-private partnerships, the state company said. This refers to construction of toll roads and development of adjoining areas. The company hopes its current partners, which include Arks, SGC and Mostotrest, will be interested, but analysts believe it will be difficult to find investors willing to invest in such projects (Vedomosti, p. 4).
Construction company Izhtransstroy has filed a lawsuit against Russia's Air Transport Agency demanding the termination of a contract to build a third runway at Sheremetyevo Airport and compensation of 4.15 billion rubles for expenses. The firm claims the agency violated contract terms, while the agency blames the contractor. A new contractor has not been chosen yet, but market players believe this role might be filled by a unit of the Mostotrest group (Kommersant, p. 7).