MOSCOW, May 27 (RIA Novosti)


Algeria To Buy Russian Tanks And Fighters

Algeria may buy one or two squadrons of Sukhoi Su-30-MKI heavy-duty fighters and three or four squadrons of cheaper Mikoyan-Gurevich MiG-29-SMT air-superiority fighters with enhanced ranges, a deal that could hit the $1.2 billion mark, Kommersant, a daily, reported.

Russia suggested for the first time that Algeria return 36 old MiG-29 warplanes in exchange for the new ones. This exchange would help Moscow cope with its rivals, like Paris, which is currently promoting its Mirage-2000-5 fighter in Algeria.

"Algeria plans to sign a contract for the purchase of 300 T-90-S main battle tanks from Russia. This document was coordinated a long time ago," a source at the Federal Military-Technical Cooperation Service said.

Algeria buys more Russian weapons than any other African country. It received 47 Mil Mi-8-T helicopters, 42 Mi-17 helicopters, 96 X-35 anti-ship cruise missiles, 18 Smerch (Tornado) multiple-launch rocket systems (MLRS) and radio-technical reconnaissance systems during the last ten years.

In 2004, the Novosibirsk aircraft association delivered of 22 Su-24-MK tactical bombers worth $120 million to Algeria, which also bought six Ilyushin Il-78 air-force tankers.

Some Russian-Algerian contracts worth about $2 billion were finalized, but never signed because of the recent personnel reshuffle within the Algerian Army. Algeria could have bought 50 MiG-29 fighters worth $1.5 billion, 300 T-90-S tanks worth $650 million and new small patrol ships and motorboats.

"Our meetings with the algerian chief of staff [Maj.-Gen. Salah Ahmed Gaid of the Algerian National People's Army] show that some aspects will have to be re-negotiated. For example, the Algerian military plan to reassess the national Air Force's demand for new aircraft," a source at the Federal Military-Technical Cooperation Service said.

Nezavisimaya Gazeta

UN Expects Russian Companies To Fight For Their Contracts

During the two-day 30th session of the UN Interagency Procurement Working Group (IPWG), which concluded its work in here yesterday, Russian Chamber of Commerce President Yevgeny Primakov noted Russian's companies' weak competition for UN contracts, Nezavisimaya Gazeta reported.

Russia's share in UN contracts is small and is limited to transport services, mainly air transport, although the competitive potential of Russian goods and services is much larger.

Session participants announced Russian businessmen would have access from now on to information about the dates and conditions of all UN tenders.

However, UN official James Provenzano, who presided over the session, said at this point the UN could not offer Russia any concrete contracts to be signed during the session. "We are still at the contact stage. The UN expects Russian companies to join a fierce competition for our contracts. The most important task for business is to increase its level of responsibility."

UN experts believe Russian businessmen are still lacking skills in risk management. The fact that they avoid the creation on nation-wide business networks augments the existing risks of business contacts.

The volume of UN contracts with many countries exceeded $5 billion by 2003. In contrast, Russian contracts in 2004 only brought in $140 million. All Russian contracts were concluded under the UN peacekeeping program, while other countries participated in a variety of other UN programs.

On January 1, 2005, the UN company list registered 52 Russian companies, and to date has added another 28, but the only UN actively works only with about three dozen of them.

Politichesky Zhurnal

Expert On Political Situation In Uzbekistan

Events in Uzbekistan are unlikely to take the roads followed by those in Georgia, Ukraine and Kyrgyzstan because Uzbekistan does not have an organized opposition that could win over the security-related structures and public opinion, said Sergei Andreyev, an expert in Asian studies, Politichesky Zhurnal, a weekly, reported.

According to Andreyev, Western sponsors or Russia are also unlikely to support the Islamic rebels (uprising leader Bakhtiyar Rakhimov said openly that the unrest was aimed at creating an Islamic state). The rebels could get assistance from international Islamic organizations, but it may not have enough forces for a nationwide revolution. The Islamic rebels will most probably resume terrorist attacks and try to lead public protests against the dramatic economic situation and repressive policies of the authorities.

This could eventually become Islam Karimov's worst nightmare - a civil war similar to the one that ruined Tajikistan, where the war was waged between religious clans under the banner of Islam, he said.

Seeing the effectiveness of using armed force to solve the problem, the current Uzbek regime will hardly launch broad political and economic reforms. Instead, it might use traditional methods, like bribing the regional clan elite, to strengthen the regime's foundation, Andreyev said.

