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Maxim Sladky`s News Agency
2002 A.D.
CONSOLIDATION OF REGIONAL ELITE LIMITS KURSK MEDIA FREEDOM
(18 September 2002)
KURSK GOVERNOR MAKES PEACE WITH BUSINESSMAN/STATE DUMA MEMBER
(3 September 2002)
FEDERAL AUTHORITIES SATISFIED WITH KURSK STABILITY
(20 May 2002)
YEDINAYA ROSSIYA'S KURSK FOUNDING ENDS IN DISARRAY
(13 March 2002)
CENTRAL BLACK EARTH ASSOCIATION LOBBIES FEDS ON ELECTRICITY
(6 March 2002)
ENVOYS SET UP REGIONAL BODIES OF FEDERAL OFFICIALS
(27 February 2002)
WITH POLTAVCHENKO, MAYORS CREATE ASSOCIATION IN CENTRAL DISTRICT
(20 February 2002)
MORE PROBLEMS THAN ACHIEVEMENTS IN KURSK`S SMALL BUSINESS
(13 February 2002)
DECREASED GLOBAL DEMAND FOR FERROUS METALS HURTS KURSK PLANT
(16 January 2002)
MAIR BUSINESS GROUP SIGNS AGREEMENT WITH KURSK GOVERNOR
(9 January 2002)
CONSOLIDATION OF REGIONAL ELITE LIMITS KURSK MEDIA FREEDOM
During his nearly two-year tenure, Communist Kursk Governor Aleksandr Mikhailov has greatly improved his relations with business groups operating in Kursk, whether local or from other regions. Now, it is much easier for business to coordinate activities with the governor's office than it was during the administration of previous Governor Aleksandr Rutskoi and even during the early days of the Mikhailov's own administration. Rutskoi and his lieutenants often pursued their own business interests in a variety of areas, including pharmaceuticals, petroleum products, alcoholic beverage production, and sugar.
Businesses have taken advantage of Mikhailov's new attitude to sign agreements with the oblast administration. During the last two years, the governor has signed agreements with Metalloinvest, the Tyumen Oil Company, Schetmash (part of the SOK group of companies), Pikur (Sun-Interbrew), the Kursk Bearing Factory, Akkumulyator, Agrokholding, and many others (see Russian Regional Report, 3 September 2002, for one example). Negotiations with other companies are under way. In some cases, the agreements are not committed to paper, but that does not mean that they are not enforced. Usually in these agreements, the businesses offer loyalty to the oblast authorities and timely tax payments in exchange for non-interference in the companies' business activities.
The consequence of warming relations between business and the authorities has been the practical disappearance of critical material about the governor and his cabinet from the local media. Most of the oblast's newspapers belong to local businessmen and are dependent on them. Nikolai Greshilov, the owner of the GRINN Corporation, owns Kursk Oblast's most popular newspaper, Drug dlya druga, which has a circulation of 32,000. After the scandal following Mikhailov's anti-Semitic remarks in November 2000 (see Russian Regional Report, 15 November 2000), there have been no critical articles in this publication. Their absence signals that the company had come to terms with the administration. The situation is basically the same with the influential newspaper Kurskii vestnik, which has a circulation of 10,000, and belongs to Kursk Businessman Aleksandr Degtyarev. The previous critical material about Rutskoi has now been replaced by boring interviews with deputy governors, their wives, and other officials. This is also a signal!
When Agrokholding owner Aleksandr Chetverikov signed an agreement with the governor, criticism of oblast policies disappeared from the three papers published by his Land and Business publishing house. These papers have a total circulation of 15,000.
The other media in the region also support the governor. Kurskaya Pravda is owned by the oblast administration. The State Television and Radio Company Kursk also avoids criticism. The Communist Party newspaper Golos Naroda backs Mikhailov and he has avoided any conflicts with the local Communists. Further ensuring favorable coverage, Mikhailov limits his interviews to a narrow circle of journalists: Sofiya Kondrateva at the State Television and Radio Company Kursk, Yevgenii Kotyaev, the editor of Kurskaya Pravda, and Boris Gogolev, the editor of Golos Naroda and the third secretary of the KPRF obkom.
