MOSCOW, January 22 (RIA Novosti) Moldovan president ready to make a deal with Moscow/ Gazprom makes lucrative offer to Azerbaijan/ Russia to build cheap railway in Saudi Arabia/ Gaz de France seeks LUKoil partnership to bid for Russian power generator/ Interior Ministry wants full provocation rights
Kommersant
Moldovan president ready to make a deal with Moscow
Russian President Vladimir Putin will meet with his Moldovan colleague, Vladimir Voronin, today. Russia is allegedly prepared to help Moldova settle the Transdnestr conflict if Moldova accepts its "patronage."
The Kremlin's draft plan for a political settlement to the conflict does not envisage a unitary model for Moldova as advocated by Chisinau, or a confederation as proposed by Tiraspol.
Moscow proposes a federative model and believes it can convince the stubborn Transdnestr authorities to accept it, but only if Chisinau fulfils several conditions.
According to a source connected with the talks, Moldova must above all formalize its neutrality in the constitution and in an international agreement signed by Russia, the United States and the European Union. Moscow believes this would discourage Chisinau's rapprochement with the West and above all its aspiration to join NATO.
The Kremlin also insists that Moldova affirm Russia's military presence. Chisinau demands a change in the format of the peacekeeping operation in Transdnestr, while Moscow says that it would do this once the problem is settled politically.
The third condition stipulates guarantees of inviolability of property privatized by Russian businesses in Transdnestr.
Voronin has so far provided only oral guarantees, but Moldova has a law, which invalidates all privatization deals in the region that have not been coordinated with Chisinau.
Moldova's turn to Russia has coincided with deterioration in its relations with Europe. Last year, Moldova nearly severed diplomatic relations with Romania, which it accused of conducting an "imperial" policy and of planning to turn Moldovans into Romanians.
The Moldovan president has said more than once that settling the Transdnestr problem was a matter of honor for him. He has little time left to do this, as his presidential term ends in 2009. The settlement of the Transdnestr problem would also suit Putin, who would leave the Kremlin as a peacemaker.
Nezavisimaya Gazeta
Gazprom makes lucrative offer to Azerbaijan
Russian energy giant Gazprom and Norway's Statoil are negotiating the acquisition of natural gas from the Shah Deniz field in Azerbaijan.
Shah Deniz is the largest natural gas field in Azerbaijan. It is situated off the Azerbaijani coast in the South Caspian Sea, approximately 70 km (44 miles) southeast of Bakubat, at a depth of 600 meters.
Baku has not commented on the news, and Gazprom spokesmen are also reluctant to discuss it.
The possibility seemed implausible last year, given the intention of the United States and several European countries to diversify gas supply routes to Europe.
The West has not abandoned the idea, proposing different export routes bypassing Russia. But the only project implemented so far is the Baku-Tbilisi-Erzerum pipeline. Gas from Shah Deniz, whose reserves are estimated at 1.2 trillion cubic meters, is being delivered through that pipeline to Georgia, Turkey and Greece, and will be supplied to Italy in a few years.
Potential buyers are fighting for gas to be produced at the deposit beginning in 2013. The field is being developed by an international consortium operated by British Petroleum and Statoil (the latter is also the project's commercial operator).
Ilkham Shaban, head of Azerbaijan's Center for Oil Research, said Gazprom's intention to buy gas in Azerbaijan was logical in view of Russia's plan to build a gas pipeline across Bulgaria, which will need additional gas supplies. This will also suit Azerbaijan, because "many sides have shown interest in Caspian gas, but nothing concrete has been done about it so far."
"Gazprom's offer could be attractive if only because the Gajikabul-Mozdok gas pipeline, linking Azerbaijan and Russia, is idling now," Shaban said. "It could be used to deliver about 10 billion cubic meters of gas, beginning in 2013, without additional outlays."
The expert said it was a highly promising idea that would rule out the need to conduct lengthy talks with potential buyers.
Gazprom will benefit because it would be cheaper to deliver gas from Azerbaijan than from Turkmenistan or East Siberia. Besides, by buying Shah Deniz gas Gazprom would almost certainly bury such projects as the Nabucco pipeline, Shaban said.
Kommersant
Russia to build cheap railway in Saudi Arabia
The state-owned monopoly Russian Railways (RZD) has won an $800 million tender to construct a 1,435-mm European gauge railway in Saudi Arabia, the first foreign project to be implemented by the company. The Saudi railway will cost $1.5 million per kilometer or four times cheaper than the cost in Russia.
RZD hopes that it will be able to build other railways in Saudi Arabia and the rest of the Arab world.
The 520-km railway, also known as CTW-400, will feature 621 water ducts, 20 camel overpasses, 26 rail and highway viaducts and 8 railway bridges. Over 112 million cubic meters of earth will have to be removed during the construction work.
