Russia 110314 Basic Political Developments

Rosatom Mad at Bulgarian Minister for 'Downgrading' Their Reactors

Energy | March 13, 2011, Sunday

Russian state nuclear corporation Rosatom has slammed Bulgarian Minister of Economy, Energy and Tourism Traicho Traikov over a statement he made about the troubled project for Bulgaria's second NPP in Belene.

Speaking on Darik Radio on Saturday, Traikov declared that the two reactors that Rosatom and its subsidiary Atomstroyexport are supposed to provide for the Belene Nuclear Power Plant will be of the 2+ generation, with sufficiently reliable protection against earthquakes with magnitude of up to 7.0 on the Richter scale.

Traikov was commenting on the reliability of the nuclear facilities in Bulgaria over concerns caused by the damages on nuclear plants in Japan by Friday's devastating earthquake there.

"State corporation Rosatom expresses its great surprise at the statement of Economy, Energy, and Tourism Minister... We believe that because of his position, the Minister should be aware that the Belene NPP project offers reactors of generation 3+, certified according to European Utility Requirements (EUR), with an unique combination of passive and active safety defense ... that cannot be found in any other type of reactors produced at the moment," Rosatom said in a statement to the Bulgarian media.

In its statement Rosatom also denied being involved in any official talks with Bulgaria over the price of the construction of the Belene NPP - while the Bulgarian government has been talking about being in such talks for months.

It further points out that the protection of such a reactor can withstand the crash of a 400-ton aircraft, and confirms Traikov's words that the reactor can function in the event of an earthquake of 7th degree on the Richter scale in accordance with the requirements of the International Atomic Energy Agency.

http://www.neurope.eu/articles/105249.php

Russian Prime Minister Vladimir Putin is likely to use his upcoming visit to Serbia to breathe new life into the South Stream project. Putin will visit Slovenia on 22 March and Serbia on 23 March, the Russian embassies in Ljubljana and Belgrade confirmed to New Europe by phone on 11 March. Both countries are potential buyers of South Stream gas.

“No agenda yet - no one knows what it will be,” a Russian official in Belgrade quipped. But if I was a betting man I would have some Serbian Dinars on Putin delivering a message that Europe needs South Stream as part of its energy security because it can no longer rely on North Africa as a safe alternative. “I would imagine that Putin will use the visit to Serbia to try to put new life into the project,” Chris Weafer, chief strategist at Uralsib bank, told New Europe by phone on 10 March. “My guess is that he will use the instability in North Africa, in Libya and potentially in Algeria as a catalyst to revive South Stream, essentially saying to the Europeans: ‘Look you see what’s happening in North Africa, that’s an unreliable route for energy supplies. You need South Stream as part of your energy security,’” Weafer said.

The last couple of months it seems as if the momentum behind South Stream and competing Nabucco projects has been declining, Weafer said, adding that there isn’t a strong commercial case for either one of these projects. Pavel Sorokin, an oil and gas analyst at Moscow’s Alfa Bank, agreed. There are political factors that drive South Stream and Nabucco forward, he told New Europe by phone on 10 March.

Nevertheless, Serbia is definitely a country which can be used to tap a fairly lucrative market and definitely secure a better position in Europe, Sorokin said. Weafer said that Serbia is a very critical part of the whole South Stream project. “It is a major junction on the route and I would be very surprised if we didn’t hear Putin making that message very clearly that Europe needs South Stream as part of its energy security,” Weafer said. Serbia always leaned politically more towards Moscow. “I would guess that the Serbians certainly would be very willing partners in the project,” he said.

Putin also wouldn't miss the opportunity to deliver a message to neighboring Bulgaria to make up its mind on the Burgas-Alexandroupolis oil pipeline project, Weafer said. “I would expect Putin to make a very direct reference to Bulgaria’s delay in approving Burgas-Alexandroupolis and try to push them along, essentially saying that if they don’t agree to the project then Russia will look for alternatives and cut Bulgaria out of the energy equation indefinitely,” Weafer said. “Messages like that have more of an impact if they’re made in the region - in Serbia - than if they are made in Moscow.” He noted the strong political and historical relationship between Belgrade and Moscow. “That’s a good platform for Putin to use to deliver a message meant both for Europe and the region as a whole,” Weafer said.

 KGeropoulos@NEurope.eu
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Russia and Poland trade more than insults

http://www.bne.eu/storyf2564/Russia_and_Poland_trade_more_than_insults

Dmitry Medvedev's ice-breaking visit to Warsaw in December, the first official visit of a Russian president to Poland since 2002, was expected to open a new chapter in the often-troubled relations between the two neighbours. And indeed, within months of Medvedev's visit, a deal that could be the first in a series of new Russian ventures in Poland was sealed, while Polish investors are lining up to set up production facilities in at least 10 regions of Russia.

