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Russia: Ostankino Fire Has Economic Consequences

After the recent Moscow bombing and the sinking of the Kursk submarine, the latest unexpected disaster to hit Russia -- and its president, Vladimir Putin -- was the outbreak of fire yesterday in Moscow's Ostankino television tower. The fire, which is still raging, has knocked most the capital's television and radio stations off the air. RFE/RL correspondent Sophie Lambroschini reports.

Moscow, 28 August 2000 (RFE/RL) -- Russian popular wisdom was right on the mark. "When misfortune comes, open your gates wide," Russians say. It usually comes in threes because, as the Russian saying goes, "God loves a trinity."

The burning 520-meter-high Ostankino television tower -- the world's second highest free-standing structure -- is the last of a "trinity," after the Kursk submarine fiasco two weeks ago and a lethal bombing in central Moscow several days before. All three events threaten to upset the Kremlin's reform plans and President Vladimir Putin's reputation as a man in control of events.

Speaking today at an emergency cabinet meeting, Putin also seemed to see the fire as the last in a series of catastrophes:

"This new emergency situation shows once again the state of our vital areas and important installations -- the state that our country is in."

At the meeting, called to deal with the fire, Putin stressed that such situations should not side-track the country from its reform plans. But it is already clear that the fire in the Ostankino tower will have important effects on the nation's communications sector and on its overall economy.

Still inaccessible to fire-fighting brigades, the fire started Sunday afternoon at a height of between 350 to 420 meters, probably because of an electrical short circuit. It spread quickly through elevator shafts and along the cables that support the structure. Apparently, there was no automatic fire-extinguishing system in the tower at the height where the blaze began.

Today, Moscow Mayor Yuri Luzhkov called the situation "worrisome" because half of the oiled metal cables that stabilize the tower and give it flexibility are either burnt or dried-out. Luzhkov said he "hoped" that it wouldn't crash, there was some doubt "whether the tower will remain stable in high winds." In any case, the immediate area around the tower has now been evacuated.

The fire left authorities standing by helplessly as most television channels -- and radio stations -- in Moscow went off the air, leaving the 20 million inhabitants of Russia's political and economic heartland without TV. Among those losing Moscow viewers were state-owned RTR and ORT -- in which business tycoon Boris Berezovsky is a 49 percent shareholder -- Moscow city's TV Tsentr and NTV, owned by tycoon Vladimir Gusinsky's Media-MOST group.

None of them, it appears, had made provisions for back-up facilities in case of an emergency like the current Ostankino fire. Onno Zonneveld, an independent media consultant for eastern Europe, says he is "amazed by the obvious lack of forethought in Moscow."

According to Leonid Taube, vice president of the state-controlled VGTRK holding group that owns RTR, several provisional solutions are possible -- including turning the tower of Moscow University into a transmission center and utilizing the run-down tower that was used before Ostankino was erected. Information Minister Mikhail Lesin told RFE/RL's media correspondent Anna Kachkayeva that several possibilities were being considered, but that no detailed plans had yet been worked out.

But already, some analysts are warning that the financial consequences of the fire could be close to catastrophic. Lesin admitted that there would very high losses not only because of the fire's impact on the media but because of its effects on the communications market in general. But he said that it was too early to foresee the exact amount.

"Hundreds of millions of dollars have already been lost because of the fire. It's a serious situation. It's an unexpected blow. We recently registered an increase in the TV advertisement market, and counted on the situation improving further."

Sergei Koptev, head of the Association for advertisement Agencies. told one newspaper ["Vedomosti"] that the Moscow area makes up 40 percent of the overall Russian ad market. He said: "I don't see how you can sell ad time on a TV channel without including Moscow." Koptev estimates that income from TV advertising could fall between 30 and 50 percent, producing what he called "huge" losses.

Ironically, it is Gusinsky -- targeted by the Kremlin only a few months ago -- who may be the only media tycoon to benefit from the fire. His Media-MOST holding company includes a minor television channel, TNT, that -- crucially, it turns out -- airs through an independent transmitter. When the fire ended transmissions from Ostankino, Media-MOST immediately switched its news broadcasts to TNT.

Media consultant Zonneveld put it this way: "In effect, the 'enfant terrible' of Russia's state-dominated TV market was the only one broadcasting last night [in the Moscow area]. He should have a virtual television monopoly for the foreseeable future."

As early as yesterday evening, NTV-Plus -- Media-MOST's satellite subscription TV, which airs RTR in Moscow -- launched a new sales campaign for its service. It promised a discount to new subscribers.