Beyond the Communist Party, the only other political organization with an oblast newspaper is the pro-Kremlin Yedinnaya Rossiya. This paper is called Region 46 and its editors say that it is "mildly opposed" to the governor. In practice, however, the paper openly cooperates with the governor. Yedinnaya Rossiya's status as the "party of power" easily explains such close ties. Oblast and raion level civil servants make up the majority of its 3,700 regional members and numerous mayors head up local Yedinnaya Rossiya party organizations. Deputy Governor Aleksandr Kamardin is a member of the party's regional political council.
The regional offices of the Ministry of Internal Affairs and the oblast procurator control the only other newspaper in the region. Yet, as with the business groups, Mikhailov has close relations with these law enforcement agencies as well. The articles they publish about the political and economic situation in the oblast are correspondingly favorable to the governor.
The main feature of Mikhailov's administration - a lack of conflict, which is transforming into passivity - has become a real obstacle to the realization of media freedom in the oblast. Mikhailov has even managed to build good relations with the federal government. Currently the regional elite has no interest in opposing the governor, fostering a deadening passivity on the media, which is under its control.
18 September 2002
KURSK GOVERNOR MAKES PEACE WITH BUSINESSMAN/STATE DUMA MEMBER
On 9 July, after years of fighting, the Kursk Oblast administration and the Agrokholding group of companies signed an investment agreement. Kursk's Communist Governor Aleksandr Mikhailov was at odds with the company because Aleksandr Chetverikov, its majority owner and the chairman of its board of directors, won a State Duma seat in the 1999 elections, defeating one of the leaders of the local communists, Aleksandr Potapenko. The election demonstrated the company's independence from the oblast authorities. Agrokholding has worked in the region for 11 years and owns several enterprises, including poultry farms, pig farms, animal feed factories, meat processing plants, and plant-growing enterprises.
Since Agrokholding had poor relations with the oblast authorities, the governor supported the company's key competitors on the local market: the firm Kurskaya zemlya (which belongs to the Metalloinvest holding company) and Stroitransgaz-Agro (which belongs to Stroitransgaz). In the last two years, these companies invested 1.5 billion rubles in Kursk projects.
Upon signing the agreement, Chetverikov said, "... All this time we dreamed of normal, business relations with the authorities. Now we can confidently say that we have realized our dream. We have good business relations with the oblast government, with the local legislatures, and we quickly and by mutual consent resolve the most difficult problems. The situation in which businessmen export more than $20 billion every year is possible only because we still do not have an answer to the question 'what should be the relationship between business and the authorities?' It is a relief to say that recently the Kursk Oblast authorities have begun to enable the development of business." (Kurskaya Pravda, 10 July)
The two sides reached the agreement after six months of difficult negotiations. The authorities worried that the businessmen were quickly enriching themselves at the expense of ordinary people, while the businessmen worried that the politicians would seek to increase the use of administrative controls over them. According to Governor Mikhailov, the authorities' doubts about Agrokholding's motives were assuaged because the company took over enterprises and land that other businesses did not want and paid attention to developing the social sphere. Presidential Envoy to the Central Federal District Georgii Poltavchenko removed the governor's last doubts during a visit to the oblast on 6-7 July.
According to the agreement, the firm will invest no less than 400 million rubles in a variety of Kursk enterprises, reviving local agriculture production. The agreement also focuses on social questions, such as providing for the gasification of several parts of the oblast, preserving and creating jobs, organizing professional training, retraining factory workers, and increasing salaries. The governor is happy because none of these projects will require funds from the oblast budget.
The signing of this agreement suggests that the Communist governor is giving up his ideological aims in favor of pragmatism. The administration has now signed 16 agreements similar to those signed with Agrokholding.
3 September 2002
FEDERAL AUTHORITIES SATISFIED WITH KURSK STABILITY
In recent years, the relationship between the federal government and the Kursk Oblast government has been one of the most difficult in the country. Initially, these problems grew from President Boris Yeltsin's displeasure at the election of his erstwhile vice president, Aleksandr Rutskoi, as governor. Rutskoi and the regional legislature adopted numerous laws that violated federal legislation, redirected federal money sent to the region for purposes not intended by Moscow, illegally used oblast property, came into conflict with the federally-controlled police and procurator, and caused many other problems for Moscow.
With Rutskoi's removal from power, when the court declared that he was not able to participate in gubernatorial elections to secure another term, the number of public scandals in the region dropped considerably. The region welcomed the end of such dictatorial and tempestuous rule in favor of the more steady hand of the current administration.
