What the Russian papers say


MOSCOW, February 5 (RIA Novosti) Election commission spots 'orange revolutionaries' among international observers/ Russian Navy not in condition to fight pirates/ British Alumni Club defends British Council/ Russia reluctant for another gas war before presidential elections - expert/ Norilsk Nickel spurns the idea of Energo-Polyus


Election commission spots 'orange revolutionaries' among international observers

The Russian Central Election Commission's negotiations with OSCE's Office for Democratic Institutions and Human Rights (ODIHR) have gone up a blind alley after the commission spotted some "orange revolutionaries" among ODIHR monitors who were due to participate in the observer mission at the March 2 presidential vote.
Sources in Russia's Foreign Ministry told Kommersant that CEC head Vladimir Churov had consulted the ministry about the proposed European observers. Having analyzed a list of 15 observers' names, the ministry pointed out those who participated in the OSCE mission during Ukrainian presidential elections and had made relatively harsh statements there, for example, American observer Beata Rozumilowicz.
Churov, who doesn't want a long-term OSCE mission here, can certainly count on the support of Russian parliamentary parties in this issue.
Liberal-Democratic faction leader Igor Lebedev said he fully agreed with the CEC's standpoint: "It is for us to decide whom we invite, how many, when, and for how long."
"They shouldn't be having moods, but just fly in here," said Communist leader Gennady Zyuganov. "We have submitted an application with the Council of Europe, haven't we, sent them convincing evidence of how the Communists were robbed of their votes at 56,000 out of the 94,000 polling stations during the 2003 Duma elections. They should have considered our application in the European Court by now and given us a clear answer how it happened! Why haven't they? And now they don't like the timeframe!" the presidential candidate raged.
"Neither Russia, nor the ODIHR want this mission to come to Russia," said Fyodor Lukyanov, editor-in-chief of the Russia in Global Affairs magazine. "The ODIHR is perfectly aware that in advanced totalitarian regimes the voting procedure is usually up to the line, and there should be no large-scale fraud on the polling day. As for other aspects, they wouldn't be allowed to asses them anyway. Russia, in turn, is stepping up tensions because it does not want to recognize the ODIHR as the sole judge of legitimacy on the face of it."

Nezavisimaya Gazeta

Russian Navy not in condition to fight pirates

More frequent pirate attacks on Russian ships have given rise to statements that the Navy must resume its presence in the World's Oceans, particularly in major fishing areas, and must also patrol the main seaways.
Captain First Class Igor Dygalo, Aide to the Russian Navy's Commander-in-Chief, said a permanent naval presence in the World's Oceans was essential. His statement suggests that the government will now finance all navy programs because it would otherwise be impossible to fight piracy.
However, the Russian Navy is still unable to set up an ocean patrol because its aircraft carriers, cruisers and strategic bombers are ineffective against Malaysian or Somalian pirates. And instead it needs high-speed boats and hydrofoils with rapid-fire weapons, and such craft have not been part of the fleet for a long time. Moreover, up-to-date battle-control systems are lacking.
Deployment is another problem because Russia does not have any naval bases near the Molucca or Bab-El-Mandeb Straits; nor will such bases appear in the foreseeable future.
Many Russian merchant ships are privately owned, have multinational crews and sail under foreign flags. Consequently, it is unclear whether the Russian Navy should protect them on a commercial basis.


British Alumni Club defends British Council

A group of 156 members from the British Alumni Club have asked President Vladimir Putin and Foreign Minister Sergei Lavrov to reopen the British Council's regional branches.
The group comprises bank officials, including from VTB and Rosbank, heads of business associations, TV and editorial journalists, and university lecturers.
The British-educated Russians write that culture and education, as well as the interests of Russians, must not be made hostage to differences in Russian-British relations. The appeal says the council helped 1.25 million Russians last year.
The petition was sent by e-mail and registered mail.
The British Alumni Club was set up by the British Council Russia and the British Embassy in 1998 as an exclusive networking forum for Russian professionals. It has around 1,700 members.
One of the signatories, Christina Mogillar, a consultant and entrepreneur who graduated from the University of Wolverhampton in 2000, said the idea originated at the end of last year, when the Russian Foreign Ministry ordered the British Council, which acts as the British Embassy's cultural arm, to close its offices in St. Petersburg and Yekaterinburg on January 1 because they were operating illegally.
Mogillar said the council and the embassy were not party to the initiative. Many more people had signed the petition, but not all the names were left on the final list, she said.
Dmitry Vechkanov, a top manager at Rosbank, said: "I support the British Council, a charitable organization, which gives people the chance to get quality education." He said his name was not on the list because of a technical malfunction.
Moscow bank managers Yulia Ostroukhova and Pavel Busygin, and Sergei Makedonsky, director general of the in4media.ru consulting agency, confirmed they had signed the petition.
Andrei Shilov, NTV's Berlin correspondent, said he signed the petition because he had personally benefitted from the council's operation. He said he was surprised that fewer people had signed the petition than had studied.
He added that he was not speaking on behalf of his company.
Svetlana Ganushkina, head of Civil Assistance, a regional non-profit public organization of aid for refugees and forced settlers, said the appeal would be useless unless some of the signatories have connections in the top echelons of power.


