MOSCOW, October 26 (RIA Novosti) Putin's era will continue - political analyst / Natural Resources Ministry threatens to sue Sakhalin Energy / International Paper will give Ilim Pulp global standing / Russia to sell 200 rocket engines to India / Russia launches online trade in unmounted diamonds
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Izvestia, Gazeta
Putin's era will continue - political analyst
President Vladimir Putin's annual televised question-and-answer session was in the trademark style of the incumbent president and the highest form of today's Russian democracy. "Putin's era will continue," concluded after the broadcast Vyacheslav Nikonov, president of the Politika think tank.
Yesterday's interview gave, surprisingly, an answer to the question so important for many Russians. "I hope that even after leaving my post and losing the levers of presidential power, I will be able to preserve the trust of the nation, which is a thing that any politician should nurture."
"Putin is vigorous, he says he likes his job, he looks ahead and is planning his life in the next decade," Nikonov said. "It was reiterated that a president cannot hold his position for more than two consecutive terms. The word "consecutive" was not said accidentally."
The political analyst believes Putin "does not reject the possibility of running for the presidency after a [four-year] break. Thanks to the level of trust he has built, Putin will remain an influential political player even after 2008. It means that he will try to influence Russian politics while retaining his electoral resource. The key question is how."
The question is not particularly crucial for Dmitry Oreshkin, head of the Mercator research group: "It is evident that Putin is going to stay at the highest level, and the ways of achieving this are not important."
But he is concerned with something else: "We were shown that all bodies of power, except the president, are absolutely unnecessary. Who needs the millions of officials standing between the nation and the head of state? The reason why the president is asked a million questions is the lack of real tools to tackle these issues locally. It means the state apparatus, which is overlooked by the head of the executive power, is inefficient."
Vedomosti
Natural Resources Ministry threatens to sue Sakhalin Energy
On Wednesday, Russia's Natural Resources Minister Yury Trutnev called the work of Sakhalin 2 project operator, Sakhalin Energy, "outrageous," and said its violations were covered by five Criminal Code statues and that all materials must be submitted to the Prosecutor-General's Office within two weeks.
Trutnev analyzed preliminary results of the Sakhalin 2 project's environmental check in Russia's Far East Wednesday and extended inspections until late November.
Russia's environmental watchdog, the Federal Service for the Oversight of Natural Resources, launched investigations into Sakhalin 2 in September and exposed several violations. The service's deputy chief, Oleg Mitvol, said Sakhalin Energy had caused $50 billion worth of damage to the environment.
Environmental watchdog officials said Sakhalin Energy did not want to cooperate with inspectors and had not responded to numerous inquiries.
Sakhalin Energy vice president for corporate affairs Igor Ignatyev said the company had not yet been notified about a comprehensive check and the environment service was ignoring its requests.
He denied many alleged violations and said all pipeline route changes had been coordinated with authorities.
However Sakhalin Energy CEO Ian Craig said Wednesday after talks with Trutnev that the company had admitted its mistakes and was ready to correct them, but that he doubted specific estimates.
Mikhail Subbotin, head of the independent Russian SRP-Ekspertiza (PSA Agreements Expert Assessment) agency, said PSAs did not list environmental fines among reimbursable expenses.
He wondered why the environmental watchdog and the Natural Resources Ministry were making sensational statements about possible environmental damage while the check was still in progress.
"This tarnishes the reputation of investors, who can file business lawsuits," Subbotin told the paper.
Gazeta.ru
International Paper will give Ilim Pulp global standing
Ilim Pulp, a major Russian timber producer, is unlikely to hold an IPO - it has found an enviable strategic investor. A pulp and paper multinational, International Paper, is buying 50% of Ilim and will invest $1.2 billion in its modernization. Experts think this deal will consolidate the partners' lead in the Russian market.
The joint venture will be set up by IP purchasing 50% of shares of the Swiss-registered Ilim Holding company, which owns more than 90% of the pulp and paper assets of Ilim Pulp (Kotlas pulp and paper works, Bratsk pulp and paperboard plant and Ust Ilim timber industrial plant), and also a controlling stake in the St. Petersburg paperboard and printing factory.
The plants belonging to Ilim Holding are being consolidated in the Ilim Group, which will be administered by a board of eight directors - four from each side. Ilim Group will become a joint venture.
The exact size of the deal is not being revealed, but considering that both sides acknowledged Ilim Holding's evaluation at $1.3 billion as fair, the purchase of a 50% stake in the company will cost IP at least $650 million.
