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Side effect
Due to the sale of Sibneft, the Omsk region may lose half of its budget
The Minister of Finance of the Omsk Region, Natalya Frolova, through State Duma deputies, sent a letter to the Russian government stating that in the Irtysh region, in the event of the sale of Sibneft to Gazprom, a financial disaster could break out.“The government of the Omsk region is concerned,” says Natalya Frolova, “about the proposed transaction to purchase shares of the Sibneft company by Gazprom. This, in the case of re-registration of a legal entity, will lead to the loss of the only largest taxpayer - OJSC Sibneft currently provides about 59% of revenues to the consolidated budget of the Omsk region. According to the calculations of the regional government, the consolidated budget of the region will therefore not receive income in the amount of 13,600 million rubles in 2006.” Therefore, the Omsk Minister of Finance asks to increase the amount of financial assistance to the region by this amount.
According to Ms. Frolova, “an analysis of information on the investment intentions of the largest Russian companies and the forecast of socio-economic development of the Omsk region compiled on this basis and the forecast estimate of regional budget revenues for 2006 allows us to conclude that next year the Omsk region may face critical situation in the fulfillment of expenditure obligations of the regional and local budgets. In the Omsk region, it will become impossible to provide the population with the required number of budget services, and the services provided will be of low quality due to the insufficient level of funding. Consequently, it will be impossible to implement the main directions of budget policy defined in the message of the President of Russia for 2006, primarily such as improving the quality and accessibility of budget services.”
State Duma deputy from the Omsk region Oleg Smolin, who lobbied for the passage of this letter in federal structures, says that he has already informed Prime Minister Mikhail Fradkov that “such a significant reduction in the Omsk regional budget could lead to social tension and political destabilization.” He told a Vremya Novostey correspondent that at a plenary meeting of the Duma he asked Finance Minister Alexei Kudrin to comment on Ms. Frolova’s letter. Mr. Kudrin said that in the regions everything will be fine with the budget, but he did not explain how exactly this would be done. Nevertheless, during the second reading of the federal budget, Mr. Smolin is still going to clarify this issue and intends to seek a corresponding amendment to the main financial document of the country, providing for an increase in assistance to the Omsk region.
It is possible that the concern of the Omsk authorities is due to the fact that they cannot boast of warm relations with Gazprom. While Omsk Governor Leonid Polezhaev has always had good personal relations with Roman Abramovich, the owner of Sibneft, he has never met Alexey Miller, at least publicly. Gazprom still has no direct interests in the Irtysh region. And the regional authorities did not have good relations with subsidiaries and other companies dependent on the gas concern. The management of the Tyumen construction company Zapsibgazprom publicly vowed to cooperate with the Omsk region, accusing Mr. Polezhaev of not paying his obligations. The regional authorities also quarreled with Omskshina, which is part of Sibur. And the Regional Energy Commission, controlled by the region, had a conflict with Omskregiongaz, accusing gas workers of incorrectly calculating gas coefficients for retail sales.