Russia reluctant for another gas war before presidential elections - expert

Kazakhstan has raised gas transit prices and Russian gas monopoly Gazprom does not want to disclose details of the Russian-Kazakh agreements. The price rise will affect mostly Ukraine, but the Russian government has no intention of starting another gas war with its neighbors before the presidential elections.
On February 4, the Kazakh side announced the rise in tariffs from $1.1 to $1.4 per 1,000 cu m/100km starting January 1.
Analysts say Gazprom will not suffer any sizeable losses from the tariff rise as Russia is not the country that will pay for it. Gazprom supplies a blend of Russian and Central Asian gas to Ukraine, and its price is set taking into account gas transportation costs via neighboring countries, says Timur Khairullin, an expert at the Atlanta Capital investment company.
"Probably, from the second half of 2008 gas price agreements with Ukraine will be upwardly revised," he added.
He recalled that the average price for Russian gas transit in Europe was $2-$3 per 1,000 cu m/100 km.
Experts think Gazprom will do its best not to initiate price rises.
"The Russian government is trying to minimize tensions in international relations prior to the election, in particular, to diffuse potential conflicts in gas relations between Russia, Ukraine and Belarus, or even remove the most acute problems from the field of information," says Dmitry Abzalov, an expert from the Center of Current Political Studies.
"For this reason, Gazprom has not announced a rise in Kazakh tariffs so as not to annoy Ukraine once again and strain the far from simple relations between our two countries," the expert says.
Prior to the Russian elections, Gazprom is trying to maintain good relations with the Ukrainian side, so as not to disturb the Russian electorate further," Abzalov explains. "This is why the [Russian gas] monopoly has agreed to rather low prices for Ukraine despite the fact that Turkmenistan, Kazakhstan and Uzbekistan have raised their gas prices."
The expert is convinced that later Gazprom will try to get back its lost profits for political reasons. "By the end of the year, we can expect very difficult talks with Ukraine and Belarus," he says.

Business & Financial Markets, Kommersant

Norilsk Nickel spurns the idea of Energo-Polyus

Yesterday Russian mining giant Norilsk Nickel's board of directors approved the sale of non-core power assets worth a total of $7 billion. Analysts gave the move a thumbs up, although the deal may prove unprofitable.
An earlier plan was to spin off these assets as a separate company called Energo- Polyus to go under the control of Mikhail Prokhorov as part of a business split. But later Onexim Group withheld its backing for the power business.
Alexander Kornilov, an Alfa Bank analyst, said: "A power holding with such disparate assets would not have been attractive. Besides, the mining company had no coherent development strategy."
Vladimir Popov, an analyst with Entente Capital, said: "The power assets were the stumbling block for NorNickel's majority holders. The decision to sell them makes it clear the basic shareholders have found common ground and are now sticking to a single development policy."
Also yesterday approval was given to a deal to sell 1.72% of OGK-5 shares in a buy-out bid by Italy's Enel. NorNickel is selling this asset for $106 million, which, in the estimate of Semyon Birg, an Alfa Capital brokerage analyst, is 7.5% higher than the market value. The only non-selling company left is Taimyrenergo, which supplies power to the Norilsk industrial area.
NorNickel's management could not say if it would sell its power assets as one package or individually.
Dmitry Usanov, NorNickel's director for investors' relations, said: "We will consider all options and choose the best."
As seen by Vasily Sapozhnikov, of Otkrytie brokerage, NorNickel's power assets total $6.6 billion, although the company itself estimates them at $7 billion.
Dmitry Skvortsov, a Bank of Moscow analyst, believed that the securities were worth less than $6 billion, saying prices slipped 28% since NorNickel made the original purchase. He said NorNickel would get the desired sum only by selling assets piecemeal.
Kornilov said: "NorNickel paid $4 billion for OGK-3, with $570 per kW, although now the market puts the company value considerably lower."
But Popov said the market situation would improve by the middle of the year and perhaps NorNickel would realize its stakes in the power companies without a discount.


Russia, Venezuela may sign $1.4 bln contract for three subs in April

Russia and Venezuela are at the final stage of talks on a deal to sell three Kilo-Class Project 636 submarines to Venezuela's Navy, which could be clinched in April. The Project 636 submarine is designed for anti-submarine warfare and anti-surface-ship warfare, and also for general reconnaissance and patrol missions. It is considered to be one of the quietest diesel submarines in the world.

The paper quoted a Russian government agency official as saying that the $1.4 bln contract was agreed in principle last December and could be signed during President Hugo Chavez's visit to Russia in April, while delivery could start before the end of the year.

It said the Venezuelans originally planned to buy state-of-the-art Amur submarines, but Russia persuaded them to opt for an older project, saying that some of the Amur's systems were still being tested. Dmitry Vasilyev, an expert with the Moscow based Center for Strategic and Technological Studies, said Russia may have agreed to install powerful anti-submarine Club missiles to compensate for its refusal to sell Caracas the Amur submarines.

The official said it was unclear which shipyard would get the contract. The Russian Kilo Class submarine, designed by the St. Petersburg-based Rubin Central Design Bureau, entered service in the early 1980s.

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