MOSCOW, May 4 (RIA Novosti) Rival groups within the Kremlin/ State plants involved in piracy/ New audit cuts Alrosa valuation/ Transeft to become diversified holding/ Russian analysts less optimistic than Goldman Sachs/ Russians prefer one source of news: state television
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Moskovsky Komsomolets
Parity between rival groups in Kremlin impossible - political expert
The state of the nation address, which President Vladimir Putin is to deliver to parliament on May 10, should become his main ideological document, the testament binding for his potential successor. The Kremlin groups are trying to become co-authors of this document because the prize could be victory in the 2008 presidential elections.
Putin had planned to deliver the address in April, but work on the text is taking too long, in part because of differences among members of his team. In particular, chief of the Kremlin staff Sergei Sobyanin, who is involved in his first annual address, is dissatisfied with the theses prepared by liberal economists and experts.
The annual addresses are mostly formal documents consisting of generally correct theses that do not provoke any questions. But this year the address is expected to be highly ideological. Deputy chief of the Kremlin staff Vladislav Surkov has promised an embracing document that will become "a stability code" to be respected and maintained by the potential successor.
The 2008 presidential elections may provoke political discord because the next president's ratings might not be as high as those of Putin, which cannot be passed to his successor.
Keeping up parity among the elite groups is one of the priority tasks of the outgoing president. But political scientist Alexei Zudin said parity could not be maintained.
"The rival Kremlin groups - the security-related officials and the 'lawyers' - are appealing to Putin, who maintains the balance as the decision-making center," he said. "There is a growing probability that a representative of one of the above two groups will be the next president. And this will disrupt the balance."
Biznes
Dozens of state plants engaged in piracy
American associations of video, audio, software and medication producers insist that Russian plants producing pirated goods be closed. But this demand could prove unachievable, as a lion's share of the fakes comes from facilities where access is restricted even for law enforcement officers.
According to Igor Pozhitkov, regional director for Russia and the CIS at the International Federation of the Phonographic Industry, as many as 1,100 items of pirated products from 25 Russian plants were found in almost 30 countries in 2005. On January 1, 2005, Russia had 34 plants producing optical media. On May 1, 2006, this number had already risen to 50. In 2002-2005 Russian law-enforcement bodies carried out 39 operations and confiscated over 7.5 million music CDs and DVDs. Yet only in five cases were defendants found guilty and given suspended sentences, whereas the charges were dismissed in 12 cases and confiscated items were returned to the producer in three others.
The main demand of the U.S. business associations - to close the plants - is unlikely to be met. A lion's share of the fakes are produced on 42 state-owned plants, most of which are restricted access facilities even for the police. "During the day these plants manufacture legal goods, and at night they work for the black market," said Alexei Portansky, director of the news bureau on Russia's accession to the World Trade Organization.
But Russian officials are upbeat about the talks on Russia's WTO accession and experts share their opinion. "The United States understands that it is impossible to eliminate piracy completely," said Anatoly Martynov, director general of the Center of Trade Policy and Law. "They also have similar underground manufacturing, and China has the same problems."
Kommersant
Re-audit cuts diamond producer value
Russian diamond monopoly Alrosa, which is effectively in the process of transfer to majority federal ownership, could be finally valued at $6.1 billion, after it accepted a re-audit by the Moscow-based Center for Professional Appraisal.
Six months ago, Alrosa failed to approve the first audit ordered by the Federal Agency for the Management of Federal Property, because its result, $300 million higher than the new figure, raised suspicions of overvaluation, which reached Vyacheslav Shtyrov, the president of the Siberian republic of Yakutia (Sakha), where Alrosa mainly operates. He claimed the diamond producer had been overvalued by at least $1.5 billion.
The new audit based on income-oriented methodology has probably discounted long-term investment and accounted more accurately for exploration and underground construction costs for years to come.
Yakutia has yet to finalize the appraisal of PNO Yakutalmaz, a state company that gave birth to Alrosa in the 1990s and is still its core production unit. Under current plans, after the complete appraisal the regional and central governments, who currently hold 32% and 37% in Alrosa, respectively, are to agree on an additional issue of shares. Moscow is expected to walk away from the deal with 50% plus one share, leaving 40% to the regional government.
The possibility of a smooth solution comes in the wake of legal action taken last Friday by the Federal Property Management Agency against Yakutia over Yakutalmaz assets, and the apparent completion of an aggressive buyout of minority holders' shares by state-controlled Vneshtorgbank and its agent MAK Bank. What has turned out to be a solid 10% stake (already consolidating the Moscow-controlled assets to 47%) was reportedly bought for 338,000 rubles ($12,380) per share, a bargain compared with what the audits suggest.
