Tatar-Bashkir Report: July 24, 2003

Tatar, South Korean Company Discuss Cooperation
A Tatar delegation visiting South Korea met on 23 July with LG International Corp. President Su Kho Li and the heads of LG Engineering & Construction Co, intertat.ru reported the same day, citing the press service of the Tatar Trade and Foreign Economic Cooperation Ministry. Tatar Prime Minister Rustam Minnikhanov signed a memorandum with LG International Corp. and LG Engineering & Construction Co. officials on mutual understanding between the Tatar government and the LG corporation. Under the agreement, the sides will study opportunities for cooperation in the oil and petrochemical sectors and for the development of small businesses in Tatarstan. The two sides will study the need Tatar companies may have for high-tech from the Korean companies and will look at establishing joint ventures in the petrochemical, energy, construction, environmental, agricultural, and food-processing sectors. Trade turnover between Tatarstan and South Korea totaled $17 million in 2002.

Eurocopter To Participate In Mi-38 Project
Kazan Helicopter Plant General Director Aleksandr Lavrentev said on 23 July that Eurocopter will take part in the creation of the Mi-38 helicopter even after it leaves the Euromil joint venture that was established in 1994 to develop the Mi-38 (see "RFE/RL Tatar-Bashkir Report," 21 July 2003). Lavrentev said Eurocopter, which repeatedly asked the Russian government for permission to have a 33-percent stake in Euromil but was constantly refused, will remain a supplier of equipment for the Mi-38 and will maintain the right to sell the helicopter on the world market. The Kazan Helicopter Plant and the Moscow Mil Helicopter Plant will likely divide the Eurocopter's stake into equal parts. Mi-38, into which the Kazan Helicopter Plant invested $80 million, will be equipped with Eurocopter-produced navigation devices and Pratt & Whitney engines. The Mi-38's first test flight is scheduled within the next two months, Lavrentev said.

Duma Official Concerned About Privatization Of Tatarstan's State-Run Companies
In an interview with Ekho Moskvy on 23 July, Deputy State Duma Security Committee Chairman Viktor Ilyukhin (Communist Party) said there is "a lot of doubt" about the privatization of Tatneft and other Tatar state-run companies and their merger into one holding. Ilyukhin was commenting on an appeal he sent to the Prosecutor-General's Office, the Federal Security Service, and Audit Chamber Chairman Sergei Stepashin against plans by the Tatar government to privatize republican companies, including Tatneft, Nizhnekamskneftekhim, and Tatenergo, by passing their controlling interests to the Svyazinvestneftekhim holding (see "RFE/RL Tatar-Bashkir Report," 21 May 2003). Ilyukhin said the fact that these leading Tatar companies -- which are involved in very different activities -- are planning to unite "under one roof" arouses anxiety. Ilyukhin claimed that the project is an attempt to repeat the privatization process of early 1990s which, he said, was "illegal and inefficient" and will not result in the economic development of Tatarstan and Russia. He also said the merger moves the companies from the supervision of federal bodies and subordinates them fully to Tatarstan.

Compiled by Gulnara Khasanova

Bashkir Presidential Spokesperson Says Bashkir Privatization Cannot Be Revised
Commenting on the results of the audit of the Bashkir fuel and energy sector announced by the Russian Audit Chamber on 22 July, Bashkir presidential administration information directorate head Marat Yamalov said on 23 July that privatization results cannot be revised in the republic. "Nothing new can be found in the republic. Audit Chamber Chairman Sergei Stepashin has been to Bashkortostan many times and knows very well that the legal grounds of our reforms were always reliable," he said. Yamalov said nonconformity between republican and federal legislation is behind the controversy, adding that many republican laws were adopted much earlier than federal ones. "Nobody disputes that privatization in Bashkortostan was held in accordance with republican legislation," Yamalov said, adding that the dispute should be resolved in a constitutional way but not politicized.

The head of the legal department of the Bashkir Property Relations Ministry, Rinat Abdurakhmanov, told RosBalt on 23 July that the results of the probe into the privatization of state petrochemical companies in Bashkortostan are "tendentious" and "unfair." Ministry press service head Yulai Kerimov commented that "the results of the probe are a political campaign against Bashkortostan's leadership."

"Vedomosti" commented on 24 July that to return Bashkir petrochemical companies to state ownership, Moscow will have to prove that it improperly shared property with Ufa in the early 1990s and that the Bashkir fuel and energy sector is in fact federal property, a very long process deserving attention from the Constitutional Court.

Bashkir Tax Ministry Sues Bashkirenergo, Emergency Situations Ministry
Lawyers from the Bashkir Tax Ministry will appeal to the Bashkir Supreme Arbitration Court demanding that Bashkirenergo and the republican Emergency Situations Ministry's Fire-Prevention Service compensate financial and moral damage to the directorate, RosBalt reported on 23 July. Tax Ministry Legal Department head Artur Kheiretdinov told the news agency that the lawsuit came in reaction to the 10-day cut-off of electricity in the ministry's central office and two raion offices in Ufa. The offices lost power from 12 July to 22 July at the initiative of the Fire-Prevention Service for violating fire-prevention rules.

Ministry officials link the measures against the directorate to the appointment on 26 June as Bashkir tax minister of former Bashtransgaz General Director Aleksandr Veremeenko, who is in opposition to the Bashkir leadership. Since the appointment of Veremeenko, the ministry has been inspected by numerous republican-level inspectors and utilities (see "RFE/RL Tatar-Bashkir Report," 9, 18, and 22 July 2003). Electricity was restored on 22 July after the interference of the Bashkir prosecutor's office. Kheiretdinov said the ministry will make claims for tens of millions rubles in the lawsuit.

Mezhprombank's Ufa Branch Appeals Against Bashkir Prosecutors
The Ufa branch of Mezhprombank appealed to the Ufa Lenin Raion court, accusing the Bashkir prosecutor's office of inaction, RosBalt reported on 23 July. The head of the branch's legal department, Aleksandr Panishev, said the prosecutor's office "refrained from giving legal evaluation of activities by Bashkir Interior Ministry employees who searched the Mezhprombank branch on 11 June." He said the prosecutor's office has ignored almost all complaints sent by bank lawyers. The search was conducted of the Mezhprombank Ufa office as part of a fraud investigation involving Mezhprombank promissory notes, which was halted on 14 July by the Russian Interior Ministry (see "RFE/RL Tatar-Bashkir Report," 12, 17, 18, and 19 June and 22 July 2003).

Compiled by Gulnara Khasanova