This is part of the ambitious 2,400-km North-South transport corridor worth over $2 billion, due to be completed by 2011.
Analysts were surprised by the low construction costs. Alexei Bezborodov, head of the InfraNews research agency, said a study of the long-term RZD program until 2030 showed that it cost $6.7 million to lay each 1,000 meters of tracks in Russia.
According to RZD, it cost almost $7 million to build one kilometer of a railway bypassing the collapsed Berezniki Potassium Mine in Russia's central Urals region; and a railway to Sheremetyevo Airport near Moscow is costing $10 million each 1,000 meters.
RZD CEO Vladimir Yakunin said nationwide railway construction costs depended on regional conditions and terrain.
Analysts disagreed and said Saudi Arabia was not a convenient location.
Mikhail Lyamin, senior analyst at the Bank of Moscow, said costly pre-construction work was an important element of building any railway, and that substantial earthmoving operations would be required in order to reinforce the sandy terrain in Saudi Arabia.
According to Bezborodov, a railway in the desert would prove even more difficult and expensive to build than those in Russia's sprawling taiga and tundra regions.
Business & Financial Markets
Gaz de France seeks LUKoil partnership to bid for Russian power generator
Gaz de France plans to bid for newly-issued shares of TGK-10, a Russian power generating company, in partnership with LUKoil. Analysts do not think it strange, because the stake is very impressive - $3 billion. However, it is not known if LUKoil will take the offer.
Sources close to the TGK-10 flotation say LUKoil has yet to make a final decision. The company itself declined to comment.
Irina Filatova, an analyst with BrokerCreditService, said: "The point is how seriously LUKoil is interested in the company. The IFD Kapital brokered its acquisition of generating capacity in southern Russia by purchasing control in TGK-8. TGK-10, if bought, could allow LUKoil to reduce gas and oil transportation costs a great deal, because the generator's plants are located in the oil and gas areas: the Tyumen and Chelyabinsk regions, and the Khanty-Mansi and Yamal-Nenets districts."
Filatova estimates the capitalization of TGK-10 at $1.8 billion (in view of the unfinished consolidation of the Kurgan generator). An Otkrytie analyst, Vasily Sapozhnikov, estimates it at $1.6 billion.
These estimates correspond to $612-613 per kW of TGK-10 installed capacity, which is high compared to the entire generating segment.
The investor will have to pay out $3 billion for the TGK-10 package (Russian government's stake of 23% and newly issued shares making up 53.6% of the increased authorized capital). Gaz de France's efforts to find a partner are justified.
Any new contender, such as Gaz de France, makes competition keener. Rosneft, Finland's Fortnum and Norilsk Nickel were previously interested.
According to Sapozhnikov, what attracts investors is that by buying the additional issue of shares they secure company control without a government stake.
"Another attractive feature is that the generator has no blocking shareholder that can claim pre-emption rights and keep control," he said.
TGK-10's newly-issued shares are to be placed and the government stake to be auctioned in February or March. TGK-10 shares dropped only 1.31% on the MICEX yesterday, outperforming the market.
Gazeta
Interior Ministry wants full provocation rights
The Interior Ministry is preparing amendments to the Law "On Operational Search Activity," which may give it the right to instigate bribe proceedings by offering any official a kickback.
A source at the State Duma's security committee said the new amendment, if it comes into effect, will enable operatives to instigate bribes against the lowest-ranking officials.
The present federal law only allows the method to be used by those suspected of plotting or committing grave or very serious crimes. Legal experts believe the ministry's initiative should be put to a thorough anti-corruption test.
The bill could be discussed on February 8 at an expanded ministry meeting, which is occasionally attended by the Russian president.
The legal community is harshly opposed to the idea.
Lawyer Yevgeny Chernousov said: "Six months ago the lawmakers allowed covert operatives to wiretap telephone calls of those suspected of some minor offences. Now they are going to give the green light to agent provocateurs. The Ministry wants to make life easier for its staff and for their professional deterioration. There must be a clear-cut case to allow the bill. They should provide statistics on how many cases failed because it was impossible to provoke the crime."
In Chernousov's view, dishonest operatives could exploit gaps in the federal law to keep entire government departments in fear.
Gennady Gudkov, deputy chairman of the Duma's security committee and a retired FSB colonel, said: "The lower house has refused to approve such initiatives for several years. The first to protest were lawyers who feared the police could abuse their powers."
According to Chernousov, an increasing number of "provoked" cases have been making their way to Russian courts in recent years. The European Human Rights Court, which later protested their rulings, has even demanded that Russian lawmakers introduce amendments restricting the use of provocation.
In the lawyer's opinion, the ministry's new scheme, if approved by the government and parliament, will most likely defeat these efforts.
Vladimir Novitsky, president of the Russian section of the International Society for Human Rights, believes that although such practice already exists in the British-American judiciary, it is flawed, both ethically and legally.
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