Moscow Times
June 18, 2009
Pikalyovo Wants Putin to Throw Pen Again
By Nadia Popova / The Moscow Times
PIKALYOVO, Leningrad Region Prime Minister Vladimir Putin is revered as a hero by many residents of this small town after he forced tycoon Oleg Deripaska to pay their back wages. Now, some of Pikalyovo's other crisis-hit businesses wish that Putin would intervene on their behalf.
"I am going to go bankrupt because of BaselCement, and Putin's visit didn't help me at all," said Anatoly Ogloblin, director of Stroimontazh Plus, a local construction firm.
Deripaska's BaselCement owes 12 million rubles ($390,000) to Stroimontazh Plus for switching an oven from alumina to cement production at its Pikalyovo factory last year.
"I had just opened my firm, and BaselCement was the first and only client," Ogloblin said.
"Since there was no payment, I haven't paid 2 million rubles in taxes. The tax service filed for my bankruptcy in May," he said.
He waited until this spring to sue BaselCement, explaining that he hadn't wanted to lose his only client.
A total of 50 lawsuits have been filed against BaselCement, according to the web site of the Arbitration Court for St. Petersburg and the Leningrad region, mostly by business owners seeking to recoup debts incurred before Deripaska shut down the factory in February.
Some of the owners are among Pikalyovo residents whose problems remain unresolved after Putin's lightning visit to this one-industry town of 22,000 people, located 245 kilometers southeast of St. Petersburg. At Putin's prompting, the BaselCement factory reopened Saturday with a contract for enough raw materials for the next three months.
But it has not made good on all its debts, leaving related industries and other businesses in a tight spot.
"I haven't paid 40 of my workers because of BaselCement, and they are now waiting penniless," said Alexander Umansky, director of Taiga-1, a construction firm that worked with Stroimontazh Plus in switching the factory oven between August and November.
Umansky sued BaselCement for the outstanding 1.7 million rubles ($54,000) in December and won. But the money still hasn't been paid.
"Putin's visit hasn't affected our situation in any way," Umansky said. "We still have not received our money, and we are not sure whether we will in the near future."
BaselCement spokeswoman Yelena Andreyeva said by cell phone Wednesday that BaselCement would pay off its debts soon.
"We have gone through difficult times," Andreyeva said. "Now, we are planning to pay our debts, but will consider every case separately. And we expect our partners at the Pikalyovo plant and in the town administration to pay us, too."
The city administration owes BaselCement about 125 million rubles ($4 million) for heat produced by the local power plant, which BaselCement owns. It wasn't immediately clear how much Metakhim and Pikalyovo Cement which share the same compound as BaselCement owed the factory.
When BaselCement stopped paying wages to its 2,600 employees in March, Metakhim cut salaries significantly. Pikalyovo residents stopped paying their utility bills, leading the power station to turn off the town's hot water. A 2-year-old boy died when a pot that his family was using to heat up water on a stove overturned, searing him with boiling water, the Pikalyovo hospital said.
Angry and hungry, about 400 residents blocked the federal highway for seven hours on June 2, creating a 438-kilometer traffic jam.
BaselCement welder Sergei Shitin said it had been hard to explain to his 10-year-old son and 17-year-old daughter why there was no food for them to eat.
"The kids had gotten used to eating yogurt and other tasty things like that," Shitin said at the factory's gates. "We didn't buy any for the last three months, but they would run to the fridge every five minutes in hope that something would appear there."
Shitin used to take home a monthly salary of 30,000 rubles, including bonuses, but he received only his base pay when he got his three months of back wages, or a total of 39,000 rubles ($1,250).
Shitin decided not buy any yogurt with the money. "We are not buying much food now, because we don't know what will happen next," he said. "No one knows anything about this man, Deripaska. We don't trust him."
Putin rebuked Deripaska and other factory owners during his visit to Pikalyovo, comparing them to cockroaches. "You have made thousands of people hostages to your ambitions, your lack of professionalism or maybe simply your trivial greed," Putin said in remarks shown on state television. At one point, Putin threw a pen at a contract and told Deripaska to sign it. The document was a three-month contract for raw materials for the factory.
Putin is now quoted on every corner in the town. The residents especially like to retell the moment when Putin threw the pen at Deripaska.
"Putin is our hero, and Deripaska is our enemy No. 1," said BaselCement worker Andrei Khvan, 59.
"Putin is the idol of my 14-year-old daughter," said Valery Kononchuk, a realtor at Address, the only real estate firm in the town. "Putin's portraits have now been hung up in the kindergartens."
"Our country badly needs a strongman like Putin," said Marina, 35, a worker from Metakhim, her eyes sparkling. "Medvedev is too much of a humanitarian. He is not the right type."
Pikalyovo Mayor Sergei Veber, however, downplayed the significance of Putin's visit, saying many government officials had toiled to resolve the town's problems. "People tend to think it was only with Vladimir Putin's visit that everything was decided, but it was actually preceded by days and nights of intense work by the regional government, the government in Moscow and our administration," Veber said in an interview.
Veber also said he believed that he had done all he could to prevent unrest. "Look at the law," he said. "The city administration worked perfectly to prevent problems in the town.
We did everything that we were responsible for."
When asked whether he had been aware of the brewing conflict with the factory owners, he likened intervention in the dispute to breaking into an apartment, noting that the factories were private property.
Putin has accused unnamed people of paying Pikalyovo residents to blockade the highway a suggestion that perplexed Yelena Guryanova, the trade union leader at the BaselCement power station.
"He must have gotten some incorrect information from officials who had not expected us to take such an action," Guryanova said. "We must be respected. We have our civil rights and liberties to defend."
She and other residents said the only thing that has changed in their lives was the burst of attention surrounding Putin's visit.
Olga Germanova, 35, said all of the 10,000 rubles that she earns each month selling goods in a shop goes toward paying off three loans that her family of four took before her husband lost his job at Metakhim.
"We bought a car, a cellphone and a computer when times were good," Germanova said.
The family lives on her husband's unemployment pay of 4,900 rubles.
"We eat pasta. Nothing has so far changed with Putin's visit," Germanova said.
At Address, the real estate agency, the price for a one-room apartment has dropped from 950,000 rubles to 400,000 rubles over the past three months as people default on their mortgages.
"Everyone wants to sell their apartment," said Address head Yevgeny Sulin, sitting in his empty office. "We have gotten about 80 apartments to put on sale over the last three months. Many of those who want to sell can't service their mortgages."
Unemployment in Pikalyovo has risen from 1.7 percent in October to 9.5 percent as of mid-June. A total of 1,098 people have registered with the local unemployment office, which has 158 job openings.
"There are more jobs in nearby towns, but no one wants to move, because the salaries there are just as low as here and there is usually a problem finding a place to live," said Svetlana Yershova, head of the unemployment office.
Posters on the wall of the office advertise jobs for a veterinarian (20,000 rubles a month), the conductor of a brass band (15,000 rubles) and a blacksmith (4,557 rubles). All the jobs are located in the Voronezh region, more than 1,200 kilometers to the south.
"We are not going to move anywhere just because someone like Deripaska has destroyed our nest," said Guryanova, the trade union leader.
Veber, the mayor, said people did not want to move because they did not like change. "People are not ready for active change," Veber said. "The Russian mentality is like that."
Guryanova, 39, described the last three months as the hardest in her life. She spoke in her kitchen, sitting beside her husband, Alexander, who also works for the BaselCement power station.
She, like many Pikalyovo residents, has survived for the last three months on vegetables grown last summer at her dacha just outside the town.
"I have never eaten as many pickles in my life as I ate during this time," Guryanova said.