Belarus - Prime Minister: Belarus' target for economic growth in 2010 is achievable and real

A new facility for production of energy-saving glass with magnetron coating are to be constructed at the Gomelsteklo company in 2010. The relevant order was issued by Prime Minister of Belarus Sergei Sidorsky during his tour of the company on 3 February.

"The new facility will manufacture a wide range of glass products including energy-saving glass. This glass will be used in new homes, which will facilitate energy saving," said the Belarusian Prime Minister.

On getting familiar with the construction of the second float-glass production line of Gomelsteklo, Sergei Sidorsky demanded that the project should be implemented in due course. The manufacturing process is scheduled to begin in March. It is the first project of such kind in the glass industry of Belarus. The new manufacturing capacities will increase the volume of production by 2.2 times and the percentage of export to 70%-75%, and create 265 jobs.

Apart from that, the project will help reduce the energy consumption during the glass production process. According to the preliminary calculations, the furnace fuel consumption will be half as much as it is nowadays. After the new production line is introduced, the construction, engineering and furniture industries of Belarus will be provided with high-quality glass products in full. The export deliveries will increase too. The Gomelsteklo profits will increase more than four times over 2008. Gomelsteklo plans to epxort new products both to the CIS and Europe.

Foreign investors are interested in financing the construction of biogas units in Belarus, said Prime Minister of Belarus during his visit to the biogas facilities of the Gomel poultry farm.

For instance, a German firm is ready to invest from ?30 million to ?35 million annually in the construction of biogas units in Belarus. This money is enough to construct some eight or nine units of such kind.

The national energy saving program for 2006-2010 and the state program for Belarus' innovation development for 2007-2010 envisage the construction of ten biogas units in Belarus by 2011. In 2008 two units of such kind were put into operation in the Minsk and Brest oblasts. In 2009 another biogas unit was put into operation at the Gomel poultry farm.

Belarus will be producing biogas plants soon, Prime Minister of Belarus told media.

"In 2010 we will launch the production of such units and hence will address settle several issues: import substitution, cheap energy, improved energy supply, reduced impact on the environment," Sergei Sidorsky said.

Foreign companies, including from Germany and Austria, have sent proposals to Belarus to take part in the projects on biogas unit production. "These projects are to be carried out in our country within the Kyoto Protocol through investing," the Belarusian PM stated.

According to Sergei Sidorsky, Belarus is to construct ten biogas plants by 2011. There are only few of them in the country. At the same time, for instance, Germany builds up over 500 such complexes annually.

Belarus are planning to produce high-speed passenger trains in the near future, Prime Minister told media.

Various foreign companies are showing their interest in such projects. "There are proposals from investors to develop the production of high-speed trains in Belarus using Belarus' technologies alongside with foreign innovations," the Premier stressed.

Sergei Sidorsky emphasized the necessity to develop high-speed rail network in Belarus. "Unfortunately traveling between the oblast centers takes four or five hours, what is too much. All necessary measures will be take within the next two or three years to develop high-speed passenger trains in the country. Last month the head of state gave instructions to design fast trains in Osipovichi," the PM said.

Attention will be given to the expansion of motorways in the country. Loans including from China are to be used to implement such projects. The funds will be put in the expansion of motorways Gomel-Minsk, Minsk-Grodno and others.

Belarus' target for economic growth in 2010 is quite attainable and real, Prime Minister of Belarus told media in Gomel on 3 February.

"We are expecting a gradual growth from 100% to the forecast 111-113% in 2010," Sergei Sidorsky said.

The Government has also considered the further development of the GDP-forming companies of the country. "We have done everything possible to support such companies both on the domestic and foreign markets in order to balance their production indicators," the Premier said.

Sergei Sidorsky stressed that the country's economy cannot be balanced without foreign investments. In 2010 Belarus plans to attract USD 2.7 billion of direct foreign investments.

Analyzing the activity of the economic sectors this year, Sergei Sidorsky informed that in January 2010 the industrial output of the oil-refining and petrochemical sectors fell 8% as against January 2009. The reduction was driven by the changes made in the terms of oil supplies from Russia to Belarus. "These alterations have brought down the growth rate in the area. Its industrial output is expected to make up 92% in January," the Prime Minister said. At the same time he noted that the Government of Belarus had offered Russia to settle the issue concerning oil deliveries in H1 2010. "The Russian side, however, insisted on the issue to be considered in the early January," Sergei Sidorsky added.

Belarus and Russia have recently signed a protocol to the 2007 agreement which spells out the areas of further development of trade and economic relations between the two countries in oil refining in 2010. "In accordance with the agreement, Belarus will get 6.3 million tonnes of Russian oil duty-free for domestic consumption. This volume is enough to satisfy the demand of the Belarusian market," Sergei Sidorsky said. The rest will be supplied to Belarus with 100% duties which are effective in the Russian Federation until the single customs territory comes into force within the framework of the Customs Union of Belarus, Russia and Kazakhstan. "Common customs tariffs became effective on 1 January this year. From 1 July 2010 we will have a single customs territory and by 2012 we will finish creating the single economic space. The second and third steps presuppose new scenarios of cooperation in fuel and energy. They should be reflected in the new programme of Belarus-Russia cooperation in fuel and energy," Sergei Sidorsky said.