The Communist team of Governor Aleksandr Mikhailov proved to be more compliant in establishing relations with the federal authorities than Rutskoi had been. This cooperative approach brought concrete results, including a meeting for Mikhailov with Putin, a visit to Kursk by State Duma Speaker Gennadii Seleznev, increased visits to the region by federal ministers, and numerous agreements signed between federal agencies and the region. Increased transfers from the federal budget complement these political achievements.
Judging by the Kursk example, difficulties between the federal government and Communist dominated regions are becoming a thing of the past. According to Kursk Oblast Chief Federal Inspector Viktor Surzhikov, "the governor's party membership no longer plays a significant role" (Kurskaya pravda, 8 May)". He cited three reasons for this change. First is the overall strengthening and consolidation of the federal authorities. Second, governors of regions like Kursk that lack oil and gas have a very narrow set of choices in how they conduct their relations with the federal government. A lack of such resources means that the governor must maintain relatively friendly ties with the federal authorities. Third is the personal disposition of the governor. Mikhailov made clear from the beginning that he supported Putin and wanted to be a member of his team.
Currently, the economic situation in Kursk Oblast is tense, but not hopeless. The main problems are the recent drop in steel prices, which has a major impact on the local Mikhailov Mining and Processing Combine, and a planned reconstruction of the Kursk nuclear power plant, causing a temporary 20 percent cut in electricity output. The other sectors of the economy, including agriculture, are developing in a stable manner and the region has attracted two billion rubles of investment in the last two years. Regional politics are far from stable now, but the situation is much better than it was under Rutskoi.
Thus, within its "limited corridor of possibilities," the Kursk oblast administration is conducting itself in a manner the federal government approves of. Mikhailov was happy to receive a warm reception in the Kremlin and publicly claims establishing relations with the federal governments as one of the key accomplishments of his administration (Kursk Television Company, 30 April).
20 May 2002
YEDINAYA ROSSIYA'S KURSK FOUNDING ENDS IN DISARRAY
The Kursk Oblast congress to merge Otechestvo, Vsya Rossiya, and Yedinstvo into Yedinaya Rossiya on 1 March closed inconclusively when the delegates refused to confirm Moscow's choice for regional party leader and could not elect a leader on their own. The Moscow-based central council of the party had chosen Vitalii Gukov, the former leader of the Kursk Oblast labor unions, as the Kursk chapter party leader, but he failed to win the support of local party members. Gukov was the only candidate of 35 seeking a seat in the regional party's political council not elected: 198 delegates voted against him, while only 171 backed him.
There are several reasons for Gukov's failure. First, he is already the chairman of the oblast branch of the Agrarian Party and many Kursk party delegates may not have wanted to elect someone with split loyalties. Second, many of the regional activists may have been insulted that the central leadership of the party had chosen a candidate convenient for it but not the local party. Third, Governor Aleksandr Mikhailov has clashed with Gukov for many years and certainly had some influence in blocking his election. In the end, the results demonstrated a lack of unity within the Kursk party chapter.
Having rejected Gukov, the oblast party chapter could not elect an alternative leader because, according to the party's by-laws, the candidate has to be nominated by the central party leadership. Vladimir Losev, the former leader of the oblast Yedinstvo branch, tried to place his candidacy before the delegates, but others pointed out that the party leadership could simply disband the regional branch if it so flagrantly violated the rules. Ultimately, the delegates elected Vsya Rossiya leader Boris Chukhraev as the acting leader and postponed further action until Moscow could send new instructions.
On 7 March, Kurskii vestnik published a resolution from Yedinaya Rossiya's central party council, in which the party leaders decided to renominate Gukov and try to win his election at a new conference with expanded rural representation. The Moscow leadership charged that representatives from the city of Kursk had dominated the founding conference, with only a few participants from other parts of the oblast.
13 March 2002
CENTRAL BLACK EARTH ASSOCIATION LOBBIES FEDS ON ELECTRICITY
The Central Black Earth Interregional Association held a meeting on 27 February to analyze how reforming Russia's electricity monopoly Unified Energy System (EES) would affect the regions. The reform should divide up the current company into privately-owned generating companies and state-owned transmission lines. The representatives of the regions fear that the changes will lead to higher electricity prices and want to prevent such an outcome.