Zakhar Smushkin, board chairman and one of the main Ilim Pulp owners, said investments of such a size ($1.2 billion) are unprecedented for the Russian timber industry, and although the investment program is set for five years, the partners plan to carry it out in three.
He also recalled a directive by Vladimir Putin, who earlier urged reduction of un-processed timber exports and increasing the value-added exports.
Analysts, however, think Ilim Pulp's interest in the merger is due not so much to a desire to please the authorities as to advantages for its business.
"Every businessman in Russia would like to have such a strategic investor," said Alexei Bogatyryov, managing partner of Lesprom Industry Consulting.
"Such a partnership means wide access to the latest technologies and vast financial opportunities, which are now opening up before Ilim Pulp. Investments in the pulp and paper industry are capital-intensive, and it would be problematic for Ilim Pulp to make them alone," Bogatyryov said.
Kommersant
Russia to sell 200 rocket engines to India
Russia and India have signed a $100 million contract on the sale of 200 small rocket engines from Rybinsk-based engine-maker NPO Saturn in 2007. New Delhi is to receive engine production licenses from Russia in the future.
The engines will be installed on India's Lakshya drones.
However, the contract may never be fulfilled because Moscow does not want to violate the missile technology control regime.
NPO Saturn commercial director Vasily Danilov said the first 12-month contract with India had been signed in April. "We are now implementing R&D projects on Indian orders," Danilov told the paper.
Igor Grigoryev, deputy NPO Saturn commercial director for foreign-economic operations, said the TRDD-50-MT engine, which had been developed for Russian cruise missiles, will be used to make upgraded rocket engines for India.
The new engines will operate for several dozen hours, rather than 45 minutes.
Although the contract envisions no technology transfers to India, such transfers are possible in the future.
Danilov said his company's partners had stipulated possible engine production in India. "We are still discussing this issue; engine production and testing facilities may be sited in India," he told the paper.
A defense enterprise source said the license contract may cost $250-300 million.
The Federal Service for Military-Technical Cooperation said it perceived no problems during the sale of NPO Saturn engines to India as long as they were used on drones and unmanned spy planes.
Its officials said India may not receive a TRDD-50-MT production license because it wants to develop a medium-range cruise missile on the basis of the Lakshya drone.
This missile falls under the missile technology control regime, the Service's officials said off the record.
Defense industry experts said the missile technology control regime was detrimental to Russia.
"We must find a way of withdrawing from this regime," said Konstantin Makiyenko, deputy director of the Center for Analysis of Strategies and Technologies.
He said Russian producers were sustaining serious losses due to this regime, but its abolition may aggravate political relations with the United States.
Biznes
Russia launches online trade in unmounted diamonds
Russia's largest diamond producer, Smolensk-based Kristall, has opened an online store for wholesale and retail trade in unmounted gems. So far, Russia has sold only ready jewelry for individuals online. Apparently, Kristall is trying to attract buyers to Russian diamonds due to their excessive supply abroad, experts told the paper.
"There is a growing interest in pure stones in Russia on the part of people who want to invest in diamonds or to have a piece of jewelry made to their own design," said Kristall's spokesman Nikolai Zhuravlev.
"Because of this demand, we have set up an online store that will sell unmounted diamonds of different sizes, forms and colors for both wholesale and retail buyers. You can place an order online, and it will be delivered by a special service with guards."
The company has its own retail chain, Smolenskiye Brillianty, which sells jewelry, but "an online store is a more convenient form of cooperation with wholesale buyers, private jewelers and jewelry companies," Zhuravlev said. "It is easier and faster for a client to compile a portfolio of stones he is interested in."
This is a promising idea, said Anatoly Sitnikov, CEO of the Moscow Diamond Exchange. "Buyers who can afford expensive diamonds often cannot spare the time to go shopping, and it is easier to buy online," he said. "It is also easy because you can see the supplier's assortment and prices in real time."
Kristall's diamonds are certified and they can be sold remotely, but the store's main clients will be individuals, not jewelry companies, said Viktoria Ivanova, deputy CEO of the Elit plant. "Most jewelry producers buy stones in large batches abroad, so this offer will be of little interest for them," she said.
There is a surplus of diamonds on the global market, and Kristall, launching online sales, hopes to promote Russian stones, said Alexander Chekotin, commercial director with Yuvelirny Teatr. "We have few contacts with this supplier and buy most of our stones abroad," he said. "But if there are attractive offers in terms of prices and assortment, Kristall is quite likely to find buyers among jewelers."
