Kommersant
Investors converge on the Caucasus
State-owned company Kurorty Sevenovo Kavkaza (“North Caucasus Resorts” or KSK) has attracted another investor for the construction of five ski resorts worth over 10.8 billion euros. Ravi Viswanathan, managing director of Natixis Corporate Solutions, is ready to invest nearly 735 million euros in the project. KSK's partners include the French state bank Caisse des Depots et Consignations (10 billion euros) and a subsidiary of Korea Electric Power Corporation (one billion euros).
Yesterday at the MIPIM Asia 2011 real estate and investment conference in Hong Kong, KSK and Viswanathan's Suprema Associates signed an agreement on an investment of $1 billion (735 million euros) in the construction of hotels and retail space.
Viswanathan said that the KSK project interests him primarily because the Russian state is paying for the necessary infrastructure construction.
“The Russian authorities guarantee reimbursement for political risks,” said Viswanathan.
KSK head Ahmed Bilalov said that the Finance Ministry is prepared to compensate investors for 70% of their investments in a force majeure situation. KSK General Manager Alexey Nevsky said that Viswanathan and KSK management will meet in November to go over the details.
In September, KSK secured 10 billion euros for ski resort construction. At the International Economic Forum Sochi 2011, KSK signed an agreement with the French state bank CDC. The partners intend to establish a joint venture in which KSK owns 51%, and a CDC subsidiary 49%. One of CDC's main conditions is for KSK to engage only French developers and general contractors. This agreement follows Russian President Dmitry Medvedev and French President Nicolas Sarkozy's signing, at the G8 summit in Deauville, of an MoU on French-Russia cooperation in developing a tourism cluster in the North Caucasus. KSK also signed an agreement with Korea Western Power, Korea Electric Power Corporation’s subsidiary, to invest 1 billion euros in building the energy infrastructure for the resort.
While the original project cost nearly 11 billion euros, KSK managed to secure almost 12 billion euros from third-party investors. The Russian government allocated an additional 60 billion rubles (1.44 billion euros) for KSK's charter capital. KSK's budget may increase to 783 billion rubles (18.7 billion euros). In May, Dmitry Medvedev instructed KSK to expand the tourism cluster by creating new resorts on the Caspian and Black Seas, as well as in the town of Mineralniye Vody. Nafta Moskva owner Suleiman Kerimov is ready to invest in the construction of two new beachfront hotels in these regions.
KSK was founded in December 2010. The Russian government owns 98% of its shares, with Vnesheconombank and Sberbank owning the remaining 2%. KSK manages ski resort construction in Adygea, Elbrus, Kabardino-Balkaria, Karachaevo-Circassia, North Ossetia and Dagestan. A total of 803 km of slopes and tourist accommodation with a capacity of 104,500 are planned for the region, with investment totalling 451.4 billion rubles (about $14.7 billion, or 10.83 billion euros).
Moskovskiye Novosti
Audit Chamber slams inadequate spending on high-tech medicine
Russia’s Audit Chamber warned that the country could see a repeat of last summer’s high-tech surgery quota crisis once the federal financing allocated for next year is spent.
The Audit Chamber – a supervisory body that audits the federal budget – has analyzed how expensive healthcare services were provided in 22 Russian regions over the period 2008-2011. It concluded that the shortage of funds for high-tech treatment of critically ill patients chiefly resulted from poor planning.
Different regions take different approaches to forecasting the demand for high-tech services, which makes it difficult to assess the extent to which their funding requests are credible and justified. The auditors also cited “organizational problems,” implying that medical consultations and diagnosis are not always thorough and timely.
In 2011, the government allocated 44.7 billion rubles ($1.46bn) for expensive surgery. Additional amounts had to be provided in summer once the initial sum was exhausted. By the end of this year, more than 320,000 patients will have received high-tech services, just half the number who need them.
