RFE/RL Newsline – 10/23/2006

RADIO FREE EUROPE/RADIO LIBERTY, PRAGUE, CZECH REPUBLIC
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RFE/RL NEWSLINE Vol. 10, No. 195, Part I, 23 October 2006

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Headlines, Part I

* PUTIN YIELDS NOTHING AT RUSSIA-EU SUMMIT

* HUNDREDS OF FOREIGN NGOS LEFT STRANDED

* ABKHAZ LEADER REAFFIRMS INDEPENDENCE BID

END NOTE: WILL MOSCOW FACE A COLD, DARK WINTER?
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TRANSCAUCASUS AND CENTRAL ASIA

ARMENIAN OPPOSITION PARTY LEADER SAYS FORMER PRESIDENT TO SEEK RETURN
TO PRESIDENCY. Ararat Zurabian, the leader of the former ruling
Armenian Pan-National Movement (HHSh), announced on October 20 that
former Armenian President Levon Ter-Petrosian "will definitely
participate" in the country’s 2008 presidential election, according
to RFE/RL’s Armenian Service. Zurabian added that Ter-Petrosian’s
return to active politics will "completely change the existing
situation in Armenia," but noted that he was merely "expressing his
personal view" and admitted that he has not discussed the issue with
the reclusive former president. Although Zurabian made the same
announcement before the 2003 presidential election, Ter-Petrosian
failed to enter that race as predicted and has showed no signs of
returning to politics. The opposition leader further explained that
even without Ter-Petrosian, the opposition party still plans on
putting forth a presidential candidate "in any case," and hinted at a
possible tactical alliance with other ideologically similar
opposition parties prior to the May 2007 parliamentary elections.
Despite a recent attempt at regaining its lost political standing in
Armenia, the party remains hindered by an internal split between
rival actions divided among a group loyal to fugitive former Interior
Minister Vano Siradeghian and a rival faction aligned with the former
president. RG

ARMENIAN AND AZERBAIJANI DEFENSE MINISTERS MEET. In a statement
released in Yerevan, Armenian Defense Ministry spokesman Seyran
Shahsuvarian confirmed on October 20 that Armenian Defense Minister
Serzh Sarkisian met with his Azerbaijani counterpart Safar Abiyev at
the westernmost section of the heavily militarized frontier along the
Armenian-Azerbaijani border, RFE/RL’s Armenian Service reported. The
ministers, meeting at the initiative of the OSCE officials empowered
to monitor the so-called "line of contact" separating both sides,
discussed "issues of mutual concern" related to a recent series of
cease-fire violations along the border and near Nagorno-Karabakh. RG

GEORGIAN SOCIAL SECURITY OFFICIAL RELEASED FROM CUSTODY. A Tbilisi
municipal court ruled late on October 20 to release Zaza Sopromadze,
the director-general of Georgia’s United Fund for Social Security,
from detention after he agreed to post some 50,000 lari ($28,500) in
bail, ITAR-TASS reported. Arrested on October 19 with six other
colleagues, Sopromadze faces criminal charges of "abuse of office,"
fraud, and embezzlement estimated at roughly 570,000 lari ($325,000).
The six other senior officials of the Social Security Fund, including
the deputy head of the fund and several departmental heads, were
sentenced on October 21 to two months pre-trial detention. RG

ABKHAZ LEADER REAFFIRMS INDEPENDENCE BID… EU Special Representative
for the South Caucasus Peter Semneby on October 21 met in Sukhum
(Sukhumi) with Sergei Bagapsh and Sergei Shamba, who are president
and foreign minister respectively of the unrecognized Republic of
Abkhazia, according to apsny.ru and ITAR-TASS. Bagapsh informed the
EU envoy that the Abkhaz "position remains unchanged" and reaffirmed
the Abkhaz drive for independence. He added that "we do not consider
Georgia a reliable partner in the negotiating process" and argued
that "Georgia is not ready to solve the problem by peaceful means,"
further warning that "Georgia is actively preparing for a war with
Abkhazia and South Ossetia." Both Abkhaz leaders stressed that
Abkhazia is prepared to resume talks with Georgia as soon as that
country complies with the October 13 UN Security Council resolution
demanding that it withdraw from the Kodori Gorge the troops it
deployed there in late July, and also the so-called Abkhaz government
in exile, in order to "make it possible to resume the dialogue" (see
"RFE/RL Newsline," October 16, 2006). Accompanied by the German and
Finnish ambassadors to Georgia, Patricia Flor and Tery Hakala,
respectively, Semneby said that the European Union continues to "show
keen interest" in a peaceful settlement of the Georgian-Abkhaz
conflict. He further argued that an "orientation to Europe will
create conditions for the economic development" of Abkhazia as "close
relations with the EU will give guarantees, which are necessary for
investors" interested in the region. LF/RG

