Nezavisimaya Gazeta
Appointment of Mayors Postponed?
The presidential administration discussed the appointment of mayors yesterday at a session of the interdepartmental working group on federative relations and local governments. The discussion began when one governor suggested expanding the system of appointing regional heads to the cities. Presidential aide Igor Shuvalov stopped the discussion as soon as it began, saying that the president was firmly against amending the constitution.
It also transpired that the idea had been suggested long ago and has been energetically discussed by a narrow circle of the working group, as well as in the Main Legal Department under the president, in the Constitutional Court and "at the top political level," Mr. Shuvalov said. Deputy Mokry, the chairman of the State Duma's local government committee, said it would be impossible to appoint mayors without flouting the constitution. Moreover, the possibility is precluded by "some international documents we have signed, in particular, the European Charter of Local Self-Government."
According to Nezavisimaya Gazeta, the Kremlin has decided to halt the discussion of the appointment of mayors along the lines of the gubernatorial scheme, as it is inadequately substantiated in terms of law. But the issue has not been removed from the agenda altogether; in early October, the State Duma received a legislative initiative from the State Council (parliament) of Bashkortostan, where mayors have long been appointed.
"We will choose a 'soft model,'" said Alexander Ivanchenko, head of the Independent Institute of Elections. "The regional heads will be granted control functions and the right of legislative initiative. There will not be a direct subordination [of mayors] but the authorities will really control the operation of municipal governments. This will put an end to the people's ability to decide issues of local significance at meetings and referendums. This may be a respite before a breakthrough to completing the vertical system of power a year from now."
Vremya Novostei
Russia Makes Another Attempt to Settle Abkhazian Crisis
Moscow is trying to regain the initiative in the settlement of the Abkhazian crisis, which it lost after its candidate's defeat at the presidential elections in the self-proclaimed republic. The former premier, Raul Khadzhimba, and his opponent Sergei Bagapsh, who views himself as the winner, held secret consultations in the Russian capital yesterday, writes Vremya Novostei.
The crisis in the self-proclaimed republic emerged after the Supreme Court of Abkhazia adopted two mutually exclusive decisions early on October 29. First it recognized as legal a Central Election Commission decision on Mr. Bagapsh's victory, but a few hours later it ruled that the elections were invalid and instructed the republic's CEC to hold a new election within two months.
Even the two candidates' teams wondered which structures invited Mr. Bagapsh and Mr. Khadzhimba to Moscow. The former's election staff hopes that the Moscow meetings will help to stabilize the situation in Abkhazia. The visit will presumably show if Moscow has changed its position in favor of Mr. Bagapsh. Mr. Khadzhimba's team also spoke about the desirable contribution of Moscow to the republic's "stabilization."
Russia maintains contacts with Abkhazian politicians not at the working rather than the top political level. Moscow has decided to act as the mediator in the Abkhazian conflict because it believes that an escalation of tension in the republic may be fraught with destabilization, which is not in Russia's interests. According to sources close to the negotiations, Moscow has nothing against Mr. Bagapsh becoming the new president of Abkhazia. Contrary to the general belief, Mr. Khadzhimba did not make a positive impression on Vladimir Putin during their September meeting in Sochi, which was interpreted as the Kremlin's blessing on a Khadzhimba presidency.
Kommersant
China Enters The Fight For Sakhalin Gas With Help Of ExxonMobil
Yesterday, representatives of Gazprom and ExxonMobil announced they intended to cooperate on the Sakhalin-1 project (which Exxon is overseeing). At the same time, ExxonMobil entered negotiations with China National Petroleum Corp. (CNPC) on supplying Sakhalin-1-produced gas to China. Exxon aims to reach an agreement with CNPC to build a natural gas pipeline between Sakhalin and China that would cost as much as $9.4-14.1 billion. Kommersant comments that for Gazprom this project might be an alternative to building a pipeline from western Siberia to China.
Formally, Gazprom does not hold any shares in Sakhalin-1; however, next year it will become the owner of Rosneft's assets through its oil unit, Gazpromneft. Rosneft holds a 20% stake in Sakhalin-1.
