From Volume 6, Issue 37 of EIR Online, Published Sept. 11, 2007
Russia and the CIS News Digest

Russian Premier: Look To a 100-Year Railroad Boom

Sept. 8 (EIRNS)—The development of Russia's railroads until the year 2030 was at the center of discussion at a Sept. 6 Cabinet meeting, chaired by Prime Minister Mikhail Fradkov. Speaking to Russian Railways CEO Vladimir Yakunin, Fradkov congratulated him for "getting out in front," in developing his sector of responsibility. "This is appropriate for the role railroads play, and will play for the next 100 years, in the context of a railroad boom."

Yakunin and Deputy Minister of Transport Alexander Misharin presented "minimum" and "maximum" versions of the rail plan, which won initial approval on April 10, when Yakunin reported to a government meeting with President Vladimir Putin. After the Sept. 6 deliberations, it awaits a final decision in November, in conjunction with the overall Russian economic development policy for the next 15 years. If implemented, Vechernaya Moskva newspaper wrote yesterday, the maximum program will mean that "rail becomes one of the most crucial national projects."

Misharin underscored the urgency of new construction and equipment procurement, noting that 70% of Russian rolling stock and 84% of locomotives are obsolescent. Total track has shrunk by 2,500 km in the past 15 years. In the "maximum" Russian Railways plan, 20,000 km of new railroads will be built by 2030, including high-speed networks in the western part of the country and central Siberia, new freight lines in Siberian raw materials areas, and "strategic" connections, including the 3,500 km line to the Bering Strait. The article "Russia: Contours of an Economic Policy to Save the Nation," in EIR of Sept. 7, details these plans.

Yakunin motivated the maximum program, according to Russian media reports, as "the infrastructural basis for long-term economic growth in Russia," as well as a higher standard of living, and development of new regions and new raw materials sources. In his words, "Full-scale implementation of the strategy will guarantee Russia's social and economic development according to an innovation scenario."

The plan anticipates 13.8 trillion rubles of investments ($530 billion at the present exchange rate), of which the federal budget would provide 20%; Russia's regions, 5%; and the state-owned company Russian Railways, 42%. The other one-third of the investments would be sought from private sources. The indicated federal financing level represents a 70-fold increase in government funding for rail, Misharin pointed out.

Misharin presented a concept of "flexible rates" for the railroads, with discounts according to specific purpose. Media based in the Urals were quick to say that this approach could make the Industrial Urals-Arctic Urals regional resource development program profitable. EIR of Sept. 7 also reported on the controversy around this megaproject.

U.S. Ambassador Is Asked About Bering Strait Plan

Sept. 8 (EIRNS)—William Burns, the U.S. Ambassador to Russia, has just toured the Russian Far East. Interviewed yesterday by Itar-TASS, he focussed on potential cooperation between Russia's easternmost region of Chukotka, and neighboring Alaska. While several of the questions and answers involved polar bears and tourism, Itar-TASS also asked Burns, "There exists the almost fantastical project of a rail tunnel under the Bering Strait. If it is done, how big will the economic benefit be for Russia and the U.S.A.?"

Burns replied, "That project is a very interesting idea," before calling it also "difficult and expensive," and saying he was not an expert. "There have been many conferences on this question," said Burns, adding that he would like to look at data on the project's viability.

Burns is a career diplomat, not a political appointee. The most prominent conference on the Bering Strait was the April 24, 2007 event, which heard from Americans Lyndon LaRouche and former Alaska Governor Walter Hickel.

In popular Russia press coverage of the Sept. 6 government meeting on rail development, the Bering Strait project is also prominent. Vechernakaya Moskva headlined, "From Washington to Moscow by Train?" The vision of the Russian rail people, the paper said, is for "an infrastructure link between the U.S.A., Japan, India, and Europe—a kind of overland Suez Canal."

