Moscow press review for October 21, 2014
MOSCOW. Oct 21 (Interfax) - The following is a digest of Moscow newspapers published on October 21. Interfax does not accept liability for information in these stories.
POLITICS & ECONOMICS
The first legislative initiative of Russia's unified Supreme Court in arbitration proceedings could significantly lengthen the litigation process, experts believe. A key point of amendments to the Arbitration Procedural Code the court plenum will discuss Tuesday is mandatory pretrial resolution of arbitration disputes that will be applied to a huge number of administrative disputes such as customs, antimonopoly and resource use (Vedomosti, p. 1).
Russia and China might sign an agreement on cooperation in the area of international information security during President Vladimir Putin's visit to Beijing on November 10. This refers to confidence building and preventing cyber incidents from escalating into conflict. So far there is only such an agreement between Russia and the United States, whose cooperation with China in this area has ground to a halt (Kommersant, p. 1).
The Foreign Investment Advisory Council met with the Russian government on Monday completely behind closed doors for the first time, allowing members to speak more openly about their concerns. Besides standard complaints about regulation, there was criticism of recent legal initiatives and worsening conditions for doing business. But investors want to continue working in Russia and are willing to increase localization of production, while officials are promising not to increase the administrative burden on foreign companies already operating in the country (Vedomosti, p. 4; Kommersant, p. 8).
The State Duma budget committee has approved Russia's draft federal budget for 2015-2017 for a first reading, but there is less possibility of substantively debating the bill this year. Nearly a quarter of expenditures in 2017 will be classified, economists note. In defense spending, set to grow 33% in 2015, more than two thirds of expenditures are classified, including for the first time all state procurements for the army. Some 289 billion rubles of new classified spending appeared in the budget on its way from the Finance Ministry to the Duma (Kommersant, p. 8).
Interview: Oleg Savelyev, Russian Minister for Crimean Affairs (Kommersant, p. 1).
OIL & GAS
The former shareholders of oil company Yukos, Group Menatep Limited, intend to seek the seizure of Russian assets abroad. GML, which won a ten-year lawsuit in The Hague in July, intends to file lawsuits in Europe and the United States in coming weeks if it is not paid $50 billion. However, Russia has until mid-November to file an appeal (Kommersant, p. 11).
METALS & MINING
The shareholders of Norilsk Nickel have postponed the Russian mining giant's obligations to pay $1 billion of special dividends until 2018, reportedly in order to ease pressure on the company in 2015-2016, which are expected to be difficult years, and not to rush the sale of noncore assets. Analysts said Norilsk Nickel's dividends will exceed $2 billion annually in any case, so the deferment is not critical (Kommersant, p. 11; Vedomosti, p. 12).
BANKING, FINANCE & INSURANCE
Ruble retail deposits at Russian banks shrank by 0.4% or 52.6 billion rubles in September, the first decrease since March, Central Bank data show. Russians are trying to protect their rubles from depreciation by converting to dollars or buying imported goods. Taking into account changes in exchange rates, Russia's banking system lost about 200 billion rubles in retail deposits in September, Fitch analysts estimate (Vedomosti, p. 10).
RETAIL & CONSUMER MARKET
Iosif Badalov, whose company produces the popular King drinking water, was freed from pretrial detention on Monday. The Russian businessman was arrested six months ago when he sought advice on his tax case from the head of law firm Zaschita, Dionisii Zolotov, who claimed to be related to the first deputy head of the Interior Ministry. As a result, Badalov was accused of fraud and nearly lost his business, but investigators ultimately concluded his actions did not constitute a crime (Kommersant, p. 1).
Interview: Vadim Gagloyev, CEO of Russian State Circus Company (Vedomosti, p. 8).
REAL ESTATE & CONSTRUCTION
Construction of one of the largest logistics parks in Moscow Region, developer TGK's Radumlya complex with planned space of about 750,000 square meters, has been suspended. Demand for warehouses is falling and the co-investor - Promsvayzcapital and its co-owner Dmitry Ananyev have reportedly suspended financing for the project, the cost of which is estimated at $525 million-$565 million (Vedomosti, p. 11).
TELECOMMUNICATIONS, MEDIA & TECHNOLOGY
Russia, like other countries, should have the ability to manage the Internet on its own territory, Communications Minister Nikolai Nikiforov said at an international conference on Monday. Citing various threats and vulnerabilities, he proposed discussing the situation within the context of the UN and to change it so that nations gain "sovereignty in the Internet," starting with the adoption of an "international convention on Internet management" drafted by Russia (Vedomosti, p. 10).
TRANSPORTATION
Russian flag carrier Aeroflot might buy three Bombardier Q400 turboprop airplanes in 2015 for flights in the Far East. The airline's board will discuss the purchase of the planes, which have a catalogue price of $30 million each, next week. The Russian SSJ100 jets are not suitable for services in the region due to the poor condition of airfields (Vedomosti, p. 11).
The helicopter services market, until recently seen as one of the most stable and profitable sectors of the aviation industry, has declined dramatically, statistics from the biggest Russian player in the sector show. UTair's helicopter freight shipments tumbled nearly 35% in January-September. This is attributed in part to a 40% reduction of rates on multimillion-dollar UN contracts with Russian companies. Demand for helicopter services is also falling among industrial customers, particularly oil and gas companies (Kommersant, p. 9).
AUTOMOTIVE & ENGINEERING
Kamaz, Russia's largest truck maker plans to only produce civilian products. The group intends to sell its last military asset - the Special Automobiles Plant in Tatarstan, which makes the Typhoon armoured personnel carriers and Vystrel infantry combat vehicles - by the end of 2014 to a company affiliated with plant management. The plant is working on some major R&D projects for the military and if they succeed it could become a major supplier to the Defense Ministry (Vedomosti, p. 12).
AGRICULTURE & FORESTRY
Foreign investors are again prepared to invest in Russia's agriculture market. Singapore's Olam, a major agribusiness group, plans to resume dairy farming projects that call for $400 million of investment. The decision follows Russian government promises to again subsidize investment loans for farmers, debts on which total about 22.7 billion rubles (Kommersant, p. 1).