MOSCOW, October 12 (RIA Novosti) Paris remains Moscow's key partner / State Duma moves to ban referendums on all issues / Russia's external oil routes to get more flexible / Elecricite de France may buy blocking stake in Inter RAO UES / Russia, India sign major aviation contract
Gazeta.ru
Paris remains Moscow's key partner
Nicolas Sarkozy's first visit to Moscow as French president has prompted some to point out: Sarkozy is not Chirac, so the Kremlin should forget about "axes" and "triangles."
But the eccentric and Americanized style of the new French president should not fool anyone, says a Russian analyst.
Fyodor Lukyanov, chief editor of the English-language quarterly Russia in Global Affairs, said Sarkozy's career shows that he is an ambitious and goal-oriented politician, who chooses the means to attain his goals very pragmatically.
According to the analyst, Vladimir Putin is also a hardened pragmatic and has his own views on national greatness.
The common traits of the two presidents allow us to expect that they will understand each other. This does not mean they will like each other - on the contrary, mutual irritation may grow, Lukyanov said. But finding solutions often depends not on mutual sympathy, but on a correct understanding of the partner.
Under Jacques Chirac, Paris became closer to Moscow and Berlin, but the possibility of the triangle frightened France's partners in the European Union, the analyst said. The split, provoked by differences over the Iraq war, deepened when Central and East European countries were admitted to the EU. Chirac angered them by ordering them to keep silent when big boys talk.
Two of the three pillars of France's Euro-Atlantic balance - relations with the United States, internal EU policy, and special ties with Russia - sagged, disrupting the balance, Lukyanov said.
Sarkozy's goal is to restore that balance, which is why he is steering closer to the Untied States while paying more attention to the "new" Europe (new members of the EU).
This would have been bad news for the Kremlin, if not for Sarkozy's goal of restoring the balance, which means that he will need to strengthen relations with Russia. Moreover, the closer Paris leans toward the Untied States, the more it will need to balance the process by promoting relations with Moscow.
According to Lukyanov, the belief that Russia is a key element of European stability has been a fundamental principle of France's policy for 15 years, irrespective of who governs Russia - a tsar, a general secretary, or a president.
The Kremlin should abandon the illusion that it can win over Paris completely, because this does not suit France's political principles, the analyst said. Yet Moscow can still hope to gain its support in more complicated geopolitical and geoeconomic structures.
Vedomosti
State Duma moves to ban referendums on all issues
Members of the pro-Kremlin United Russia parliamentary party have proposed to make the referendums a "dormant" practice, which on paper are possible, but which cannot actually be held on any issue.
The authors of the amendments adopted by the State Duma in the first reading on Thursday want to ban bringing to referendums any issues that are under the sole competence of the government, such as the federal budget, taxes and duties, government bond issues, changes in the government's financial liabilities, state regulation, the issuance of currency, international treaties, the status and protection of the federal border, war and peace.
Under the new law, to hold a referendum, an initiative group will have to apply to the Central Election Commission (CEC) for verification of the organizational part, said Valery Grebennikov, one of the authors of the bill. The CEC will obtain a Supreme Court ruling and will register the group or refuse to do so, depending on what the court says. In the latter case, the group can appeal against the CEC's decision in the Supreme Court. The fact that the Supreme Court will have to hear appeals on its own rulings does not seem to put Grebennikov off in the slightest. "There is nothing above the Supreme Court," he said.
The idea of amending the law came after the Constitutional Court's verdict of March 21, which allowed bringing issues relating to the state's financial liabilities to referendum in case the budget is not revised. The ruling was made upon the Communist Party's application, which had tried to stage a referendum ever since 2005. The CEC then banned it, and the Supreme Court supported that decision.
The Constitutional Court holds a different position. The State Duma's legal department said the issue required further discussion, as Russian law does not mention such a concept as exclusive competence of the government, and therefore can be interpreted rather loosely.
If this bill is passed, referendum as an accepted practice will become senseless, according to CEC member Yevgeny Kolyushin. It will exist on paper but no issue will be ever brought to referendum, because the term "government" embraces the judicial, representative and executive power bodies, i.e. everything except city halls and election commissions, Kolyushin said.
This is an insult to the Constitutional Court and its decisions, according to Communist party secretary Vadim Solovyov. We'll probably have to apply again, he said.
Nezavisimaya Gazeta
Russia's external oil routes to get more flexible
Brussels has supported the idea of the Ukrainian, Lithuanian and Polish presidents, backed by Azerbaijan, to set up a transit route to ship Caspian oil to Europe bypassing Russia. Experts said the project could act as a "positive irritant" for Russia.
