What the Russian papers say
Economic problems force Belarus to makes concessions to Russia / Russian-Turkish agreements may strip Bulgaria of oil pipeline / Denmark issues permit to lay Nord Stream gas pipeline / Foreign investors abandon real estate projects in Russia /
MOSCOW, October 21 (RIA Novosti)
Economic problems force Belarus to makes concessions to Russia / Russian-Turkish agreements may strip Bulgaria of oil pipeline / Denmark issues permit to lay Nord Stream gas pipeline / Foreign investors abandon real estate projects in Russia /
Kommersant
Economic problems force Belarus to makes concessions to Russia
Belarus has taken its first step towards Russia after the dairy dispute in June. It was reported on Tuesday that last week Belarusian President Alexander Lukashenko signed the June agreement on the establishment of a rapid reaction force of the Collective Security Treaty Organization (CSTO).
The CSTO comprises Armenia, Belarus, Kazakhstan, Kyrgyzstan, Russia, Uzbekistan and Tajikistan.
Belarus, which badly needs money, is reportedly preparing to fulfill one more of its outstanding promises - to consider recognizing Abkhazia and South Ossetia.
According to sources in the Russian Defense Ministry, Belarus has agreed to provide a special force brigade, a KGB counterterrorism unit, a special unit of the Interior Ministry and a team of the Emergencies Ministry, totaling some 5,000 servicemen, for the Collective Rapid Reaction Force.
Belarusian analysts say Lukashenko has started fulfilling his promises to Moscow due to his country's serious financial problems.
The country's largest industrial enterprises - the MAZ truck and special vehicles plant, the MTZ tractor plant, and BelAZ manufacturer of quarry vehicles - have been working a three-day week since July.
Pyotr Prokopovich, chairman of the Belarusian National Bank, the other day predicted serious problems for the country's banking system because of the shortage of foreign currency.
Belarus has been unable to receive the next tranche of the $3.5-billion IMF loan issued early this year. The fund's spokesmen said they were dissatisfied with the slow speed of economic reforms in Belarus and efforts to restrain the national currency rate.
IMF representative in Minsk, Natalia Kolyada, said recently: "Belarus will be unable to make do without Russian loans."
Jaroslav Romanchuk, president of the Mises Research Center, said financial problems could force Minsk to make other concessions to Moscow in the hope of getting its financial assistance, for example recognize the independence of Abkhazia and South Ossetia.
According to Kommersant sources, the Belarusian authorities have taken the first steps towards recognizing the breakaway Georgian republics. Vitaly Busko, deputy chairman of the parliamentary Commission on the CIS, said the commission was considering the issue.
The announcement came as a surprise, because commission members said until yesterday that they had not even discussed the possibility.
Gazeta.ru
Russian-Turkish agreements may strip Bulgaria of oil pipeline
Turkey has given Russia permission to lay the planned South Stream gas pipeline across its exclusive economic zone. In exchange, Russia agreed to take part in another pipeline project, Samsun-Ceyhan.
This trade-off gives Russia a powerful pressure tool in its talks with Bulgaria on Burgas-Alexandroupolis, yet another project. Analysts warn that Bulgaria might end up with nothing.
Samsun-Ceyhan is an oil pipeline planned to ease traffic through the Bosporus and Dardanelles, turning into an important oil route from Central Asia to Europe. After the completion of construction, jointly carried out by Turkish and Italian companies, the throughput capacity of the 555-kilometer link between the Black and Mediterranean seas will reach 1.5 million barrels per day.
Dmitry Abzalov, an analyst at the Center for Current Politics think tank, said: "Turkey is aiming to become an independent player and trying to gain tools to pressure the European Union, so it wishes to join all projects involving the transportation of energy resources to Europe. Therefore, the country's joining South Stream does not rule out its participation in Nabucco. However, a resource base for Nabucco is still questionable."
"So Turkey is choosing the bird in the hand," Abzalov concludes.
