Moscow press review for April 22, 2014
MOSCOW. April 22 (Interfax) - The following is a digest of Moscow newspapers published on April 22. Interfax does not accept liability for information in these stories.
POLITICS & ECONOMICS
The Russian government is seriously considering creating a unified national rating agency and this issue might be raised this week at the level of First Deputy Prime Minister Igor Shuvalov. The authors of the idea see such a Russian agency, in partnership with other alternative foreign agencies, becoming a competitor to the three leading international players - Moody's, Fitch and S&P (Kommersant, p. 1).
Former RTS Stock Exchange president Oleg Safonov might replace Alexander Radkov as head of Russia's Federal Tourism Agency. Following the high-profile collapse of Lanta Tour Voyage in late 2012, the agency managed to prevent new major bankruptcies in the outbound tourism sector, but it has essentially failed to carry out the program to develop domestic and inbound tourism (Kommersant, p. 1).
The proposal to introduce a "presidential quota" in the Federation Council has drawn criticism in a number of Russian regions. The draft amendments to the Constitution would not allow the upper house to fulfill its role in the system of checks and balances against presidential powers, they argue (Kommersant, p. 1).
The Federal Property Agency is proposing that the tariffs of state-controlled monopolies such as Gazprom, Russian Railways and Russian Grids, factor in expenditures on dividend payments and that dividends be paid on forecast, rather than actual profits. The Federal Tariff Service is opposed to the idea (Vedomosti, p. 11).
UTILITIES
State holding company Rosneftegaz plans to inject 40 billion rubles into RusHydro in exchange for an 11% stake in Russia's biggest hydropower company consisting of treasury stock and new shares. The money might be used to build a hydropower plant in Kyrgyzstan, as well as RusHydro's projects in the Far East (Kommersant, p. 9).
METALS & MINING
The largest investment project of heavily-indebted Russian steel and coal group Mechel - the development of the giant Elga coal field - might be financed by China Exim Bank. State lender VEB, which has agreed to lend $2.5 billion for the project, is holding negotiations with the Chinese bank to provide funds (Vedomosti, p. 12).
BANKING, FINANCE & INSURANCE
Russia's Central Bank on Monday suspended the operations of four Ukrainian banks in Crimea, including Ukraine's largest lender Privatbank, saying they failed to meet obligations to creditors and depositors. This first deposit insurance case on the Black Sea peninsula since it was joined with Russia could result in claims of 16.6 billion rubles (Kommersant, p. 9).
VEB, Russia's state development bank, is seeking refinancing from the Central Bank in the face of restricted access to foreign capital markets. However, analysts believe VEB, which plans to repay a $2.45 billion syndicated loan next week, will have a hard time reaching an agreement with the Central Bank, as in this case the regulator would essentially become engaged in economic development, which conflicts with its main role (Kommersant, p. 10; Vedomosti, p. 14).
RETAIL & CONSUMER MARKET
President Vladimir Putin has submitted a bill to the State Duma proposing to turn Crimea into a gambling mecca. Previous attempts to create such gaming zones in Russia have not been successful. The Economic Development Ministry announced Monday that it has submitted proposals to create both a gambling zone and special economic zone in Crimea (Vedomosti, p. 10).
REAL ESTATE & CONSTRUCTION
The timetable for land reforms initiated by President Vladimir Putin might get off track. The State Duma is not willing to allow municipalities to give investors any land parcels for development as the authorities could lose control over the use of land resources. Lawmakers intend to rewrite government amendments to the Land Code that have been passed in the first reading (Vedomosti, p. 4).
Moscow Region is preparing to ban the construction of more than 30 series of prefab panel residential buildings, some of which are used by leading Russian builders such as SU-155 and PIK. This could push up residential real estate prices as construction costs will increase, developers warn (Vedomosti, p. 10).
St. Petersburg's LSR will become the biggest developer of the ZiL industrial zone in southern Moscow. The company won a tender for the rights to develop more than 62 hectares. The land alone will cost the developer about 43 billion rubles, and the overall cost of the project is estimated at 100 billion rubles (Kommersant, p. 12).
Interview: Mikhail Balakin, Principal Owner and Chairman of SU-155 (Kommersant, p. 14).
TELECOMMUNICATIONS, MEDIA & TECHNOLOGY
VKontakte founder Pavel Durov has been dismissed from his post as CEO of Russia's largest social network, as the company decided that he incorrectly retracted his resignation. Durov said VKontakte has now fallen under the complete control of Rosneft president Igor Sechin and billionaire Alisher Usmanov (Vedomosti, p. 1; Kommersant, p. 1).
AUTOMOTIVE & ENGINEERING
Renault and Fiat might drop plans to assemble light commercial vehicles at ZiL. Renault said the weakening of the ruble calls into question the project's profitability. The Moscow auto plant is continuing talks with these automakers, but is also trying to find new partners (Vedomosti, p. 11).