RS Main Sobyanin, the king of the road

Sobyanin, the king of the road

September 2013

The capital's mayor is living up to expectations

In September, Muscovites will go to the polls to elect a mayor. When asked to assess the performance of Sergei Sobyanin, who is seeking to extend his time in office, most independent analysts in Russia are fairly generous in their praise of the city's mayor. At a time when he has had a huge amount of administrative work to handle, along with all the problems that go with it, Mr. Sobyanin has managed to show himself in the best possible light within a relatively short space of time. Having said that, there are still a fair few problems that need dealing with - not least seeing through the idea of setting up an International Finance Centre (IFC).

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Sobyanin
Mayor of Moscow Sergey Sobyanin

Many experts agree that Mr Sobyanin has managed to make some headway with regard to the traffic jams that clog up Moscow - a problem which never seems to go away.

According to Timur Nigmatullin, an analyst from the Investkafe agency, Sobyanin definitely deserves credit for arranging separate lanes for public transport on major highways. "There are plans to make sure 80% of Moscow roads have these lanes by the end of 2013," the expert continues. "To date 158 km of roads with special lanes for public transport have been opened."

According to data published by the Moscow government, the average speed of public transport increased by 7.3%, whilst passenger numbers were up 23.2%.

Mr. Nigmatullin also points to the significant fact that there has been a sharp increase in the pace of construction work on the Moscow metro. "At present there are 313 km of lines, and 188 stations," he informs us. "But the Moscow government plans to construct 64 more stations and 137 km of track by 2020. According to data from the Moscow government, the current pace of construction on the metro has overtaken the records set under the Soviet Union. Whereas 13 km of track were constructed in 2011 and 2012, in 2013 alone 14 km of track will be laid down."

Sergei Sobyanin can also be credited with refurbishing the city's parks, constructing parking areas in residential areas, installing cycle lanes, and working on infrastructure projects on the Moscow Ring-Road (MKAD) and the major highways.

"On a separate note it's worth pointing out that during Sobyanin's time in office, unemployment in Moscow has fallen dramatically," Nigmatullin adds. "In 2012 it stood at just 0.44%. Whereas in early 2010 it was at around 0.93%.

As for the idea of the IFC, it is under threat for several reasons. And this is through no fault of the mayor, but for objective reasons, and it is down to the federal government to deal with these problems."

If Sergei Sobyanin manages to make sure that all the existing legislation is complied with, no additional measures will be needed in order to set up the IFC

For her part, Daria Zhelannova, a senior analyst at Alpari, feels that the outlook is somewhat brighter, and points out that in recent years Russia has got much closer to its goal of creating the IFC. "During his time in office, Sobyanin has set himself a whole range of tasks which are going to help Moscow achieve a new status," she says. "Firstly, he played an active role in the bail-out of the Bank of Moscow, which meant that we were able to save the city's budget and maintain the flow of funding, thus avoiding panic. And let's not forget that at the outset, VTB was fairly sceptical about the deal to buy out the bank." Secondly, she points out that a range of measures have been taken to ease the capital's travel problems.

Reference

Founded in 1995 as the joint-stock commercial "Moscow Municipal Bank - Bank of Moscow".

In April 2010, Yuri Luzhkov, who was mayor at the time, signed an order that the bank should be supported using funds from the city budget. According to this order, 7.5 billion roubles had to be set aside from the capital's budget for 2010.

In early April 2011, 20.32% of shares of the bank belonged to Andrei Borodin and Lev Alaluev. According to media reports, when Borodin, who had been the Bank's president, left, more than half of the bank's portfolio of loans consisted of loans issued to companies in which Borodin had an interest. The total amount of lending by the bank to companies linked to Borodin exceeded the bank's own capital.

And in her opinion the IFC is certainly a realistic idea. "There is still a long way to go, of course, but it's clear that progress has been made: on February 15-16, 2013 Moscow hosted a meeting of finance ministers and the heads of the central banks of the G20, as part of Russia's chairmanship of the world's most influential international organization," Zhelannova adds. "I would add that Moscow is already a financial centre for the CIS. So this task is the one that will be solved, as well."
Sergei Sobyanin's two and a half years in office have made a favourable impression on the vice president of "Fondservisbank" Valery Golev. "We mustn't forget, though, that he hasn't had nearly enough time in office for us to be able to draw conclusions on what he has achieved, or give an objective assessment. All the more so given that here in Russia, Moscow isn't so much a city as a state within a state," he adds. "As for the work he is doing to turn Moscow into an international financial centre, what you have to understand is that you don't do that by putting up skyscrapers and keeping the streets clean, but by ensuring that the law is scrupulously upheld at all times. The City of London in the 19th century serves as a classic example. If Sergei Sobyanin manages to make sure that all the existing legislation is complied with, no additional measures will be needed in order to turn Moscow into an IFC."

Sergey Kulikov,
Economic Commentator for Nezavisimaya Gazeta
Еxclusively for Russian Survey RS