The relevant document and proposals of Belarus are being coordinated with Russian partners. The draft programme is expected to be submitted for consideration of Prime Minister of Belarus Sergei Sidorsky and Prime Minister of Russia Vladimir Putin during their meeting for 16 March in Brest.

In the near future Belarus will lift export duties on oil products, Sergei Sidorsky told media.

"As oil duties stand at 100% at present, we will soon nullify export duties on oil products at Belarus' outside perimeter," said Sergei Sidorsky.

The head of Government reminded that following Belarusian-Russian agreements Belarus will get 6.3 million tonnes of oil without duties. This figure will be used to keep oil refineries busy as well as Belorusneft and Belarusian Oil Company. They will be the main operators in charge of buying, processing oil and supplying oil products to the domestic market.

Speaking about Belarus' cooperation with Russian oil companies, the Prime Minister remarked that Belarus is interested in advancing this partnership. "We are interested in Russian companies working on the Belarusian market. We will do our best to make the agreement signed in Moscow work," said Sergei Sidorsky. The Prime Minister explained that according to the agreement Belarusian companies will be able to import 100% duty oil to Belarus, process it at Belarusian refineries and export oil products back to Russia. Sergei Sidorsky said it is necessary to calculate the economics of this scheme. "We can shuffle things a bit during refining because apart from gasoline, diesel fuel there are other chemical components. We need to find an opportunity for the business to gain extra revenues in this area," he remarked. All revenues from the goods to be made on commission will be transferred to the Russian budget. "We assured it will be so," added the Premier.

Belarus also suggested that Russian Rosneft and Gazpromneft should consider prospects of operating on the Belarusian market. They could register an affiliated company in Belarus in line with national regulations and get busy with refining the 100% duty oil to ship the resulting oil products to Russia, specified Sergei Sidorsky.

According to the Prime Minister of Belarus, the President of Russia has given an instruction to assess the proposal of Belarus. "I think we will get an answer soon. Transparent operation of Belarusian and Russian companies is the most important thing," said the head of Government.

Belarus is interested in the privatization of the Naftan-Polymir complex, Sergei Sidorsky told.

"We are interested in Naftan-Polymir to be seen as a complex," said the Prime Minister. He stressed that the Belarusian Government has never banned negotiations on privatizing Belarusian companies. "As far as privatization is concerned, we have always had a package of decisions that have to be made before privatization and fulfilled by the investor willing to work at our enterprises after privatization," said Sergei Sidorsky.

The Prime Minister added that the participation of Russian companies in privatizing the Naftan-Polymir complex are reflected in the new program on Belarus-Russia cooperation in fuel and energy sphere. "Both sides are now interested in these matters. Everything is being done to adopt a long-term bilateral strategy for the fuel and energy industry, pass it and present it for consideration of the Supreme State Council of the Union State".

Belarus expects to come to terms with Gazprom to preserve the last year's level of gas prices in 2010, Prime Minister of Belarus told media.

"We expect to achieve it taking into account the investment projects forwarded to the Russian company. If our proposal is interesting to Gazprom, the gas price will be as high as last year's," said Sergei Sidorsky. Belarus had prepared the proposals following instructions the presidents of the two countries gave at the session of the Supreme State Council in December 2009. Belarus is waiting for an answer from Russia now.

The Prime Minister noted that at present gas is pumped to Belarus without interruptions. Belarus paid for gas in 2009 in full and continues regularly paying for it this year. "I think we will come to terms with Gazprom about how we will pay for gas in 2010," he added.

According to the Belarusian head of Government, Gazprom stands by initial terms of the contract. The latter provides for supplying gas to Belarus with a 10% discount off the average European price this year. Taking into account falling gas prices on spot markets Belarus believes it will be possible to get a 25% discount.

Sergei Sidorsky specified that increasing the reduction factor for the gas price Belarus pays year after year is stipulated by the gas supply contract signed by Belarus and Gazprom. "When we created the joint venture, we had plans for gas industry development. In February 2010 after a regular payment of USD 625 million is transferred, Gazprom's share in Beltransgaz will reach 50%," remarked the head of Government.

Belarus and Russia will sign the package of documents relating to building the nuclear power plant in June at the latest, Sergei Sidorsky told.

According to the head of Government, the Russian side suggested signing the document relating to the nuclear station construction and those relating to granting the loan for the project as a package. The package of documents is supposed to be signed in June 2010 at the latest.

"Task groups are busy with the matter. I think we will sign a package agreement that will suit both Belarus and Russia, including the matter of the loan," said Sergei Sidorsky.

He reminded that the decision to build the nuclear power plant in Belarus had been made. "We have begun building the social infrastructure and now, starting 2010, we should put efforts into creating the production infrastructure," said the Prime Minister of Belarus.


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