…AND SOUTH OSSETIAN LEADER RULES OUT REJOINING GEORGIA. South
Ossetian President Eduard Kokoity reiterated on October 21 his
opposition to any reunification with Georgia, according to Interfax
and ITAR-TASS. President Kokoity characterized the South Ossetian
history as a part of Georgia as one of "our people being threatened
with genocide," Interfax reported. The South Ossetia leader echoed
the resolve of Abkhaz President Sergei Bagapsh, who similarly
contended that Abkhazia "can never live with Georgia" as a unitary
state and reaffirmed the Abkhaz drive for independence (see above).
Abkhazia also recently appealed to the Russian parliament for formal
recognition as an independent state (see "RFE/RL Newsline," October
17 and 19, 2006). RG

GEORGIA REJECTS ANY ATTEMPT TO RESOLVE CONFLICTS BY FORCE… Georgian
Foreign Minister Gela Bezhuashvili pledged on October 21 that Tbilisi
will not use force to resolve its conflicts with Abkhazia or South
Ossetia, ITAR-TASS reported. The foreign minister added that the
Georgian government has in fact "prepared a statement that sets forth
the position of the Georgian authorities on a peaceful solution to
these conflicts," and affirmed that Tbilisi pursues "a clear line
towards peaceful settlement of these conflicts on the basis of plans
drafted by the country’s leadership and approved by the OSCE and
other international organizations." Bezhuashvili’s remarks follow
recent statements by Russian President Vladimir Putin during a news
conference after an informal EU-Russia summit in which he blamed the
Georgian leadership for worsening relations between Moscow and
Tbilisi, and accusing Tbilisi of seeking "a favorable climate" for
"solving the problems with South Ossetia and Abkhazia by force
through bloodshed." RG

…AFTER U.S. RULES OUT SUPPORT FOR ANY MILITARY MOVE BY GEORGIA.
U.S. Assistant Secretary of State Daniel Fried warned on October 20
that the United States would not support military action by Georgia
to regain control of Abkhazia and South Ossetia, stating that there
is "no military solution to any of these conflicts," ITAR-TASS
reported. RG

OPPOSITION SLAMS GEORGIAN PRESIDENT’S CALL FOR EARLY ELECTIONS.
Opposition parties and political figures expressed outrage on October
20 at President Mikheil Saakashvili’s announcement the previous day
that he plans to submit to parliament a bill on bringing forward by
eight months the date of the presidential election due in January
2009, Caucasus Press reported. Saakashvili reasoned that it would
save "time and energy" to hold the presidential ballot concurrently
with the parliamentary election. Pikria Chikhradze of the New
Conservatives (aka New Rightists) suggested that Saakashvili is
concerned at the dwindling popularity of his United National
Movement, while Zviad Dzidziguri commented that Saakashvili wants to
eradicate the Georgian opposition, Caucasus Press reported. Davit
Usupashvili of the opposition Republican Party suggested
Saakashvili’s proposal was a response to both domestic disillusion
and criticism by the EU and U.S. of his policy. Former Foreign
Minister Salome Zourabichvili accused Saakashvili of seeking to
prevent a redistribution of forces within parliament and to establish
totalitarian rule, Caucasus Press reported on October 21. LF

CLASH ERUPTS BETWEEN HUNDREDS OF KAZAKH, TURKISH WORKERS. A regional
prosecutor in the Kazakh Caspian Sea port of Atyrau, Rakhimbek
Mamyrbaev, reported on October 20 that a mass brawl between Kazakh
and Turkish construction workers left nearly 140 people injured,
Interfax reported. The clash, involving as many as 300 Kazakh and 100
Turkish workers, left 115 seriously wounded and requiring medical
attention. The laborers, contracted for the Tengizchevroil joint
venture, are working on the construction of a plant near the Tengiz
oil field, according to "Kazakhstan Today." RG

