RUSSIA INFRASTRUCTURE September 2, 2013 TOP STORY 1. Rostec Seeks to Manage State Stake in Aeroflot 21. Rostec to assemble Rohde & 2. More than $12bn of deals done at Schwarz equipment MAKS airshow 22. 's Aviaexport, Ukrinmash to 3. Russian Aircraft Makers Need New export aircraft jointly Recovery Strategy – Deputy PM 23. State Company Wins $3 Billion 4. Russians offers Airbus World Cup Construction Contract shares RUSSIA ROADS 5. 3 Tycoons Bidding for 24. Prosecutor Investigating $43M Sheremetyevo Terminal Theft From Roadbuilding Budget 6. First aircraft plant fails 25. Russia's govt includes highway to produce any planes in 2 years bridge construction in govt program 7. Tajikistan to set stricter rules for RUSSIA TRAINS 26. Globaltrans - might benefit from 8. Russia sells part of controversial Rostransnadzor demanding that RZD EADS stake stop using old railcars 9. Russian Budget Red Wings to 27. Ministry offers stripping Russian Double Fleet by 2017 Railways of ticket aid RUSSIA INFRASTRUCTURE NEWS RUSSIA PLANES 10. Medvedev predicts Russia's 28. After Emergency Landing in aviation market to exceed RUB1tn Moscow, United Airlines Passengers soon Appeal for Help 11. State Support Crucial for Russian 29. More than $12bn of deals done at Aircraft Industry – Medvedev MAKS airshow 12. Building of shipyard for Russia's 30. 129 civil planes worth $7 bln sold behind schedule on 1st day of MAKS airshow 13. Cuba Gets 3rd An-158 Plane, Signs 31. Aeroflot gets 2nd SSJ 100 plane to Deal for 3 More full spec from Sukhoi 14. Gazprom Avia Gets 1st Long-Haul 32. Bombardier to sell 100 Q400 Superjet 100 planes to Russia 15. Investing into Russian Trans- 33. may buy up to 8 SSJ Siberian railway 100 planes for Avia 16. Russian regions to pay 65% of 34. Gazprom Avia Gets 1st Long-Haul suburban traffic costs from 2014 Superjet 100 17. THE INSIDERS: Export credit 35. Mexico's Interjet may buy more agencies step into the breach SSJ-100 airplanes from Russia INFRASTRUCTURE OTHER NEWS 36. Rostec, Airbus to team up in 18. $455k suit against Moscow airport making aviation biofuel over terrorist attack rejected 37. Russia's Oboronprom, 19. Moscow Driver Gets Record 300 Rosoboronexport to assemble EADS Parking Tickets in Six Months airplanes 20. Road Project Brings Hope and 38. Russia's SAT Airlines to transfer Problems 49% stake to Region 39. Russia's Sukhoi may share 60. Master plan for Airport technologies with Chinese firms territory to be ready in 2013 40. Russia's government to extend 61. Truckers free to bypass toll roads aircraft loan subsidies till 2015 in 41. Russia, may co-produce EA INFRASTRUCTURE heavy lift helicopters 62. to open up air transport 42. Russian helicopter industry sector after Armavia collapse reaches for global markets 63. Azerbaijan Railways to upgrade 43. Russian ministry: needless to railcar fleet construct new facilities for low-cost 64. Georgian start-up, Air Caucasus, airports launches ops with Tbilisi - Antalya 44. Sberbank-Leasing, Sukhoi to 65. Kyrgyz President emphasizes market SuperJet jointly importance of railway to link Turkic- 45. St Pete's Pulkovo Airport speaking countries passenger traffic rises 18% in July 66. Mongolia, Russia, China Discuss 46. Sukhoi agrees with AviaAM Leasing Issues On Railway Transportation on provision of 5 SSJs 67. TURKMENISTAN: Building a port 47. Sukhoi to sell 2m extra shares to 68. Transit traffic increases after government launch of Turkmen-Kazakh railway 48. , Virgin America Sign section Agreement CE INFRASTRUCTURE 49. Signs $217M Contract for 6 69. Etihad, Garuda, China Southern Superjets Airlines said eying Croatia Airlines 50. VEB, Ilyushin to consider supplying stake 4 planes to Cuba 70. Income from port contributions to 51. Deripaska, Vekselberg bid in Latvia's budget to be used for road Sheremetyevo tender maintenance 52. Sheremetyevo to build $300-350m SE INFRASTRUCTURE new terminal 71. Albania's New Leaders Slam Port 53. Aeroexpress Terminal to Boast Privatisation Deal New Look This Autumn 72. Bulgaria starts 75 mln euro rail RUSSIA SHIPS upgrade project 54. Putin to hold conference on civil 73. Bulgaria‚Äôs Varna Airport New shipbuilding in Far East Terminal Welcomes First Passengers 55. Russia’s STK Group may build oil 74. Ex Bulgarian PM: EU to Freeze refinery in Estonian port Funds over New Govt 56. Government Plans $7Bln Port on 75. Highways in Romania, three times Black Sea Coast more expensive than in Bulgaria, price EE INFRASTRUCTURE variations higher than in region 57. Russia and CIS countries' air 76. Israel promotes trade route carriers to buy planes for $140bn between Turkey and Middle East 58. Belarus Air Carrier Cancels Flights 77. Turkish company to build major to Egypt new port in Turkmenistan 59. Decision on more toll roads in Belarus in the pipelin

RUSSIA INFRASTRUCTURE TOP STORY

sale of its stake. The GDR/ADR 1. Aeroflot Rostec placement of treasury shares could improve liquidity and enlarge the Seeks to Manage investor base. Rostec is an State Stake in experienced investor in aviation although it failed to build a profitable Aeroflot business based on Rosavia, which UralSib included Rossiya, KMVA, Orenburg August 30, 2013 Airlines, Avia, and Sakhalin Airlines. The Government supports transferring loss-making Rosavia was finally 25% of Aeroflot to Rostec. transferred in return for a 4% stake in Aeroflot in 2011. The deal turned out According to media, the government to be value-destructive for Aeroflot, could transfer the blocking stake out of which is still struggling to turn around its 51% stake in Aeroflot (AFLT RX – the loss making ex-Rosavia airlines. Buy) to state-run Rostec if the latter manages to sell the rest of the Marginally negative for the sentiment. government’s stake to investors. We believe transferring the blocking stake to Rostec would not increase Sergey Chemezov, the CEO of Rostec, dramatically the risk of politically who currently owns 3.6% in Aeroflot, motivated rather than economically- said at MAKS-2013 international air viable deals for Aeroflot, if it could be show, that Aeroflot’s strategy could be offset by the reduction of the state’s changed towards purchasing more stake and an increase of minorities’ domestically produced aircrafts. voting power, which would enable them to better protect their interests. Equity placement possible. So far The company’s investment case is Aeroflot’s needs for planes, especially supported by growth in air-passenger long-range ones, cannot be covered by traffic and an expected turnaround in the domestic aircraft industry, which is profitability of the regional airlines. We currently concentrated on the reiterate our Buy recommendation for production of planes for regional the name with a target price of routes. The government is currently $2.3/share. Please see also our considering reducing its ownership in desknote ‘Rostec Seeks to Manage Aeroflot to a blocking stake by 2016 State’s Stake in Aeroflot’ published on and it could place its quasi-treasuries 8 July 2013. in New York or London ahead of the

Russian Prime Minister Dmitry 2. More than $12bn Medvedev. of deals done at Corporation head Pogosyan said his MAKS airshow company’s current portfolio of orders for the Defense Ministry was for over RIA Novosti August 30, 2013 300 planes, while the total volume of orders as part of the state arms procurement program would be about More than $12bn in contracts have been signed at the MAKS-2013 600 aircraft. international air and space show near Moscow, a sum exceeding the $10bn Under a separate deal, the Defense record set in 2009. Ministry will receive three modernized A-50U early-warning-and-control

United Aircraft Corporation president planes this year, said Vartan Mikhail Pogosyan said his company Shakhgedanov, deputy general designer at the Vega company, which alone had signed at least $12bn worth of contracts at the MAKS show this produces the planes. year, compared with $7.5bn last year. A contract for a fourth plane is

Russia’s state-run arms exporter expected to be signed shortly, he Rosoboronexport has signed five new added. collaboration agreements with Italy’s Finmeccanica industrial group and Shakhgedanov also said the Defense Ministry would receive the first of the OMA SUD aircraft maker, and inked a contract with Cameroon for Mi-17 two advanced Tu-214ON planes helicopters. Russia’s MiG fighter jet equipped for the Open Skies international program, at the MAKS maker has clinched an agreement with India to establish a servicing center for airshow. The contract for the two its aircraft in the Asian country. aircraft is worth 5bn rubles ($150m), he added.

The Russian Defense Ministry has signed a comprehensive $3bn The Defense Ministry currently uses four An-30 aircraft and one Tu- agreement with the UAC on maintenance and servicing of its 154MLK-1 under the Open Skies aircraft, avionics and equipment, and Agreement. signed a $50m contract for a unique electronic warfare system. On Wednesday, the MiG fighter jet maker signed two additional contracts

The UTair airline has signed a contract with India worth a total $55m. They with Sukhoi Civil Aircraft Co. for six are part of a general contract with India’s air force. long-haul Superjets, worth $217.2m.

