Moscow press review for February 12, 2014
MOSCOW. Feb 12 (Interfax) - The following is a digest of Moscow newspapers published on February 12. Interfax does not accept liability for information in these stories.
POLITICS & ECONOMICS
The Federal Migration Service and Economic Development Ministry have drafted a bill that proposes to grant Russian citizenship to individuals who invest at least 10 million rubles in the country's economy and to foreign students who have graduated from Russian post secondary institutions and have worked in Russia for at least three years. Analysts note that while the first case applies to a few entrepreneurs, the second involves millions of people (Kommersant, p. 1).
Russian consumers will pay for the weakening of the ruble as prices will rise faster while real incomes will grow more slowly. However, this will not reduce demand for imported goods, the HSE Development Center has concluded. The ruble could depreciate 20% against the dollar/euro basket in 2014, the center believes (Vedomosti, p. 1).
The draft of the second part of the Eurasian Economic Union (EEU) treaty that is scheduled to be signed in May 2014 indicates that the chances of the EEU being created in 2015 are increasing due to the fairly substantial reduction of its scope. Essentially the parties are now only arguing about rules for coordinating oil and gas markets, as other contentious issues are being left for the future (Kommersant, p. 2).
Russia's Supreme Arbitration Court has allowed courts to verify land appraisals on the basis of which businesses reduce the cadastral value of their properties, and thereby their property taxes. The ruling was made in a case where the cadastral value of the land under a Rusal smelter was reduced by more than three quarters. The government, meanwhile, wants to increase the liability of appraisers (Kommersant, p. 8; Vedomosti, p. 4).
The Far East Development Ministry has come up with more new agencies for governing Russia's Far East. It is proposing to set up an agency to attract investment and support exports in the Far East and a second to develop human resources. The ministry is asking for 726 million rubles in funding to create the agencies in 2014 (Vedomosti, p. 4).
OIL & GAS
Russia's Summa Group has consolidated 100% of Shtandart TT BV, the operator of a project to build an oil terminal at the Rotterdam port, after buying out the 25% stake of Dutch company VTTI. State oil major Rosneft could become Summa's new partner in the project - negotiations are already being held (Vedomosti, p. 12).
Rosneft, which has been gobbling up assets in recent years, is now seeking to sell its 50% stake in Polar Lights, a joint venture with ConocoPhillips valued at $120 million-$150 million. The Russian state oil major has deemed the project unprofitable, and the U.S. company is selling its 50% stake for the same reason. But no potential buyers have stepped forward yet (Kommersant, p. 7).
Billionaire Suleyman Kerimov, having already sold his stakes in potash giant Uralkali and developer PIK, is now selling his stake in Iskra-Turbogaz, a gas equipment maker whose customers include Gazprom and Rosneft. The deal is worth an estimated 400 million rubles. The service business is becoming less attractive as Russian state companies seek to cut costs at the expense of suppliers (Kommersant, p. 10).
UTILITIES
Inter RAO subsidiary Eastern Energy Company might partner with China to build the world's biggest thermal power plant at the Yerkovetskoye coal field in eastern Russia, with capacity of 5-8 GW. It would enable the Russian company to export up to 50 billion kWh of electricity to China annually. But analysts estimate the project, with a high-voltage power line, would cost $14 billion-$26 billion (Kommersant, p. 7; Vedomosti, p. 12).
METALS & MINING
Centerra Gold wants to expand its presence in Russia and is looking for partners to develop deposits with resources of about 60 tonnes of gold. Analysts say assets can be bought cheaply now, but opportunities for the Canadian company are limited to deposits with up to 50 tonnes, as larger ones are deemed strategic and their ownership requires government approval (Kommersant, p. 10).
BANKING, FINANCE & INSURANCE
The Central Bank of Russia revoked the licenses of Eurotrust Bank and Link Bank on Tuesday, citing their involvement in questionable transactions, but surprisingly decided to bail out My Bank Ipoteka. It is unclear what will happen to the money of clients of the Migom money transfer system, which is controlled by Eurotrust, as unlike depositors they are not insured (Kommersant, p. 1).
RETAIL & CONSUMER MARKET
Russian retailer Enter, looking to Amazon Marketplace as a model, plans to make its website available to outside retailers such as clothing companies this year. Enter, which has 128 physical outlets in 53 cities, will not only handle order processing, but also logistics to the pick-up point. The company aims to increase sales 50-60% in 2014 (Vedomosti, p. 11).
REAL ESTATE & CONSTRUCTION
UC Rusal principal owner Oleg Deripaska, whose aluminum business is in serious trouble, is undertaking an expensive development project. His company plans to build a residential development on the 12-hectare site of the Kazakov plant on Moscow's Kutuzovsky Prospekt that could cost up to $740 million (Vedomosti, p. 10).