Nezavisimaya Gazeta
Vremya Novostei
Azerbaijan will not renew radar lease with Russia
President Vladimir Putin proposed the joint use of the Gabala early-warning radar, leased by Azerbaijan to Russia, to U.S. President George W. Bush at the G8 summit in Heiligendamm, Germany.
However, experts in Baku have said that should the U.S. agree, Azerbaijan would be unlikely to renew Russia's lease and would instead hand the radar over to the United States after 2012. Some others have said the radar would, in any case, have expended its service life by that time.
The Gabala radar issue will be raised at the July 9-10 Azerbaijan-U.S. talks in Washington. Independent military expert Rauf Radzhabov from Azerbaijan said that everything depended on the bilateral strategic partnership, and that Baku would not extend the radar lease contract, due to expire in 2012.
Major General Vladimir Dvorkin (Reserve), chief research associate at the International Security Center, Institute of World Economy & International Relations (Russian Academy of Sciences), said the Daryal-type radar at Gabala was the most powerful installation in its class.
He said it was commissioned in 1985 and would not become obsolete by 2012. According to Dvorkin, the decision to build a Voronezh-type radar near Armavir in the North Caucasus was politically motivated, because the four early-warning radars were located abroad.
Dvorkin said the Gabala radar was incompatible with U.S. missile-defense systems, and Washington would not overhaul it.
The United States has decided to transfer its radar from Kwajalein Atoll in the Pacific Ocean to the Czech Republic, and to use it to guide missile interceptors in Poland to their targets.
He said neither the Gabala nor the Voronezh radars are able to provide target-acquisition data.
Major General Alexander Vladimirov, vice president of the Military Experts Board, explained Washington's reluctance to accept the Russian proposal by pointing out that the Gabala radar is able to scan a vast 8,000-kilometer (5,000-mile) arc, from Canada to China, but cannot "see" Russia.
He said that is the reason the United States wants to deploy its radar and missile interceptors in Eastern Europe.
Another early-warning radar, under construction in the Krasnodar Territory (southern Russia), will only be able to monitor foreign missile launches.
Gazeta
Russians' access to European Human Rights Court to be restricted
Valery Zorkin, chairman of Russia's Constitutional Court, has come up with an initiative to amend legislation making it harder for Russians to appeal to the European Court of Human Rights (ECHR).
Experts explain the initiative by saying that complaints from Russia have been growing in number from year to year, and that the rulings do not always suit the Kremlin.
"It must be laid down that a person may not go to the European Court until he or she has run through all the levels of judicial defense in the country," Zorkin said.
Nine years ago, the European Court said Russia's judicial review system was ineffective and agreed to accept Russian claims that did not pass through every stage of appeal in their home country.
Today, Russian citizens are entitled to appeal to the ECHR without waiting for a Russian Supreme Court decision, even if they were turned down by republican, regional or even district courts.
In December of last year, the State Duma derailed a reform of the European Court that would have expedited the examination of cases by refusing to sign Protocol No. 14 to the European Convention. Russia was the only country not to approve the document.
Moscow has been particularly vexed by a series of losses involving claims on Chechnya, which are just now beginning to reach the European Court.
"Chechen affairs have come thick and fast, on top of the Khodorkovsky case, to which Strasbourg has given exceptional consideration, and therefore the concern of our Constitution's chief custodian is quite justified," said political expert Alexei Makarkin.
The bar community has said it resents Zorkin's contention. "Our law enforcement and judicial system is outdated," said lawyer Igor Trunov, who is filing a claim with the ECHR on the Nord-West case. "The only real lever against it today is the European Court."
If Zorkin's proposal goes through, the appeal period will be extended by one more year at the very least, because the Russian system abounds in supervisory authorities.
That means not only the Supreme Court, but also the review bodies of the courts of general jurisdiction. Still higher up are their chairmen, whose official replies will also need to be waited for.
Kommersant
More governors asking to be reappointed in run-up to general elections
Since early 2007, President Vladimir Putin has asked regional legislatures to reappoint 12 governors, including seven in the last 30 days.
In December 2007, Russia will elect the State Duma, the lower house of parliament, and the election race is scheduled to begin this August.
Until late August, other governors, primarily those in charge of regions where the pro-government United Russia party expects problems, could ask the president to reappoint them.
In October 2004, United Russia suffered a defeat in regional parliamentary elections in the Sakhalin Region in the Russian Far East and received only 28.5% of the votes during elections to the Kirov Region legislature in the spring of 2006.
In January-June 2007, 17 governors asked to be reappointed because they wanted to prove their commitment to strengthening the national power hierarchy and the new procedure for electing regional leaders.
Experts said the reappointment of numerous governors was linked with the upcoming general elections.
Georgy Chizhov, deputy director of the Institute of Regional Studies, said the governors were now convinced that the Kremlin, which wanted pre-election stability, would not replace anyone.
