The cost of Russian roads is set by a combination of factors. While corruption and weak controls over budget spending cannot be fully ruled out, I believe that the largest contributor to high costs in this area is linked to a fundamental problem of the Russian economy, namely its extremely high levels of monopolisation and, consequently, low levels of competition. Monopolisation comes as part of the Soviet heritage that Russia received (Soviet planning meant the creation of aggregated producers rather than multiple small operators). However, while low competition is partially the result of high monopolisation levels, it is also a direct result of the weak levels of state support for private initiatives and the difficult investment climate that exists in the country.
The reason is corruption. Because based on our estimates, 10 per cent of the cost goes towards the actual construction. Everything else is kickbacks and additional payments. Apart from that, our market of construction materials is highly monopolised and prices for all construction materials are much higher than they could be. We do not conform to construction technology, so it's lucrative to start repairing the road just after it's finished. This is normal practice. Funds are not released immediately, so construction begins in the winter, when it's more expensive. The main point behind this corruption is not to construct a road that will be functional. The main point is the building process itself, because while it is going on there is money and the possibility to allocate funds from the budget.
Road construction is one of the areas most vulnerable to corruption, and this is not just in Russia but all over the world. There are simply too many opportunities to apply so-called grey schemes, inflate construction costs and so on. Given the very high level of corruption in Russia, indicated by a variety of indices, the implied costs of corruption in road construction must be very high. Of course I do not think that this is the only reason. Russia's climate also contributes to costs, as well as obsolete construction techniques which are not modernised.
Thursday, 3 December 2009
Scandal grows over Russian ‘golden youth’ car crash
The Russian road-racing scandal which has gripped Geneva has thrown the spotlight onto the antics of Russia's so-called "golden youth".
With four young Russian citizens - one identified as the son of a wealthy construction magnate and two others believed to be the sons of flamboyant oligarch Telman Ismailov - apparently roaring through the villages around Lake Geneva at 220 kilometres an hour, the normally sedate Swiss are aghast.
And the imminent court appearance of 22-year-old Zia Babayev, a student at a Geneva university affiliated with Moscow State University, on suspicion of causing an accident which left a 70-year-old motorist severely injured, has also seen sharp criticism of the pampered classes back home in Russia.
Reports that three of the four men involved, students at a Geneva university affiliated with Moscow State University, were whisked out of Switzerland by private jet in the aftermath of the crash has done little to appease many people furious that youngsters were careering out of control in a Bugatti Veyron, a Lamborghini MurciƩlago, a Mercedes SLR McLaren and a Porsche Cayenne Turbo.
It is, after all, a story which has everything - fast cars, money, a whiff of corruption and a brush with tragedy, washed down with a hint of booze.
Local paper Tribune de Geneve has reported in detail on the incident since it skidded into view last week, and their latest account questioned how these four students - aged between 20 and 25 - were able to hire high-powered sports cars when the under-30s are usually barred from renting these marques.
Among Russians, NATO envoy Dmitry Rogozin has been the most outspoken critic of the high-speed exploits.
Within hours of the story breaking, Rogozin told Vesti 24 TV that the current ‘gilded generation' - the brattish off-spring of wealthy and influential parents - was behaving "like prats".
"Our [countrymen] love anything glamorous, anything expensive and anything shiny," Rogozin said.
"The offspring of our top-ranking bureaucrats and millionaires behave in exactly the same way in Courchevel as those who had the car accident."
The scandal increases the pressure on Telman Ismailov, an Azeri-born oligarch who controlled the Cherkizovsky market in Moscow.
The names of his two sons, Alek and Sarkhan, emerged in the media very quickly - long before the identity of the prime suspect and his father, Mehrazh Babayev of construction firm Version M, became known.
Ismailov reportedly angered the Kremlin by hosting a lavish opening party for his Turkish hotel in the height of the crisis back in May.
That party featured Sharon Stone, Richard Gere and Paris Hilton - as well as Moscow Mayor Yury Luzhkov and his wife, Yelena Baturina.
