Kommersant, Vremya Novostei

Moscow, Washington to finalize new START treaty by April 12

Russian President Dmitry Medvedev and U.S. President Barack Obama said on Wednesday that strategic arms reduction talks were nearing completion.

The papers' sources said Moscow insisted that the treaty reflect the missile defense issue, and that this was the main problem. Both sides plan to finalize the treaty within the next few weeks.

START negotiators were feeling rather pessimistic in late December 2009. Experts involved in drafting the document began to complain that the enthusiasm of U.S. negotiators was waning.

It appears that the diplomats have regained their strength during the New Year holiday season. The sides are now vying with each other to tell us that the new treaty will be ready soon.

An expert drafting the treaty said on condition of anonymity that the diplomats had reached a final agreement on telemetry data exchanges.

"Technically speaking, they have agreed on cases when telemetry data will be open or classified," he said, declining to give any details.

The sides have also managed to coordinate delivery vehicle ceilings, one of the most difficult issues. In the summer of 2009, Washington and Moscow proposed cutting the number of delivery vehicles to 1,100 and 500, respectively.

A source said the draft treaty now envisaged specific parameters but declined to name them. According to another source, the sides will retain 550-800 delivery vehicles each.

Sources said negotiators had failed to agree on only one serious issue, namely, the linking of strategic offensive arms with defensive weapons, i.e. missile defense systems, as initially insisted upon by Russia.

On Wednesday, Russian Foreign Minister Sergei Lavrov made it clear after negotiations with U.S. Secretary of State Hillary Clinton in London that Moscow was ready to support UN sanctions against Tehran. This is the first such statement in the past few months.

Moscow's tougher stance on the Iranian nuclear problem could be motivated by the headway made on START talks, probably including the missile defense issue.

Judging by the statements made by presidents and diplomats, the document is currently being finalized. The papers' sources in Moscow said the sides now hoped to sign the treaty by April 12, when a nuclear security summit is scheduled to open in Washington.

Pavel Zolotaryov, deputy director of the Moscow-based Institute of U.S. and Canada Studies, said Moscow wanted to pressure the U.S., while Obama faced the formidable task of railroading the treaty through Congress.

Now that the Democrats have lost a qualified Senate majority, "the opponents of Obama, his party and administration will use any concession to Russia as a pretext for torpedoing the new treaty or delaying its ratification as long as possible," Zolotaryov said.

"Russia should tackle this issue in a comprehensive way, analyze purely military questions and assess the current line-up in U.S. domestic politics," Zolotaryov said.

Gazeta.ru

International community searching for ways out of Afghan dead-end

Officially, the goal of the conference on Afghanistan, which began in London on Thursday, is "to fully align military and civilian resources behind an Afghan-led political strategy" in order to create "a stable and secure Afghanistan." But commentators view it as evidence of the international community's search for ways out of the Afghan debacle, a Russian analyst writes.

Fyodor Lukyanov, editor-in-chief of the Moscow-based magazine Russia in Global Affairs, writes that the London conference, which should define the criteria for declaring the situation in Afghanistan stable, reminds him of the situation in Kosovo three years ago.

The main principle adopted for Kosovo in 2007 was the following: first, enforce humanitarian standards, and then achieve territorial status. However, the formula was reversed when it became clear that humanitarian standards were unlikely to be enforced anytime soon, the analyst writes.

The similarity becomes glaring if we recall that Norway's Kai Eide, now the UN Secretary General Kofi Annan's special envoy in Afghanistan, who assessed standards in Kosovo, has now been assigned the same role in Afghanistan. So, we can assume that if the situation deteriorates, the high standards set by the world for Afghanistan will be moderated.

Russia has been walking a fine line in the Afghan collision, Lukyanov writes. On the one hand, future developments and the deployment of foreign troops in Afghanistan are very important to Moscow, because any serious instability there could easily spread to Central Asia. Therefore, Russia should not stay away from the problem.

On the other hand, it fears getting bogged down in Afghanistan and eventually sharing NATO's responsibility for developments there.

And lastly, Russia would like to have a degree of influence in Afghanistan when the Western coalition troops leave the country after restoring stability there, even though the latter so far seems unlikely.

By declaring a desire to restore infrastructure facilities the Soviet Union built in Afghanistan, Russia has demonstrated its readiness to help the Western coalition and the Afghan government, the analyst writes.

By demanding international financing of these projects, Russia is protecting its commercial interests. By insisting that it be given the right to restore these projects without bidding, it is forcing the other countries to deny it this possibility.

The result is a lively political debate without any result, either positive or negative, Lukyanov writes. Moscow will most likely assume a wait-and-see stance, making only the minimum necessary motions to support the international process in Afghanistan.