The members of the association face many problems. Currently there are 17 regional utilities (usually called "energos") operating in the association's area of jurisdiction, four EES electric generating stations, and four nuclear power plants run by the Rosenergoatom company. Today Central Black Earth generators produce 43 million kilowatts, but anticipated consumption by 2010 will be 50 million kilowatts, assuming an average growth rate of 2-3 percent a year. By 2010 the nuclear plants will have reached the end of their anticipated lifetimes. Since it takes 10-12 years to build new generators, future energy supply has become the main economic question facing the Central Federal District.
According to Kursk Governor Aleksandr Mikhailov, EES is doing nothing to address this problem even though it is the main electricity provider in the region. Additionally, the governors and deputy governors participating in the meeting expressed dissatisfaction that regional representatives had been removed from the boards of directors of the energos.
In contrast, Rosenergoatom (which produces 40 percent of the electricity in the region) is actively working with the regional authorities. Created by the Russian government eighteen months ago, this company now controls ten of the largest nuclear generating plants. Many regional leaders see working with Rosenergoatom as an alternative to reliance on the EES monopoly.
As part of the discussion, Mikhailov proposed creating a unified electricity distribution company on the basis of the existing networks in Kursk, Bryansk, and Orel oblasts. Such an interregional company would have tremendous competitive advantages on the wholesale electricity market, he argued.
In a final document adopted by the delegates attending the meeting, the regions defined their interests as maintaining state ownership of the reformed electricity sector, ensuring the availability of electricity and heat to enterprises and residences, and maintaining the line against price increases. Since Russia's nuclear power plants are now part of a national, state-owned generating company, the regional leaders sought to ensure that tax revenue generated by the plants remain in the regions. The regional leaders also sought to ensure that Rosenergoatom could be held responsible for addressing the social needs of people living near nuclear power plants. The regional leaders in the association believe that the Russian government will give their concerns a favorable hearing since numerous regions are involved.
6 March 2002
ENVOYS SET UP REGIONAL BODIES OF FEDERAL OFFICIALS
On 20 February Belgorod Oblast became one of the last regions in the Central Federal District to set up a collegium of federal officials working in the region. First Deputy Presidential Representative to the Central Federal District Anton Fedorov chaired the meeting, which adopted a plan for the first half of the year. The leaders of all federal bodies working in the oblast automatically became members of the body, including representatives of the Ministry of Internal Affairs, judiciary, procurator's office, treasury, customs service, tax inspectorate, and others. The collegium, subordinate to the federal authorities, will coordinate the activities of the 46 federal agencies in the region. Similar bodies have already been set up in most regions of the Central Federal District.
Belgorod Governor Yevgenii Savchenko said that he welcomed the new body, which would help the federal government carry out a coherent policy in the regions. Savchenko noted that he had good relations with federal officials working in the region, making it possible to implement joint programs aimed at improving living conditions.
Fedorov will serve as the chairman of the new body. He said that he was favorably disposed toward Belgorod and was looking forward to spending more time there. Until now, Fedorov was the key member of Presidential Representative Georgii Poltavchenko's staff dealing with Belgorod and the formation of the body institutionalizes this post. When Fedorov cannot attend meetings of the new body, Chief Federal Inspector for Belgorod Nikolai Shatokhin will chair the sessions.
27 February 2002
WITH POLTAVCHENKO, MAYORS CREATE ASSOCIATION IN CENTRAL DISTRICT
At a 15 February meeting in Kursk, the mayors of the 18 Central Federal District capital cities voted to create an Association of Central Federal District Cities. Only Moscow Mayor Yurii Luzhkov, who was not present, and the Tver mayor did not support the proposal. Presidential Representative to the Central Federal District Georgii Poltavchenko initiated the idea and is expected to participate in the association's formal founding in a month. However, he sent two assistants, Aleksandr Gromov and Anton Fedorov, to this organizational meeting.
Working so closely with the mayors is a new step for the seven presidential representatives. Until now, they have focused on the governors, who are members of the federal district councils. These councils meet regularly in each of Russia's seven federal districts and are considered important components of the power hierarchy President Putin is establishing.
Now, the federal government is seeking to increase its influence over the cities. In the past, local officials generally approached the federal government (and federal districts) through regional intermediaries. Now the situation is changing and the presidential representatives will deal with the mayors directly. This new relationship should give the mayors new strength in their frequent confrontations with the governors.
The governors view Putin's "hierarchy of power" (vertikal vlasti) as running from the federal level, to the federal district, to the region, to the municipalities. The formation of the new association will reduce gubernatorial influence at the local level. According to the new model discussed in Kursk, the federal districts will now influence the regions working through the governors, mayors, and federal ministries with representatives in the regions.
