15.06.2010

Moscow megalopolis has truly become a “city of contrasts”. Even in Soviet times the city has grown significantly in size and became a “state within a state”. It embodied everything that the leaders of the truly “Great Power” wanted it to be. Today Moscow is the political, economic, scientific, medical, cultural, sporting, spiritual and commercial center of Russia and beyond. It rapidly develops various sectors of the economy, including industry, energy, transport, trade, banking and so on. But times change, certain things from the past have become a burden for the future. Much of what used to be welcomed and supported at the expense of urban infrastructure, has become ineffective and burdensome. This is particularly true for the city’s industry.

Moscow has concentrated automotive, machinery, oil companies and other large enterprises of various industries; it would be advisable to relocate them to the regions of Russia. That could free up considerable amount of land in the capital city from the withdrawn enterprises, to improve its environmental conditions, release some transportation arteries capacity, increase housing stock and develop urban infrastructure in general. Industrial enterprises relocated from Moscow should be placed in the Federal Subjects with maximum efficiency, binding them closer to the country’s centers of raw materials, with energy supply and an extensive transportation infrastructure, thereby creating comfortable conditions for socio-economic development of regions.

Of course, it must be taken into account and kept in mind, how significant were the well-known manufacturers of cars and trucks, machinery, equipment, etc, established in Moscow in the period of USSR’s industrial development. But today, what happened to these industry giants of the past? Where their main markets are, and what are the prospects for the development of the Moscow megalopolis? We can, of course, pump in a lot of money for their maintenance, but would that be practical, and should that be done? It is much more expedient to relocate large enterprises from the capital city to other Federal Subjects, under a state program of industrial development of regions, specially created for this purpose.

Such an important decision should be taken on the basis of federal programs of development of aerospace, automotive, shipbuilding industries, mechanical engineering, machine tools & instrumentation engineering and other leading industries of the Russia's economy. Establishment of modern industrial complexes in the regions (which, after a strategic marketing campaign, will host large industrial companies relocated from Moscow) should, from the very start, be strictly aimed at production of competitive and promising products, with high economic efficiency and profitability.

To achieve the maximum effect on the development of domestic industry in Russia, it is necessary to create, together with the West, new joint ventures or long-term cooperation with leading foreign companies on favorable terms for the parties. The foreign partners should initially see their interest and the prospects of such cooperation, taking into account the availability of raw materials, energy and labor resources of Russian partners. Assortment of products (goods) should be regularly renewed on the basis of current and future needs on the markets in Russia and abroad, as well as through the active introduction of new products in the “know-how” mode.

Establishment of modern industrial centers of the country requires a comprehensive program of socio-economic development of the regions, where modern enterprises will be built with attractive infrastructure which will create conditions for new skilled workers and specialists eager to relocate to a new place. Russia’s specific feature is that the development of industries in the regions of the Federal Subjects is possible only with governmental policy and support, based on the approved plans for development of country’s industry. In Soviet times, these issues have been taken care of by Gosplan.

Volgodonsk city of Rostov region is a specific example. Under a comprehensive program of socio-economic development, large modern industrial enterprises of country-wide significance of nuclear, radio-electronic and chemical industry were established. Those companies consumed energy of the Tsimlyansk hydropower station, two thermoelectric plants and, later, the Rostov nuclear power plant. Modern housing with electricity, water, heat and gas, kindergartens, nurseries, schools, educational institutions, medical institutions, companies of trade and public catering, consumer services, sports and recreation facilities, cultural and entertainment facilities, public and administrative buildings and many more were built under the master plan in the city of Volgodonsk.

Many regions of Russia had good reasons to envy Volgodonsk's social infrastructure, which is so necessary for the efficient economy development of any city. Volgodonsk is situated on the banks of Don River and the Tsimlyansk Reservoir and has a significant geographical advantage over the regions of southern Russia and beyond. If not for premeditated bankruptcies of the city’s enterprises, Volgodonsk, possessing unique transportation infrastructure and energy, could have become one of Russia’s most promising industrial centers. The most noteworthy enterprise bankrupted in Russia was Atommash OJSC, the flagship of nuclear engineering.

This industrial giant has been associated with many regions of Russia, CIS and foreign countries by rail, road and air service, as well as by water through the Volga-Don Shipping Canal (VDSK). It was very important that Atommash had its own heavy duty mooring on the shore of the Tsimlyansk Reservoir, which allowed shipping heavy and oversized goods by water through the Sea of Azov, Black Sea, Mediterranean and Caspian Seas. This was a significant advantage of Atommash OJSC over its competition in Russia and abroad. Cities like Volgodonsk are exactly what Russia needs; therefore, it’s necessary to allocate earmarked funding for the development of its businesses, in amounts sufficient for the implementation of promising projects and programs of socio-economic development. This is advantageous both for the industrial city and the Federal Subject, and also for Russia itself, strengthening its defense and economic security.

If Russia’s industry starts to develop, science and scientific achievements will be in demand. Unfortunately, unique achievements in basic and applied science made in the former Soviet Union did not find their application in today’s Russia over the period of its existence. Instead those achievements are being successfully used overseas, bringing huge economic benefits, but alas - not for Russia’s development. From this it follows that Russia undergoes a leakage of scientific discoveries and “brains” that were not able to find a decent application of their talent and proper appreciation in their own country.