KAZAKH PRESIDENT’S DAUGHTER CRITICIZES INDIAN OWNER FOR TRAGIC MINING
ACCIDENT… The daughter of Kazakh President Nursultan Nazarbaev on
October 20 accused the Indian-born steel magnate Lakshmi Mittal of
responsibility for the deaths of more than 80 Kazakh coal miners in
the past three years, RFE/RL reported, citing the weekly "Karavan"
newspaper’s website. In a "Karavan" interview, Nazarbaeva criticized
the Arcelor Mittal group and its executives for failing to ensure
adequate safety conditions at several of the coal mines that they
operate in Kazakhstan. Nazarbaeva, who holds a seat in the
parliament, added that Kazakhstan must improve its labor laws and
called for greater legislative oversight over foreign investors.
After protests over a gas explosion in September that killed 41
Kazakh miners, the Arcelor Mittal group raised the monthly salaries
of its employees to the equivalent of at least $700 and pledged to
address safety concerns in the mines. RG

…AFTER KAZAKH PROSECUTORS ANNOUNCE ANOTHER ARREST. Prosecutors in
the central Kazakh region of Qaraghandy announced on October 19 the
arrest of a fifth coal-mine employee over the gas explosion that
claimed 41 lives in September (see "RFE/RL Newsline," September 21,
2006), according to "Kazakhstan Today." The latest arrest, which
reportedly took place on October 14, follows the arrest of four other
mine officials on charges of criminal negligence. RG

PLANNED MEETING BETWEEN KYRGYZ AUTHORITIES AND OPPOSITION CANCELED. A
planned meeting between Kyrgyz President Kurmanbek Bakiev and leaders
of the opposition was canceled on October 21 after some opposition
leaders objected to the size of the presidential delegation, RFE/RL’s
Kyrgyz Service reported. The meeting was intended to ease tensions
between the opposition and the Kyrgyz president before a planned
opposition rally set for November 2 in Bishkek. Galina Kulikova, the
leader of the Menin Olkom (My Country) party, said that opposition
For Reforms movement leader Temir Sariev was responsible for calling
off the meeting, although "the presidential administration was
prepared" to meet "all the conditions presented" by the opposition
for the talks. Tursunbek Akun, the head of the presidential Human
Rights Commission, blamed both sides and urged them to engage in a
constructive dialogue. RG

KYRGYZ PARLIAMENTARIAN SAYS PRESIDENT OFFERED SENIOR POSTS TO
OPPOSITION DEPUTIES. Kyrgyz opposition lawmaker Azimbek Beknazarov
announced on October 20 that he and two other opposition leaders
declined an offer of state jobs by President Kurmanbek Bakiev,
AKIpress and the 24.kg website reported. Speaking to reporters in
Bishkek, Beknazarov said that he was offered the position of Supreme
Court chairman, while former Trade Minister Almazbek Atambaev was
promised the prime ministerial post and Omurbek Tekebaev was offered
his former position as parliamentary speaker. A second opposition
parliamentarian, Melis Eshimkanov, also reported to the parliament
that he was given assurances from an unnamed senior presidential
official that Bakiev would meet with opposition leaders. RG

PLAY BY TURKMEN PRESIDENT OPENS IN ASHGABAT THEATERS. A play
purportedly written by Turkmen President Saparmurat Niyazov opened in
five theaters in the capital, Ashgabat, on October 21, according to
Interfax. An unnamed Culture Ministry official explained that the
theaters chose to offer stage productions based on Niyazov’s
"immortal works." In a televised address the same day, Niyazov
appealed to the Turkmen public to not praise him so often, saying
that "it is hard for me to listen to applause meant only for me." RG

TURKMEN PRESIDENT ADMITS HEART CONDITION. President Niyazov admitted
on October 20 for the first time that he suffers from a heart
condition, the ferghana.ru website reported. In a speech to a "world
congress of ethnic Turkmen," President Niyazov explained that he is
unable to fast during the holy Muslim month of Ramadan because he has
to take medication for an unspecified "heart ailment." Niyazov’s
health has long been the object of speculation, exacerbated by
reports in the state-controlled media that has undergone medical
checkups twice this year. RG

