Pikalevsky Economic Forum

On June 4, the next annual St. Petersburg Economic Forum opens in the Northern capital. However, the usual police-festive feeling for this event, when the streets are full of greetings to distinguished guests and the gray uniforms of cops rounded up from all over the area, is not present this year. The real economic forum is taking place 250 kilometers from St. Petersburg, in the small town of Pikalevo, where, according to the pattern described by crisis theorists, a riot broke out due to the shutdown of city-forming enterprises.

All PEF participants taken together received even less honor than Patriarch Kirill alone. Before his first visit to his homeland in his new status, city authorities hung posters “We welcome our fellow countryman, Patriarch Kirill” on street billboards. Guests of the economic forum, unlike all previous years, are not greeted this way. Perhaps Smolny ran out of steam during the City Day celebrations that took place throughout the previous week and simply did not fuss. Or they don’t expect any multi-billion dollar contracts from the current “St. Petersburg Davos” and therefore try to make it look like an ordinary event. It is curious that on Tuesday, a few days before the forum, the Nissan plant opened in St. Petersburg - even this event was not timed to coincide with the PEF.

However, there are more police officers on the streets than usual, but they started duty during City Day. As is customary before all important events, fighters against the regime were summoned to police stations and required to sign statements that they would not engage in illegal activities. By order of the intelligence services, all mobile operators have turned off signal encryption, but for some reason they are embarrassed to admit it. But this no longer surprises anyone. Fighters against the regime, in turn, also succumbed to general apathy and, as far as one can judge, are going to limit themselves to one rally agreed with the authorities.

Vladimir Putin is not included in the list of forum participants - it will be opened by Dmitry Medvedev. However, in St. Petersburg they are confident that on this day the prime minister will still appear in his homeland and go to Pikalevo, a city with a population of 20 thousand in the Leningrad region, where it is now much more interesting than at the PEF. Regional officials are deeply saddened by this.

Problems in Pikalevo began at the end of last year. More than half of the city’s population works at three enterprises: the Pikalevsky Alumina Refinery (PGZ), the Pikalevsky Cement cement plant and the Metakhim chemical production plant. The first receives ore from Murmansk, from which it extracts alumina (raw material for aluminum), and production waste is used to make cement and all kinds of chemicals. From Soviet times until 2004, it was a single production complex, but then it was divided between three owners. In the fall, due to a conflict with ore suppliers, the gas processing plant stopped, after which Pikalevsky Cement and Metakhim were left without raw materials. As a result, the entire city industry stopped working, and Pikalevo became the place from which, theoretically, a new proletarian revolution should begin - a single-industry town with city-forming enterprises that had stopped. It is quite possible, of course, that Russia is already full of such cities, it’s just that no one knows about them. But Pikalevo’s proximity to St. Petersburg provided it with the media resource necessary for fame.

In winter, workers organized several rallies, the authorities of the Leningrad region communicated with them and promised to restart production that had stopped. The situation was saved by the fact that the layoffs at the factories did not take place simultaneously; in addition, those laid off were paid benefits for the first three months. On March 12, regional governor Valery Serdyukov reported on the current situation to the president. At the same time, he tried to deal with the owners of the enterprises.

Their owners are eminent. PGZ belongs to Basic Element, Pikalevsky Cement belongs to Russia’s largest cement producer Eurocement Group, and Metakhim belongs to SevZapProm. At the same time, Basel stated that it would no longer supply raw materials to Pikalevsky Cement and would begin to produce cement itself, for which it would re-equip the enterprise. Pikalevsky Cement was also going to re-equip so as not to depend on supplies from the PGZ. The owners of Metakhim offered to buy the alumina refinery from Deripaska and restore the production chain, but could not agree on the price.

As always happens, the reason for the revolution was minor everyday inconveniences. On May 16, hot water was turned off to residents of Pikalevo, because the local thermal power plant, which is part of the PGZ, owed 140 million to gas suppliers. During one of the meetings on this issue, dissatisfied local residents knocked down the door in the room where it was held (strictly speaking, the door was plywood, so it could have been knocked out simply by leaning poorly). The meeting itself at that moment was filmed by a camera from the St. Petersburg TV channel 100TV, which captured the revolutionary Pikalevites breaking into the administration. On the same day, all this was shown in a news broadcast, and even Reuters called 100TV asking for the recording.

Regional authorities urgently allocated money to pay off the debt for gas, but then the employees of the thermal power plant unexpectedly went on strike - they were not paid their salaries. The region has paid them too, but there is no hot water yet. On Tuesday, residents of Pikalevo blocked the St. Petersburg-Vologda highway for 6 hours, resulting in a 400-kilometer traffic jam. Riot police arrived at the scene, but did not enter the battle.

Regional officials themselves unofficially claim that popular indignation is the enemy’s machinations. True, it is not clear whose. There is an assumption that the intrigue is directed against Valery Serdyukov himself. It is believed that he has far from ideal relations with the Kremlin (for example, Vladimir Putin took an indecently long time to consider the regional governor’s request to reappoint him to this post). Serdyukov took his chair in 1998, that is, he is not part of Putin’s team. Whereas there are probably many people interested in the region with its ports, transit corridors and forests. In particular, Valentina Matvienko dreams of annexing the Leningrad region to St. Petersburg, but last year she was forbidden to think about this topic.

However, this is not the only version. Popular unrest is theoretically beneficial to any of the three factories. Pikalevsky Cement, for example, is not interested in PGZ becoming its direct competitor by starting to produce cement. If Metakhim wants to buy Deripaska’s enterprise, then riots are beneficial to it, since they reduce the capitalization of this asset. Basic Element itself may also need popular unrest - if it wants to get rid of the PGZ and believes that selling the enterprise to the state, which is interested in resolving the conflict, is more profitable than Metakhim. The bill on nationalization by buying out all three enterprises was submitted to the State Duma just on Wednesday. If Metakhim offered 20 million dollars for the PGZ, then in the draft law on nationalization it is estimated at 30 million.

The most interesting thing, however, is what Putin will say in Pikalevo if he does come there. To come and tell the workers that the state has solved all their problems through nationalization or some other way is beautiful, but dangerous. No one knows how many highways will be closed the next day across the country. And coming here to admit your own powerlessness is completely stupid. You can, however, come and fire Serdyukov - it will be both beautiful and safe. Moreover, the topic of layoffs, as you know, often occupies the mind of our prime minister.

In any case, the results of the workers’ forum in Pikalevo seem much more important than the results of the forum of magnates and officials in St. Petersburg. Because they will clearly be of a precedent nature.

Photos by RIA Novosti and from the site pikalevo.net