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Giant state companies wait to hear on 'Go East' move

06 June 2014

Gazprom, Transneft, RusHydro, Alrosa and Rosneft all on a list for shift from Moscow to boost the Far East economy.

The 'final decision' will be made by President Vladimir Putin, says the paper citing its sources. Picture of Vladivostok, The Siberian Times

This week vice-prime minister Yuri Trutnev will start negotiations with state companies on a government list as potential movers, Izvestia newspaper reports. 

Such a development would give credence to the government's claim that Far East development is its top priority. The timing comes and strained relations with the West over Ukraine, but when Russia is also keen to signal its economic future is linked to Asia and the east.

Ten major companies are on their list for relocation, among them Gazprom, Transneft, RusHydro, Alrosa and Rosneft. The 'final decision' will be made by President Vladimir Putin, says the paper citing its sources. 

The companies were selected because of their 'clear ability and potential to develop significant investment projects in the Far East of Russia and countries of the Asia-Pacific region', said Yelena Gorchakova, deputy chief of the Ministry of Eastern Development. 

'We have looked through large companies with state stake in the capital, whose investment projects both planned and currently carried out on the territory of the Far East of Russia can give an impulse to the region's growth and development.'

Gazprom, Transneft, RusHydro, Alrosa and Rosneft all on a list for shift from Moscow to boost the Far East economy


Gazprom, Transneft, RusHydro, Alrosa and Rosneft all on a list for shift from Moscow to boost the Far East economy

A Transneft source was quoted saying that 'moving offices to another part of the country brings a number of technical, logistical and other issues. Pictures of Vladivostok International airport, courtesy airport's press service 

The audacious plan is that the selected companies will move offices, staff and tax registration to the Far East. 'What is meant here is moving the headquarters of companies, moving the personnel and in the case of state-owned companies - shifting the tax base to the Far East,' Trutnev has said.

Trutnev, also the president's representative in the Far East, will hold talks with the companies starting in the coming week, reported the newspaper. 

'The company's opinion will be taken into account. Then the list will be passed to President Putin who will personally make corrections,' said Izvestia's source. 

Gazprom, Rosneft, Alrosa and RusHydron refused to give official comments on a potential move. 

'But the official source confirmed that they are on the list; the question now is who will be in the final list'.

A source at the Ministry of Eastern Development told Izvestia: 'Events in Ukraine and Crimea together with the reaction from the West tell us that creating infrastructure on the Far East of Russia will now become a priority.'

Gazprom, Transneft, RusHydro, Alrosa and Rosneft all on a list for shift from Moscow to boost the Far East economy


Gazprom, Transneft, RusHydro, Alrosa and Rosneft all on a list for shift from Moscow to boost the Far East economy


Gazprom, Transneft, RusHydro, Alrosa and Rosneft all on a list for shift from Moscow to boost the Far East economy


Gazprom, Transneft, RusHydro, Alrosa and Rosneft all on a list for shift from Moscow to boost the Far East economy

Gazprom, Transneft, RusHydro, Alrosa and Rosneft all said to be on a list for shift from Moscow. Picture of Vladivostok, The Siberian Times

A Transneft source was quoted saying that 'moving offices to another part of the country brings a number of technical, logistical and other issues, like moving  personnel, and the fact that about 200 of the company's clients are in the European part of Russia. Should the move to Vladivostok happen it would make meetings and negotiations with them a lot more difficult.

'The head of our company takes part in a number of meetings with the government almost daily'.

Last week Vedomosti newspaper speculated on a move east by Rosneft. Alrosa, one of the world's largest diamond companies, is already headquartered in the Sakha Republic, or Yakutia, so it is unclear what a move to the Far East would mean. 

Gazprom's main production capacity are in the Yamal-Nenets Autonomous District, while the company is also active in Sakhalin in the Russian Far East. 

RusHydro owns 61 water power plants in Russia, along with two pumped storage plants, and three geothermal power stations in Kamchatka.

The company is strongly represented in Irkutsk region. It is also preparing to launch the construction of four power plants in the Far East of Russia. 

Rosneft is active in Sakhalin-1, and is strongly represented on projects in the Far Eastern Federal District.

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