RUSSIA

PUTIN YIELDS NOTHING AT RUSSIA-EU SUMMIT… Meeting with EU leaders
on October 20 in Lahti, Finland, for what Britain’s "Financial Times"
described as a "tense" summit dinner, President Vladimir Putin did
not agree to guarantee Russia’s international contracts, open up its
energy market, or ratify in its present form the Energy Charter,
which Moscow signed with the EU in 1994 and which would require it to
open up access to its pipelines, international media reported (see
"RFE/RL Newsline," October 20, 2006). EU leaders by and large went to
great pains to present a united front and stressed the importance of
transparency and observing legal norms in developing mutually
beneficial energy ties. But the "Financial Times" added that "the
meeting with…Putin served as an embarrassing reminder to European
leaders that their attempt to build a more equal energy partnership
with Russia has yielded few positive results." The summit came
against a backdrop of recent Russian moves against Georgia and
Georgians living in Russia, the unresolved murder of critical
journalist Anna Politkovskaya, questionable Kremlin behavior over the
Sakhalin-2 gas production-sharing agreement (PSA) and other PSAs, and
remarks by Putin that appeared to make light of serial rape. French
President Jacques Chirac, who favors strong ties with Russia as a
"counterweight" to the United States, said that "moral issues [and]
economic interests…should not be connected." In response, Estonian
Prime Minister Andrus Ansip said that "we have to take a very strong
position…[and] find a good balance between [human rights] values
and economic interests. It is totally wrong to pay attention only to
[economic] interests." PM

…BUT OFFERS SOME QUIPS OF HIS OWN… Georgia and human rights
played only a "marginal role" at the October 20 EU-Russia summit at
Lahti, Finland, Germany’s "Frankfurter Allgemeine Zeitung" wrote on
October 23. But President Putin stressed that Georgia is to blame for
the current tensions, saying that Russia’s aim is to "avoid
bloodshed." An unnamed "furious diplomat" told the "Financial Times"
of October 23 that French President Chirac "hung Georgia out to dry"
by refusing to let that issue get in the way of energy discussions.
Putin, whom the London daily described as an "implacable dinner
guest," sought once again to divide some of the older EU members from
the newer ones by "taking pleasure in appearing to confuse Latvia and
Lithuania." In a manner reminiscent of Soviet rebuttals of U.S.
criticism of Soviet human rights practices by referring to U.S.
racial inequalities, Putin responded to negative comments about
Russian democracy by noting the extent of corruption in Spanish
municipalities, London’s "The Guardian" reported on October 23. He
left Italian Prime Minister Romano Prodi "without words" by pointing
out that "mafia" is an Italian word. Putin nonetheless appeared to
win at least some approval around the table by remarking that the
EU’s most important challenge is to "safeguard Christianity in
Europe." PM

…WHILE TRYING TO BE UPBEAT. President Putin left the October 20
Lahti EU-Russia summit by saying that he is that even the "most
controversial" differences with the EU can be resolved, RFE/RL
reported. The two sides will hold a full summit meeting in Helsinki
on November 24. The EU hopes to use that session to launch talks on a
new comprehensive cooperation agreement to replace the current
Partnership and Cooperation Agreement, which runs out in 2007. Putin
said in Lahti that he would like the new accord to be called a
Strategic Partnership Treaty, but also suggested energy issues might
need to be tackled outside of it. The German Foreign Ministry, which
is controlled by the Social Democratic Party (SPD), has drawn up a
position paper independent of Chancellor Merkel and her Christian
Democratic Union (CDU-CSU), in which the ministry aims to develop the
EU’s relations with Russia on the basis of an expanding network of
interrelationships (see "RFE/RL Newsline," September 5 and October 19
and 20, 2006). In January 2007, Germany will take the rotating chairs
of the EU and the Group of Eight (G8) leading industrialized
countries. PM

