Moskovsky Komsomolets
Moscow mayor cancels 70 development projects
Moscow City Hall has revised large-scale development contracts inherited from the previous government, canceling at least 70 planned high-rise, residential and office developments, shops and clubs.
Moscow Mayor Sergei Sobyanin began a major cleanup of the city’s investment contracts in late 2010. According to him, this sector is an eloquent example of “corruption, outrageous bureaucratic abuse, disorder and imbecility.” The zoning and planning commission Sobyanin chairs is to determine the future of the 1,175 construction projects by September; as of today, they have considered 270 and halted 70, Sobyanin said on TV.
Several dozen companies were allowed to proceed with their projects but were asked to scale down or re-categorize them, for example by building a hotel or an apartment building instead of another business center.
The two main formal reasons for the cancelation of development contracts are broken deadlines or poorly registered land ownership. It is an open secret that developers often “stockpiled” construction projects before the economic downturn, without focusing on their quality. Some of these projects later appeared unprofitable, others affected third parties and still others required additional formalities to complete. Developers have failed to start construction work on as many as 500 projects.
Marat Khusnullin, who heads the city’s urban development department, estimated the total area of canceled construction projects at about 14 million sq ft. Most were planned in the Central Administrative Area, where some large projects have been banned because of dense traffic. A wide variety of projects were “black listed,” from residential and office buildings to a local paintball club in eastern Moscow and a convenience store; the last two had been supported by the previous Moscow government.
Nearly all underground development projects were deemed ineffective. City Hall does not seem to like combinations of underground parking lots with commercial facilities. Therefore, a parking lot will replace the planned shopping center under Belorussky Station Square. Sobyanin has promised to buy the developer out of the project and complete it with budget funds. A similar project under Paveletsky Station Square will see its planned shopping area reduced while the space given over to parking is increased. The decision on the Pushkin Square project is still pending, as officials have ordered another feasibility study of the two tunnels planned there. As for the shops and underground skating rinks, these have all been ruled out for certain.
A four-level entertainment center under Smolenskaya Square has been canceled. The commission said there are enough entertainment establishments in the Foreign Ministry vicinity already and that the Garden Ring certainly does not need more traffic.
The Moscow government also canceled three high-rise projects, including the one on Novy Arbat that Russia had presented at the 2010 MIPIM property fair in Cannes.
The commission will now start revising projects involving entire neighborhoods. One project, involving the recreation of an historical downtown development, is caught up in tangled land ownership.
Moskovskiye Novosti
Defecting? Don’t even think about it!
Russia finds them, Russia trains them but it is other countries that reap the rewards. The exodus of Russian athletes, above all into former Soviet republics, has reached menacing proportions. Seven wrestlers who won medals at the recent FILA Wrestling Championships in Dortmund had been Russian nationals before they switched countries. Most members of the Azerbaijani freestyle wrestling team that topped the overall medal tally at the European championships in 2009 had, once upon a time, held Russian passports.
There are several reasons for this. First of all, competition in the Russian national team is extremely tough. “The leading five athletes from our team stand good chances of sweeping the gold either at a world championship or at the Olympics,” says Dzambolat Tadeyev, head coach of Russia’s national wrestling team. “Wrestlers only have a short career and by the time you get the chance to win, it could be too late.”
Another reason is the loose regulations of FILA, the International Federation of Associated Wrestling Styles. Wrestlers are free to change their nationality, provided they keep a two-year “quarantine” period. The country the wrestler is leaving does not even get reimbursed. This regulation has proven especially handy for former Soviet republics, where it merely takes a stroke of a pen to become a national.
For example, in the run-up to the 2010 European championship the Azerbaijani team renamed Russian wrestler Mahmud Magomedov as Magomed Magomedov to get around this two-year requirement. In 2010, he won a gold medal in his weight class. After a protest from the Russian Wrestling Federation, Magomedov was banned from the world championship but was not stripped of his medal.
The Russian Wrestling Federation is now introducing an online database called Atlet. It will feature a full record on each athlete, including their biography, medical and biochemical data, training facilities and sparring partners. “Most importantly, this system may be taken up as a blueprint by other sports federations,” says Georgy Bryusov, first vice-president of the Russian Wrestling Federation.
In addition to the practical value in training athletes, the system will also help identify the athletes. Even if a Mahmud becomes a Magomed, the system will retain hard proof that he has defected.
Kommersant
Management companies rebound to pre-crisis levels
The trust management market has begun to emerge from the crisis as management companies showed growth in 2010 after two years of decline. For the first time since 2007, these companies have been able to increase earnings from their core activity: trust management. Companies managing retail unit investment funds have performed better than those running large clients, such as non-state pension funds.
Kommersant based its overview of how management companies performed during 2010 performance by assessing their earnings from trust management. Fifty companies with earnings of more than 50 million rubles were analyzed. Revenues from trust management services last year totaled 10.3 billion rubles, a rise of 17.3%. Some companies (Uralsib, Troika Dialog and Lider) posted over one billion rubles in earnings.
Last year marked a turning point for the companies, which for the previous two years had seen revenues fall because of the crisis and its effects. In 2009, half the companies posted reduced proceeds and those managing large retail unit investment funds were hit hardest. Last year, however, their earnings increased. According to the National League of Managing Companies, mutual funds accounted for 439.5 billion rubles in net asset value by December 31, 2010, compared with 322.3 billion rubles the previous year.
The funds are continuing to make good headway. Kommersant estimates that the first quarter of 2011 has been a four-year high point for open-ended investment funds. Net inflow of funds amounted to 3.8 billion rubles, four times as much as in the first quarter of 2010 (less than 900 million rubles).
Remarkably, last year companies handling mutual funds showed higher earning growth rates than companies dealing with institutional customers, such as non-state pension funds. Earnings of the largest management company (Lider), which manages the funds of the Gazfond non-state pension fund, fell 0.4% in 2010, and those of the Kapital group of companies (one of the largest in terms of managed pension funds) by 12.3%. Meanwhile, during the crisis, it was companies in the institutional investment sector that outperformed their retail sector counterparts.
Vadim Soskov, general director of Kapital, explains that competition for managing pension funds increases as they grow in size. Management companies have to cut their commissions, which have an impact on earnings. “It is true that institutional clients bring more funds for management, but in earning terms retail clients are the most lucrative for management companies,” he says.
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