Warplanes Under the first, $43m contract, a servicing center will be established in On Tuesday, the UAC and the Defense Ministry signed a 80bn ruble ($2.5bn) India for maintenance and repair of contract for the servicing of aircraft, Zhuk-ME on-board radars, MiG avionics and related equipment. The representatives said. The second, contract was signed in the presence of $12m contract provides for the creation in India of a servicing center for modernized MiG-29UPG fighter in Russia, with initial deliveries due to jets. start in 2017.

Russia will deliver six MiG-29K Fulcrum ’s Antonov aircraft maker has “generation 4++” fighters to India this handed over a third An-158 passenger year as part of a 2010 contract for 29 airliner to Cuba and signed a contract planes worth $1.5bn, MiG CEO Sergei for the delivery of three more. Korotkov said. Ramon Martinez Echevarria, president India currently has 21 aircraft. Under of the Cuban Civil Aviation the contract, MiG is to deliver 29 Corporation, thanked Russia’s leasing planes before 2015, Korotkov said. company, Ilyushin Finance Co., and Last year four aircraft were delivered the Antonov aircraft manufacturer for and one has been delivered so far this making the deal possible. The delivery year, he added. of the other three aircraft has been planned for next year, Echevarria said, Civil Aviation adding that they would help boost the Sukhoi Civil Aircraft Co., the UTair tourist flow to and from Cuba. airline and VEB Leasing signed a contract for the delivery of six Sukhoi The An-158 is made by Ukraine, but Superjet-100LR planes, worth about 60% of its components are $217.2m. Russian-produced, which is why Russia has an interest in facilitating such Deliveries of the 103-seat planes will deals, Russia’s minister for industry start next year. The three companies and trade, , told a previously signed a preliminary group of aviation students in Moscow agreement for the delivery of 24 in February. The aircraft also uses Superjets as the first stage of the components that are French, German implementation of a leasing agreement and US made, with the share of this signed prior to that. last being under the 10% cutoff point that would prevent it being sold to UTair is planning to operate the planes Cuba under US sanctions. both on domestic flights (western Siberia and European Russia) and on Bombardier Q400 NextGen flights to Europe. Russian state corporation Rostec and Bombardier announced Wednesday The Superjet-100 (SSJ-100) is a short- that they had signed a letter of intent to-medium-haul passenger aircraft for the sale of 50 Q400 NextGen developed by Sukhoi in collaboration aircraft, The Wall Street Journal with US and European aviation reported. The two companies also corporations including Boeing, signed a memorandum of Snecma, Thales, Messier Dowty, understanding to validate the Liebherr Aerospace and Honeywell. opportunity to set up a Q400 NextGen final assembly line in Russia. UTair and VEB Leasing also signed a memorandum of intent for the lease of If definitive agreements are reached, a 10 MS-21-300 airliners. Under the firm-order contract for 100 Q400 deal, the aircraft will be provided NextGen aircraft would be valued at between 2018 and 2020. MS-21 around $3.39bn, the WSJ said. aircraft, currently in development, are to replace all models of Tu-154 and At present there are more than 120 Tu-134 aircraft, as well as the Yak-42 Bombardier commercial aircraft in service in Russia and other the CIS states, Bombardier forecasts a market demand of about 400 aircraft in the Eleron-3SV is a modernized unmanned region over the next two decades, the aerial vehicle that was approved for WSJ said. service with the Russian Armed Forces earlier this year. The system is about Helicopters “five times cheaper” than its Western In a groundbreaking deal, Russia on analogues, Pobezhimov said. Wednesday inked a deal to deliver Mi- 17 military transport helicopters to Cameroon. The deal was signed by Cameroon’s Defense Ministry and Russia’s state-run arms exporter Rosoboronexport, which is part of Russian Technologies.

It was not immediately clear how many helicopters Russia would deliver under the contract or when.

Drones Russia’s Defense Ministry will sign a contract with the Kazan-based Enix company for 34 short-range reconnaissance drones before the end of the year, Enix General Designer Valery Pobezhimov told RIA Novosti.

Deliveries of 17 Eleron-3SV complexes comprising 34 drones should start in the first quarter of next year, he said.

Rogozin, who is responsible for the 3. Russian Aircraft defense and aerospace industries, said at a government meeting to discuss Makers Need New the situation in the civil and military Recovery Strategy – aircraft industries.

Deputy PM “The situation is unacceptable, so RIA Novosti whether you agree or not, we must August 19, 2013 develop a strategy of new re- conquest,” he said, noting that up to The Russian aircraft industry must 80% of all civil aircraft on Russian implement a new development domestic flights are foreign-made. strategy to conquer lost markets, Deputy Prime Minister Dmitry Rogozin According to company data, Aeroflot said Wednesday. and Transaero, Russia’s two leading airlines, fly mostly Boeing and Airbus “Despite all efforts, the Russian civil planes, with just a handful of Russian- aviation market has been lost to a made Ilyushin Il-96-300, Tupolev Tu- great extent by our manufacturers,” 214, and -95 aircraft in service. airliner in 2017, according to Russia's Rogozin proposed that all major Rostech holding, UAC's parent Russian aircraft brands should be company. Aeroflot will be launch revived as part of the new strategy. customer for the aircraft, with 50 on order. “These are such national drivers as Tupolev, Sukhoi, MiG, Yakovlev and The Russian civil aircraft industry faces other well-known brands, which for massive competition from Airbus and some inexplicable reasons have been Boeing, which have received orders for pushed almost into oblivion…,” he 734 and 692 airliners each so far this said. year, the Guardian reported last month. China has also announced it Rogozin also proposed setting up a intends to start producing its own consultative body similar to the airliner, the Comac C919, which will Russian government's Marine Board to compete head-on with the MC-21. regulate relations between the aviation industry and its customers. Russia currently produces no light aircraft, but at last month's Paris Russia has produced only one totally airshow, Rostech announced a tie-up new passenger plane since the with Austria's Diamond Aircraft to start collapse of the Soviet Union, the production of a new 19-seat utility Sukhoi Superjet 100 regional airliner. plane intended for local air services in United Aircraft Corporation, the Russia. holding which incorporates the myriad elements of the Russian fixed-wing Sukhoi SuperJet-100 aircraft industry, is due to begin production of the MC-21 (formerly known as the MS-21) mid-range

However, the European owned 4. Russians offers company was reluctant to let the Russians in and had VEB has finally Poland Airbus shares given up hope of moving closer to the bne company or getting representation on August 19, 2013 the board.

Russia is finally selling out of its The company’s French shareholders 5.02% in Airbus, formerly known as have proposed VEB sell its stake to EADS and has offered the stake to Poland. Poland. Rzeczpospolita cites CEO Jean-Pierre The Russia's state-owned development Talamoni as saying some time ago bank Vnesheconombank (VEB) holds during his visit to Poland: "I have the shares and the Russian come here to tell the Polish government was hoping to increase its government representatives that we stake to up its cooperation with the want to marry with Poland." company as part of its on going efforts to develop a domestic aircraft Airbus is hoping to tie the deal to an manufacturing industry. order from Eurocopter and other units of Airbus to deliver equipment to the Polish army, according to EUR763m. VEB has already reduced its Rzeczpospolita. stake to 2.88% and since it has been below 3%, it is not obliged to inform The CEO estimated at the time about further reductions. Airbus's potential investments in Poland at EUR7-8bn. The value of the Russian transaction is estimated at

Airport's Northern Terminal Complex, 5. 3 Tycoons Bidding a news report said Tuesday. for Sheremetyevo Applications have been submitted by Terminal Transstroi, Renova and TPS Avia The Moscow Times Group, the airport's communications manager said. August 28, 2013

Three Russian tycoons are bidding Read more here: http://www.themoscowtimes.com/busi against each other for the lucrative project to redevelop Sheremetyevo ness/article/3-tycoons-bidding-for- sheremetyevo-terminal/485129.html

6. First Kazakhstan The Department blames the plant's Russian partner MVEN from Kazan. aircraft plant fails to According to the authority, the produce any planes company failed to submit technical documentation and the certificate for in 2 years assembly of the aircrafts to Tengrinews KazAviaSpektr that owns the plant. August 29, 2013 Read more here: The first Kazakhstan aircraft plant http://en.tengrinews.kz/companies/Fir Sunkar in Karaganda oblast has not st-Kazakhstan-aircraft-plant-fails-to- produced any aircrafts over 2 years of produce-any-planes-in-2-years-22208/ its operations, Tengrinews.kz reports citing the oblast Department of Entrepreneurship and Industry.

Tajikistan is to introduce new, stricter 7. Tajikistan to set rules for domestic air carriers, to raise standards and ensure the country is stricter rules for not placed on an international air airlines safety blacklist. bne August 29, 2013 Tajikistan is working on amendments to regulations and laws affecting the sector in advance of a visit from auditors from the International Civil Two other Central Asian countries, Aviation Organization (ICAO) in Kazakhstan and , are November 2013, the head of the already included on the blacklist, transport ministry’s civil aviation almost all airlines registered in both directorate, Alisher Rustamov said countries are banned by the European August 28, according to Asia Plus. Union from flying in EU airspace.

Rustamov warned that the visit is The ICAO makes five-yearly visits to important for Tajikistan, as if the ICAO each of its member states. On its makes an unfavourable report, the previous visit, ICAO inspectors gave country risks being included on a recommendations to Tajikistan’s blacklist of countries. This would affect aviation authorities of steps to be the four passenger airlines and three taken to resolve problems in the cargo airlines that are registered in country. Tajikistan.

8. Russia sells part of The stake building was seen by many analysts as a bid by Moscow for a controversial EADS board seat or even a blocking minority stake in the conglomerate, though neither FT ever materialised. VTB later sold the August 19, 2013 stake to Vnesheconombank.