The Odessa-Brody oil pipeline is expected to stretch as far as Gdansk in Poland and Mazeikiai in Lithuania. The Mazeikiai refinery will process oil from Azerbaijan, and perhaps Kazakhstan, and then send it on to the European market. As the project expands, refineries in all the participating countries will join in. These countries are Ukraine, Lithuania, Poland, Georgia, and Azerbaijan.
The project is estimated at $1.3 billion and will be financed by European companies. The total length of the pipeline to Gdansk will be almost 1,300 kilometers.
EU spokesman Ferran Tarradellas Espuny, in an interview with Nezavisimaya Gazeta, welcomed the "new transportation route which can increase oil supplies to European countries."
In the opinion of Russian experts, the minimum cost of the pipeline, including its completed Odessa-Brody section, which cost more than $500 million to build, will total $1.3 billion. Its overall length to Gdansk will be almost 1,300 kilometers.
Valery Nesterov, an analyst with Troika Dialog brokerage, said that there was not yet a hundred per cent certainty that the project would become a reality. He said the project had no serious oil resources to back it up. Besides, Azeri oil was of a better quality than Russia's Urals brand, which was processed by Eastern European refineries, and it carried a higher price tag - $90 rather than $80 per barrel.
Besides, additional investments will be required to re-equip the refineries. Oil will be twice reloaded in ports, also adding to costs. The political risks will also remain.
But, Nesterov said, the Vilnius project could ultimately act as a "positive irritant" for Russia, and stimulate Moscow to build the second stage of its bypass Baltic Pipeline System, to Primorsk. This, in turn, will make Russian oil deliveries to external markets more flexible. The expert did not think European importers would reject supplies from Russia via the Druzhba pipeline.
Kommersant
Elecricite de France may buy blocking stake in Inter RAO UES
A blocking stake in Inter RAO UES, the Russian electricity monopoly's import and export operator, may be sold to a foreign investor.
French utility Elecricite de France (EdF), which showed no interest in the Russian energy sector, has filed a bid for the asset. It may have to pay $500-$875 million for it.
The rumor appeared a year ago, when experts assessed the company at $1.3 billion. Its capitalization has grown since then.
By contributing stakes in several thermal plans wholly owned by RAO UES to the charter capital of Inter RAO UES, the electricity monopoly's share in the import-export operator will rise from 60% to 85%. After that, about 30% of the shares will be divided proportionately between the minority shareholders of RAO UES, but the state will maintain a controlling stake.
Informed sources say that talks with EdF have only just begun and it is not yet clear which shares in Inter RAO will be sold.
EdF will not buy less than 25% of shares, according to the source.
EdF refused to comment, but a source close to the company confirmed that the talks had been held, saying that the next discussion on terms is scheduled for this month.
A source close to RAO UES said the deal would not go through before the end of the holding's reform in July 2008.
According to experts, there are good reasons for EdF's interest in Inter RAO. Alfa Bank said the addition of RAO UES power plants would increase the operator's capitalization to $2 billion. The Uralsib investment company put its capitalization at $3.5 billion.
Alexander Kornilov, an analyst with Alfa Bank, said: "EdF is attracted by the diversified business of Inter RAO."
Yury Saakyan, head of Russia's Institute of Natural Monopolies, said the main attraction is the power plants, which are "the most modern and attractive assets" of Inter RAO.
Matvei Taits, an analyst with Uralsib, who shares this opinion, said the power plants would make up 40% of Inter RAO's capitalization. "This will give EdF access to new markets, primarily in the CIS," he said.
Vedomosti
Russia, India sign major aviation contract
On Wednesday, Rosoboronexport, Russia's main state-owned arms exporter, and Hindustan Aeronautics Limited (HAL) of India signed a $1.6 billion contract for the sale of 40 Sukhoi Su-30-MKI Flanker fighter assembly sets to the Indian Air Force, a source in the government told respected business daily Vedomosti. A source close to the Defense Ministry confirmed this information.
Rosoboronexport and the Russian aircraft manufacturer Irkut Corporation, that will provide the sets, due to be assembled by HAL, did not elaborate.
The Indian Air Force has already received the first 40 Su-30-MKIs. Under a 2000 contract, 140 more warplanes will be assembled to a Russian license before 2014, and another contract stipulates the delivery of 18 Su-30-MKIs to replace the same number of the less advanced Su-30-K aircraft.
A source in the defense industry said the 230 Su-30-MKI fighters would cost over $5 billion.
Konstantin Makiyenko, deputy director of the Center for Analysis of Strategies and Technologies, said the Indian Air Force had announced the fighter contract this February, and that the country's Armed Forces were usually slow in signing such documents.
Makiyenko said this would become the contract of the year for Rosoboronexport, and that India had signed it so quickly because the national Air Force was losing its superiority over the Pakistani Air Force, which is being actively rearmed by the United States and China.
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