But his friendship with the mayor couldn't save Cherkizovsky from closure this summer after a long-running investigation into health and safety and trading standards complaints.
Now Ismailov's sons may face an extradition battle if the Swiss authorities decide they were holding an illegal road race.
A spokesman for the Swiss Attorney General confirmed that if there was evidence of the Russians re-enacting a grand prix on the roads between Geneva and Lausanne they would seek to extradite the Ismailovs and an unnamed third driver to face trial.
But he added that it would not be justified for a speeding offence alone.
A lawyer for Babayev claimed that there was no race but added that his client admitted responsibility for the accident.
Jacques Barillion also told the Tribune de Geneve newspaper that media coverage of the incident had given a false impression that his client was receiving preferential treatment.
"The reality is different," he said. "He was questioned immediately by local police and made available for future questioning.
"He never intended to flee and is deeply affected by the consequences of this accident."
With four young Russian citizens - one identified as the son of a wealthy construction magnate and two others believed to be the sons of flamboyant oligarch Telman Ismailov - apparently roaring through the villages around Lake Geneva at 220 kilometres an hour, the normally sedate Swiss are aghast.
And the imminent court appearance of 22-year-old Zia Babayev, a student at a Geneva university affiliated with Moscow State University, on suspicion of causing an accident which left a 70-year-old motorist severely injured, has also seen sharp criticism of the pampered classes back home in Russia.
Reports that three of the four men involved, students at a Geneva university affiliated with Moscow State University, were whisked out of Switzerland by private jet in the aftermath of the crash has done little to appease many people furious that youngsters were careering out of control in a Bugatti Veyron, a Lamborghini MurciƩlago, a Mercedes SLR McLaren and a Porsche Cayenne Turbo.
It is, after all, a story which has everything - fast cars, money, a whiff of corruption and a brush with tragedy, washed down with a hint of booze.
Local paper Tribune de Geneve has reported in detail on the incident since it skidded into view last week, and their latest account questioned how these four students - aged between 20 and 25 - were able to hire high-powered sports cars when the under-30s are usually barred from renting these marques.
Among Russians, NATO envoy Dmitry Rogozin has been the most outspoken critic of the high-speed exploits.
Within hours of the story breaking, Rogozin told Vesti 24 TV that the current ‘gilded generation' - the brattish off-spring of wealthy and influential parents - was behaving "like prats".
"Our [countrymen] love anything glamorous, anything expensive and anything shiny," Rogozin said.
"The offspring of our top-ranking bureaucrats and millionaires behave in exactly the same way in Courchevel as those who had the car accident."
The scandal increases the pressure on Telman Ismailov, an Azeri-born oligarch who controlled the Cherkizovsky market in Moscow.
The names of his two sons, Alek and Sarkhan, emerged in the media very quickly - long before the identity of the prime suspect and his father, Mehrazh Babayev of construction firm Version M, became known.
Ismailov reportedly angered the Kremlin by hosting a lavish opening party for his Turkish hotel in the height of the crisis back in May.
That party featured Sharon Stone, Richard Gere and Paris Hilton - as well as Moscow Mayor Yury Luzhkov and his wife, Yelena Baturina.
But his friendship with the mayor couldn't save Cherkizovsky from closure this summer after a long-running investigation into health and safety and trading standards complaints.
Now Ismailov's sons may face an extradition battle if the Swiss authorities decide they were holding an illegal road race.
A spokesman for the Swiss Attorney General confirmed that if there was evidence of the Russians re-enacting a grand prix on the roads between Geneva and Lausanne they would seek to extradite the Ismailovs and an unnamed third driver to face trial.
But he added that it would not be justified for a speeding offence alone.
A lawyer for Babayev claimed that there was no race but added that his client admitted responsibility for the accident.
Jacques Barillion also told the Tribune de Geneve newspaper that media coverage of the incident had given a false impression that his client was receiving preferential treatment.
"The reality is different," he said. "He was questioned immediately by local police and made available for future questioning.