Regional leaders, who are disliked by Moscow, view this as the only way to be reappointed, because Putin's successor would otherwise find it easy to remove lame duck governors. However, that does not concern governors guilty of violating the law.
Many governors will head United Russia's regional ballots during State Duma elections. However, United Russia could make a poor showing because it faces increasingly tougher competition from the Just Russia party.
Nevertheless, not a single governor has been sacked to date for failing to ensure United Russia's victory.
Stavropol Governor Alexander Chernogorov, who was expelled from United Russia in March for losing out to Just Russia in regional legislature elections, kept his job.
It appears that many of the 16 regional governors elected by universal suffrage will ask the President to reappoint them before December.
Vedomosti
Vneshtorgbank touting 5% EADS stake
Vneshtorgbank is getting ready to sell the 5% stake in the European Aeronautic Defense and Space Company (EADS) it bought last summer. It is looking for a purchaser and waiting for the price to go up.
The bank had hoped for a seat on the board of directors, but was refused. The EADS shareholders' pact gives management rights only to shareholders that represent the French and German governments.
"Now, Vneshtorgbank is waiting for higher quotations," one of the analysts believes. "We will sell when we feel we can make a good profit on the deal," bank president Andrei Kostin said at the end of June.
According to Deutsche UFG analyst Mikhail Shlemov, the deal is most likely to be concluded in the third or fourth quarter of 2007.
"I have a feeling the sale will not be pulled off so quickly - as early as the end of the year," said Svetlana Kovalskaya, an analyst with Renaissance Capital.
"Currently, Vneshtorgbank's share in EADS is 2% to 3% below the price it paid for it," Troika Dialog experts said in their report on a meeting between Vneshtorgbank's management and analysts of brokerages.
When Vneshtorgbank bought the EADS stock last summer, the price was not disclosed.
In March-April 2006, the shares traded at 34.5 euros to 35 euros, dropping to 20 euros in the summer.
Vneshtorgbank's 2006 report booked the EADS stake at $1.4 billion, and the report for the first quarter of 2007, at $1.26 billion. Since the end of the first quarter, their price has risen by almost 5% - from 23.2 euros to 24.3 euros.
"The bank's management has reported that it already has several proposals from abroad and inside Russia," one of the analysts said.
Last week, the Global Strategic Equities Fund, a Dubai Holdings division, announced it had bought a 3.2% stake in EADS at a market price of $836 million.
"If the Russian government still entertains the hope of getting management rights in EADS, it can recommend to Vneshtorgbank a structure close to the government," one of the analysts said, listing the United Aircraft Building Corporation (UABC), state banks, and loyal oligarchs.
The UABC declined to comment. "The price of the stake is about $1.5 billion. We will benefit more if we invest the money in the development of Russian aircraft building," said a source close to the UABC. "Joint projects with EADS are unaffected - they are successfully developing without it."
Vadim Vlasov, head of the EADS representative office in Russia, agrees.
Business & Financial Markets
Vedomosti
Nissan unveils models to be produced in Russia
On Sunday, a stone-laying ceremony for a new Nissan plant took place outside St. Petersburg.
For the first time, the company named the models it plans to manufacture in Russia - the up-market Teana sedan and the X-Trail sports utility vehicle.
It is no easy thing to lower the production costs of low-priced cars in Russia, so auto giants seek to occupy the niche of more expensive models, experts said.
Investments in the first stage will total about $200 million. The plant is expected to go on-stream in the fall of 2008, and its starting capacity will be 50,000 vehicles. The first Nissan cars of Russian manufacture will appear on the roads in early 2009.
Neither the Teana nor the X-Trail is a mass-produced car, said Yevgeny Shago, an analyst with Trust Bank.
Demand for the sedans, in his view, will not be more than 10,000 to 15,000 units, and for the X-Trails, about 20,000 a year. The X-Trail has better prospects in Russia, considering that it will be the latest model, said Shago.
According to Carlos Tavares, Nissan Motor Co. senior executive vice president, who was present at the ceremony, more than 6,000 Nissan Teana cars have been sold in Russia since June of last year, when sales started.
Sales of the Toyota Camry, Nissan's Teana main rival, reached almost 12,000 units in the first half of 2007 by comparison.
However, the Russia-made Teana has a chance of becoming the most affordable business-class car, said Shago.
In addition, the company profits nicely from selling luxury cars, since the mark-up is higher than on mass-produced cars, said Maxim Ivanov, an analyst with the Tsentrinvestgroup brokerage.
Manufacturers that build plants in Russia want to get a foothold in those sectors where they can make the most out of every car sold, said Yevgeny Bogdanov, head of engineering and transport for Russia and the CIS at A.T.Kearney.
"The production costs of mass-produced cars can be cut back only insignificantly. It is more profitable to export them from, for example, Korea," the expert said.
However, companies wishing to make expensive cars in Russia run a risk - to find sites for their production is more difficult than for cheaper models, Bogdanov said.
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