Vnesheconombank declined to A Russian state-controlled bank has sold part of its 5 per cent stake in comment on the sale, which was EADS , the European aerospace group, originally reported by Russian newspaper Vedomosti. But a recent ending an audacious experiment in Russian integration with EU industrial filing with the Dutch Financial Markets policy. Authority showed the stake was reduced from 5 per cent to 2.88 per

The sale by Vnesheconombank comes cent. amid signs that it plans to sell out The sale of the shares on that date completely of EADS to fund an increasingly costly foray into civilian would have been worth about €763m, aircraft. based on market prices at the time.

In September 2006 the Kremlin told Read more here: http://www.ft.com/intl/cms/s/0/16c30 stunned French and German governments that VTB, another 6d0-0682-11e3-9bd9- Russian state bank, had bought a 5 00144feab7de.html#axzz2cO8G4SYy per cent holding in Europe’s flagship aerospace group.

9. Russian September 2, 2013

Budget Airline In mid-June, Russia’s Federal Air Red Wings to Double Transport Agency (Rosaviatsia) gave Red Wings permission to resume Fleet by 2017 operations that were suspended soon RIA Novosti after a fatal incident at a Moscow August 19, 2013 airport in December.

Russian budget airline Red Wings is Read more here: planning to more than double its http://en.rian.ru/russia/20130819/182 aircraft fleet by 2017, from eight 851008.html planes to 18, a company executive said Monday.

RUSSIA INFRASTRUCTURE NEWS

not satisfied with that," Medvedev said 10. Medvedev at a meeting at the MAKS air show. predicts Russia's He said that the revenue of plane aviation market to producer reached almost RUB1tn as of the end of 2012. "According to all the exceed RUB1tn soon forecasts, it is evident that despite all bne sorts of problems and crises, the August 27, 2013 volume of the market will grow," Medvedev said. Russian Prime Minister expects the volume of the He said that local manufacturers will aviation market to exceed RUB1tn in showcase a business version of Sukhoi the coming years, RIA Novosti Superjet 100, a modernized Tu- reported Tuesday. 204SM, and the PAK FA fifth generation jet fighter at the show. "Production has doubled over the past 10 years, which is good on the one hand, but on the other hand we are

Tuesday in the town of Zhukovsky, 11. State Support just outside Moscow.

Crucial for Russian The Russian premier said international Aircraft Industry – collaboration would be one of the factors for Russian aircraft builders to Medvedev secure substantial positions. As an RIA Novosti example, he cited the Sukhoi Superjet August 28, 2013 100 regional airliner, developed jointly with the United States, France, Italy State support is crucial for Russia’s and other countries. modern aircraft industry, Prime Minister Dmitry Medvedev said Medvedev told the participants and Tuesday. guests of MAKS-2013 earlier in a welcome message that Russia should “I think the main thing today is to do everything possible to strengthen ensure stable consumer demand for its aircraft’s positions on the global aircraft makers and help them reach market. the needed production volumes and profitability on already started projects He also talked to Russian cosmonauts as soon as possible and create the on the International Space Station in a necessary safety margin for communication session organized at developing and launching new high- the Russian space agency Roscosmos’ tech products,” the prime minister said pavilion at the airshow. at an international aviation congress. In addition, the prime minister visited Investment risks seriously hinder the other pavilions and inspected a model industry’s development, Medvedev told of a new Russian jet airliner, the MS- the congress, held as part of the 21. MAKS-2013 airshow, which opened on

Deputy Prime Minister Dmitry Rogozin 12. Building of said on Monday. shipyard for Russia's "It became clear that the shipyard's Gazprom behind construction is already 14 months behind schedule. We have raised our schedule primary concern and have discussed it bne with our largest clients Rosneft and August 19, 2013 Gazprom. We now understand that the tension in their relationship with the The building of the Zvezda shipyard, United Shipbuilding Corporation has which will manufacture shelf reached a head," Rogozin said cited by development vehicles for Gazprom and Prime. Rosneft in Russia's Far East, is 14 months behind schedule and needs interested investors to continue,

the Antonov aircraft manufacturer for 13. Cuba Gets 3rd making the deal possible.

An-158 Plane, Signs The delivery of the other three aircraft Deal for 3 More has been planned for next year, RIA Novosti Echevarria said, adding they will help August 29, 2013 boost the tourist flow to and from Cuba.

Ukraine’s Antonov aircraft maker has handed over a third An-158 passenger The An-158 is made by Ukraine, but about 60% of its components are airliner to Cuba and signed a contract for the delivery of three more, Russian-produced, Russia’s Minister for Ukraine’s UNIAN news agency Industry and Trade Denis Manturov told a group of aviation students in reported Wednesday. Moscow in February, which is why – he The transfer ceremony took place at explained - Russia has an interest in the MAKS-2013 international air and facilitating these deals. space show just outside Moscow. The aircraft also uses components that Ramon Martinez Echevarria, president are French, German and US made, of the Cuban Civil Aviation with the share of this last being under the 10% cutoff point that would Corporation, thanked Russia’s leasing company, Ilyushin Finance Co., and prevent it being sold to Cuba under US sanctions.

SSJ-100 Long Range. A firm contract 14. Gazprom Avia for the delivery of 10 such aircraft toward the end of 2015 was signed in Gets 1st Long-Haul August 2011. Superjet 100 The SSJ-100 Long Range has a RIA Novosti August 30, 2013 maximum haul of 4,580 kilometers. It is equipped with a turbofan SaM146 engine that provides extra thrust. Sukhoi Civil Aircraft Co. has delivered the first long-haul Sukhoi Superjet 100 (SSJ-100) to the Gazprom Avia airline, The Superjet-100 (SSJ-100) was originally designed as a short-to- Sukhoi said Thursday. medium-haul passenger aircraft by The handover ceremony took place at Sukhoi in collaboration with US and the MAKS-2013 international air and European aviation corporations space show, just outside Moscow. including Boeing, Snecma, Thales, Messier Dowty, Liebherr Aerospace Gazprom Avia, Gazprom’s principal air and Honeywell. carrier, will become the first airline to begin commercial operation of the

by 2020. In addition, the port at St. 15. Investing into Petersburg is expanding by 44 percent, and German engineering Russian Trans- giant Siemens signed a $3.2 billion Siberian railway deal in 2012 to supply 675 cargo electric locomotives to Russia. Stratfor August 19, 2013 Moscow has two goals in the railway expansion. First, it hopes to boost its Rail-based transport between Asia and Europe is considerably cheaper than exports of raw commodities. Russia seaborne transit, and Russia's has become among the top oil infrastructure investments could producers and exporters in the world, relieve economic pressure on and around 250,000 barrels of Russian oil is transported to Asia by rail each European and Asian countries that are struggling to maintain current trade day -- an amount that could increase levels. The Trans-Siberian Railway, for with the Trans-Siberian expansion. The coal industry too would rely on an example, is capable of moving some 120 million tons of cargo each year, expanded Trans-Siberian Railway for and around 13 percent of container exports to Asia. The upgraded railway would also give Russia a more trade between Europe and Asia utilizes the line. A recently approved $17 prominent role in trade between billion expansion of the 9,300- Europe and Asia. Currently, goods kilometer (roughly 5,800-mile) railway from Asia can reach Europe in roughly would add another 55 million tons of 10 days via the Trans-Siberian Railway. By comparison, seaborne capacity by 2018 -- a 46 percent increase. goods from South Korea or Japan, for example, take around 28 days to reach Germany and 40 days to arrive The railway expansion will be accompanied by several other in St. Petersburg. Moscow hopes the infrastructure projects. According to rail expansion will make overland transit through Russia even more Russian railway and port operator N- Trans, Russia will triple rail-to-port attractive as an alternative to capacity in its Pacific coast terminals seaborne routes.

suburban train department director, 16. Russian regions said on Wednesday. to pay 65% of The regional authorities establish suburban traffic costs fares, which are usually below the costs, but also have to redeem all from 2014 additional losses to Russian Railways. Prime The current payment rate for August 21, 2013 infrastructure usage is 0.01%.

