The selling of Moscow and Leningrad

July 31, 1991

By Irina Gluchenko

MOSCOW — Will New Holland belong to France? This is the question now before the people of Leningrad, regarding the island New Holland, which is part of the city's territory.

Leningrad Mayor Anatoly Sobchak plans to grant a long-term lease over New Holland to the Soviet-French firm Peterfrance. Under the terms of the agreement, concluded in February, Peterfrance will renovate and then use buildings and structures on the island.

When the Communist Party was in power in Leningrad, a New Holland stock company was formed which was given all rights to the land and buildings of the island.

All rights to the island have now been transferred to Peterfrance, for the minuscule sum of 10 roubles per square metre per year. Buildings on the island will be transferred free of charge to Peterfrance if they carry out any maintenance on them. No rent will be charged for the first 10 years. When the city repossesses the island after 99 years, it will have to buy buildings back from Peterfrance at market prices in US dollars.

The construction projects planned for New Holland could do irreparable damage to the island's 18th century buildings. Those speaking out against the development scheme include Leningrad environmental organisations and defenders of the city's cultural heritage.

The struggle to prevent New Holland being sold off is headed by a deputy to the Leningrad soviet, Aleksey Kovalev. "The new city authorities are competing amongst themselves to see who can best serve the interests of Western capital to the detriment of their own citizens.

"The New Holland affair is simply the tip of the iceberg. There are multitudes of such projects. If these plans are even partly realised, the city will go bankrupt", he said.

And in Moscow's October region, two shadowy enterprises named Firit and UKOSO have arisen. Firit has received extensive privileges from the October regional soviet. All information on the region's territory, population and infrastructure is supplied free of charge to Firit. Firit then sells the information back to the October regional soviet!

This curious deal has already cost the region 30,000 roubles. By the end of the year Firit hopes to have received a million roubles from the region's budget.

UKOSO is an independent firm charged with administering all the collective property in the October region. UKOSO has monopolised all activity relating to privatisation, land ownership and land use. It acts as the region's main construction firm. It was established illegally, but this has not stopped it flourishing. Local authorities have been unable to obtain even basic information on many of UKOSO's dealings.

There is nothing unusual about such practices. They have been the norm for the city's administrators for a long time.

Moscow authorities have been accused by the Socialist Party of failing to observe basic ethics of business and politics, and of pursuing policies harmful to the city's interests.

Vladimir Kondratov, a Socialist Party deputy to the Moscow city soviet, explained that a France-Soviet enterprise has been given a 99-year lease on 60 hectares of land in the October region for a total of $10 per year. The firm does not have to pay taxes, and can demand compensation for the slightest breach of the agreement by the local authorities.

A member of the executive of the Socialist Party, Anatoly Baranov, claimed that "even before the (Moscow) elections, there was a

definite business structure standing behind each of the present Moscow leaders".

Among the newly established firms, two in particular stand out — the Institute for the Development of Moscow, owned by Mayor Popov, and Orgkomitet, owned by Vice-Mayor Luzhkov. Both are commercial firms which act as monopoly intermediaries in the process of privatising city property.

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