From Volume 37, Issue 47 of EIR Online, Published Dec. 3, 2010
Russia and the CIS News Digest

Budget-Cutting Threatens Russian Infrastructure Projects

Nov. 22 (EIRNS)—Reports are piling up about damage to Russian economic development from the current budget-balancing approach of Finance and "Sub-Prime" Minister Alexei Kudrin (London press dubbed him "Finance Minister of the Year"). "Crisis forces corrections in major infrastructure projects," headlined the Russian Railways outlet RZhD Partner ( on Nov. 19. It reported that plans for the Industrial Urals-Arctic Urals (UP-UP) infrastructure and resource project have been reconfigured to emphasize more private investment (such as funds from Persian Gulf mini-states, according to other reports). Also this month, Russian Railways, Gazprom, and the UP-UP company signed an agreement for getting the Salekhard-Nadym rail line built, despite funding cuts.

On Oct. 15, Russian Transport Minister Igor Levitin reported, "We have not a single bridge across the Lena"—the easternmost of Siberia's great river systems. "The decision to build a bridge across the Lena was made in 2008, but now the economic situation is different, and what's being discussed is to build not a combined highway and rail bridge, but a cheaper one, highway only, in order to get it built as far as Yakutsk." The rail bridge across the Lena is a critical element of a rail line to Yakutsk and, ultimately, the Bering Strait.

The Far East online publication DV-ROSS reported Nov. 9 that modifications have been made to the federal program for Economic and Social Development of the Far East and Transbaikal to 2013. "Alas, not to increase it. The government resolution on implementation of the program calls for spending 337.7 billion rubles, nearly 9 percent less than planned earlier."

Rothschild Overt Control Grab for Norilsk Nickel Deflected

Nov. 22 (EIRNS)—An Oct. 21 extraordinary shareholders meeting of Norilsk Nickel rejected an attempt by co-owner Oleg Deripaska to get Nathaniel "Nat" Charles Jacob Rothschild elected to the Norilsk board of directors. Supporters of the other major owner, Vladimir Potanin, prevailed in a vote against making any changes in the board.

The close relationship between Nat Rothschild and Deripaska, best known as CEO of Russian Aluminum and in-law of the late President Boris Yeltsin, goes back several years. Its highlights include the rendezvous between Deripaska and leading British figures then-Business Secretary Peter Mandelson and now-Chancellor of the Exchequer George Osborne, on Rothschild's yacht in 2008. As Moskovsky Komsomolets noted in reporting the Norilsk meeting, Deripaska himself is a pirate of the Caribbean: "The head offices of Rusal are registered in offshore havens under British jurisdiction: the Isle of Jersey and the British Virgin Islands. That is where, in circumvention of the Russian budget, profits from Russian aluminum production end up."

On the eve of the meeting, Nat Rothschild advertised himself in an interview with the Russian business paper Vedomosti: "Before World War I, the Rothschilds owned assets in Azerbaijan, but then they left. I suppose one could say that I have brought the Rothschilds back to Russia." A disingenuous statement, on both counts: 19th-Century Rothschild family involvement in Russian sovereign debt operations and politics went far beyond Baku; and Nat Rothschild's grandfather Victor and father, Jacob, were each deeply involved in Soviet and Russian affairs.

Norilsk Nickel produces one-fifth of the world's nickel, and more than half the platinum group metals.

Yakunin Announces Container Shipment Accord

Nov. 24 (EIRNS)—Russian Railways President Vladimir Yakunin addressed the 5th Russian-Chinese Economic Forum in Moscow today, saying that rail freight between the two nations could rise 50% this year. Russian Railways has "agreed with China's transport minister to set up a three-party joint venture, in which German partners will also take part, in the field of container shipments." The greatest potential will be for expanding container shipments from China's northeast provinces, which have no direct access to the ocean, through Russia's Far East ports, to southern China, Japan, South Korea, and other countries, Yakunin said.

Most important, given the current fracas between North and South Korea, Yakunin said that Russia "also discussed with China's transport minister the possibility of cooperation to develop the Khasan port-Rajin rail section and the construction of a 160-kilometer track." This railway will link the Russian border town of Khasan, with North Korea's Rajin port. Just before the G20 summit in Seoul Nov. 9, Russian President Dmitri Medvedev had said that three-party projects among North and South Korea and Russia—especially this rail project—would help normalize the situation on the peninsula.

Russian Railways is "paying close attention to improving transport provision and developing rail and terminal-logistic infrastructure on the main freight routes between Russia and China," Yakunin said. They are developing rail infrastructure in Siberia and Russia's Far East, having invested over 12 billion rubles in 2009, and spending another 13 billion rubles this year. Under the program for cooperation between the Russian Far East and Siberia, and northwest China up to 2018, Russian Railways will also help open a new border crossing to China, from Nizhneleninskoye to Tongjiang across the Amur River, and reconstruct the existing Birobidzhan-Leninsk line.

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