Moscow press review for November 13, 2013
MOSCOW. Nov 13 (Interfax) - The following is a digest of Moscow newspapers published on November 13. Interfax does not accept liability for information in these stories.
POLITICS & ECONOMICS
Prime Minister Dmitry Medvedev on Monday publicly criticized a bill submitted to the State Duma in October by President Vladimir Putin that would give law enforcement agencies back the power to open criminal tax cases independently, without evidence from the tax authorities (Vedomosti, p. 1).
The Audit Chamber, Russia's fiscal watchdog, on Monday announced the results of an audit of 543.58 billion rubles in funding provided to the Defense Ministry in 2011-2012 for construction of housing and infrastructure, showing abuses and failure to complete contracts worth tens of billions of rubles (Kommersant, p. 2; Vedomosti, p. 2).
Russia's Far East is refocusing on exports, but these plans are still far from fruition. In the meantime, the government has primarily decided to further work on the development model for the troubled region and draft new proposals (Vedomosti, p. 4).
Russia is prepared to file several lawsuits against the European Union with the WTO, the country's chief trade negotiator said Monday. Moscow intends to defend the interests of Russian businesses in the WTO and at the same time help gas giant Gazprom (Vedomosti, p. 5).
OIL & GAS
The privatization of Russian oil major Rosneft might be postponed by another year to 2016, First Deputy Prime Minister Igor Shuvalov said Monday. There could be even further delays since the government wants to sell high, but with its current strategy the company is unlikely to appreciate rapidly (Vedomosti, p. 1).
Russia's Rosneft and Gazprom are butting heads on a new market - Vietnam. The oil major gave up plans to buy an oil refinery in the country, leaving it to Gazprom Neft, but wants to supply about 1 million tonnes of LNG per year to Vietnam. The gas giant has also announced plans to supply natural gas to Vietnam (Kommersant, p. 12).
METALS & MINING
UC Rusal reported Monday that its net loss grew to $232 in the third quarter. The Russian aluminum giant has managed to reduce production costs to record lows, but they are still higher than prices for the metal. Dividends from Norilsk Nickel will help the company service its huge debt (Kommersant, p. 12; Vedomosti, p. 12).
BANKING, FINANCE & INSURANCE
Sberbank's new strategy calls for doubling assets and profits in the next five years, which would mean growth will slow by a third compared to the previous five years but still outperform the market. The leading Russian lender expects to shed 30,000 employees, or 12% of its workforce in the five years (Kommersant, p. 1; Vedomosti, p. 10).
The central depository, a key part of efforts to turn Moscow into an international financial center, will not help foreign investors. They will not be able to vote with the shares held at the depository as they do on other markets. This would require legislative changes (Vedomosti, p. 11).
RETAIL & CONSUMER MARKET
Andrei Rogachev, the founder of Russian retail chains Pyaterochka and Karusel, has folded up his Okey-Dokey project in the United States. He had planned to create a chain with sales of $1 billion, but decided earlier this year to close the 11 stores in Florida. He will now focus on developing the Russian chain Verny (Kommersant, p. 1).
Interview: Irene Rosenfeld, CEO of Mondelez International (Vedomosti, p. 8).
TELECOMMUNICATIONS, MEDIA & TECHNOLOGY
Osnova Telecom, an operator that is partly owned by Russia's Defense Ministry, has again run into problems securing frequencies needed to roll out a full-fledged LTE network in the country. The company can currently use only 71 base stations in 59 regions (Vedomosti, p. 10).
TRANSPORTATION
Russian Railways (RZD), in line with government demands, is trying to force its suppliers to lower prices by 10% in 2014 and has sent such proposals to 68 companies. Reducing input costs could save RZD 38.5 billion rubles based on 2013 expenditures, but almost all suppliers have refused to lower prices (Kommersant, p. 9).
AUTOMOTIVE & ENGINEERING
Rosneft, Gazprombank and United Shipbuilding Corporation have approved a plan to form a consortium that will get control of shipyards in the Far East by September 2014. They will get most of the assets cheaply. The Zvezda shipyard will need the biggest investments, but the investors expect to even get this money from the government - they want to borrow 100 billion rubles from state bank VEB and get 27.5 billion rubles from the federal budget (Kommersant, p. 1).