"He never intended to flee and is deeply affected by the consequences of this accident."
Russia holds Nevsky Express train blast funerals
The funerals of some of the 26 people who died in a blast that derailed a Moscow to St Petersburg luxury train on Friday have taken place in Russia.
Officials say the Nevsky Express derailment was caused by a bomb, but no group has yet claimed responsibility.
Meanwhile, Russian officials say a second blast which exploded on Saturday at the scene of the original blast was intended to hurt investigators.
Some analysts have suggested North Caucasus rebels may be responsible.
However a senior senator with expertise in the Caucasus, Alexander Torshin, has questioned that theory.
Mr Torshin said local "saboteurs" could be responsible for the blast, Russia's Interfax news agency reported.
"The blast was carried out professionally, we are talking about well-prepared, well-trained people using a cold-blooded calculation, and it is the counterintelligence's task to track them down," he said.
Police have identified a house where they believe suspects had been staying, Russian media reports say.
Among those who were buried on Tuesday were Sergei Tarasov, a former St Petersburg vice governor and Boris Yevstratikov, head of the Federal Agency for State Reserves.
Some of the 26 have already been buried.
Russian railways chief Vladmir Yakunin said extra security measures were being taken to prevent other similar attacks.
Police are continuing to comb the debris of the Nevsky Express - a luxury high-speed train which travels between Russia's two main cities.
Police said an "improvised explosive device" derailed the last three carriages of the express.
Twenty five people were killed on Friday when the train derailed near the town of Bologoye, some 400km (250 miles) north-west of Moscow. The toll rose to 26 over the weekend when an injured woman died in hospital. Russian media reports have put the death toll at 27, but this has not been confirmed.
Nearly 100 people were wounded, some of them seriously. Authorities said six foreigners were among them - an Italian, a Belgian, an Azerbaijani, two Belarussians and one Ukrainian.
A second, less powerful device went off on Saturday near the site of the first, reportedly injuring one of the men searching for clues.
Alexander Bastrykin, a lead investigator, is thought to have suffered a head injury.
This explosion was reported to have been triggered by a remote mobile phone.
The Nevsky Express is an expensive train popular with government officials and business executives.
Russian officials have released a photo-fit of a man they believe is linked to the bombing.
The interior ministry circulated the sketch of a man in his 50s with a wig of red hair, who had reportedly been seen by witnesses near the blast scene.
In 2007, a bomb on the same line derailed a train, injuring nearly 30 passengers.
That blast has been blamed on Chechen separatists.
Officials say the Nevsky Express derailment was caused by a bomb, but no group has yet claimed responsibility.
Meanwhile, Russian officials say a second blast which exploded on Saturday at the scene of the original blast was intended to hurt investigators.
Some analysts have suggested North Caucasus rebels may be responsible.
However a senior senator with expertise in the Caucasus, Alexander Torshin, has questioned that theory.
Mr Torshin said local "saboteurs" could be responsible for the blast, Russia's Interfax news agency reported.
"The blast was carried out professionally, we are talking about well-prepared, well-trained people using a cold-blooded calculation, and it is the counterintelligence's task to track them down," he said.
Police have identified a house where they believe suspects had been staying, Russian media reports say.
Among those who were buried on Tuesday were Sergei Tarasov, a former St Petersburg vice governor and Boris Yevstratikov, head of the Federal Agency for State Reserves.
Some of the 26 have already been buried.
Russian railways chief Vladmir Yakunin said extra security measures were being taken to prevent other similar attacks.
Police are continuing to comb the debris of the Nevsky Express - a luxury high-speed train which travels between Russia's two main cities.
Police said an "improvised explosive device" derailed the last three carriages of the express.
Twenty five people were killed on Friday when the train derailed near the town of Bologoye, some 400km (250 miles) north-west of Moscow. The toll rose to 26 over the weekend when an injured woman died in hospital. Russian media reports have put the death toll at 27, but this has not been confirmed.
