Tatar-Bashkir Report: January 20, 2004

New Tatar-Korean Petrochemical Company Established
Representatives of Tatneft, Nizhnekamskneftekhim, Svyazinvestneftekhim, and Korea's LG signed documents on 16 January to establish the Tatar-Korean Petrochemical Company (TKNK), intertat.ru and Tatar-inform reported the same day. A nine-member TKNK board that was elected the same day comprises Tatneft General Director Shefeget Takhawetdinov and two other senior Tatneft executives; Nizhnekamskneftekhim General Director Vladimir Busygin and another Nizhnekamskneftekhim representative; LG International Corporation's Moscow director; Tekhnopark Idea General Director Denis Moratov; Tatneftekhiminvest Holding General Director Rafinat Yarullin; and Tuben Kama Oil Refinery General Director Khemze Bagmanov. Takhawetdinov was elected TKNK board chairman and Bagmanov was appointed general director. The joint venture is aimed at the construction of a refinery capable of processing some 7 million tons of oil a year, an ethylene plant capable of producing 600,000 tons a year, and plants to produce and processing of polymers (see "RFE/RL Tatar-Bashkir Report," 24 December 2003). Tatneft owns more than 45 percent of the joint venture, Nizhnekamskneftekhim over 36 percent, Svyazinvestneftekhim 8 percent, and LG some 10 percent.

Svyazinvestneftekhim General Director Valerii Sorokin told a news conference on 19 January that TKNK plans to attract $900 million from a consortium of Western banks in the first stage of construction of the oil-refining and petrochemical complex in Tuben Kama, intertat.ru reported the same day. The $1.3 billion first stage of the project is scheduled for completion within six years. Sorokin also said the company's capital might increase from its current $220,000 to $300 million. Sorokin added that all deliveries of equipment to TKNK will be made as a result of tenders.

Fitch Ratings Lowers Tatneft Rating
The international credit-rating agency Fitch Ratings has announced that it placed Tatneft's main unsecured credit rating (currently B) on its "rating watch negative" list, Finmarket reported on 19 January. Fitch also placed Turkey's Tupras on the same list, and noted recent reports that Tatneft's interest in a 65 percent stake in Tupras is represented by Efremov Kautchuk GmbH. Efremov Kautchuk has been identified as a front-runner in the bedding for that stake (see "RFE/RL Tatar-Bashkir Report," 19 January 2003).

Prosecutor Reports Progress In Extradition Request For Guantanamo Prisoners
Senior investigator Igor Tkachev said on 15 January that the United States is prepared to extradite Russian citizens currently being held at Guantanamo Bay, Cuba, ITAR-TASS reported on 16 January. The issue was reportedly on the agenda of Tkachev's meeting with members of a working group on criminal investigation from the U.S. Defense Department. Tkachev said Washington is prepared to cover the expenses of those prisoners' transportation to Russia. "An agreement in principle was reached that our citizens are to bear responsibility on our territory, even for crimes committed outside Russia," Tkachev said. He added that investigations are continuing in some cases, however. Russian citizens are among those being held at Guantanamo as "enemy combatants." They include, from the Republic of Tatarstan, Rawil Minhajev and Airat Wakhitov; and Shamil Khajiev and Rawil Gomerov from Bashkortostan.

KamAZ Team Wins Paris-Dakar Rally In Trucks Division
Tatarstan's KamAZ-master team won its fifth Paris-to-Dakar rally, Russian news agencies reported on 19 January. The victory was the third in a row and fourth overall for Vladimir Chagin (registered Tchaguine) who headed the winning crew. Tatar President Mintimer Shaimiev sent a congratulatory telegram to KamAZ-master Captain Semen Yaqubov and KamAZ General Director Sergei Kogogin on 19 January. A KamAZ crew led by Firdewes Kabirov placed second, while a KamAZ driven by Ilgizer Merdiev placed fourth. Less than a third of the 58 trucks, 140 cars, and 180 motorcycles from 38 countries that took part in the rally finished the race.

Compiled by Gulnara Khasanova

Bashinform Ponders A Perceived Dearth Of Foreign Investment
In a 19 January commentary, the state-controlled Bashinform news agency considers reasons for a perceived lack of foreign investment into Tatarstan and Bashkortostan's petrochemical industries. The piece suggests that foreign investors are deterred because those industries are considered key strategic sectors in both republics, and therefore local governments are interested in preserving single-handed control over them. Bashneft accounts for 25-30 percent of Bashkortostan's industrial production, the agency asserts, while it writes that Tatneft is said to account for half of Tatarstan's industrial output.

Bashinform cites the Expert RA ratings agency as saying that, in 2002-03, Bashkortostan was 11th among Russia's regions in terms of investment risk, having overtaken oblasts like Samara, Leningrad, Tyumen, and Sverdlovsk. Bashkortostan was rated 15th among Russia's oblasts in terms of investment potential, above the Leningrad and Novosibirsk oblasts and the Yamalo-Nenets Autonomous Okrug, the agency reports.

The agency adds that the monopoly-like position of a handful of industrial ventures in regions such as Bashkortostan -- where 12 companies accounted for 72 percent of the republic's industrial output in 2002 -- is widely believed to discourage potential investors. As in many other regions of Russia, much of Bashkortostan's tax revenue depends solely on the fuel and energy sectors, a fact that negatively affects the region's long-term credit rating.

The agency also writes that local governments are cool and reserved regarding possible foreign investors.

Bashkortostan's Banking System Claims To Have Won Back Clients
Residents of Bashkortostan increased their ruble-based bank deposits by 43 percent between early 2003 and the start of 2004, to the equivalent of roughly $1 billion, Bashkortostan State Radio reported on 19 January. The portion of hard-currency deposits declined in the same period from 26 percent to 19 percent. (Editor's note: The report did not include a figure for exchange-rate conversion.)

FSB Honors Bashkortostan's President
President Murtaza Rakhimov met with Viktor Kolmogorov, deputy director of the Russian Federal Security Service (FSB), in Ufa on 19 January to discuss security issues in Bashkortostan, the presidential press service announced the same day. Kolmogorov also delivered a medal to the Bashkir president "for cooperation with the FSB," including Rakhimov's "considerable personal contribution to the achievement of positive results in joint activities with state security bodies," the presidential press service announced.

Compiled by Iskender Nurmi