Until recently, the participation of Japan's SODECO in the project implied the supply of gas from Sakhalin-1 to Japan either by a pipeline or in liquefied form. However, the project's profitability has raised serious doubts in Japan.
The Sakhalin-1 project's current gas reserves make the construction of an expensive pipeline to China unprofitable. However, gas supplies to the country might become possible in the future - through the existing Sakhalin-Khabarovsk pipeline whose current capacity is still much lower than the potential supply volumes of Sakhalin-1. The expansion of this pipeline along the Khabarovsk-Vladivostok-Kharbin route in the future will not only enable ExxonMobil and Gazprom to enter the Far East gas market, but also to develop other projects on the Sakhalin shelf.
The cost of the future gas pipeline is comparable with the cost of a gas pipeline from Kovykta, which means Gazprom will not have to hurry to develop other gas projects in western Siberia until 2010.
Vedomosti
Russians Spend More On Foreign Cars Than On Domestic Models
This year, Russians will spend, for the first time, more money on foreign cars than domestic models.
For example, according to calculations of the Unified Financial Group (UFG), customers will spend $4.8 billion on imported cars and an additional $2 billion on foreign models assembled in Russia, Vedomosti reports.
Russian carmakers, though, will make only $4.3 billion on sales of domestic models, claims UFG analyst Yelena Sakhnova. In her opinion, the Russian car industry has three major problems: low quality compared to foreign makes, a lack of new models and constantly growing prices, which at present are already comparable with those for cheap foreign cars.
Car dealers present even higher numbers. According to Sergei Alekseychuk, the vice president of the Russian Car Dealers Association, this year Russians have already spent $6 billion on foreign cars and more than $4 billion on domestic models. This represents an 80% increase in sales of foreign makes and a 5-10% increase in sales of domestic models.
Analysts from the Togliatti-based agency Lada-on-Line report that domestic manufacturers increase their profits by pushing up car prices rather than by increasing sales volumes. Dmitry Ivashchenko, director of Ford Motor dealership development in Russia, believes that the sales volumes of domestic models will remain the same in the near future, while the domestic car market, which is expected to double, will be taken over by foreign manufacturers. However, it will take foreign makes another seven years to catch up with domestic models in terms of sales volumes - only by 2010 will about 800,000-1,000,000 foreign cars be sold a year in Russia.
Russian-made cars first lost their dominance of the domestic market to foreign makes in 2002. In that year, Russians spent $3.2 billion on second-hand foreign makes compared with $3 billion on buying domestic models.
Finansovye Izvestia
Moscow high street - one of the most expensive in the world
Analysts at the Cushman & Wakefield Healey & Baker international agency have compiled a table of the most expensive streets in the world, which includes Moscow's Tverskaya Street in seventh place, ahead of Tokyo's Ginza, streets in Beverly Hills, and also the up-market areas of Sydney, Toronto and Montreal. According to the agency, rent rates in Tverskaya have soared by 40% since last year.
This summer, Finansovye Izvestia continues, Moscow featured in another world rating when analysts at Mercer Human Resource Consulting claimed the Russian capital was the second most expensive city in the world. A year before then, Cushman & Wakefield Healey & Baker researchers included Moscow in the top five cities in terms of office rent.
This time, experts evaluated commercial estate rents in the most animated streets of the world's capitals. They compared average annual commercial rents per square meter. Moscow was in seventh place ahead of Pitt Street in Sydney ($3,449 per square meter) and right after Kaufingerstrasse in Munich ($3,577). According to international experts, it costs $3,500 to rent one square meter on Russia's main street, which is an unrivaled record high figure for the country.
Interestingly, commercial renting in Rodeo Drive, Beverly Hills, would cost nearly 20% less - $2,950 per square meter. Commercial rents in Union Square in San Francisco are even lower - $2,691 per square meter.
European streets, too, have proved to be fairly expensive. On the whole, commercial rent in 2004 went up by an average of 4.6% worldwide.