Nearly 100 people were wounded, some of them seriously. Authorities said six foreigners were among them - an Italian, a Belgian, an Azerbaijani, two Belarussians and one Ukrainian.
A second, less powerful device went off on Saturday near the site of the first, reportedly injuring one of the men searching for clues.
Alexander Bastrykin, a lead investigator, is thought to have suffered a head injury.
This explosion was reported to have been triggered by a remote mobile phone.
The Nevsky Express is an expensive train popular with government officials and business executives.
Russian officials have released a photo-fit of a man they believe is linked to the bombing.
The interior ministry circulated the sketch of a man in his 50s with a wig of red hair, who had reportedly been seen by witnesses near the blast scene.
In 2007, a bomb on the same line derailed a train, injuring nearly 30 passengers.
That blast has been blamed on Chechen separatists.
Vladimir Putin 'to think about' presidential bid
Russian Prime Minister Vladimir Putin has said he will think about running for president again in 2012.
"I will think about it," said Mr Putin during an annual Q&A session with Russian citizens. He served as Russia's president from 2000 to 2008.
Answering some of 700,000 questions from viewers, he called for tough measures against those behind Friday's train bombing, in which 26 people died.
He said the attack showed the threat to Russia from terrorism remained high.
He also said the US was hindering Russia's efforts to join the World Trade Organisation, adding that his priority was to strengthen relations with Russia's neighbours.
In the wide-ranging Q&A session, Mr Putin condemned last Friday's attack on the Moscow-St Petersburg express train, in which senior government officials were killed.
A North Caucasus Islamist group has claimed responsibility for the attack on the Nevsky Express, some 400km (250 miles) north-west of Moscow.
"It is necessary to act in a very tough way against criminals who carry out these kinds of terrorist attacks," said Mr Putin.
"We have done a lot to break the spine of terrorism, but the threat has not been fully liquidated... The threat of terrorism remains very high."
He urged viewers to remain vigilant and alert to the possibility of future attacks.
A website claim on Kavkazcenter.com said the train attack was carried out by the "Caucasian Mujahadeen" on the orders of its leader, Doku Umarov.
The Chechen is described as one of Russia's most wanted rebels, but it was not possible to verify the claim's authenticity.
Economic reassurance
Mr Putin's annual phone-in appearance, which was aired live on state television, recalled similar Q&A sessions during his eight-year presidency.
He stood down after two consecutive terms as president in 2008, but the term in office has since been extended to six years, making him eligible to stand again.
The phone-in was a largely stage-managed event.
Mr Putin's successor as president, Dmitry Medvedev, has not made any such appearances.
Taking questions from around the country, Mr Putin said it was not only security that was at the forefront of people's minds.
One woman appearing by live video-link asked how she should survive the recession. Mr Putin tried to reassure her by saying the worst of the economic crisis was over.
On trade, Mr Putin said: "For some unknown reasons some countries, including the United States, are hindering our accession to the WTO."
The US has said it backs Russia's entry to the 153-member trade organisation, which opens up trade between member states.
But this week US officials said they were concerned about Mr Putin's threat to widen Russia's WTO bid to include its neighbours Belarus and Kazakhstan, with whom it has formed a customs union.
Mr Putin also fielded questions from Togliatti, where Lada is based, voicing his support for the struggling carmaker.
"We must not lose this brand, even if the share of our foreign partners changes," he said.
"A Conversation with Vladimir Putin: The Sequel" was being broadcast from a conference centre next to the Kremlin and lasted for a number of hours.
The eighth session of its kind, the interview has become something of an annual event, and organisers said they had received more than 700,000 questions by phone, text message and through the internet.
"I will think about it," said Mr Putin during an annual Q&A session with Russian citizens. He served as Russia's president from 2000 to 2008.
Answering some of 700,000 questions from viewers, he called for tough measures against those behind Friday's train bombing, in which 26 people died.
He said the attack showed the threat to Russia from terrorism remained high.
He also said the US was hindering Russia's efforts to join the World Trade Organisation, adding that his priority was to strengthen relations with Russia's neighbours.