Since it joined the EU in 2004, Poland has weighed heavily on Russia's relations with the bloc, often slamming the Kremlin for human rights abuses and its hawkish foreign policy in what it calls its "near abroad". However, after last year's election of Bronislaw Komorowski as Poland's president, replacing the nationalistic late president Lech Kaczynski, hopes were high in Warsaw that the change at helm would pave the way for a more effective dialogue with Moscow, on top of boosting the flow of Russian capital into the nation's economy.

Then on February 7, Russian-British car maker Intrall Rus signed a letter of intent with the Polish Information and Foreign Investment Agency (PAIiIZ) and regional authorities to set up a car plant and a research and development centre in Szczecin, in the country's north-western region of Zachodniopomorskie. Construction of the plant is expected to commence in late 2011, while the first vehicles should come off the production lines by 2014, company officials said. The factory will make a range of commercial vehicles, vans and pick-up trucks for both domestic and foreign markets. Intrall intends to create up to 600 new jobs in Szczecin.

The latest venture by Intrall, valued at about €270m, represents the biggest Russian investment in Poland in years, despite Russia being ranked as its sixth largest export market and the second largest importer from Poland, according to data from the Polish Ministry of Foreign Affairs.

The Polish government is reportedly likely to provide a grant to support the investment, which is Intrall's second attempt at establishing itself in the local market. In 2003, the company acquired the troubled Daewoo Motor Poland car factory in Lublin, but it was forced to halt production four years later.

But the investment flow is not just one way. On March 10, Andrzej Zygmunt, first secretary of the Polish Embassy in Russia, was reported by RIA Novosti as saying during a meeting with Smolensk First Deputy Mayor Sergei Maslakov that Polish investors are interested in setting up production facilities in at least 10 regions of Russia, because it's more profitable to manufacture goods for the Russian market on Russian territory than import them from Poland.

Though the level of accumulated Polish investments in Russia is rather low at present, a mere $600m, Zygmunt said Polish business activity in Russia is growing every year, with the embassy receiving 3,000 applications from Polish businessmen wishing to set up operations in different parts of Russia. He said Moscow and the region surrounding it account for about 50% of Polish imports, with rest going to the regions of Smolensk, Kemerovo, Chelyabinsk and Sverdlovsk and others.

According to Anatoly Leyrikh, chief executive of Intrall Rus, the carmaker has been long planning to invest in Poland, and was particularly interested in launching its latest venture in the Zachodniopomorskie region. The convenient locale of the region, which lies at the crossroads of transport routes connecting Western and Eastern Europe, and its positive investment climate have played a decisive role in sealing the deal, he said. These factors, as well as the presence of highly-qualified engineers, "create proper conditions for establishing a research and development centre where we will design the majority of our new cars," Leyrich said at the signing ceremony on February 7.

Hopefully, the latest project by Intrall could lure other automotive investments to Poland, also from across the eastern border, industry analysts say. They also point out that there is a potentially strong demand for cheaper, locally-built commercial vehicles in Poland, and Intrall's cars would likely fit into this niche.

Poland is home to 16 out of a total of 41 vehicle and engine plants located in the EU's emerging European member states. However, one major preoccupation of Poles is the growing competition the country's automotive industry faces from other automotive hubs in the region, such as the Czech Republic, Slovakia and Hungary. "Poland's latest car plant was set up back in 2000. Since then, all major manufacturers have chosen to invest in neighbouring countries," says Wojciech Drzewiecki, head of Samar, an automotive market research firm based in Warsaw. "If Poland wants to foster new automotive investments, the government should focus on encouraging investments by leading manufacturers... but also on strengthening the domestic market. Domestic sales account for less than 3% of Poland's car output, which is far below the level expected by potential investors."

Recent data from Samar confirms that Poland's automotive industry is chiefly export-oriented. In 2010, a total of 799,255 passenger vehicles rolled off the local assembly lines, down 4.1% from the year earlier, including some 533,455 units which left the production lines at the country's largest production facility, the Fiat Auto Poland plant in Tychy. Of these, approximately 97.4% were exported, Samar says.

In Poland's light commercial vehicle (LCV) segment, the disproportion is just as apparent. Last year, some 87,986 LCVs were made at Volkswagen's factory in Poznan and Fiat's plant in Tychy. According to Samar, nearly 96.7% of the aggregate output by the two OEMs (Original Equipment Manufacturers) was intended for export. "With such high dependency from foreign markets, it will probably be long before Poland's automotive market reaches stability," says Drzewiecki, adding that this weakness is echoed in the way the country's monthly car sales often fluctuate wildly from month to month.

March 14, 2011 11:46