The government will order the regions Read more here: and their commuter train operators, http://www.1prime.biz/news/interview joint ventures between Russian s/_INTERVIEW_Russian_regions_to_pa Railways and local authorities, to pay y_65_of_suburban_traffic_costs_from 65% of the costs for using Russian _‘14/-202/{39252331-8B68-4207- Railways' infrastructure from 2014, B796-E6F8FD827843}.uif Maxim Shneider, Russian Railways'

bne 17. THE INSIDERS: August 17, 2013 Export credit Holding court on the terrace agencies step into overlooking the lush grounds of the American Mission in Prague on a the breach sweltering August day, Fred Hochberg, head of the US Export-Import Bank, is in ebullient mood. With many parts of the global economy in the doldrums and weak Seated next to him is Danny Roderick, banks constrained in the amount they president and CEO of Westinghouse, can lend to large projects such as the US nuclear company that's one the those for transport and energy main reasons for Hochberg's visit to infrastructure, that has opened up a the Czech Republic. Westinghouse is in lot of space for multilateral institutions the midst of a battle with Russia's and export credit agencies like Rosatom to win the right to build two Hochberg's. "Banks with the new Basel new nuclear reactors in the country, in III requirements have a big a deal worth €8bn-12bn, and Ex-Im disincentive to make long-term loans. bank wants to play its part by offering These are projects that require vast low-interest loans to companies that amounts of capital and the financial buy American equipment and services. crisis has changed the appetite of banks for long-term loans," Hochberg "What Ex-Im Bank is successful at is says. "We, however, are backed by the keeping a level paying field, so that full credit of the United States when Westinghouse goes into the government." marketplace our product is evaluated on quality and technical merits, not on "As such, Ex-Im also offers capacity some extraordinary pricing package We did a large [liquefied natural gas] offered by some other government or project in Saudi Arabia last year worth state-owned agencies [like Rosatom]," $20bn it's very hard to assemble says Roderick. $20bn of financing. These infrastructure projects have gotten so Hochberg, fresh from being confirmed large and on such a scale that it in July by the US Senate for a second requires a much broader portfolio of term as president of Ex-Im Bank, credit, much more a consortium to do presided over a banner year in 2012 - the financing and export credit and 2013 looks like it could surpass agencies are being called upon more even that. The bank's overall financing and more." For example, in May Ex-Im in 2012 exceeded $35.7bn, backing approved an approximately $500m $50bn of exports by US companies. direct loan to finance the continued Exports in the year continued their development of the giant Mongolian recovery from the depths of the global copper/gold mine Oyu Tolgoi, which crisis in 2008, with US exports upon completion will generate reaching a then record high of approximately 30% of Mongolian GDP. $188.7bn set in December 2012. But Hochberg is keen to stress that it's This was then surpassed in June this not all about big business a nod year when US firms exported a record perhaps to Republican criticism that $191.2bn of goods and services, the bank is little more than a slush according to data released on August 6 fund for a few big companies. Justin by the Commerce Department, Amash, a Congressional Republican, suggesting a better year in 2013. has proposed a bill that would shut Exports of goods and services in the down the agency's financing activities 12 months to June totalled $2.2 after a year, then turn them over to trillion, which is 41.5% above the level the Treasury Department before of exports in 2009. US exports have closing Ex-Im Bank for good. been growing at an annualized rate of 10.4% when compared with the same "There are two groups of US exporters period in 2009. who are having a particular challenging time getting financing: small businesses and very large One lesson Hochberg says he learnt projects, and it's in those areas where from his first term as president is that we excel," he explains. "The share of as important as those key markets Ex-Im's loans to small businesses is up are, equally important are key sectors about 90% since President Barack that need financing to close the deal Obama was elected and I got into this for example, satellite technology, job in 2009. We've done more small nuclear power, energy in general, business loans in four years under large commercial aircraft, transport President Obama than eight years and mining. "So we try to fill the gap under President Bush. I think we have on products that are hard to finance strong record when it comes to small and countries that are hard to business." finance."

New markets Given the bank provides loan guarantees to foreign companies in In terms of countries, the trend is 178 countries that do business with US definitely toward the emerging exporters, clearly default rates are a markets. In the 12 months to June, key factor, but it's incredibly low even among the major export markets (ie. in this difficult economic environment. those with at least $6bn in annual "I'm very proud of our default rate, we imports of US goods), the countries report to Congress every 90 days and with the largest annualized increase we're running about 0.3% on our from 2009 were Panama (+28.6%), portfolio," he says. "Last year it was United Arab Emirates (+23.1%), $37m on a portfolio of $106bn." Russia (+22.6%), Peru (+21.9%), Chile (+21.4%), Colombia (+19.5%), Looking ahead, Hochberg says he's Hong Kong (+19.2%), Argentina optimistic about the prospects for the (+18.5%), South Africa (+18.3%) and world economy and global trade. "The Venezuela (+18.1%). global economy is having some teething problems right now, but I Hochberg say his institution has think the medium-term prospects are identified about eight or nine key quite strong. There's more people markets that US companies are having joining the middle class and this is a difficult time finding financing to help going to fuel a huge and local companies buy their products. unprecedented investment in "US companies are sometimes selling infrastructure: they want better to countries that are hard to finance healthcare, better education, power 24 into," he says. "Kazakhstan, South hours a day all those things that will Africa, Colombia these are more drive growth. And the US will get its difficult markets for banks to be fair share of that." comfortable in."

INFRASTRUCTURE OTHER NEWS

terrorist attack at the Domodedovo 18. $455k suit airport held in January 2011, on the recovery of 15 million rubles ($ against Moscow 455.147 million) from the airport, her airport over terrorist attorney Igor Trunov told RAPSI. attack rejected The lawyer will appeal the ruling in the RAPSI Moscow City Court. August 23, 2013 Read more here: The Moscow Presnensky District Court http://www.rapsinews.com/judicial_inf rejected on Tuesday the lawsuit filed ormation/20130827/268679366.html by Yelena Krivolutskaya, a victim of a

Fines for improper parking in Moscow 19. Moscow Driver were increased from 100 rubles (about $3) to 2,500 rubles (almost $76) on Gets Record 300 July 1, 2012, so the driver is estimated Parking Tickets in Six to pay about 750,000 rubles ($22,700) in total. Months RIA Novosti The figure, however, is much less than August 25, 2013 the fine imposed on Jennifer Fitzgerald from Chicago, who accumulated 678 A Moscow driver was fined for parking unpaid tickets, worth more than violations record 300 times in six $106,000 in total, since 2009. A car months, the Moskva 24 TV channel registered on her name was reported on Saturday citing deputy abandoned in an airport parking lot, mayor Maxim Liksutov. and remained there for two and a half years. Earlier this week, she settled Liksutov said the driver gradually pays with the city out of court for $4,500. his bills. He did not disclose the driver’s name or place of work, saying Main types of parking facilities only that he is “not a civil servant.”

be expropriated to give way to the 20. Road Project new road.

Brings Hope and "An acquaintance was looking at the Problems development plan of his rural settlement … He was surprised to find Moscow Times August 27, 2013 a pedestrian bridge belonging to the Central Ring Road right in place of his barbecue oven," user baus said Construction of the highway will have a negative effect on so-called old in 2008 in a post on one of the forums dacha settlements that are located at for dacha owners. a distance of about 35 kilometers from Moscow. But the project stalled on uncertainty about financing and organizational

The Kremlin's move to revive details. ambitious Luzhkov-era plan to build Now the Central Ring Road is being a gigantic circular highway 50 kilometers beyond the Moscow Ring given another chance in what is widely Road is bringing to life the dreams expected to boost development of the Moscow region and ease Moscow's of developers and nightmares of owners of property in its path. heavy traffic by diverting freight transportation. Construction of the Central Ring Road For a map of the future road go to was first approved by federal ring-road.ru/project/map/ authorities in 2001 as part of a plan to direct heavy transportation flows Read more here: away from the city center, http://www.themoscowtimes.com/busi ness/article/road-project-brings-hope- beginning more than a decade of apprehension for home owners and-problems/485091.html whose cottages and land plots might

agreement seen by RIA Novosti on 21. Rostec to Tuesday. assemble Rohde & "The acquired technology for control Schwarz equipment and measurement equipment bne manufacturing will allow for the August 27, 2013 assembly of high-tech measurement equipment and of equipment for the Russian state-owned industrial car and space industry, of equipment corporation Rostec has acquired the for signal generation and analysis, for rights to do semi-knocked-down the appraisal of connection network assembly of Rohde & Schwarz operation and for power measurement," Rostec said. equipment at its plant in Nizhny Novgorod, as follows from the

22. Russia's The cooperation with Aviaexport will allow the Ukrainian party to purchase Aviaexport, spare parts for plane and helicopter Ukrinmash to export equipment directly from Russian producers, Ukroboronprom said. aircraft jointly bne The companies will jointly export August 29, 2013 aircrafts, in particular Mil Mi-17 and Mil Mi-171 helicopters, and provide repair Russia's Aviaexport has signed an services. The option of joint agreement with Ukrinmash, a unit of development of the helicopter repair Ukraine's Ukroboronprom, over a market is also being considered. cooperation in aircraft repairs and exports at the MAKS 2013 air show, RIA Novosti reported on Wednesday.

The company, affiliated with the 23. State Company Sports and Tourism Ministry, will spend over 100 billion rubles ($3 Wins $3 Billion World billion) building new stadiums in Cup Construction Volgograd, Kaliningrad, Nizhny Novgorod, Rostov-on-Don, Samara Contract and Saransk in addition to renovating The Moscow Times the existing arena in Yekaterinburg, August 26, 2013 Vedomosti reported.

The government has chosen the state Read more here: company Sport Inzhiniring (Sports http://www.themoscowtimes.com/busi Engineering) as the general contractor ness/article/state-company-wins-3- for building or restoring seven out of billion-world-cup-construction- 12 arenas for the 2018 football World contract/484974.html Cup in Russia.

RUSSIA ROADS

to road maintenance in a southern 24. Prosecutor Russian region.

Investigating $43M Prosecutors initiated the probe after a Theft From Russian lawmaker, who was not named, raised the issue. Local officials Roadbuilding Budget are accused of siphoning off money The Moscow Times intended for road repairs to cover August 22, 2013 other costs.