In the wide-ranging Q&A session, Mr Putin condemned last Friday's attack on the Moscow-St Petersburg express train, in which senior government officials were killed.
A North Caucasus Islamist group has claimed responsibility for the attack on the Nevsky Express, some 400km (250 miles) north-west of Moscow.
"It is necessary to act in a very tough way against criminals who carry out these kinds of terrorist attacks," said Mr Putin.
"We have done a lot to break the spine of terrorism, but the threat has not been fully liquidated... The threat of terrorism remains very high."
He urged viewers to remain vigilant and alert to the possibility of future attacks.
A website claim on Kavkazcenter.com said the train attack was carried out by the "Caucasian Mujahadeen" on the orders of its leader, Doku Umarov.
The Chechen is described as one of Russia's most wanted rebels, but it was not possible to verify the claim's authenticity.
Economic reassurance
Mr Putin's annual phone-in appearance, which was aired live on state television, recalled similar Q&A sessions during his eight-year presidency.
He stood down after two consecutive terms as president in 2008, but the term in office has since been extended to six years, making him eligible to stand again.
The phone-in was a largely stage-managed event.
Mr Putin's successor as president, Dmitry Medvedev, has not made any such appearances.
Taking questions from around the country, Mr Putin said it was not only security that was at the forefront of people's minds.
One woman appearing by live video-link asked how she should survive the recession. Mr Putin tried to reassure her by saying the worst of the economic crisis was over.
On trade, Mr Putin said: "For some unknown reasons some countries, including the United States, are hindering our accession to the WTO."
The US has said it backs Russia's entry to the 153-member trade organisation, which opens up trade between member states.
But this week US officials said they were concerned about Mr Putin's threat to widen Russia's WTO bid to include its neighbours Belarus and Kazakhstan, with whom it has formed a customs union.
Mr Putin also fielded questions from Togliatti, where Lada is based, voicing his support for the struggling carmaker.
"We must not lose this brand, even if the share of our foreign partners changes," he said.
"A Conversation with Vladimir Putin: The Sequel" was being broadcast from a conference centre next to the Kremlin and lasted for a number of hours.
The eighth session of its kind, the interview has become something of an annual event, and organisers said they had received more than 700,000 questions by phone, text message and through the internet.
Russia and the Vatican establish full diplomatic ties
Russia and the Vatican have agreed to establish full diplomatic relations, the Kremlin has announced.
Until now, Moscow only had an office of representation at the Vatican. The new status means full-fledged embassies will be established in Moscow and Rome.
The announcement comes after President Dmitry Medvedev met Pope Benedict XVI while on a visit to Italy.
The move follows improvements in relations between the Russian Orthodox Church and the Vatican.
Decades of distrust
"President Medvedev told Pope Benedict at today's meeting that he signed a decree concerning the establishment of full diplomatic relations with the Vatican," presidential spokeswoman Natalya Timakova told reporters.
"He asked the foreign ministry to lead discussions to establish the relations and raise the level of representation to apostolic nuncio and embassy," she added.
The political detente follows decades of distrust between the Roman Catholic and Russian Orthodox churches.
The Orthodox Church has long accused the Catholic Church of seeking to convert Russians to Catholicism.
The Vatican says its activities in the country cater largely for traditional Catholic minorities like Poles, Germans and Lithuanians, who have faced discrimination and persecution in the past.
Until now, Moscow only had an office of representation at the Vatican. The new status means full-fledged embassies will be established in Moscow and Rome.
The announcement comes after President Dmitry Medvedev met Pope Benedict XVI while on a visit to Italy.
The move follows improvements in relations between the Russian Orthodox Church and the Vatican.
Decades of distrust
"President Medvedev told Pope Benedict at today's meeting that he signed a decree concerning the establishment of full diplomatic relations with the Vatican," presidential spokeswoman Natalya Timakova told reporters.