EADS WELCOMES RUSSIA AS ‘STRATEGIC’ PARTNER. Thomas Enders, who is
the German co-chief executive of the European aerospace firm EADS,
which is primarily a Franco-German enterprise, has welcomed the
Russian state’s acquisition of a stake in the company, diewelt.de
reported on October 23. Enders says cooperation with the Russian
aerospace industry is of "strategic importance" for EADS. Russia’s
state-owned Vneshtorgbank recently confirmed it holds a stake of just
over 5 percent in EADS, the parent company of Airbus. But German
Chancellor Angela Merkel and the management of EADS, which seeks
lucrative U.S. defense contracts, have blocked Russian plans to
acquire blocking rights and a seat on the board (see "RFE/RL
Newsline," September 20, and October 10, 11, and 13, 2006). He added
that Russia is valuable to EADS not only as a market but as a source
of "multifaceted experience in the development and construction of
aircraft." Russia’s new United Aircraft Company (OAK) seeks a strong
foreign partnership to modernize Russia’s moribund aerospace
industry, which London’s "The Times" recently described as a
"glorious junkyard." PM

U.S. SECRETARY OF STATE DISCUSSES IRAN, NORTH KOREA IN MOSCOW… U.S.
Secretary of State Condoleezza Rice sought support from top Russian
officials in Moscow on October 21 regarding the nuclear programs of
North Korea and Iran, news agencies reported (see "RFE/RL Newsline,"
October 18 and 19, 2006). But even before she arrived, Russian
Foreign Minister Sergei Lavrov repeated his opposition to tough
sanctions against Iran. He told the Kuwaiti news agency KUNA that
"any measures of influence should encourage creating conditions for
talks." Lavrov added that "we won’t be able to support and will
oppose any attempts to use the Security Council to punish Iran or to
use Iran’s [nuclear] program [as an excuse] to promote the idea of
regime change there." In addition to discussing North Korea, Rice
appealed to Russia and Georgia to reduce the tension between their
countries. PM

…AND MEETS WITH SLAIN JOURNALIST’S FAMILY. During her one-day
Moscow visit on October 21, Secretary of State Rice gave an interview
to "Novaya gazeta," the newspaper for which critical journalist
Politkovskaya wrote before her recent murder, news agencies reported
(see "RFE/RL Newsline," October 10, 11, 12, and 16, 2006). She also
met with Politkovskaya’s son. An unnamed senior U.S. State Department
official told "The Moscow News" of October 23 that "we planned this
not as a poke in the eye [of the Putin regime], but [as] an
absolutely necessary and human step." The official also described the
meeting with Politkovskaya’s family as very emotional for Rice. She
told reporters that "the fate of journalists in Russia is a major
[U.S.] concern. Anna Politkovskaya was a particularly well-known and
well-respected journalist, so I think it’s important to note that."
In a commentary on the case, London’s "The Economist" wrote on
October 14 that "whoever killed [Politkovskaya], Putin shares the
blame for having made independent journalism both rare and
perilous…. It is not there yet, but Russia sometimes seems to be
heading towards fascism." PM

HUNDREDS OF FOREIGN NGOS LEFT STRANDED. U.S. Secretary of State Rice
also sought information in Moscow on October 21 about the fate of
several hundred foreign NGOs, which are being forced under new
legislation to reregister under highly complex and somewhat arbitrary
rules in what is widely seen as an attempt to close many of the NGOs,
news agencies reported (see "RFE/RL Newsline," September 21 and
October 17 and 20, 2006). She said that "in some cases [the
legislation] is being implemented in ways that is making it difficult
for NGOs to operate, and so I think we have to go over that." U.S.
Assistant Secretary of State Daniel Fried met with federal human
rights ombudsman Vladimir Lukin to discuss the law and said later
there had been progress. The "Frankfurter Allgemeine Zeitung"
reported on October 21 that about 400 out of some 500 foreign NGOs
have at least temporarily suspended their operations in Russia
pending word from the authorities as to whether they have been
reregistered. Many smaller NGOs have left Russia altogether, saying
that the complex and drawn-out procedure exhausted their meager
resources. Among the NGOs awaiting word of their fate are Amnesty
International and Human Rights Watch, as well as the institutes
linked to the two major U.S. political parties, namely the National
Democratic Institute (NDI) and International Republican Institute
(IRI). The Kremlin has linked those two institutes to the 2004 Orange
Revolution in Ukraine and the 2003 Rose Revolution in Georgia. The
German daily added that Foreign Minister Walter Steinmeier has
contacted his colleague Lavrov to ensure that German NGOs are not
subjected to arbitrary bureaucratic obstacles. PM

