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Monday, March 12, 2018

Dagestani oligarchs are waging a battle for control of the state port

Reports of large and regular theft of oil in the Makhachkala trade port was only the tip of the iceberg. For this important and potentially highly profitable asset, still formally owned by the state, are fighting the most influential Dagestani business clans. And all this is directly connected with the international situation around Iran.

Prospects for trade growth with Iran has provoked the intensification of the struggle for Russia’s largest harbour in the Caspian sea is Makhachkala sea trading port. A few years ago the management of this asset was transferred to the team, close to the Dagestani billionaire Suleiman Kerimov, but now the control port may accrue to management associated with the group “Sum” Ziyavudin Magomedov, another influential businessman with Dagestani roots.

The battle for the state

“We are all the property of the state kept, a kilogram of nails here not taken, no one thing sold, and what was previously sold, tried to return”

The struggle over the Makhachkala commercial sea port (MITI) – the main event in the news agenda of Dagestan for the past two weeks. It all started with the fact that the Agency of sea and river transport of RF (Rosmorrechflot) took the decision on change of the head of the port, which is Federal property in the status of the Federal state unitary enterprise. Is Ahmed Hajiyev, head of the ISCP for the last five years, the new CEO of the port according to the results of the contest were appointed Andrey Hormah to the first Deputy head of United grain company (UGC), the largest Russian grain exporter.

For understanding the further developments it should be noted that although MITI formally belongs to the state, for control over them has long been a struggle between several Dagestani oligarchs. In 2011, the port’s management managed to intercept the team, close to Suleiman Kerimov, billionaire, representing Dagestan in the Federation Council. Now the former Director General of Murmansk commercial seaport Akhmed Gadjiyev – the brother of the Deputy of state Duma Magomed Hajiyev with Kerimov’s long-standing relationship. Andrew Hormah, by contrast, represents the interests of other oligarchic groups – holding “the Sum of” brothers Ziyavudin and Magomed Magomedov. The sum is a long-standing player in the Russian market of port services: the group is one of the key shareholders of Novorossiysk commercial sea port. In addition, it owns 50% minus one share in UGC, where and invited the new Director of the port of Makhachkala.

In response to the decision of Rosmorrechflot, on the territory of the Murmansk commercial seaport was organized strike team of the company, which requested the Director Hajiyev. A few days later when there was a rumor that the new leader intends to occupy their workplace with the help of the assault, to the building of the port began to shrink strong men in civilian clothes, and some of them had seen firearms. At the same time, the Rhodope Boulevard in Makhachkala, within a ten minute walk from the port, staged a rally supporters of the change of management not less strong guys, holding placards “Port – a new life”, “This is not a property brothers Hajiyev”, “We support the decision of the Federal government.”

Similar demonstrations fully comply with the tradition of “violent entrepreneurship” in Dagestan, so the local law enforcement authorities did not undertake any visible efforts to support one of the parties to the conflict, and open skirmishes between them, fortunately, did not happen. Moreover, the parties have indicated that they intend to negotiate peacefully. Until the conflict is to temporarily perform the duties of the General Director of the ISCP will be the first Deputy Akhmed Gadzhiev Murad Hidirov. At the end of last week at a press conference in Makhachkala, he said that the final decision on the fate of the ISCP will be taken at the meeting of the head of Dagestan Ramazan Abdulatipov, the Russian presidential envoy in the North Caucasus Federal district Sergey Melikov and the transport Minister Maxim Sokolov. As reported by the newspaper VIEW, representative of the Murmansk commercial seaport, the exact date of this meeting is not yet scheduled, but is expected any day now.

The Persian perspective

The main reason for the escalation of the conflict around the ISCP observers called the new opportunities that opened in front of the port after the lifting of international sanctions against Iran. At the moment, through the Murmansk commercial seaport handled mainly bulk cargoes: oil is brought in the Dagestani capital of the sea, further from tankers will be discharged into the tanks of the oil depot of OJSC “Dagnefteprodukt” and from there enters the pipeline Makhachkala – Novorossiysk. The volume of transshipped via the ISCP minor dry cargo – mostly grain, which is sent to the same Iran.

Meanwhile, in the past decade to increase the cargo turnover of the port of Makhachkala was made multimillion-dollar investments from the Federal budget. In particular, was established with dry cargo Harbor transshipment complex (3 million tons per year), berths for General, bulk cargoes and containers (up to 1.2 million tons), rail and car ferry terminals (1.3 million tonnes), grain terminal (0.5 million tons). All this was done, in the long run to increase the turnover of the port is theoretically the ISCP can handle 8-8. 5 million tons of bulk cargo and 3.5 million dry. However, this did not happen: last year Murmansk commercial seaport handled just only 3.83 million tons of goods (22.6% less than in 2014). According to “SPARK-Interfax”, the official revenue of the port in 2014 amounted to only 632,6 million rubles, net profit – about 11 million rubles. It’s just crumbs, compared to other Russian port companies working with liquid cargo. For example, a transshipment complex of ZAO “Tamanneftegas” on the black sea coast of Krasnodar region in 2014 showed a net profit of 5.39 billion rubles, while the volume of transshipment of hydrocarbons 6,324 million tons.

In his first statement to the press Andrew Hormah emphasized that Makhachkala port has power, which are currently not used. “In addition to the transshipment of oil and grain, I plan to strengthen the Board of the direction, which is poorly represented in the port,” he said, making special emphasis on the expansion of cooperation with Iran. In September 2014, during the Russian-Iranian business forum Hormah said that the UGC could supply Iran with 1-2 million tons of grain in the total volume of the Iranian market of 5-7 million tons. From this point of view, the prospect of the inclusion of the port of Makhachkala in the structure of UGC makes sense, especially because the company already gathered a considerable collection of port assets. In particular, this Novorossiyskiy Kombinat KHLEBOPRODUKTOV – Russia’s largest grain transshipment complex, a similar facility in Murmansk and port Elevator in Yeysk.

