MOSCOW, March 15 (RIA Novosti) Iran is losing its ally/ American radars may be deployed on Russia's southern border/ China supplies Russian equipped fighter jets to Pakistan/ New pipeline to slash Russian oil transportation costs/ General Motors to increase its Russian capacity by 150%
Vremya Novostei, Vedomosti
Iran is losing its ally
The United States appears to be happy with the deterioration in relations between Iran and Russia, its main ally among the UN Security Council's permanent members.
U.S. Deputy Secretary of Energy Clay Sell, who was is in Moscow this week, said Moscow's demand for a timely payment under the Bushehr nuclear power plant project was correct.
Russian president Vladimir Putin, who is on a visit to Italy, was more restrained by saying that he did not see "a reasonable alternative to political and diplomatic efforts" in resolving the Iranian nuclear issue.
However, it is clear that the positions of Moscow and Washington on the Iranian problem have become much closer.
Ongoing talks between Russian and Iranian experts in Tehran so far do not appear promising. Russian nuclear equipment export monopoly Atomstroyexport, the general contractor for the project, has accused Iran of delaying payments.
Sergei Kiriyenko, head of the Russian Federal Nuclear Power Agency (Rosatom), said yesterday he was shocked by Iran's stance: "It looks as if Tehran has lost any interest in the project. We have not received a kopek since mid-January."
Moscow and Tehran's contradictory statements over Bushehr have become another factor that may encourage the Security Council to adopt a tough resolution on Iran. It prohibits foreign trips by prominent Iranian nuclear and missile experts, bans the export of arms to Iran, and restricts the granting of loans to it.
It is unlikely that Russia will defend Iran's interests with the same zeal as before.
Mikhail Margelov, chairman of the international affairs committee of the upper house of Russia's parliament, said yesterday: "Nobody wants Iran to become a nuclear power which does not play by the rules."
There are enough reasons for Russia to be dissatisfied with Iran apart from Bushehr, said Vladimir Averchev, an expert of the Russian Council for Foreign and Defense Policy.
"The main thing is that Iran has not fulfilled the requirements of the previous UN Security Council's resolution adopted in December 2006," Averchev said. "Instead of stopping its uranium enrichment project, Tehran has put into operation hundreds of new centrifuges, which can enrich and accumulate uranium."
The International Atomic Energy Agency has also been unable to confirm that Iran's uranium enrichment program is not designed to create nuclear weapons.
Taken together, this is sufficient to approve tougher sanctions, Averchev said.
Gazeta
American radars may be deployed on Russia's southern border
Eduard Kokoity, president of the breakaway republic of South Ossetia, said Georgia was enthusiastically preparing to accept elements of the U.S. ABM system.
Henry Obering, director of the U.S. Missile Defense Agency (MDA), has attempted to calm Russia. He said the United States had not discussed the deployment of anti-ballistic missile (ABM) systems with any other country apart from the Czech Republic and Poland.
The Air Force general is rather well known in Russia, which was shocked by Obering's recent admission that the United States "would like to place a radar base in the Caucasus." Obering said in Washington on February 22 that such a radar system in the Caucasus would be "useful, but not essential," and that it would serve as the initial missile system for a more powerful radar to be deployed in the Czech Republic.
Yesterday the general actually retracted his initial statement, saying that the U.S. had not discussed radar deployment with any country other than Poland and the Czech Republic, and that there were no plans for the deployment of such facilities in the Caucasus.
However, Kokoity said March 14: "Preparations are underway for the deployment of a powerful military radar" in the Kazbegi district of Georgia, close to the Russian border, another radar system is to be located in the Georgian-Ossetian conflict zone on Georgian territory.
Levan Nikoleishvili, first deputy defense minister of Georgia, said Georgia would not be discussing the deployment of radars with the United States. "There are other republics in the Caucasus, and nobody has pointed directly at Georgia," he said.
He was not telling the truth, as Russian troops are stationed in the other two South Caucasian republics, notably a Russian military base in Gyumri, Armenia, and the Daryal radar in Azerbaijan, who is not keen to get rid of it.
The deployment of American anti-missile systems next to Russian military facilities would not be logical and the only country where they could be located would be Georgia, from where Russia is due to withdraw its military bases in Batumi and Akhalkalaki by late 2008.
Kommersant
China supplies Russian equipped fighter jets to Pakistan
China has delivered its first two JF-17 Thunder fighter planes equipped with Russian engines to Pakistan. The situation is tense with a potential conflict arising between Russia and India, which is rather tetchy over its partners' relations with Pakistan. The step may threaten military contracts between Moscow and New Delhi worth more than $1.5 billion a year.
The Chinese fighters arrived in Pakistan early in March. They are to be publicly displayed on March 23 during a parade marking Pakistan Day, the country's national holiday. A source in Islamabad confirmed delivery, saying that "the contract will be further honored." Under the agreement with China, Pakistan is to take delivery of 150 JF-17 Thunder (FC-1) fighters. In 2005, Russia's defense export agency Rosoboronexport concluded a contract with China on the supply of a hundred RD-93 engines for FC-1s, plus spare parts and servicing. The possibility is now being discussed that the contract will be increased to 500 engines and their upgrade. The first shipment of 15 engines left Russia at the end of 2006.