Vremya Novostei
Transneft to become diversified transportation holding
State-owned pipeline monopolist Transneft may be transformed into a diversified transportation holding. State officials are considering the integration of state hydrocarbon and petrochemicals transportation assets.
Transneft is to take over a stake in Transnefteproduct (100% owned by the state), the Caspian Pipeline Consortium (CPC, 24%), and companies whose business had never been associated with Transneft: 100% state-owned SG-Trans (LNG transportation and storage) and a 20% stake in Volgotanker, which last year carried about a third of the country's petrochemicals exported by river.
Sources in the Kremlin and the government confirmed the plan existed but differed over details. One of them doubted that SG-Trans would be involved, and the other was not sure that a stake in the CPC would be handed over to Transneft.
Sergei Nikitayev, who had been deputy head of the Federal Agency for Railroads, became the director general of SG-Trans three weeks ago. The company is on the 2006 privatization list and is preliminary valued at $800 million.
Only recently officials suggested turning over the state-held package in the CPC to Transneft. The CPC crude pipeline system was built by the governments of Russia, Kazakhstan and Oman and several private oil companies to transport Kazakh and Russian crude from Tengiz (Kazakhstan) to Novorossiisk (Russia) on the Black Sea.
However, the company's new director general does not represent Transneft. Vladimir Razdukhov was deputy director general of Zarubezhneft, which does not even have a stake in the project. This encouraged some ministerial spokesmen to say off record that the idea of turning over the CPC stake to Transneft had been buried.
Novye Izvestia
Russian analysts disagree with Goldman Sachs on Russia's outlook
Russian analysts have reacted cautiously to a bright outlook for Russia's economic development by 2027 published by Goldman Sachs.
The U.S. investment bank based its forecast on Russia's might as an energy superpower. Its experts project that the Russian economy will grow quicker than European countries' thanks to the oil and gas sector, and in 20 years Russian GDP will be bigger than in Germany.
If the current dynamics continue, Russia has a fairly good chance of becoming the leader in Europe, said Oleg Solntsev, leading expert with the Center of Macroeconomic Analysis and Short-Term Forecasts. However, growth is most likely to slow, he said. The effect of the 1998 ruble devaluation is fading, and the country cannot boost exports fast.
"Goldman Sachs is known for its optimism about the Russian economy," said financial analyst Olga Belenkaya. However, the expert said it would be incorrect to offer exact forecasts for such a long term, as you cannot take into account "the volatility of oil prices and political changes both in Russia and in the world."
The country's development is hindered by other factors as well, such as depreciation of production facilities, which at present stands at over 50%, she said.
"It is very difficult to sustain a high growth pace in these conditions. A solution may be to diversify the economy and invest large sums in technology and production."
Unless this is done, the domestic market will not come to the country's salvation: it will be seized by foreigners, as Russian producers are not competitive enough, Belenkaya warned.
Vedomosti
For Russia, two TV channels seem one too many
Most Russians seek news through one source only. State-run television's Channel 1 is the dominating newsfeed for many, according to a survey of 1,000 Russian respondents conducted by Russian research agency CESSI and ordered by London-based consultancy GlobeScan.
Experts put this down to state monopoly in the media sector and lack of alternative sources of information.
As 58% of respondents indicated they trusted the media, compared with 54% who trust the authorities, said Leonid Sedov, an expert with respected Russian pollster Levada Center. He explained this as being down to a habit inherited from the strong role the media used to play in the Soviet Union.
However, the media are losing trust, he warned, from 28% of respondents saying they trusted the media completely in 2001 to 22% this year.
"The all-is-well talk on TV is in contrast with high inflation, low wages, and struggling reforms in real life," said Manana Aslamazyan, the chief executive of media agency Internews Russia.
Channel 1 leads the public trust ranking with 36%, and national channels NTV and Rossiya share a distant second place with 16% and 15%, respectively. Only 9% of Russians trust international media. Half of the respondents said they preferred to receive news from one source, a higher proportion than in most other countries.
Sedov said television was important because there was a paucity of other quality information services like printed or online media. Aslamazyan said people were uninterested in the news and unlikely to seek new sources of information because they were fed up with politics.
Political expert Boris Makarenko described the findings as favorable for the authorities, because the current level of trust in the government and government-controlled media was high enough for painful reforms to be pushed through.
The opposition, meanwhile, should concentrate on staying on air to win hearts and minds - a task that has so far proved out of reach - rather than counting the number of people in their ranks, Makarenko said.