The governors are naturally unhappy about this new arrangement, as one can surmise from the behavior of Kursk Governor Aleksandr Mikhailov. At the meeting, he read a short speech, focused on strengthening the hierarchy of power, and left. Luzhkov's absence also was an important indicator. The rise of the association suggests that the federal government's efforts to limit the power of the governors is continuing.
However, Gromov said that no attempt is being made to set the governors and mayors against each other. "The oblasts will be the main subject of our work, but we will not forget the cities," he said. More than half the population of the Central Federal District lives in the regional capital cities.
Poltavchenko's assistants explained the rationale for the association by pointing out that the big cities face many common problems and it will be easier to solve them working together. These problems usually amount to difficulty meeting local budgets, securing funds from the oblast government, implementing housing reform, and working with the electricity and gas monopolies. The city of Kursk is typical. It gives two-thirds of its overall tax collections to the oblast and federal budgets and only gets back half of what it needs for its own expenses. The tax collectors do not do as good a job collecting taxes designated for the local level as they do with federal and oblast taxes. According to the representative of the Tax Collections Ministry, the collection rate for federal taxes increased 2.5 times, while municipal tax collections went up only 11 percent in 2001 (Kurskaya Pravda, 29 January). Only about half of municipal taxes are collected. Therefore the city has difficulty paying its police, teachers, and doctors; periodic blackouts shut down or darken city offices, public transportation, and residences; and all must pay higher fees for municipal services. The association will look for solutions to these problems.
Many of the meeting participants pointed out that other parts of Russia have already set up similar associations with little impact on local problems. Such an approach has also been tried in central Russia. The already existing Association of Cities in the Central-Black Earth Region has similar goals as the new organization, but was set up by the mayors without direct federal participation. Fedorov said that the new organization would not work with the existing one (Kursk TV, 15 February). In rejecting such cooperation, he sought to distinguish between the two organizations, claiming that the new one would emphasize economic rather than political goals.
20 February 2002
MORE PROBLEMS THAN ACHIEVEMENTS IN KURSK`S SMALL BUSINESS
At a 15 February meeting in Kursk, the mayors of the 18 Central Federal District capital cities voted to create an Association of Central Federal District Cities. Only Moscow Mayor Yurii Luzhkov, who was not present, and the Tver mayor did not support the proposal. Presidential Representative to the Central Federal District Georgii Poltavchenko initiated the idea and is expected to participate in the association's formal founding in a month. However, he sent two assistants, Aleksandr Gromov and Anton Fedorov, to this organizational meeting.
Working so closely with the mayors is a new step for the seven presidential representatives. Until now, they have focused on the governors, who are members of the federal district councils. These councils meet regularly in each of Russia's seven federal districts and are considered important components of the power hierarchy President Putin is establishing.
Now, the federal government is seeking to increase its influence over the cities. In the past, local officials generally approached the federal government (and federal districts) through regional intermediaries. Now the situation is changing and the presidential representatives will deal with the mayors directly. This new relationship should give the mayors new strength in their frequent confrontations with the governors.
The governors view Putin's "hierarchy of power" (vertikal vlasti) as running from the federal level, to the federal district, to the region, to the municipalities. The formation of the new association will reduce gubernatorial influence at the local level. According to the new model discussed in Kursk, the federal districts will now influence the regions working through the governors, mayors, and federal ministries with representatives in the regions.
The governors are naturally unhappy about this new arrangement, as one can surmise from the behavior of Kursk Governor Aleksandr Mikhailov. At the meeting, he read a short speech, focused on strengthening the hierarchy of power, and left. Luzhkov's absence also was an important indicator. The rise of the association suggests that the federal government's efforts to limit the power of the governors is continuing.
However, Gromov said that no attempt is being made to set the governors and mayors against each other. "The oblasts will be the main subject of our work, but we will not forget the cities," he said. More than half the population of the Central Federal District lives in the regional capital cities.
