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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

Friday, Aug. 1


Bikers from all around the world will gather to take part in a parade, extreme shows and rock concerts during the International Biker Festival that revs its engines today and runs through Aug. 3 near Olgino Hotel, 4/2 Primorskogo Shosse.


The Peter and Paul Fortress will be turned into an open-air cinema today and tomorrow as part of the 5th International Short and Animation Film Festival. A huge screen across the fortress walls will air short films non-stop with board games, photo sessions and other activities also on offer for visitors. For more information, visit www.opencinemafest.ru



Saturday, Aug. 2


Gatchina Palace Park Museum will host its second annual Night of Light, an impressive audio-visual show across the night sky. Tickets are 600 rubles ($16).


If graphic design is more your thing then check out Illustration Day, where you will be able to visit an exhibition, attend lectures by professionals and even show experts some of your own work. The event starts at noon at Zona Deystvia, 73 Ligovsky Prospekt. The entrance fee is 350 rubles ($10).



Sunday, Aug. 3


History lovers shouldn’t miss the chance to see reenactments of World War I battles in Pushkin at noon. Besides exciting war scenes, visitors can enjoy live music, historical costumes, an equestrian show and a fancy-dress parade starting from the Moscow gates.


Garage Sale, the popular and growing flea market where nothing is priced over 500 rubles ($14.11), starts today at noon in Loft-Project Etagi, 74 Ligovsky Prospekt. Be sure to get in early to score a bargain. Entry costs 50 rubles ($1.40)



Monday, Aug. 4


Continue the working week with a calm and steady mind with a free yoga lesson at 7 p.m. in the Bukvoyed store at 23A Vladimirsky Prospekt.



Tuesday, Aug. 5


Visit The Romanov Dynasty doll exhibition today, where more than fifty porcelain dolls depicting Russian rulers, and made by Olina Ventzel, will be on show. The exhibition continues through Aug. 31 in Sheremetyev Palace, 34 Fontanka Naberezhnaya.



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