The Prosecutor General's Office said Read more here: Monday that it was investigating the http://www.themoscowtimes.com/busi misappropriation of 1.4 billion rubles ness/article/prosecutor-investigating- ($43 million) of budget funds allocated 43m-theft-from-roadbuilding- budget/484769.html

follows form documents seen by 25. Russia's govt Prime. includes highway The project will comprise the design, bridge construction in construction, and exploitation of the bridge, and will be implemented on the govt program basis of concession agreements, which bne will last for 168 months. August 23, 2013 Investment into the project will Russia's Transport Ministry has amount to RUB77.409bn, including prepared amendments to the state 56.952 billion rubles' worth of state program on the country's transport funds and RUB20.457bn worth of system development for 2010-2020 to extra-budgetary funds. implement the project of highway construction over the Lena River as

RUSSIA TRAINS

prolonged in 2012. This concerns 30- 26. Globaltrans - 35,000 railcars, or 3% of the fleet used in Russia. might benefit from Rostransnadzor Our View: The glut of available railcars has put pressure on transportation demanding that RZD tariffs, so this demand would support rates. Given that Globaltrans stop using old maintains a modern fleet, it would not be affected by this measure, hence we railcars view this development as potentially VTB Capital positive for the company. August 19, 2013 Elena Sakhnova News: According to Kommersant, Olga Doronina Rostransnadzor has demanded that Russian Railways (RZD) stop operating old railcars, the use of which was

27. Ministry offers According to the ministry's recent report, passengers prefer using planes stripping Russian nowadays. Railways of ticket aid bne Russian Railways sustained RUB18.7bn August 27, 2013 losses from long-distance passenger traffic in 2012. The government paid it RUB30bn in aid in 2012. It will pay The Finance Ministry has offered to abolish subsidies to Russian Railways only RUB14.8bn in subsidies in 2013. for long distance fares, Vedomosti The Finance Ministry also offered to business daily reported on Tuesday, citing ministry's documents. start covering parts of the airlines' costs for some flights instead of the current practice where the government Economy class tickets on a Russian Railways train traveling 1,500 pays for each passenger entitled to a kilometers or farther from its reduced-price ticket. departure point are partially subsidized by the government.

RUSSIA PLANES

stranded in Russia after their United 28. After Emergency Airlines flight made an emergency landing at the Moscow airport early Landing in Moscow, Tuesday. United Airlines The Boeing 777-200 jet traveling from Passengers Appeal India to the U.S. landed around 4:10 a.m. after pilots detected an for Help unspecified problem with the aircraft’s The Moscow Times main battery, Interfax reported, citing August 23, 2013 airport police.

Domodedovo Airport 1, United Airlines Read more here: 0. http://www.themoscowtimes.com/new s/article/after-emergency-landing-in- That at least seems to be the opinion moscow-united-airlines-passengers- of the 264 mostly Indian passengers appeal-for-help/485109.html who unexpectedly found themselves

Finmeccanica industrial group and 29. More than $12bn OMA SUD aircraft maker, and inked a contract with Cameroon for Mi-17 of deals done at helicopters. Russia’s MiG fighter jet MAKS airshow maker has clinched an agreement with RIA Novosti India to establish a servicing center for its aircraft in the Asian country. August 30, 2013

More than $12bn in contracts have The Russian Defense Ministry has been signed at the MAKS-2013 signed a comprehensive $3bn international air and space show near agreement with the UAC on maintenance and servicing of its Moscow, a sum exceeding the $10bn record set in 2009. aircraft, avionics and equipment, and signed a $50m contract for a unique electronic warfare system. United Aircraft Corporation president Mikhail Pogosyan said his company alone had signed at least $12bn worth The UTair airline has signed a contract with Sukhoi Civil Aircraft Co. for six of contracts at the MAKS show this year, compared with $7.5bn last year. long-haul Superjets, worth $217.2m.

Warplanes Russia’s state-run arms exporter Rosoboronexport has signed five new On Tuesday, the UAC and the Defense collaboration agreements with Italy’s Ministry signed a 80bn ruble ($2.5bn) contract for the servicing of aircraft, for modernized MiG-29UPG fighter avionics and related equipment. The jets. contract was signed in the presence of Russian Prime Minister Dmitry Russia will deliver six MiG-29K Fulcrum Medvedev. “generation 4++” fighters to India this year as part of a 2010 contract for 29 Corporation head Pogosyan said his planes worth $1.5bn, MiG CEO Sergei company’s current portfolio of orders Korotkov said. for the Defense Ministry was for over 300 planes, while the total volume of India currently has 21 aircraft. Under orders as part of the state arms the contract, MiG is to deliver 29 procurement program would be about planes before 2015, Korotkov said. 600 aircraft. Last year four aircraft were delivered and one has been delivered so far this Under a separate deal, the Defense year, he added. Ministry will receive three modernized A-50U early-warning-and-control Civil Aviation planes this year, said Vartan Sukhoi Civil Aircraft Co., the UTair Shakhgedanov, deputy general airline and VEB Leasing signed a designer at the Vega company, which contract for the delivery of six Sukhoi produces the planes. Superjet-100LR planes, worth $217.2m. A contract for a fourth plane is expected to be signed shortly, he Deliveries of the 103-seat planes will added. start next year. The three companies previously signed a preliminary Shakhgedanov also said the Defense agreement for the delivery of 24 Ministry would receive the first of the Superjets as the first stage of the two advanced Tu-214ON planes implementation of a leasing agreement equipped for the Open Skies signed prior to that. international program, at the MAKS airshow. The contract for the two UTair is planning to operate the planes aircraft is worth 5bn rubles ($150m), both on domestic flights (western he added. Siberia and European Russia) and on flights to Europe. The Defense Ministry currently uses four An-30 aircraft and one Tu- The Superjet-100 (SSJ-100) is a short- 154MLK-1 under the Open Skies to-medium-haul passenger aircraft Agreement. developed by Sukhoi in collaboration with US and European aviation On Wednesday, the MiG fighter jet corporations including Boeing, maker signed two additional contracts Snecma, Thales, Messier Dowty, with India worth a total $55m. They Liebherr Aerospace and Honeywell. are part of a general contract with India’s air force. UTair and VEB Leasing also signed a memorandum of intent for the lease of Under the first, $43m contract, a 10 MS-21-300 airliners. Under the servicing center will be established in deal, the aircraft will be provided India for maintenance and repair of between 2018 and 2020. MS-21 Zhuk-ME on-board radars, MiG aircraft, currently in development, are representatives said. The second, to replace all models of Tu-154 and $12m contract provides for the Tu-134 aircraft, as well as the Yak-42 creation in India of a servicing center in Russia, with initial deliveries due to If definitive agreements are reached, a start in 2017. firm-order contract for 100 Q400 NextGen aircraft would be valued at Ukraine’s Antonov aircraft maker has around $3.39bn, the WSJ said. handed over a third An-158 passenger airliner to Cuba and signed a contract At present there are more than 120 for the delivery of three more. Bombardier commercial aircraft in service in Russia and other the CIS Ramon Martinez Echevarria, president states, Bombardier forecasts a market of the Cuban Civil Aviation demand of about 400 aircraft in the Corporation, thanked Russia’s leasing region over the next two decades, the company, Ilyushin Finance Co., and WSJ said. the Antonov aircraft manufacturer for making the deal possible. The delivery Helicopters of the other three aircraft has been In a groundbreaking deal, Russia on planned for next year, Echevarria said, Wednesday inked a deal to deliver Mi- adding that they would help boost the 17 military transport helicopters to tourist flow to and from Cuba. Cameroon. The deal was signed by Cameroon’s Defense Ministry and The An-158 is made by Ukraine, but Russia’s state-run arms exporter about 60% of its components are Rosoboronexport, which is part of Russian-produced, which is why Russia Russian Technologies. has an interest in facilitating such deals, Russia’s minister for industry It was not immediately clear how and trade, Denis Manturov, told a many helicopters Russia would deliver group of aviation students in Moscow under the contract or when. in February. The aircraft also uses components that are French, German Drones and US made, with the share of this Russia’s Defense Ministry will sign a last being under the 10% cutoff point contract with the Kazan-based Enix that would prevent it being sold to company for 34 short-range Cuba under US sanctions. reconnaissance drones before the end of the year, Enix General Designer Bombardier Q400 NextGen Valery Pobezhimov told RIA Novosti. Russian state corporation Rostec and Bombardier announced Wednesday Deliveries of 17 Eleron-3SV complexes that they had signed a letter of intent comprising 34 drones should start in for the sale of 50 Q400 NextGen the first quarter of next year, he said. aircraft, The Wall Street Journal reported. The two companies also Eleron-3SV is a modernized unmanned signed a memorandum of aerial vehicle that was approved for understanding to validate the service with the Russian Armed Forces opportunity to set up a Q400 NextGen earlier this year. The system is about final assembly line in Russia. “five times cheaper” than its Western analogues, Pobezhimov said.

planes with an aggregate cost of about 30. 129 civil planes $7 billion at catalog prices. worth $7 bln sold on These refer to 77 regional planes SSJ- 1st day of MAKS 100 and 52 advanced trunk-route MS- 21-300. The catalog cost of the MS-21 airshow is about $83 million. The price of SSJ- Itar-Tass 100 is $35.4 million for Basic option August 22, 2013 and $36.2 million for LR one -- with an extended range of flight. On the first day of the MAKS aerospace show, Russian civil aircraft Read more here: http://www.itar- builders have concluded tass.com/c154/855095.html?utm_med memorandums and contracts for 129 ium=twitter&utm_source=ITAR-TASS

The airline will operate the plane for 31. Aeroflot gets 2nd the first time soon.

SSJ 100 plane to full Sukhoi will supply five more SSJ 100s spec from Sukhoi to Aeroflot by the end of 2013 and bne three planes in 2014. On the whole, August 29, 2013 Aeroflot ordered 30 SSJ 100s.