The results of U.S. President Barack Obama's strategy in Afghanistan will become clear within six months. Depending on them, the other key players - Pakistan, China, Russia and European countries - will set their own criteria for success. It could be rapid withdrawal, strategic strengthening, or defense from chronic instability, the analyst concludes.

Vedomosti

Secret amendment to Gazprom's Sakhalin-2 deal worth over $1 billion

Royal Dutch Shell, Mitsui and Mitsubishi's consent to cede to Gazprom the control of Sakhalin Energy, the operator of the world's largest liquefied natural gas project Sakhalin-2, has brought high dividends to Russia. The deal was followed by the issue of a preference SE share in favor of the Russian government with $1.352 billion in dividends already accrued.

The conflict between Russian authorities and foreign partners in the project had dragged on for nearly two years, as the investors were accused of damaging the environment and exceeding project estimates, and threatened with license withdrawal and lawsuits.

On April 19, 2007, a day after Gazprom became an SE shareholder, the operator signed an agreement with the government. It issued one unique non-voting preference share in favor of Russia, which is now entitled to a fixed annual yield as well as a floating dividend. The fixed sum accrued in 2007 was $1.352 billion, according to Sakhalin Energy's US GAAP report for that year made available to Vedomosti. The company does not publish its financial results.

That was a high expenditure for SE, whose 2007 earnings amounted to $939 million. The payment to the government, documented as other costs, brought the company's balance to a $1.36 billion loss in 2007, according to the financial statement; other shareholders were not paid any dividends at all for 2006 and 2007.

The statement does not cite the date of payment of the huge dividend. A Gazprom source said no payment has been made so far, but would be made soon. An official who was closely involved in the deal recalls that the payment was made. However, Sakhalin Energy, Gazprom, Shell and the government spokespersons declined to comment. The deal had been kept strictly confidential, a government source said.

Dmitry Stepanov, a partner of the Yegorov, Puginsky, Afanasyev and Partners law firm, confirmed that Russia has no obligation to disclose such assets or deals.

That preference share was acquired by the then Industry and Energy Ministry at nominal value, a source involved in the deal said. A source close to Gazprom said its nominal value was $1. The ministry was only a nominee stockholder, while the yield was channeled directly to the state coffers. The State Property Management Agency, responsible for state revenues, was not able to document the acquisition promptly, as it required amendments to the federal budget.

The dividend was calculated so as to compensate Russia for the earnings it had been entitled to for years but never received because the foreign investors kept overstating the project costs - the estimate grew from $12 billion to $21.5 billion, the former official said. Therefore, they had to decide whether or not to preserve the PSA format for Sakhalin-2, which the investors abused. So they opted for a comprehensive deal which involved selling the control to Gazprom and issuing a preference share.

The share should yield annual dividends as high as in 2007, said a source close to the Economics Ministry. However, the daily has failed to obtain a confirmation.

Sakhalin Energy Investments Company is co-owned by Gazprom with 50% plus one share, British-Dutch Royal Dutch Shell (27.5% minus one share), Japanese Mitsui (12.5%) and Mitsubishi (10%).

Vedomosti, Nezavisimaya Gazeta

Russia's military aviation industry up to the mark

A Sukhoi T-50 fifth-generation Russian fighter has taken off from a plant airfield in Komsomolsk-on-Amur and made its maiden flight today. Known as the Future Tactical Aviation Concept (PAK FA), this plane is one of the most sophisticated projects of post-Soviet time. In technological complexity, it stands on the same level with the new Severodvinsk submarine and the Bulava missile. There is nothing comparable in the civil sector.

A full-fledged fifth generation fighter has been developed only in the United States - the F-22. Currently, Lockheed Martin is developing a lighter modification, the F-35. China, too, is engaged in similar research but the date of completion is uncertain. Even if the concept aircraft does not enter service until 2020, Russia will still be ahead of China. The flight, therefore, shows Russia's membership in a club with no other members but the Americans.

The new fighter must have an engine capable of sustained operation at supersonic speeds. Its radar must be equipped with a new-technology active phased array antenna. The bottom line is its "situational awareness," or ability to get information from other planes and satellites, which makes it superior to the aircraft of other generations with regard to information gathering.

For now, not all of these technologies are available in Russia and the engine and information issue may cause problems. But without the new concept fighter, Russia will be unable to guarantee its security without allying with the U.S. or China.

The PAK FA project will take 5 to 7 years to complete, and its cost is estimated at $10 billion. The plane is to get new and more powerful engines (the maiden flight was made on engines of the so-called 4++ intermediate generation, like on the Su-35). An onboard radioelectronic system is in the works. Its radar, with an active phased array antenna, is practically ready, and is currently undergoing ground trials and tests on other planes.

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