"He asked the foreign ministry to lead discussions to establish the relations and raise the level of representation to apostolic nuncio and embassy," she added.
The political detente follows decades of distrust between the Roman Catholic and Russian Orthodox churches.
The Orthodox Church has long accused the Catholic Church of seeking to convert Russians to Catholicism.
The Vatican says its activities in the country cater largely for traditional Catholic minorities like Poles, Germans and Lithuanians, who have faced discrimination and persecution in the past.
Tuesday, 1 December 2009
Ukraine exports 11.3 million tons of grain
Ukraine has exported 11.3 million tonnes of grain since the beginning of the 2009/2010 marketing year, which started on Jul. 1, 2009 and will end on Jun. 30, 2010, which is 7% up on 2008's figure, according to the Agriculture Ministry of Ukraine. According to the ministry, Ukraine has exported 5.7 million tonnes of wheat, 3.54 million tonnes of barley, and 1.93 million tonnes of corn.Ukraine over the period has also exported 1.4 million tonnes of rape, which is 26.2% down on the 2008/2009 marketing year.The Agriculture Ministry's grain harvest forecast for 2009 is about 46.2 million tonnes. In 2008, Ukraine's grain harvest was 53.3 million tonnes.
YUKOS owners win ruling in $100 billion case against Russia
Dec 1 - The former owners of YUKOS said on Dec. 1 they had won a court ruling clearing the way for a claim of upto $100 billion against the Russian state over the way it broke up Russia's biggest oil company. YUKOS's top shareholder GML told Reuters it aimed to win the right to seize Russian assets abroad if Moscow did not meet the claim, made under an international treaty designed to protect foreign investments in Eastern Europe and the former Soviet Union.The Russian government demanded billions of dollars in tax from YUKOS in 2003 in a move which led to the company's bankruptcy and the jailing of top owners Mikhail Khodorkovsky and Platon Lebedev on tax evasion and fraud charges.Khodorkovsky denied the accusations and said the destruction of YUKOS, which was eventually bought by state oil major Rosneft , was motivated by his political opposition to then-President Vladimir Putin.A tribunal of the Permanent Court of Arbitration (PCA) in The Hague ruled on Monday that Russia was bound by the Energy Charter Treaty (ECT), despite having never ratified the document, YUKOS's top shareholder GML said.GML will have to go through two more stages in The Hague, which would take another two to three years, before claiming full victory in its battle, said Tim Osborne, a director at GML."Ultimately we would go after the Russian assets whenever we can find them," said Osborne. Russian Prime Minister Vladimir Putin's spokesman, Dmitry Peskov, declined to comment on the ruling and GML's comments.Some of Khodorkovsky's former partners, such as Leonid Nevzlin, fled Russia and promised a "life-time litigation" over YUKOS, at that time Russia's largest oil firm. The arbitration began in 2005.International investors, including U.S. pensions funds, were spooked by the fall of the country's largest private company, which had a market value of over $40 billion before the state began its tax case.Kremlin critics said the YUKOS campaign marked a turning point in Putin's presidency and was a deliberate move to curb the power of so-called oligarchs and bring key sectors of the economy back under state influence.Putin has said the tycoons were prosecuted according to the law and sentenced fairly.TheNov. 30ruling, unavailable on the PCA web site but confirmed by the non-affiliated Energy Charter Secretariat in Brussels, stated that Russia is bound by its 1994 signatory membership in the Energy Charter Treaty (ECT).The ECT - established in 1991 to take into account "the problems of reconstruction and restructuring in the countries of Central and Eastern Europe and in the USSR" - provides for the protection of foreign investments and dispute resolution between 51 European countries, including Russia.Russia opted out of its signatory status in August this year and its provisional membership in the Energy Charter expired on Oct. 18.Osborne said that GML would now have to prove in the same court in The Hague that it had been discriminated against during the YUKOS demise and then win an enforcement of the award.Should GML win all rulings in two to three years, it would get the right to go after Russian assets abroad, except for diplomatic assets, if Moscow declines to redeem damages, he said.
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