National flag carrier Aeroflot Russian The producer is expected to replace 10 Airlines has received its second Sukhoi planes of a lighter set that were Superjet 100 (SSJ 100) to full previously supplied to Aeroflot with fully specified aircraft. specification, the plane's manufacturer Sukhoi Civil Aircraft said, Prime reported.

venture to assemble such aircrafts in 32. Bombardier to Russia. The documents were signed at the MAKS- 2013 air show. sell 100 Q400 planes to Russia In compliance with the contract, the Itar-Tass Avia Capital Services leasing company August 29, 2013 (a Rostec subsidiary) will ensure the delivery to Russia of 50 Q400 NextGen Canada’s Bombardier and planes built in Canada. The agreement Russia’s Rostec State Corporation will become a firm contract only after have signed agreements on 100 the establishment of a joint venture to assemble such planes in Russia. turboprop Q400 NextGen planes, as well as on the establishment of a joint Read more here: http://www.itar- um=twitter&utm_source=ITAR-TASS tass.com/c32/856689.html?utm_medi

Avia, the republic's deputy 33. Chechnya may transportation and communication minister Alvi Shakhgiriyev said, Prime buy up to 8 SSJ 100 reported. planes for Grozny Shakhgiriyev said that the republic's Avia government will sign a preliminary bne agreement with aircraft producer August 28, 2013 Sukhoi Civil Aircraft on Thursday.

The government of the Russian The planes may be delivered as early republic of Chechnya may purchase up as next year. to eight Sukhoi SuperJet 100 (SSJ 100) planes for local airline Grozny

(SSJ-100) to the Gazprom Avia airline, 34. Gazprom Avia Sukhoi said Thursday.

Gets 1st Long-Haul The handover ceremony took place at Superjet 100 the MAKS-2013 international air and RIA Novosti space show, just outside Moscow. August 30, 2013 Read more here: Sukhoi Civil Aircraft Co. has delivered http://en.rian.ru/business/20130829/1 83040785/Gazprom-Avia-Gets-1st- the first long-haul Sukhoi Superjet 100 Long-Haul-Superjet- 100.htmlhere

Aleman Magnani said on Friday during 35. Mexico's Interjet an SSJ-100 presentation, as cited by RIA Novosti. may buy more SSJ- 100 airplanes from Magnani thinks this unfolding of events possible in the best case scenario for Russia growth on the market of plus or minus Prime 100 seat-airplanes. August 23, 2013 Read more here: Mexican airline Interject, the first http://www.1prime.biz/news/_Mexicos Western buyer of the Sukhoi Superjet _Interjet_may_buy_more_SSJ- 100 (SSJ-100) aircraft, may buy more 100_airplanes_from_Russia/0/%7BBA SSJ-100 planes from Russia soon, CB9B52-8649-4063-BD95- Interjet Executive President Miguel B8A1BAE9E696%7D.uif

September 2, 2013

production of aviation biofuel on the 36. Rostec, Airbus to local market using only renewable resources, RIA Novosti reported. team up in making aviation biofuel RT-Biotechprom and Airbus expect to bne receive their first results in July‚- August 28, 2013 ecember 2014 and then decide on the possibility and economic feasibility of

Russia's RT-Biotechprom, an affiliate aviation biofuel production in Russia. of state-owned industrial corporation Rostec, has agreed to cooperate with European concern Airbus in the

Oboronprom and Rosoboronexport, 37. Russia's two subsidiaries of Russian state- owned industrial corporation Rostec, Oboronprom, have signed an agreement with EADS Rosoboronexport to to assemble and purchase detection equipment chips, as follows from the assemble EADS documents seen by Prime. airplanes The parties will also jointly research bne and develop eco-friendly biofuel, August 27, 2013 titanium details and defense equipment.

Russia's Sakhalinskie Aviatrassy 38. Russia's SAT Airlines, a 100%-controlled subsidiary of Aeroflot, will complete the transfer Airlines to transfer of a 49% stake to the Sakhalin Region 49% stake to in October to allow the region to participate in the company's Sakhalin Region development, the regional government bne said in a statement on Monday, August 26, 2013 according to RIA Novosti.

"The acquisition procedure is expected statement quoted the region's to be completed in October and the Governor Alexander Khoroshavin as region will have an opportunity to saying during a meeting with Aeroflot more actively invest its own funds into CEO Vitaly Savelyev. the development of the carrier," the

show. The negotiations have been 39. Russia's Sukhoi tough but are advancing very quickly. There are still many nuances that need may share to be resolved," a source said, technologies with referring to an exhibition that starts on Tuesday. Chinese firms bne Sukhoi and Chinese authorities have August 27, 2013 already discussed the possibility of a partial outsourcing of Superjet-100 Russia's Sukhoi Civil Aircraft may soon production to China. But this is only share the technologies and rights to possible if China acquires a large batch produce some elements of the of Superjet-100s comprising more Superjet-100 airplane with Chinese than 100 units, Sergei Sanakoyev, an companies, Vedomosti business daily executive secretary of the Russian- reported on Tuesday, citing market Chinese Center for Trade and sources. Economic Cooperation, said.

"A partnership agreement with China may be signed at the MAKS 2013 air

on the basis of which the maximum 40. Russia's subsidy amount is calculated, if a company took a foreign currency government to denominated loan. extend aircraft loan For instance, in 2013 the maximum subsidies till 2015 subsidy amount on a foreign currency bne loan, taken before December 31, August 19, 2013 2012, for a leasing contract signed before November 15, 2012 will be Russia's Industry and Trade Ministry calculated based on a 12% interest will prolong a subsidy program for rate in 2013, an interest rate of 10% leasing companies to cover loans annually in 2014 and an interest rate taken from banks and of 8% in 2015. Vnesheconombank to purchase aircraft, as follows form the documents In other cases, the maximum subsidy seen by Prime. amount is calculated at an 8% interest rate. The government also ordered a gradual reduction of the interest rate

September 2, 2013

According to what they asked us, they 41. Russia, China want a helicopter capable of carry about twice the maximum capacity of may co-produce the Mil Mi-26," Rogozin said. heavy lift helicopters bne The Mil Mi-26 can carry up to 20 August 21, 2013 tonnes of cargo, the largest capacity of any helicopter currently in use.

Officials from Russia and China are discussing the possibility of jointly The two countries will also collaborate in the creation of a new long haul producing heavy-lift helicopters capable of carrying 40 tonnes of cargo, aircraft. "It would be profitable for us Deputy Prime Minister Dmitry Rogozin to jointly produce this type of plane said late on Tuesday, RIA Novosti with China for one simple reason - if reported. we produce it for ourselves, we will have a limited series and the plane will "We now understand what type of not be profitable," Rogozin said. heavy-lift helicopter the Chinese want.

Rostvertol Company, whose main 42. Russian production facilities are located in the Rostov region in Southern Russia, is helicopter industry part of Russian Helicopters, a joint- reaches for global stock holding company that incorporates all Russian helicopter markets designers and manufacturers under thinkRussia one name. Even though the holding August 22, 2013 structure was only established in 2007, some of its companies date back A visit of Rostvertol Company, a more than 60 years, and Rostvertol member company of the Russian itself was created in 1939. Helicopters group, by Russian Traditionally one of the country’s President last week flagship industrial sectors, Russia’s highlighted the challenges and helicopter industry accounts for 14 opportunities facing an industry which, percent of the global helicopter fleet more than 60 years after its creation, with more than 8,500 helicopters is fighting to maintain it’s pre- operating in over 100 countries. eminence amidst increased competition on global markets. Read more here: http://www.thinkrussia.com/business- economy/russian-helicopter-industry- reaches-global-markets

infrastructure created, and this need 43. Russian ministry: will make them raise passenger and airport fees. We need to use existing needless to construct airports because they are not fully new facilities for low- loaded," Okulov said cited by Prime. cost airports The government has been discussing bne amendments to the current legislation August 28, 2013 since January in an effort to allow low cost airlines to operate in the country. There is no foreseeable need to construct separate airports to host the Okulov said that the first low cost flights of low cost airlines in Russia, airline, which will start operations in the Deputy Transport Minister Valery July-December 2014, will belong to Okulov said on Wednesday. Aeroflot, and it will carry flights between Moscow and the largest cities "There is no urgent need to spare an of the country: St. Petersburg, additional airport for low-cost airlines. Kaliningrad, Samara, Yekaterinburg This will, by the way, put additional and Sochi. pressure on low-cost airlines because they will need to repay for the

leasing company to promote 50 Sukhoi 44. Sberbank- SuperJet planes at MAKS 2013 air show, RIA Novosti reported Tuesday. Leasing, Sukhoi to market SuperJet The appropriate memorandum was signed by Sukhoi Civil Aircraft CEO jointly Andrei Kalinovsky and Sberbank- bne Leasing CEO Dmitry Eroshok in the August 27, 2013 presence of President Vladimir Putin.