EXTREMISTS WRECK GALLERY WITH ‘COSMOPOLITAN’ ART. Numerous
ultranationalist young men ransacked Moscow’s Gelman Gallery on
October 21, "The Moscow News" reported on October 23. They beat owner
Marat Gelman and destroyed paintings by the Georgian-born artist
Aleksandr Dzhikia, as well as computers. Gelman later described the
attack as "monstrous." The attackers divided into groups to perform
specific tasks, the daily "Kommersant" noted. One day earlier, the
artworks were en route to an exhibition in London when police took
them off a plane at Sheremetyevo Airport. One collage showed a
scantily clad President Putin frolicking in bed with a similarly
dressed U.S. President George W. Bush and Osama bin Laden. An
investigation into the attack is reportedly under way.
Ultranationalists and other far-right extremists see the Gelman
Gallery as "a hotbed of cosmopolitanism and anti-Russian values,"
Vladimir Pribylovsky, president of the Panorama think tank, told the
daily. "Cosmopolitanism" is a Stalin-era anti-Semitic term. Matthew
Bown was transporting the 11 pieces of art from the gallery to his
own gallery London when he was ordered off his plane and questioned
by police. Officials confiscated the artwork, telling Bown he had
been detained because several of the pieces "contain representations
of heads of state." "Kommersant" described the incident with the
headline: "Art Critics In Black Shirts." PM

LAWSUIT BEING READIED OVER THEATER HOSTAGE INCIDENT. With Moscow set
to mark the fourth anniversary on October 23 of the Dubrovka theater
hostage taking by Chechen militants, relatives of those who died say
they plan to sue officials for negligence, news agencies reported. At
least 129 hostages and 42 militants died during a bungled rescue bid
at the theater, where the musical "Nord-Ost" was playing. Tatyana
Karpova, co-chairwoman of a group of former hostages and victims’
relatives, said the authorities did not provide proper medical care
to freed captives, among other alleged errors. The militants took
about 800 people hostage, demanding Russia end the Chechen war. Three
days later, special forces pumped a narcotic gas into the theater to
knock out the hostage takers. Nearly all the victims died as a result
of the effects of the gas. PM

MAYORAL ELECTION IN FAR EAST CANCELLED. Electoral authorities in
Dalnegorsk in Primorsky Krai decided on October 21 to drop plans to
hold a mayoral run-off election the following day after the remaining
candidates withdrew, Russian news agencies reported. The withdrawals
came in response to popular anger following the murder of former
mayor and prominent candidate Dmitry Fotyanov, (see "RFE/RL
Newsline," October 19 and 20, 2006). He was one of at least two
first-round candidates belonging to the pro-Kremlin Unified Russia
party. In other news, in the central city of Samara on October 23,
election officials announced that Viktor Tarkhov of the Party of Life
defeated incumbent Mayor Georgy Limansky of Unified Russia in the
mayoral race there the previous weekend, Russian news agencies
reported. The Party of Life is one of three leftist parties that are
joining together to form a Kremlin-sponsored "loyal opposition" for
the 2007 parliamentary elections (see "RFE/RL Newsline," October 12,
2006). PM

NALCHIK RAID SUSPECT’S PRETRIAL DETENTION EXTENDED. Rasul Kudayev,
who was detained on October 18 2005 on suspicion of having commanded
one of the detachments of young militants who attacked police and
security facilities in Nalchik five days earlier, is to remain in
pretrial detention for a further six months, until April 17, 2007,
according to kavkaz,memo.ru as reposted on October 20 by
kavkazweb.net. The rationale cited for that decision was the need for
further investigation in light of the "complicated" nature of his
case. Kudayev was captured by U.S. forces in Afghanistan in 2001 and
held for three years as Guantanamo Bay in Cuba before being released
for lack of evidence. His relatives claim he is a semi-invalid and
was not physically capable of participating in last year’s attacks
(see "RFE/RL Newsline," October 24, 2005). LF

OSSETIAN YOUTH GROUP WARNS AGAINST ABUSE OF INTERNET. In an October
22 statement posted on the independent website ingushetiya.ru, the
Patriotic Union of Youth of North Ossetia expressed concern that the
Internet is being abused in both North Ossetia and Ingushetia as a
weapon in the dispute over rival territorial claims to North
Ossetia’s Prigorodny Raion. The statement appeals to unnamed "forces
that are trying to destroy the fragile peace in the North Caucasus"
to eschew "manifestations of nationalism, xenophobia, and hate
speech." The union advocates transferring Prigorodny Raion to
Ingushetia in order to end the dispute (see "RFE/RL Newsline," August
16 and October 2, 2006). On October 20, ingushetiya.ru reported that
Ingushetia’s two largest Internet providers are blocking access to
its site to users within that republic. LF

END NOTE

WILL MOSCOW FACE A COLD, DARK WINTER?