Rumors are circulating in Tashkent that Islam Karimov is seriously ill. If this is true, the elite's power struggle will become acute. The most probable candidates for the presidency are head of the Security Service Rustam Inoyatov, Interior Minister Zakir Almatov and Presidential Adviser Ismail Dzhurabekov. None of them differ from Karimov politically, meaning his departure would not bring major political changes to the republic, Andreyev said.

On May 13, a jail and a number of government buildings were seized in Andizhan, Uzbekistan. Uzbek law enforcers conducted an operation, which resulted in the death of 170 people (official data). Journalists and human rights advocates said several hundred were killed.

Some 500 refugees are in Kyrgyzstan's west, mainly in the Jalal Abad region neighboring on Uzbekistan.


UES Faces Compensation Claims

The power outage in Moscow and neighboring regions Wednesday might become costly for Unified Energy Systems. The company has already started receiving compensation claims that its emergency relief headquarters estimates could amount to $1 billion, Gazeta, a daily, reported.

Prominent Moscow lawyer Igor Trunov said he had been approached by various individuals and legal entities that hope to receive compensation for violation of contracts and moral damages.

Those who seek compensation for contracts that were not signed due to the blackout will have to prove that the business deal did not go through because of the power failure, not because of traffic jams or other indirect causes, Trunov said. Claimants will have to present relevant documentation and business correspondence between partners. He also said people can file claims against stores that sold spoiled food on the day of the power failure. Those who missed flights or trains have good chances to win court cases. Lawyer Andrei Knyazev recommends keeping the tickets.

However, corporate claims represent bigger threat to UES. According to Knyazev, the majority of companies insure their products, meaning UES will have to face lawsuits filed against it by experienced insurance companies. A chicken farm in Petelino in the Moscow region had 700,000 of its chickens die due to ventilation and water supply systems' failures, which serves as strong evidence in court.

The Tula administration also announced its plans to file a claim against the Russian energy holding. The officials are preparing a combined lawsuit and regional governor Vyacheslav Dudka announced a special committee would be formed with the participation of local prosecutors.

If the incident is deemed a force majeur circumstance, nobody is going to be recompensed. According to managing partner at A.S.T. Legal Anatoly Yushin, this might be the case if UES manages to prove that the power outage did not occur due to negligence on the part of specific entities, for instance, project designers or operators. At the same time, managing partner at Timothy's Yevgeny Timofeyev insists force majeur cases "are very rare in legal practices," meaning that in order to win their suits, the victims will have to prove that the outage could have been predicted.

Wednesday's blackout left large areas of Moscow and its surrounding areas without electricity. Lights, water, Internet and telephone connections, elevators, ATMs, the metro, traffic lights and trains all stopped working.


Lukoil To Boost Gas Production 7-Fold In 10 Years

Vagit Alekperov, president of Russian oil major LUKOIL, told investors in New York Tuesday his company planned to increase its gas share to 30%. LUKOIL currently produces about seven billion cubic meters of gas, including 4.5 billion cubic meters of casing-head gas, and plans to up its output to some 50 billion cubic meters of gas by 2015, Gazeta.Ru reported.

"LUKOIL's 1.1 trillion cubic meter deposits enable it to boost gas production," Mikhail Bakulev, an analyst with the AVK investment brokerage company, said.

Gazprom alone may hinder the implementation of ambitious LUKOIL plans because the natural monopolist does not always allow independent gas producers to use its pipeline network. However, Alekperov did well to improve relations with Gazprom. In late March 2005, he signed a strategic partnership agreement with Gazprom until 2014. LUKOIL voiced its readiness to finance the development of Gazprom's gas transport system. The companies also stated their intention to jointly implement oil and gas projects in Russia, the Caspian region and Uzbekistan. LUKOIL agreed to sell all the gas from the Nakhodka deposit in Western Siberia) to Gazprom in 2005 and 2006 straight from its gas wells. Gazprom will therefore receive 11 billion cubic meters of gas per year.

"LUKOIL will not quarrel with Gazprom. LUKOIL will have to eliminate the monopolist's possible gas shortages," Dmitry Mangilev, an analyst with the Prospect investment company, said. Both companies consider this cooperation scenario to be quite profitable. The natural monopolist pays less for gas, subsequently raising end-consumer prices. LUKOIL "spends nothing on transportation and it isn't facing any pipeline-access problems," Mangilev said.

Sergei Glazer of Vostok-Nafta, a Gazprom minority share holder, also expressed doubt the LUKOIL could face problems.

"Independent producers often have trouble selling their gas, storing it inside pipelines. No one voices such claims to LUKOIL," Glazer said. "The company helps Gazprom to develop the infrastructure of new regions. This is why Gazprom and LUKOIL have established a special relationship."

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