Moscow Press Review for September 20, 2006: Secret Expenditures, Energy Dealings, and Railway Reforms

Strategic Insights -

Secret expenditures in Russia's budget have significantly increased since 2003, with a reported surge of 440 billion rubles. This rise in secret spending has further fueled concerns about corruption and lack of transparency in government expenditures, affecting sectors such as culture, sport, education, and housing. Prime Minister Mikhail Fradkov has dismissed Vladimir Vdovin, a deputy head of the Russian Federal Property Fund, allegedly due to his involvement in high-profile cases, including the Yukos-related Apatit case and the Tri Kita smuggling case.

Key Takeaways:

  • Secret expenditures in Russia's budget have increased by 440 billion rubles since 2003.
  • Expenditures on culture, sport, education, and housing are shrouded in secrecy, creating opportunities for corruption.
  • Prime Minister Mikhail Fradkov dismissed Vladimir Vdovin, a deputy head of the Russian Federal Property Fund, amid alleged involvement in high-profile cases.
  • Russia and Kazakhstan are drafting an agreement to allow a joint venture to sell gas to Gazprom at almost three times the price of Karachaganak field gas.
  • Gazprom CEO Alexei Miller refrained from increasing gas supplies to power plants, suggesting fuel oil stockpiling to avoid price hikes.
  • A criminal investigation has been launched against executives at Tomskneft-VNK for embezzling 6.5 billion rubles from the Yukos subsidiary.
  • The Natural Resources Ministry's decision to revoke Shell's Sakhalin-2 project approval sparked criticism from the European Union and Japan.
  • Inteko, the company owned by Moscow's mayor's wife, has become a business partner of the city government.
  • Mobile TeleSystems (MTS) considers taking legal action against a Siberian poultry farm selling eggs with a logo identical to MTS's.
  • Alexander Lebedev, the largest private shareholder of Russian flag carrier Aeroflot, has signed a deal to reserve 22 Boeing 787s and will pay up to $40 million to extend the contract.
  • The government commission for reforming Russian Railways has put the brakes on the company's plan to spin off freight services into an independent subsidiary.

Statistics:

  • 440 billion rubles: the increase in secret expenditures in Russia's budget since 2003.
  • 6.5 billion rubles: the amount suspectedly embezzled by executives at Tomskneft-VNK from the Yukos subsidiary.
  • 22: the number of Boeing 787s reserved by Alexander Lebedev and his National Reserve Corporation.
  • $40 million: the maximum amount Lebedev's company will pay to extend the contract for the Boeing 787s.

Sources:

  • Interfax
  • Vedomosti
  • Kommersant
  • Moscow Times
  • Vremya Novostei