By Roman Kupchinsky

Last winter, the Ukrainians were left shivering after Russia
cut off gas supplies. This year, there’s a chance it could be the
Russians feeling the freeze.
There are concerns that domestically Russia’s
state-controlled gas monopoly Gazprom will be unable to supply
electricity-generating companies with enough gas. If that happens, it
could mean brownouts and blackouts this winter.
Such a scenario nearly occurred last year. Mosenergo, the
majority shareholder in Russia’s Unified Energy Systems (EES)
electricity monopoly, supplies electricity to the Moscow region.
In the winter of 2005-2006, it was faced with a severe lack
of gas to power its generating plants. Gazprom was forced to briefly
limit supplies to Europe in order to keep the lights on in Moscow.
EES head Anatoliy Chubais is concerned. He has placed the
blame for the potential gas deficit squarely on Gazprom, which
controls 25 percent of the world’s gas reserves and 94 percent of
Russia’s natural gas. Chubais has said that Gazprom is unable or
unwilling to supply generating companies in Russia with enough gas
and this has forced them to buy more expensive diesel fuel to power
their plants.
In 2006 alone, the cost of diesel has risen by over 85
percent, while the price consumers are charged for electricity has
remained low.
Gas shortages began during the winter of 2005-2006 and EES
instructed its thermal-generation plants to switch to other fuels —
diesel and coal. In the first eight months of 2006 the use of diesel
increased by 35 percent and coal by 9 percent.
According to Chubais, the gas shortage makes the present cost
of diesel fuel equivalent to a price of $185 per 1,000 cubic meters
of gas. EES buys gas from Gazprom at $46 per 1,000 cubic meters.
Chubais told the "Vedomosti" business daily on September 28
that when he met with Gazprom CEO Aleksei Miller to discuss this
problem, Miller told him to switch to other fuels.
EES is also buying electricity from abroad. In October, EES
entered into negotiations with the Ukrainian Fuel and Energy Ministry
to buy excess electricity. According to the October 2 issue of the
"Kommersant" daily, EES has agreed to purchase from Ukraine some 6
billion kilowatt-hours (kWh) to make up for expected shortfalls in
the European part of Russia.
Most experts agree that Russia’s domestic gas shortage is due
to Gazprom’s paltry investments and the company’s desire to expand in
too many directions at once.
With Gazprom’s main gas fields running low, industry analysts
say the company has not done enough to invest in exploration and
development of new fields in the Yamal Peninsula. Instead, the
company, which is $38 billion in debt, has concentrated on noncore
activities such as buying into European energy companies. In
September 2005, Gazprom spent $13 billion to buy oil giant Sibneft in
order to transform itself into an integrated energy company.
It looks like the Putin-Miller team might have overextended
itself. Many analysts believe that Putin’s promise in March to supply
China with 30-35 billion cubic meters of gas by 2025 is unrealistic
as is Gazprom’s decision to develop the giant Shtokman gas field
without the help of foreign partners.
One possible solution to the gas deficit could be the
liberalization of Russia’s gas market — something the European Union
is pushing for.
Chubais believes that the gas market should be liberalized
along European lines and that Gazprom’s pipelines be opened to
independent gas producers. He says that the extra income generated by
these reforms could be used to construct new underground gas storage
facilities.
In September, Russian Energy Minister Viktor Khristenko said
that a liberalized gas market in Russia is possible and that it could
encompass over 100 billion cubic meters of domestic gas sales.
However, a liberalized gas market could cause consumer electricity
prices to rise as it would spell the end of Gazprom’s subsidized
pricing system.
The new Russian strategy to expand nuclear power generation
could well be a feasible long-term solution to declining gas
supplies, but in the meantime, residents of Moscow and St. Petersburg
should brace themselves for a frosty winter.

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