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Billionaire's Plan to Save Single-Industry Towns

Published: January 31, 2014 (Issue # 1795)



  • Payment arrears at the Basic Element cement plant in Pikalyovo in 2009 resulted in protesting and a Putin visit.
    Photo: Ekaterina Kuzmina / Vedomosti

Billionaire Oleg Deripaska's Basic Element on Wednesday outlined ways to breathe new life into hundreds of single-industry towns teetering on the edge of economic collapse.

Crude state subsidies should be jettisoned, the company said. Viable towns should be supported, while no-hopers must be wound down.

A holdover from the Soviet Union, 16 million Russians live in 340 single-industry towns across the country, according to the Economic Development Ministry. Their degeneration has long been a headache both for Basic Element and the government, as they try to hold the line between their frequent insolvency and the social consequences of allowing them to fail.

Related: Deripaska Brings in Magna’s Co-CEO for Basic Element

In 2009, workers in Pikalyovo in the Leningrad region near St. Petersburg blocked the main highway because local cement factory, owned by Basic Element, was on the verge of closing.

The situation was diffused only when then-Prime Minister Vladimir Putin flew in to offer a packet of state bank loans to fund overdue salary payments and make sure Deripaska — who owns many factories in far-flung regions — fully understood his social responsibilities.

Not all single-industry towns have the same grave outlook as Pikalyovo. Provided government help is applied in the right places, more than half are economically robust, said Sergei Lomanov of the Center for Strategic Research, a nongovernmental think tank commissioned by Basic Element to conduct the research.

Related: State to Resettle Some Single-Industry Towns

"There is no need to drag investors into many of these towns. Usually they already have small and medium-sized businesses running that need only baseline support from local authorities and, possibly, limited additional benefits," Lomanov said.

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ALL ABOUT TOWN

Saturday, Aug. 23


Uppsala Park plays host to Fairy Noon today, a performance of five separate fairy tales ranging from folk classics to more haunting selections. There will be three different renditions of the tales throughout the day and tickets start at 500 rubles ($13.80) for adults and 300 rubles ($8.30) for children.


Classic Finnish cartoon characters the Moomins expect to receive a warm welcome from Russian fans during today’s Moomin Festival at the Pearl Plaza Shopping Center at 51 Petergofskoye Shosse. Become a kid again or introduce a new generation to the beloved creation of Finnish writer Tove Jansson.



Sunday, Aug. 24


The tortured genius of Dutch master Vincent van Gogh gets his day in the center’s Konnushnaya Ploschad during Make Art Like Van Gogh, a daylong celebration of the artist that will allow amateur artists to try and replicate the work that made the famed painter world-renowned.


Experience a variety of dances highlighting the diversity of the world around as at the final day of the Ethno-Dance International Dance Festival that has been at the St. Petersburg Humanitarian University of Trade Unions this past week. Tonight’s performance will feature Egyptian dancers accompanied by local orchestras.



Monday, Aug. 25


Today kicks off the Elena Obraztsovoy International Competition for Young Vocalists in the large hall of the Shostakovich Philharmonic. Talented youngsters will showcase their range over the next six days before a winner is chosen on Aug. 30.



Tuesday, Aug. 26


Love movies but hate all those words? Then check out Rodina Cinema Center’s Factor of Consensus film forum this evening. Silent movie classics from the beginning of the 20th century will be screened and accompanied by a pianist, who will provide the soundtrack for the ongoing action. The screenings begin at 7 p.m. Check Rodina’s website for more details.



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