However, the current leadership of MITI, the prospects to increase the transshipment of grain to Iran is very skeptical. At a press conference in Makhachkala Murad Hidirov said that Iran’s need for Russian grain is only 1.3 million tons, of which 300 thousand tons were transferred via Makhachkala and the rest goes through Astrakhan and Kazakhstan. In this case, the acting Director General of Murmansk commercial seaport withdrew all the allegations of inefficient management of the port. “We are all the property of the state kept, a kilogram of nails here not taken, no one thing sold, and what was previously sold, tried to return,” said Hidirov, recognizing, however, that the port only uses 30-40% of its capacity. But then, according to Filipova, there are objective reasons: management has an obligation not to entice in the port, but to create the conditions for this. “The conditions we have created,” – said the temporary head of the ISCP.

Disappeared oil

Many reasons for dissatisfaction with the current leadership of MITI has the state of AK Transneft. In the first place – in connection with numerous “boxes” in the pipeline Makhachkala – Novorossiysk. Recently the company released an official message about criminal threats of disruption of oil transit via the port of Makhachkala. It says that the address of Transneft regularly receives requests from shippers in connection with losses of crude oil from tankers at the terminal of JSC “Dagnefteproduct”, located on the territory of Murmansk commercial seaport. This terminal belongs to another Dagestani oligarch, a former speaker of the Parliament of the Republic of Magomed-Sultan Magomedov, having a good relationship with the head of Dagestan Ramazan Abdulatipov.

Especially dissatisfied with Dagnefteprodukt oil suppliers from Turkmenistan, which have noted regular growth losses when pumping through the tank farm: the standard is not more than 0.2% in the first quarter of this year, according to the report of the Transneft, made up 1.43%. “The problem with tank farm JSC “Dagnefteproduct” has led to lower volumes of transported oil along the route Makhachkala – Novorossiysk – according to Transneft. – In 2013, PJSC “LUKOIL” reduced the amount of oil shipped through the port of Makhachkala almost twice, redirecting volumes to the oil pipeline Baku – Tbilisi – Ceyhan pipeline. Turkmen producers also declare their readiness to suspend shipping through the port of Makhachkala.

Statement of pipeline that coincided with the story around the change of the General Director of the port of Makhachkala. Transneft, together with Summa group is one of the largest shareholders of the port of Novorossiysk, and two years ago, the partners were going to build in Makhachkala oil terminal to bypass Dagnefteprodukt. In January 2014, the President of Transneft Nikolay Tokarev said that one of the world’s largest oil traders – Dutch company Trafigura is ready to consolidate all deliveries of Turkmen oil to Makhachkala, but soon Russia was under Western sanctions, and continue these commitments are not received.

Remained on paper and numerous projects in oil production in the Dagestan part of the Caspian shelf and its further pumping via the Makhachkala port. About the “huge potential” of Dagestan in offshore mining considers it his duty to report every new head of the Republic, but no practical consequences it has.

Privatization has been waiting for

At the moment MITI remains almost the only major port assets of Russia, which continues to be owned by the state. On the need to incorporate and privatize the port States for a long time, but management that is associated with the powerful Dagestani clans, constantly inhibits this process. Apparently, someone extremely favorable state status of this very attractive asset, and, judging by the revenues of the port, obviously not to the state. Abusupyan Kharkharov, the head of Murmansk commercial seaport up to 2010 and also dismissed the scandal, saying that to privatise before, you have to wait until the port is not the end of the program of modernisation of capacities. And came to replace him, the team soon Ahmed Hajiyev stated that Harharov she got such a legacy, that to restore order in the documents cannot be considered on privatizing.

As a result, the plans for privatization of the port was repeatedly postponed, and it is possible that the attempt to change the leadership of MITI is aimed to speed up the process. However, just because the current management port control of the asset does not pass. On the side of Ahmed Hajiyev has acted as Deputy Prosecutor General Vladimir Malinovsky who has brought representation to the head of Rosmorrechflot Viktor Olersky about elimination of infringements at carrying out of contest for the post of Director General of Murmansk commercial seaport identified by the Prosecutor.

“Rosmorrechflot presented documents and data do not confirm the right Hormah to hold the office of Director of the FSUE Murmansk commercial seaport. Thus, the members of the competition Committee voted and chose the candidate Hormah, not having sufficient and reliable data on the experience of the specified candidate in the field of Maritime transport, and without taking into account the views of the head of the Republic of Dagestan, the Plenipotentiary representative of RF President in the North Caucasian Federal district and Rosimushestvo”, – stated in the message of the Prosecutor General.

In addition, to help the team Hajiyeva came to the court of the Chechen city of Gudermes, which challenged the results of the competition of Rosmorrechflot at the request of a certain Magomed Kanaeva allegedly not allowed to participate in it. However, the Agency argues that any relevant statements from Kanaeva not received, in the last official statement on the situation around the ISCP indicates the reasons for the change of the management port. In the opinion of management of Rosmorrechflot, the assertion that the work of the team of Ahmed Hajiyev was successful, is untrue: the company’s debts are not repaid, the volume of transshipment of cargo annually reduced. Therefore Rosmorrechflot believes the competition legitimate, and the election to the post of the General Director of Murmansk commercial seaport of Andrew Hormah – the interests of companies, industries and the state.

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