The important political decision of the higher leadership of Russia to build a “Silicon Valley” in Skolkovo of Moscow region, as one of Russia’s most modern scientific and technological complexes for development and commercialization of new technologies, can be a real step towards the introduction of scientific developments and achievements in practical applications. But all this will only be efficient for Russia if the domestic industry is saved. Russian industry must be developed in close connection with the creative work of scientists and specialists, applying their achievements and discoveries. Otherwise, what and who will our “Silicon Valley” work for?

The estimated cost of the “Silicon valley” complex in Skolkovo, west of Moscow, in one of the most expensive and prestigious districts of Moscow region (5-7 kilometers from Barvikha) with a total area of 750 hectares of land for the construction of the complex, where 40 thousand people will live and work, is 6 billion U.S. dollars. If we compare it to the price of the 22-storey office building in Moscow on Dubininskaya street, 33, with a total area of 28.6 thousand square meters, which used to belong to YUKOS company and in May 2007 was acquired at an auction by Oil Company Rosneft JSC for $3.4 Billion, then the construction cost of the “ultra-modern scientific center” is relatively small. And that’s despite the fact that one hundred square meters of land in the vicinity of the future “innovation center” is worth at least 40 thousand dollars.

If we compare the “Silicon valley” cost with the cost of demolition of the old hotel “Moscow” in the capital of Russia with a total area of 183,000 square meters plus the design and construction of a new high-class hotel building, including “kickbacks” that cost investors about $1 Billion, it is safe to say that the price of the new “city of science” is definitely more realistic than the price of the YUKOS office building bought by Oil Company Rosneft JSC at $119,000 per 1 sq. m. This price is incomparable even to the proposed amount of $2.1 Billion for “Okhta Center” social & business district, planned to be built in St. Petersburg, with a total area of 360,000 square meters, including a 400 meters high 81-storey skyscraper.

Oil Company Rosneft JSC is a Company, where controlling stake is held by the State. This gives grounds for logical and reasoned questions. What justifies the acquisition of the office building, formerly owned by YUKOS company, by Oil Company Rosneft JSC for $3.4 Billion? Which state authorities perform real – not declarative – control over the economic, production and financial activity of Oil Company Rosneft JSC?

Page 15 of the Letter from YACONTO LLC (out. №80116-1 from 16.01.2008) to the President of Russia Vladimir Putin, which has been concealed from the latter, summarizes how Salyut Design Bureau of Khrunichev State Research and Production Space Center (Moscow) contacted Firm YACONTO LLP in 1994 with a request to construct specific oversized metallic gantry equipment for the space program on Atommash OJSC. At the time it was impossible to order this equipment to the enterprises of the country because planning & cooperation were unreasonably destroyed in Russia. Having been the largest shareholder of Atommash OJSC after the State itself, Firm YACONTO LLP organized special-purpose machinery production, ensuring timely payment and early production of the equipment with high quality and delivery of the equipment to the destination point. 

We should mention an episode when special items could not be transported by roads and railroads to their destination because they greatly exceeded the size allowed for carriage. To address this complex issue we developed a special route and formed a “dedicated convoy” of special vehicles with a fuelling lorry to deliv-er the special products to their destination. The route has been designed in a way that it passed through roads with tall bridges that allowed low loaders to transport the oversized cargo. There were several orders, and they all have been performed with high quality and on time. Tasks set by the management of Firm YACONTO have always been successfully solved in the interests of the parties.

But I would like to emphasize an important detail. Before signing the first agreement on space program matters with Firm YACONTO, the leadership of Salyut Design Bureau of Khrunichev Center has sent a group of experts to Atommash OJSC; they have been brought to the city of Volgodonsk on a plane owned by Atommash and placed in an Atommash-owned hotel. Leading experts in the field of space subjects were overjoyed with the company’s huge fleet of unique machinery for the development of nuclear industry that they carefully examined.

Experts have drawn conclusions about the Atommash’s capability to produce a large range of equipment, units, structures and components for the space program in cooperation, and provided their official resolution in favor of future cooperation. Therefore, Firm YACONTO LLP and Salyut Design Bureau of Khrunichev State Research and Production Space Center signed a Protocol of intent dated 15.06.1995 to establish broad cooperation in space matters involving this and other enterprises. This was especially justified because at that time Russia was in the process of choosing the most suitable site for the construction of a very promising international Space launch complex (SLC) near the equator. And the leadership of YACONTO Corporation had significant possibilities in the Middle East.

If the members of the Organized criminal group (OCG) had not initiated the deliberate bankruptcy of Atommash OJSC in 1995–1999, we would have signed promising agreements with potential investors and strategic partners on cooperation in the fields of nuclear engineering and space program, on the basis of long-term and mutually beneficial conditions. Not to mention the production of high-tech products for other sectors of the economy and products of high technical complexity and a wide range of consumer goods.

If lawlessness and uncontrolled mess with budget funds in Russia persists, there will be neither order nor development. Russia will still depend on the sale of oil and gas, from which Russian citizens do not receive their fair rents, as well as from the sales of other minerals and natural resources.

Wicked games played by a strictly limited group of OCG participants, who imitate some semblance of legal validity of the transition of the industrial complex formerly owned by Atommash OJSC, from one to allegedly “bona fide” purchaser to another, are a cynical mockery at the Law, which is brazenly used to cover the crime of national importance. More information about this can be found in the article: “Nuclear passions around ATOMMASH” posted on www.yaconto.ru. Are the “puppet masters” and their “puppets” even considering the possibility that times may change abruptly, and there comes an hour of reckoning for their deeds, because “nothing is permanent in this world”?