Moscow press review for April 30, 2014
MOSCOW. April 30 (Interfax) - The following is a digest of Moscow newspapers published on April 30. Interfax does not accept liability for information in these stories.
POLITICS & ECONOMICS
Russian government and Kremlin officials will meet with President Vladimir Putin on May 7 to discuss measures to support economic growth. Some proposed measures look like an attempt to respond to economic sanctions from the U.S. and EU and the threat of foreign trade isolation. New proposals include raising the effective property tax rate by changing depreciation rules, planned import substitution and forcing companies in single-employer towns to invest in new projects (Kommersant, p. 1).
The Russian Interior Ministry's economic security and anticorruption department carried out a major operation aimed at decriminalizing the banking sector. Investigators searched several banks and raided an underground settlements and cashing center, detaining members of a group that laundered billions of rubles, including money belonging to state companies (Kommersant, p. 1).
The Russian law allowing websites to be blocked by IP address is being challenged in the Constitutional Court by the head of the Association of Internet Publishers. Human rights advocates are promising a wave of similar lawsuits and are hoping for success (Vedomosti, p. 2).
Belarus might refuse to sign off on the creation of the Eurasian Economic Union with Russia and Kazakhstan due to customs regulation of Russian oil exports, President Alexander Lukashenko indicated after a meeting with President Vladimir Putin and President Nursultan Nazarbayev on Tuesday. The issue is supposed to be resolved within a year (Vedomosti, p. 4).
In the face of tougher sanctions imposed by the United States and the EU, the Russian government has begun discussing specific measures with state companies to increase the share of ruble settlements and move away from using dollars in export contracts. Russian oil and gas exporters say they are willing to use rubles, but unofficially doubt that foreign counterparties will agree to this given the volatility of the exchange rate and high inflation (Kommersant, p. 7).
OIL & GAS
Gazprom reported EBITDA up 22% to 2.009 trillion rubles in 2013, making it the world's top public company by this indicator. The Russian gas giant's net profit fell 7% to 1.139 trillion rubles, but was still the fifth highest in the world among public companies (Vedomosti, p. 1).
METALS & MINING
Russian billionaire Oleg Deripaska has ceded the CEO's chair at his En+ Group to his first deputy, 35-year old Maxim Sokov. Deripaska now remains at the helm of only troubled aluminum giant UC Rusal (Vedomosti, p. 12).
BANKING, FINANCE & INSURANCE
About 15 banks have stopped working with Contact, one of Russia's leading money transfer systems, following reports that a senior executive at its settlements bank, Russlavbank, is facing a criminal investigation into illegal banking activities. The banks have not yet decided how to proceed (Kommersant, p. 1).
Given more constrained opportunities to raise money on the market, the Central Bank is becoming the main source of short money for Russian banks. Their debt to the CBR on repo transactions has not dropped below 3 trillion rubles in April, while deposits are shrinking and bonds are rarely being placed. The CBR is prepared to provide liquidity, but using this money to finance long-term projects is risky (Kommersant, p. 8).
REAL ESTATE & CONSTRUCTION
Ziyad Manasir's Stroygazconsulting has won the contract to build the first section of the Central Ring Road in Moscow Region with a bid of 48.88 billion rubles, 3.5 billion rubles less than the starting price. Crocus Group, which put in the lowest bid for the contract, was disqualified due to lack of experience (Kommersant, p. 7; Vedomosti, p. 10).
TRANSPORTATION
The Moscow city government might hold a tender in May for the rights to supply 1,500 cars for the city's subway system. The deal will be worth a record 300 billion rubles. Germany's Siemens and Russia's Transmashholding are likely to bid (Vedomosti, p. 10).
Russian Railways plans to remain a rail freight operator in order to develop its logistics business, according to the company's development strategy to 2030. However, the infrastructure business, which generates 75% of revenue, remains the most important, the strategy states (Vedomosti, p. 11).
AUTOMOTIVE & ENGINEERING
Despite government subsidies and growth of revenue by 29% to 220 billion rubles, Russia's United Aircraft Corporation saw its net loss increase by 19.6% to 12.4 billion rubles in 2013 and debt balloon to 201 billion rubles. UAC's main divisions also posted losses, including Sukhoi Civil Aircraft due to delays with delivery of components and the SSJ 100 passenger jet (Kommersant, p. 9).