Poltavchenko's assistants explained the rationale for the association by pointing out that the big cities face many common problems and it will be easier to solve them working together. These problems usually amount to difficulty meeting local budgets, securing funds from the oblast government, implementing housing reform, and working with the electricity and gas monopolies. The city of Kursk is typical. It gives two-thirds of its overall tax collections to the oblast and federal budgets and only gets back half of what it needs for its own expenses. The tax collectors do not do as good a job collecting taxes designated for the local level as they do with federal and oblast taxes. According to the representative of the Tax Collections Ministry, the collection rate for federal taxes increased 2.5 times, while municipal tax collections went up only 11 percent in 2001 (Kurskaya Pravda, 29 January). Only about half of municipal taxes are collected. Therefore the city has difficulty paying its police, teachers, and doctors; periodic blackouts shut down or darken city offices, public transportation, and residences; and all must pay higher fees for municipal services. The association will look for solutions to these problems.
Many of the meeting participants pointed out that other parts of Russia have already set up similar associations with little impact on local problems. Such an approach has also been tried in central Russia. The already existing Association of Cities in the Central-Black Earth Region has similar goals as the new organization, but was set up by the mayors without direct federal participation. Fedorov said that the new organization would not work with the existing one (Kursk TV, 15 February). In rejecting such cooperation, he sought to distinguish between the two organizations, claiming that the new one would emphasize economic rather than political goals.
13 February 2002
DECREASED GLOBAL DEMAND FOR FERROUS METALS HURTS KURSK PLANT
The oversupply of ferrous metals and decreased demand in the construction industry worldwide are hurting Russian enterprises. The fact that this crisis is affecting the
activities of the Mikhailovskii Mining and Mineral Processing Plant (GOK), the largest enterprise in Kursk Oblast, a subsidiary of the Metallinvest holding company, indicates the degree to which the region has become integrated in the
global economy.
According to the Russian State Committee on statistics (www.gsk.ru), in the first 10 months of 2001, production of iron ore decreased by 3.4 percent and iron ore pellets by 9.4 percent compared to the same period in 2000. In the
first 9 months of 2001, exports of ferrous metals decreased by more than 4 percent and of rolled metal by almost 20 percent. World prices for such products fell by 30-35 percent. At the same time the cost of production rose,
reflecting the sharp rise in electricity costs (76 percent), gas prices (22 percent), and rail tariffs (11 percent). At the Mikhailovskii plant, the output of basic production lines fell even more sharply in 2001 than the average for
the sector: sintering ore fell by 25 percent, concentrate by 15 percent, and pellets by 15 percent (RIA Oreanda, 20 December).
Nevertheless, local problems explain some of Mikhailovskii's difficulties. Russian consumers have not been in a hurry to buy the steel produced at the plant because of its low quality. Of the main ferrous metals producing enterprises in this part of Russia (Stolenskii and Lebedinskii in Belgorod, Mikhailovskii in Kursk), Mikhailovskii produces the lowest quality steel, with the lowest iron content. As a result, metallurgical plants don't want to purchase the material from Mikhailovskii in the same quantities as before.
Moreover, the plants in Belgorod are closer to the main customer, the Oskolskii Electrometallurgical Plant, also located in this region. Since Mikhailovskii's customers are mostly in Siberia and the Urals, transportation costs increase the
price of Kursk's ore.
Mikhailovskii managers have come up with a plan to address the firm's production crisis. Measures will include laying off workers, transferring secondary production lines to independent units, improving quality, reducing delays, and introducing energy conserving technology. To enhance quality, the plant will work with three research institutes. Mikhailovskii plans to establish its own transportation company to cut costs in this area.
16 January 2002
MAIR BUSINESS GROUP SIGNS AGREEMENT WITH KURSK GOVERNOR
industrial group, one of Russia's largest investors in metallurgical, chemical, microbiological, and machine-building industries, signed a general cooperation agreement with Kursk Oblast. MAIR will help the region attract new investment to its enterprises, provide consulting services to the oblast government on investment activities, and develop plans and conclude investment agreements with the oblast administration to reform enterprises. MAIR had a turnover of $300 million in 2000. It employs 25,000 workers in 30 regions, with Kursk being the 31st.
At the signing ceremony, MAIR also signed its first concrete investment agreement to help Formplast, a Kursk factory on the verge of bankruptcy, with significant debts to federal, regional, and local budgets. MAIR will receive a 25 percent stake in the plant. In return, it will upgrade the factory's capabilities so that it can make pipes for transporting water and natural gas, fitting into MAIR's other holdings, many of which also make pipes. MAIR will invest about 22 million rubles into the plant. The factory is located in Shchigrov, the hometown of Governor Aleksandr Mikhailov. - Sergei Sarychev in Kursk to cut costs in this area.
9 January 2002