News that China had requested Russia to include Pakistan on the list of countries with which Moscow has military technology agreements broke in the fall. The point being that Beijing has no legal right to re-export Russian equipped aircraft to third countries. And India and Russia had concluded an inter-governmental agreement not to supply military hardware to Islamabad. However, in November 2006, speaking at an air show in Zhuhai (China), Li Pei, director for development at the China National Aero-Technology Import and Export Corporation (CATIC), reported that the RD-93 "will be re-exported." On February 27, Mikhail Dmitriev, director of the Federal Service for Military Technology Cooperation, said "the question was under consideration." On Wednesday, the Service and Rosoboronexport revealed "they would prefer not to comment" on the RD-93 exports to Pakistan.
"India is a more important partner for Russia than China, which, among other things, has drastically cut the volume of its purchases," said Konstantin Makiyenko, an expert at the Center for Analysis of Strategies and Technologies. At the same time, sources in the aircraft industry say another supplier of weapons to India - France - is successfully selling military equipment to Pakistan.
Biznes
New pipeline to slash Russian oil transportation costs
The construction of the Burgas-Alexandroupolis oil pipeline, which has been delayed for 14 years, could finally start moving. Today, Russia, Greece and Bulgaria are due to sign an agreement on the construction of the pipeline which should unclog the Turkish Straits (Dardanelles and Bosphorus). The new oil transportation route will halve the transportation costs for Russian oil companies as about 9% of all Russian oil exports will flow via this pipeline. Private companies will be prevented from using it, and the right to exploit the pipeline will be divided between state-run Russian companies Rosneft and Gazpromneft.
The capacity of the 280 km long pipeline will be 35 mln metric tons of oil a year, with a possible increase up to 50 mln metric tons. When the pipeline has been completed, it will be transferred to an international design company in which Russia will get a 51% stake and Bulgaria and Greece 24.5% each. The Russian share in the Burgas-Alexandroupolis pipeline consortium set up last year will be divided between Rosneft, Gazpromneft and Transneft, with the latter becoming the project operator.
Economic benefits for the companies supplying oil via the pipeline are obvious. To deliver one metric ton of oil from Novorossiisk to Alexandroupolis by sea costs $30, without the costs of ever increasing tanker delays often caused by heavy traffic in the straits. Samuil Goldshmit, of the 2K Audit-Business Consultations independent consulting group, has calculated that oil companies have to pay over $1.05 bln for the transportation of 35 mln metric tons of oil via Turkey.
When the pipeline is completed the arithmetic will be different. If oil is transported by tankers to the Bulgarian port of Burgas, the chartering of a vessel (depending on its tonnage) will cost $7-12 per metric ton, plus oil reload costs amounting to about $1 per metric ton. Russia's Transneft tariffs are $0.55-1 per metric ton/100 km. Oil delivery from Burgas to the destination point will cost $3 per metric ton/100 km. "Therefore it will cost about $16 to deliver one metric ton of oil from Novorossiisk to Alexandroupolis via the pipeline, and $550 mln to deliver 35 mln metric tons of oil," Goldshmit said.
Vedomosti
General Motors to increase its Russian capacity by 150%
General Motors Corporation has decided to increase its presence in the Russian market. GM Europe president Carl-Peter Forster announced Wednesday that the concern had decided to increase the capacity of its future plant in St. Petersburg from 40,000 to 100,000 vehicles a year. In the long-term, this will help GM to acquire financial stability, experts say.
Like all American auto concerns, General Motors has fallen on bad times. Last year, it made a net loss of $2 billion, but experts considered that a success, because the year before the company had losses of more than $10 billion. GM managed to cut back on its losses by implementing rigid cost controls. But it appears GM is not as tightfisted where its Russian projects are concerned. Russia is now GM's fifth largest outlet in Europe.
This compares with Toyota's plans to build a plant in St. Petersburg producing up to 300,000 cars a year. Nissan plans to start production from 50, 000 units up to 500,000, while Volkswagen is building a plant with an annual capacity of 115,000 vehicles outside Kaluga. Ford is capable of turning out up to 72,000 cars a year, and Renault recently decided to expand its capacities to 160,000 units.
GM's new facility is scheduled to go on line in 2009. Sergei Fiveisky, deputy chairman of the economic development committee of the St. Petersburg administration, said the increase would have no material impact on deadlines.
Experts say GM has made the correct choice. A plant producing 40,000 cars a year is too small to be constantly profitable, said Yevgeny Bogdanov, director for engineering and transport at A.T. Kearney.
"A rapidly growing Russian market can help GM solve the company's global financial problems," said Deutsche UFG analyst Yelena Sakhnova. Particularly because capacity increases will not involve high costs. According to the analyst, the project costs will rise from the initially announced $115 million to $150-160. GM had penciled in the possibility of a capacity increase during the initial building phase, Sakhnova said.
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