Russia's Sberbank Leasing and Sukhoi Civil Aircraft agreed to jointly create a

45. St Pete's Pulkovo Passenger traffic at St. Petersburg's Pulkovo Airport increased 18.1% to Airport passenger 1.56 million people in July, the airport traffic rises 18% in operator Northern Capital Gateway reported on Wednesday, as cited by July RIA Novosti. bne August 21, 2013 International traffic amounted to 4.01m people on international routes 897,700 people and domestic traffic and 3.19m people on domestic routes. was at 662,400 people in July. No comparison was provided. In 2012, the airport's passenger traffic rose 16% to 11.154m people. In January-July, passenger traffic increased 15.8% to 7.2m people, with

held in the Moscow Region city of 46. Sukhoi agrees Zhukovsky. with AviaAM Leasing The companies will focus on promoting on provision of 5 the SSJ 100 in developing countries, where the demand for regional aircraft SSJs remains high. bne August 28, 2013 The agreement was signed under the aircraft's catalogue price. Russia's Sukhoi Civil Aircraft and leasing company AviaAM Leasing Leasing company Ilyushin Finance signed a letter of intent on Wednesday Corporation and airline Transaero also to finance and lease out five Sukhoi signed a letter of intent to lease six Superjet 100s (SSJ 100), Prime MS-21-300 airplanes. The aircraft will reported. be handed over to the airline starting from 2019. The parties concluded the agreement at the MAKS air show currently being

issue under private subscription, which 47. Sukhoi to sell 2m will be acquired by the Federal State Property Management Service, the extra shares to company said, Prime reported. government Each share amounts to RUB1,000; bne August 19, 2013 however the price of the placement will be defined after the state Russia's Sukhoi Civil Aircraft will place registration of the issue. 2m common shares of an additional

August 21, 2013 48. Transaero, Virgin Russian airline Transaero has added to America Sign its list of partners offering connecting Agreement flights in the United States by signing RIA Novosti an interline agreement with California- based Virgin America, according to an official statement from Transaero pricing will be offered on some of the released Tuesday. routes, according to Transaero

The agreement links Transaero Read more here: passengers flying out of Moscow to http://en.rian.ru/business/20130820/1 Virgin America flights departing from 82873740/Transaero-Virgin-America- Los Angeles and New York. Special Sign-Agreement.html

49. UTair Signs Deliveries of the 103-seat planes will start next year. The three companies $217M Contract for 6 previously signed a preliminary Superjets agreement for the delivery of 24 Superjets as the first stage of the RIA Novosti August 23, 2013 implementation of a leasing agreement signed prior to that.

Sukhoi Civil Aircraft Co., the UTair airline and VEB Leasing signed a Read more here: contract on Tuesday for the delivery of http://en.rian.ru/business/20130827/1 82998049/UTair-Signs-217M-Contract- six Sukhoi Superjet-100LR planes worth $217.2 million. for-6-Superjets.html

held from Tuesday to Sunday in the 50. VEB, Ilyushin to Moscow Region town of Zhukovsky. consider supplying 4 Under the document, VEB and planes to Cuba Eximbank will consider the option of bne financing the acquisition of up to four August 27, 2013 –ên-148 and –ên-158 planes from Ilyushin Finance Corporation in order

Russia's state-owned to lease them out to Cuba's Aviaimport Vnesheconombank (VEB), its affiliate S.A.

Eximbank and aircraft leasing company Ilyushin Finance Corporation VEB also concluded an agreement with have concluded an agreement of intent the Moscow Region government, state- owned industrial corporation Rostec to finance the purchase of four airplanes and lease them to Cuba, VEB and the Russian Venture Company to said in a statement seen by Prime. create a technological park Ramenskoye. The parties concluded the agreement at the MAKS air show, which is being

51. Deripaska, September 2, 2013

Vekselberg bid in reported on Tuesday, citing airport Sheremetyevo tender spokeswoman Anna Zakharenkova. bne August 27, 2013 A special committee of the airport will shortlist the competitors on Friday. Transstroy, the Koltsovo Airport, and TPS Avia Group, owned respectively by In August, the airport said that it will Russian tycoons Oleg Deripaska, Viktor order the construction of a U.S. $300- Vekselberg, and Arkady Rotenberg, 350m complex of terminals and a tunnel connecting it with older have bid at a tender to build a terminal at Moscow's Sheremetyevo buildings. Airport, Kommersant business daily

connecting it with the older buildings, 52. Sheremetyevo to the airport said. build $300-350m The passenger traffic in the existing new terminal terminal totaled 26.188m people in bne 2012, while the new terminal is meant August 19, 2013 to provide services to up to 40m passengers per year with the first Moscow's Sheremetyevo airport will stage raising capacity by more than order the construction of a $300-350m 10m passengers. complex of terminals and a tunnel

its terminal in Moscow's Sheremetyevo 53. Aeroexpress International airport in November, the company said in a statement on Terminal to Boast Monday. New Look This "The changes in the existing complex Autumn are being made based on the bne suggestions of passengers and on the August 26, 2013 expert opinions of foreign consultants on organization of modern air and Russian railway operator Aeroexpress railway terminals; we are forming an plans to complete the reconstruction of open trade area with the elements of a mall," said Rustam Akinizyanov, the The reconstruction also includes the company's commercial director. renovation of ticket windows, information desks, as well as trade The total area of the objects and catering facilities. reconstructed amounts to more than 1,000 square meters.

RUSSIA SHIPS

development of civil shipbuilding in the 54. Putin to hold Far East. conference on civil A principled decision on the shipbuilding in Far establishment of a new shipbuilding complex in the city of Bolshoi Kamen East on the basis of the Zvezda (star) Itar-Tass shipyard for the construction of ships August 30, 2013 for the industry was taken several years ago. President Vladimir Putin will begin his three-day working tour of Vladivostok Read more here: http://www.itar- with a conference on prospects for the tass.com/c32/858063.html?utm_medi um=twitter&utm_source=ITAR-TASS

refinery in Estonia’s Sillamae port with 55. Russia’s STK an annual capacity of 3 million tonnes of oil products, Estonian Public Group may build oil Broadcasting said Monday, as cited by refinery in Estonian RIA Novosti. port Read more here: Prime http://www.1prime.biz/news/0/%7B3 August 19, 2013 A25B3F2-9BD7-4C6D-981A- 9E6F4E248FC2%7D.uif STK Group, owned by Russian businessmen, plans to build an oil

56. Government September 2, 2013

Plans $7Bln Port The Port of Taman will open in 2019 to on Black Sea Coast handle dry cargoes, such as grain and The Moscow Times coal, Transportation Minister Maxim August 21, 2013 Sokolov said Tuesday.

As officials scowl at the cargo that Read more here: goes out through foreign harbors, the http://www.themoscowtimes.com/busi government is making headway on a ness/article/government-plans-7bln- plan to build a $7 billion port on the port-on-black-sea-coast/484814.html

Black Sea.

EE INFRASTRUCTURE

According to Boeing, the company is 57. Russia and CIS purchasing new planes to replace obsolete narrow-bodied and regional countries' air carriers planes with new generation models to buy planes for with higher fuel efficiency.

$140bn The company will need 1000 regional bne planes, 860 narrow-bodied aircrafts, August 26, 2013 190 wide-bodied aircrafts and 20 big wide-bodied aircrafts, it said. The air companies of Russia and CIS countries will purchase 1,170 new Passenger traffic in Russia and in the planes worth $140bn within the next countries of the CIS will grow at an 20 years, Boeing Civil Aircraft average of 4.5% annually, Barnett Marketing Director Mike Barnett said, said. RIA Novosti reported on Monday.

58. Belarus Air September 2, 2013

Carrier Cancels Belavia offered charter flights to the Flights to Egypt Egyptian resort cities of Hurghada and RIA Novosti Sharm el-Sheikh, operating in August 21, 2013 conjunction with the Russian tourist firm Tez Tour. Belarusian national air carrier Belavia will suspend flights to Egypt from Read more here: September as its Russian tour agency http://en.rian.ru/business/20130820/1 partner is no longer selling trips to the 82863753/Belarus-Air-Carrier-Cancels- Flights-to-Egypt.html country, the carrier said on Tuesday.

held in Minsk on 16 August, BelTA has 59. Decision on more learned. toll roads in Belarus “The government is deciding on what in the pipelin parts of Belarusian motorways will be used for the second stage of the Belta August 19, 2013 system’s deployment,” specified Sergei Buryi. In his words, the toll road The possibility of expanding the list of system may be expanded to include toll roads in Belarus is being discussed the motorway M4 Minsk- and by the government. The information part of the motorway M5 Minsk-. was released by Sergei Buryi, Manager for Public Relations of the company Read more here: http://news.belta.by/en/news/econom IOOO Kapsch Telematic Services, which is in charge of operating the ?id=723726 Belarusian digital road toll collection system BelToll, at a roundtable session

Belta 60. Master plan for August 23, 2013

Minsk Airport The master plan for the development territory to be ready of the territory around Minsk National Airport will be completed by the end of in 2013 2013, Director of the Belarusian scientific and research city planning company Belniipgradostroitelstva said at the meeting of the construction task Read more here: group on 23 August, BelTA has learnt. http://news.belta.by/en/news/econom ?id=724251 The company’s recent order has been a general layout of the Belarusian- Chinese Industrial Park.

operating the Belarusian digital road 61. Truckers free to toll collection system BelToll, at a roundtable session held in Minsk on 16 bypass toll roads in August, BelTA has learned. Belarus Belta “Shipping companies are free to use alternative ways to bypass toll roads. August 19, 2013 The quality of the bypass road and the Truckers are free to drive round toll time it takes is another matter entirely,” said the executive. roads in Belarus. The freedom is stipulated by legislation. The statement was made by Sergei Buryi, Read more here: http://news.belta.by/en/news/econom Manager for Public Relations of the company IOOO Kapsch Telematic ?id=723738 Services, which is in charge of

EA INFRASTRUCTURE

The process is due to be launched in 62. Armenia to open mid-September, two months later than previously planned. The rights to up air transport operate flights to Europe, Russia and sector after Armavia the Commonwealth of Independent States, and the Middle East will be put collapse up for tender, with a decision to be Clare Nuttall in Astana made based on flight safety, the August 22, 2013 condition of the carrier's planes, the ticket sales system, and the carrier's The Armenian government plans to financial stability, a spokesperson from the Armenian civil aviation department hold a tender for airlines to operate flights to three world regions in told ArmInfo. The winning bidders will September, part of plans to liberalise be awarded a five-year licence to the air transport sector after the operate on selected routes. country's largest carrier Armavia filed for bankruptcy. Read more here: http://www.bne.eu/storyf5290/Armeni a_to_open_up_air_transport_sector_af ter_Armavia_collapse

63. Azerbaijan Some 10 carriages were sent to Ukraine for maintenance work and 16 Railways to upgrade to Russia. railcar fleet AzerNews "The carriages are expected to be back by the end the year," Azmammadov August 19, 2013 said. Azerbaijan Railways will receive back 26 carriages refurbished in Ukraine Read more here: and Russia, the company spokesman http://www.azernews.az/business/582 03.html Nadir Azmammadov said on August 15.

maiden flight from Tbilisi to Antalya, 64. Georgian start- Turkey on Sunday, August 18. The flight was operated using its sole MD- up, Air Caucasus, 83, 4L-LUL (msn 49948) on lease from launches ops with Swift AirCargo (Singapore Changi).