Schedule of U.S.-Russia Strategic Talks Is Packed

Sept. 7 (EIRNS)—At least three meetings of technical and military experts, as well as political officials, will take place in September on strategic issues that are on the table between the United States and Russia. A Sept. 10 meeting in Paris will discuss missile defense, the expiring START treaty, and the Conventional Forces in Europe (CFE) Treaty. So far, the U.S. leadership has refused to budge on the deployment of missile system components in the Czech Republic and Poland, while officially remaining open to President Vladimir Putin's offer to use Russian-owned or leased facilities instead; the United States is refusing to renegotiate START; and the Russians want the CFE Treaty either changed or ended. The Russian delegation for the talks will be headed by Deputy Foreign Minister Sergei Kislyak.

On Sept. 15, Russian, American, and Azeri experts will meet in Baku to discuss the use of the Russian-leased Gabala radar station for joint ballistic-missile defense (BMD). According to a source at the Russian Embassy in Washington, there will also be a meeting in Rome on strategic issues. In October, the 2+2 meeting of defense and foreign ministers will take place in Moscow. This source indicated that some in the Russian military are unhappy with Putin's proposal to share BMD technology. They are concerned that the Pentagon merely wants access to Russian modeling and algorithms used in missile defense systems.

At the top level, Russian-American BMD talks resumed between Putin and President George Bush at the Asia Pacific Economic Cooperation Forum (APEC) meeting in Australia. Putin said, "We discussed all problems on the bilateral agenda and most important international issues, first of all things related to the ABM problem." According to Itar-TASS, he mentioned the upcoming experts' trip to Azerbaijan, and added, "Thus we state that the process of the joint work in this sphere is continuing."

Putin also indicated that the two sides had discussed "some particular large-scale economic projects, the implementation of which is in the interests of the business communities on both sides, in the U.S. and in Russia," without indicating what these projects might be.

Russia Upgrades Strategic Missile Forces

Sept. 2 (EIRNS)—Gen. Col. Nikolai Solovtsov, commander of Russia's Strategic Missile Forces, said on Sept. 1 that Russia will be conducting tests of new warheads, including multiple reentry vehicles, for its Topol M land-based and Bulava submarine-launched ballistic missiles, RIA Novosti reported. The new warheads, he indicated, would help penetrate missile defenses more effectively. "If the U.S. proceeds with missile defense plans, despite serious opposition from people in Europe, the Strategic Missile Forces will manage to take adequate measures to counter threats to Russia," he said. The previous week, Solovtsov announced that a second Topol M missile battalion would be on duty before the end of the year, and that deployment to two more regions of central Russia would take place in 2010.

Putin's Indonesia Trip May Be Worth $10 Billion

Sept. 4 (EIRNS)—In previews of President Vladimir Putin's five-day trip abroad, which took him to Indonesia for the first time, Russian press wrote that his trip would "open the way for billions of dollars of Russian investment in the country's oil and aluminum industries," the Moscow Times reported. Deals worth as much as $10 billion could be generated for Russian industry in Indonesia, including a contract between Indonesian metals and mining major firm Aneka Tambang, or Antam, and Russian Aluminum (Rusal) for construction of a $4 billion aluminum smelter in Tayan, East Kalimantan.

"We are interested in Indonesia due to its rich bauxite resources," Rusal spokeswoman Olga Sanarova was quoted in the newspaper. She mentioned a "project to create a bauxite-processing plant in the country." Rusal is the world's largest aluminum producer. Indonesia's proximity to China, one of the world's largest aluminum consumers, makes the prospective deal especially attractive.

In the oil sector, LUKoil was set to ink a deal with Indonesia's Pertamina, LUKoil spokesman Vladimir Simakov said. A subsidiary of the oil major, LUKoil Overseas, signed a memorandum of understanding with the Indonesian company in April on the development of fields in Russia, Indonesia, and third countries, he said. LUKoil president Vagit Alekperov accompanied Putin on the trip. Simakov said that investment by Russia's Alfa Group in Indonesia's telecommunications sector would also be on the agenda.

The Sukhoi aircraft company was expected to firm up the sale of additional fighter jets to Indonesia.

After Indonesia, Putin attended the Asia-Pacific Economic Cooperation summit and held bilateral meetings in Australia. En route home, he is slated to stop over in the United Arab Emirates on Sept. 10.

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