Samsun-Ceyhan is an alternative project to the $1 billion Trans-Balkan pipeline Burgas-Alexandroupolis, implemented by Russia with 51%, Greece and Bulgaria with 24.5% each, and also planned to ease traffic through the Bosporus.
However, whether or not the latter project will go through largely depends on Bulgaria which has been recently threatening to out of the project over lack of cash. From this point of view, Russia's accession to the rival Samsun-Ceyhan project gives it a tool to pressure Bulgaria.
"Samsun-Ceyhan and Burgas-Alexandroupolis are not really mutually exclusive," said Abzalov. "True, they will both take Caspian oil, and there could be enough resources for two. But Russia now has a powerful trump card it can use at talks with Bulgaria, because our companies can drop out of the Trans-Balkan project altogether. Bulgaria will then be back where it started," he added.
Kommersant, RBC Daily
Denmark issues permit to lay Nord Stream gas pipeline
Russia has received the first foreign permit for its main political gas pipeline project, Nord Stream, from Denmark. It now needs Sweden's consent to start building the pipeline along the bed of the Baltic Sea. Analysts say other countries interested in the project will convince Sweden to give the permit.
Project operator Nord Stream AG has changed the pipeline's route twice and dropped the initial plan to build a compressor station and lay a fiber-optic cable. It is now completing project coordination with the state regulators of Finland, Russia, Sweden and Germany.
Finland has approved the environmental feasibility study and allowed demining the area in the Gulf of Finland where the pipeline is to be built. The Finnish government is expected to grant the permit to use its economic zone on October 29.
Russia's environmental authority, Rosprirodnadzor, should announce its decision in late November or early December, and the German and Swedish authorities by the end of the year.
Problems with the Russian and German regulators are unlikely. As for Sweden, its government should complete the last round of coordination talks on Nord Stream by November and subsequently take a decision.
The project will not be implemented if any one of these permits is not granted, the project operator said.
Sergei Pravosudov, director of Russia's National Energy Institute, said that Sweden would benefit the least from the project.
"Sweden does not plan to receive gas through the Nord Stream pipeline," he said. "Finland will not receive Nord Stream gas either, but it wants Russian timber."
However, Sweden's neighbors are likely to convince it to take a positive decision on the project, the analyst said.
Vitaly Gromadin, an analyst with the Arbat Capital investment company, said the Baltic countries might try to hinder the project, although they have toned down their protests during the crisis. "This could be a result of their strong dependence on West European loans," Gromadin said.
The 1,220 km (758 miles) Nord Stream gas pipeline, to be laid across the Baltic Sea from Vyborg, Russia, to Greifswald, Germany, will consist of two parallel legs. Its cost has been estimated at 7.4 billion euros.
Vedomosti
Foreign investors abandon real estate projects in Russia
The British Rutley Russia Property Fund, which promised to invest in Russia's real estate, has abandoned its plans and returned money to investors. Analysts say the risks are too high.
Haiko Davids, former investment director at Rutley Russia Property Asset Management (the company operating the fund), declined to comment. Cameron Sawyer, chairman of the board of one of the fund's investors, GVA Sawyer, confirmed the information. The information about RRPF, which was established in 2007, disappeared from the website of Rutley Capital Partners.
The fund announced ambitious plans to spend $1 billion on commercial real estate in Moscow, St. Petersburg, and other big cities, including $200 on car dealer centers. With the ratio of own to borrowed funds before the crisis (30:70), the fund needed to collect $300 million. RRPF managed to attract $100 million and buy only one asset - a 5,300-square meter car service center on Kiyevskoye Highway, which cost $20 million.
Then the loan crisis hit the country and the fund proposed that investors either change the strategy, or the fund give them their money back, a source close to the RRPM leadership said. The investors chose the second option. The fund returned $80 million, the remaining $20 million will be given back after the fund sells the car center (after the crisis). The fund is intended to return all the money, Sawyer says.
Vladimir Avdeyev, a partner of S. A. Ricci / King Sturge, says that the situation can be easily explained: commercial real estate rental prices have fallen by 30-50%, and they are impossible to predict, so the investors' risks are too high.
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