Tbilisi - Antalya Read more here: http://www.ch- CH-Aviation aviation.ch/portal/news/21182- August 22, 2013 georgian-start-up-air-caucasus- launches-ops-with-tbilisi-antalya Air Caucasus (Tbilisi) has officially launched operations following its

construction of a railway which will link 65. Kyrgyz President the Turkic-speaking countries, the President of Kyrgyzstan Almazbek emphasizes Atambayev said at the 3rd summit of importance of railway the Cooperation Council of Turkic Speaking States that was held in to link Turkic- Azerbaijan. speaking countries Read more here: 24.kg news agency http://eng.24.kg/community/2013/08/ August 19, 2013 16/27571.html

The President of Kyrgyzstan emphasized the importance of

and China, Mongolia's MONTSAME 66. Mongolia, Russia, news agency reported.

China Discuss Issues During the three-day meeting, the On Railway parties seek to find solutions to the problems faced by the Mongolia-China Transportation and Ulaanbaatar-East Siberia railway Bernama transportation. August 21, 2013 Read more here: A meeting was held here on Monday to http://www.bernama.com.my/bernam resolve some issues in rail a/v7/wn/newsworld.php?id=971212 transportation for freight and passengers between Mongolia, Russia

$2b port on its Caspian Sea coast 67. TURKMENISTAN: (Aug. 15). Turkmen leader Kurbanguly Berdymukhamedov and Turkish PM Building a port Tayyip Erdogan launched the project. Conway report Turkish construction company Gap August 23, 2013 Insaat will build the port.

Highlighting its energy wealth, Turkmenistan unveiled plans to build a

The Turkmenistan-Kazakhstan section 68. Transit traffic of the transnational railway was put into operation in May this year. increases after Turkmen President Gurbanguly launch of Turkmen- Berdymukhamedov and Kazakh President Nursultan Nazarbayev Kazakh railway attended the ceremony. The project on the transport corridor, which is to section ensure convenient and cost-effective Azernews delivery of goods from Europe to August 26, 2013 Central and South Asia and the Middle East, embodies the idea of reviving the The total volume of transit traffic has Great Silk Road that has linked the significantly increased due to the nations of Eurasia for many centuries. launch of the Turkmen-Kazakh section Turkmenistan is the initiator of of the international North-South reconstruction of the ancient route. railway, Turkmen Dovlat Khabarlary state information service reported on Read more here: : August 21. http://www.azernews.az/region/58513 .html

September 2, 2013

CE INFRASTRUCTURE

the airline, in which it owns 90 69. Etihad, Garuda, percent, with a new investor potentially being announced in China Southern February next year. Airlines said eying The newspaper, citing unidentified Croatia Airlines stake sources, said that Garuda Indonesia Arabian Business and China Southern Airlines were August 22, 2013 among other possible investors. It reported that Transport Minister Sinisa Abu Dhabi’s Etihad Airways is Hajdas Doncic and Croatia Airlines reportedly looking to buy a stake in Sinisa Petrovic were due to fly out to Croatia Airlines, just weeks after it Indonesia next week in order to drum sealed a deal to acquire 49 percent of up interest in a deal. JAT Airways in neighbouring Serbia. Read more here: Croat newspaper Jutarnji List claimed http://www.arabianbusiness.com/etiha that before October 15 the country’s d-said-eye-stake-in-croatia-airlines- government will tender for the sale of 514613.html

the maintenance of state roads today. 70. Income from port This will allow the government to free up some additional funds for social contributions to needs – teachers’, doctors’ and Latvia's budget to be interior’ workers salaries and social benefits,” – says a member of used for road RP’s Board, Education and Science Minister Vyacheslav Dombrovskis. maintenance BNN Coalition partners have conceptually August 22, 2013 approved this proposal. It will be added to the budget planning process. “Our proposal was supported by the RP will submit a fully developed bill on majority of the coalition partners. We the next meeting of coalition partners. urged to divert these budget funds for Read more here: http://bnn- road-maintenance-101656 news.com/income-port-contributions-

SE INFRASTRUCTURE

another attempt to plunder public 71. Albania's New assets based on a process that lacks transparency," Socialist MP Ermonela Leaders Slam Port Felaj told a press conference on Privatisation Deal Sunday evening.

BIRN August 27, 2013 Felaj promised that the decision will be reversed by the new Socialist The Socialist Party, which won June's government at its first cabinet meeting parliamentary elections, promised to next month. reverse a decision by the outgoing centre-right government to privatise "We call on the prosecutor's office to the ferry terminal in the port of launch an investigation over the plundering of public assets," she Durres. added. "The privatisation of the port of Durres, announced on August 19, is

country’s transport ministry said on 72. Bulgaria starts 75 Tuesday. mln euro rail upgrade This is part of the second phase of a project largest project for upgrade of the SeeNews Plovdiv – Svilengrad railway, the August 23, 2013 ministry said in a press release.

Read more here: Bulgaria has launched a 146.8 million lev ($100.1 million/75.1 million euro) http://wire.seenews.com/news/bulgari project for the reconstruction and a-starts-75-mln-euro-rail-upgrade- project- electrification of the Harmanli - Svilengrad railway section, the 374129?utm_source=twitterfeed&utm _medium=twitter

73. Bulgaria’s Terminal Welcomes Varna Airport New First Passengers Novinite August 29, 2013 The event marked the start of operations of the new terminal Ninety passengers on a commercial facilities. flight from Minsk arrived at the brand new terminal in Bulgaria’s coastal Read more here: city of Varna Monday. http://www.novinite.com/view_news.p hp?id=153236&utm_source=twitterfee d&utm_medium=twitterhere

The statement belongs to the leader of 74. Ex Bulgarian PM: the formerly-ruling opposition center- right Citizens for European EU to Freeze Funds Development of Bulgaria party, GERB, over New Govt and former Prime Minister, Boyko Borisov. Novinite August 22, 2013 Read more here: http://www.novinite.com/view_news.p The new "Three-Way Coalition" is well on its way to bring Bulgaria back to hp?id=153194&utm_source=twitterfee the times when EU funding was frozen. d&utm_medium=twitter

The difference between the minimum 75. Highways in and maximum costs for highways built in plain areas is higher in Romania Romania, three times than in Poland and Bulgaria, according more expensive than to the Council, which advises the authorities to avoid addenda to in Bulgaria, price highway contracts. These additions to the contract allow the bid winner, variations higher which offered the lowest price, to actually renegotiate a new value of the than in region contract, which can be even higher Romania Insider than what the winner’s competitors August 29, 2013 has submitted in the bid.

The highways built in Romania in plain Read more here: http://www.romania- areas are three times more expensive insider.com/highways-in-romania- than in Bulgaria, according to a recent three-times-more-expensive-than-in- review of the Competition Council. bulgaria-price-variations-higher-than- in-region/105503/here

running through Israel for Turkish 76. Israel promotes hauliers heading to and from Jordan and the Arab countries of the Gulf. trade route between Turkey and Middle As a result of the war in Syria, which used to be the main landbridge East between Turkey and the Middle East, FT this route has gained in strategic and August 28, 2013 commercial importance. Its growth attests to burgeoning economic ties More than 20 trucks line up at the between Israel and Turkey, Israeli-Jordanian border, bearing notwithstanding the deepening political Turkish goods ranging from carrots upheaval in their region and lingering and fabrics to steel. Another two rancour in their bilateral political carrying clothing are heading in the relations, where a reconciliation opposite direction, back to the Israeli process brokered by US President port of Haifa and from there to Turkey, Barack Obama in March has stalled. all of them part of a little-known but expanding regional trade corridor

port-in- 77. Turkish company turkmenistan.aspx?pageID=238&nID= 52690&NewsCatID=345 to build major new port in Turkmenistan Hurriyet Daily News August 23, 2013

The groundbreaking ceremony of Turkmenistan’s largest port project, “Turkmenbashi International Ports,” was held Aug. 15 with the participation of Turkish Prime Minister Recep Tayyip Erdoğan, Turkmenistan President Gurbanguly Berdimuhamedov, ministers and MPs from the two countries.

Turkish construction company GAP, owned by the Çalık Group, will build a port in the city of Turkmenbashi on Turkmenistan’s Caspian Sea coast over four years.

Read more here: http://www.hurriyetdailynews.com/tur kish-company-to-build-major-new-