“Emergency aid should be provided to cancer and cardio-vascular patients without any quotas or waiting lists, and it must be 100% government financed,” said Dr. Sergei Kolesnikov, member of the Russian Academy of Medical Sciences and deputy head of the lower house healthcare committee. “In reality, it is financed only 30%-40%.”
He said the 2012 federal budget allocates about 48 billion rubles for high-tech medical services, while the real requirement is 100 billion ($3.26bn). They even treat cancer as a routine illness, not as an emergency, he added.
The Russian government annually spends $650 per capita on healthcare, compared with $8,000 in the United States and $3,000 in Western Europe. “The government plans to include high-tech services in mandatory health insurance. In that case, people won’t get any high-tech treatment aid at all, because the insurance system can’t afford it,” he said. This policy, which is bound to kill high-tech healthcare, has been included in the new healthcare and health insurance bills, Dr. Kolesnikov said, adding that he only hoped that the newly-elected lawmakers would make reasonable changes. He will not seek reelection.
The Healthcare Ministry could not comment on the Audit Chamber’s report on Tuesday.
Alexander Saversky, head of the Patients’ Rights League, believes that this shortage of funds is rooted in an ineffective primary healthcare system. “The outpatient services system fails in the early stages – where there’s a chance the problem can be remedied by taking a pill. It takes months to see a specialist, and some outpatient clinics do not even offer ultrasounds or ECGs. Then it’s too late, and expensive treatment is required,” he said.
While agreeing that spending on high-tech healthcare is inadequate, he pointed out that it should not be increased at the expense of early diagnostics and treatment, because this will not help eliminate the shortage.
Vedomosti
Putin faces dwindling support
People tend to see more elements of a Putin personality cult in Russia, the Levada Center says.
According to the center’s October 21-24 survey of 1,600 people (statistical error up to 3.4%), 25% of respondents said there is a Putin cult in Russia, a considerable increase from 10% in March 2006. Thirty percent said that while there may not yet be a Putin cult per se, the prerequisites for it have been growing, and 33% don’t see any visible elements of a Putin cult (down from 57% in 2006).
A total of 29% of respondents agree that Russia’s political system increasingly resembles the Soviet system.
The Putin cult originated during the previous presidential election, when everyone was talking about the need for a national leader, and the idea has now reached saturation point, said Levada Center Deputy Director Alexei Grazhdankin.
There are elements of a personality cult in all countries, from the United States to Japan, said Putin’s press secretary, Dmitry Peskov. Every family has a black sheep, including Russia, but Vladimir Putin has never encouraged this personality cult and takes an extremely negative attitude to it. The cult is like an unwanted product of his personal popularity. Objectively, there is no Putin personality cult, Peskov concluded.
The respondents are obviously displeased by the revival of Soviet-era practices. The share of those who believe that having the same people in power for year after year guarantees order and stability has dropped from 34% to 25% over the past four years. Currently, 34% say that this practice engenders arbitrariness and spurs the growth of corruption and abuses, a surge from 20% in 2007.
Putin’s personal popularity is shrinking. Only 3% admire him and 24% say they like him, the lowest levels since the first such poll in May 2000 (28%). The peak, 40%, was reported in June 2008. Another 17% have a neutral attitude to him, 33% do not have anything bad to say about him, while 9% can find nothing good to say about him.
Those who dislike Putin, and who discern elements of a Putin personality cult, are the ones who are dissatisfied with the situation in the country, Grazhdankin concluded.
Political analyst Boris Makarenko mentioned a “functional depreciation of Putin as a personality” after his ratings stayed high for an unprecedentedly long time. Some people value continuity in the authorities, while others bemoan a loss of optimism. Therefore, Putin’s popularity is unlikely to return to the statistical highs of 2004, Makarenko opined.
The demand for change is weak in Russia, said Gorbachev Foundation expert Andrei Ryabov. But there is a clear feeling that the system which developed in the 2000s has reached its limits.
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