One of St. Petersburg’s most influential financiers, Vladimir Kogan, has been appointed to the Russian government, two days after the sale of his stake in PSB. Kogan has taken on the post of Deputy Director of Rosstroi, which comprises the Federal Construction Agency and the Communal and Housing Services (CHS), in what experts perceive as the first step in what will be a glittering career in the state sector.
Kogan has known President Vladimir Putin since the early 1990s. In 1994, structures closely associated with Kogan became shareholders in the Industrial and Construction Bank (PSB), which went on to become the central component of the St. Petersburg Banking House, with Kogan, the president of the Banking House, heading PSB’s board of directors.
A source within the Banking House reported that Kogan hoped to become a member of the Federation Council, while a St. Petersburg banker who wished to remain nameless reported that he hoped to be appointed head of the Central Bank or one of the other state banks.
In October 2005, however, Kogan was appointed general director of the Northwest directorate of Rosstroi, overseeing the construction of St. Petersburg’s dam. The project, which has an estimated cost of 10 billion rubles ($351 million) is being personally overseen by Putin.
Kogan was able to achieve little while working on the project, according to Kirill Ivanov, director of the Dormost agency, as winter is unsuitable for construction.
Kogan will continue to work on the dam project, according to Sergei Kruglik, head of Rosstroi. “We have to speed up the construction — if building work has been going on for 25 years, you either have to abandon it, or get it finished quickly,” Kruglik said. In 2004, Putin said that the dam should be completed by 2008. Kruglik said that in order to speed up the process, its manager would have to work within Rosstroi, adding that he had provided the initiative for Kogan’s appointment to Rosstroi.
Kruglik said that when day-to-day management issues on the dam construction have been resolved, Kogan’s responsibilities will be broadened.
“Kogan has a great understanding of finance and economics,” Kruglik said, adding that he would be overseeing one of the president’s priority national projects for the housing sector.
Vatanyar Yagya, a deputy with St. Petersburg’s Legislative Assembly, said that during the 1996 governor elections Kogan supported both Anatoly Sobchak and Vladimir Yakovlev. For that reason he has good relations with both Yakovlev, who is currently the Regional Development Minister, and Putin’s administration, Putin having also supported Sobchak.
A source at the Banking House said that the president, rather than Yakovlev, was behind the appointment. “Why would Yakovlev want a subordinate that can go over his head to deal with his superiors?” the source asked. An entrepreneur closely associated with Yakovlev also said that an appointment at such a high level could only be made with the support of the presidential administration.
Kogan’s appointment cannot be seen as purely bureaucratic as Rosstroi is a state corporation with an annual budget of around 40 billion rubles ($1.4 billion). Similarly, Kogan is widely regarded as being in “quarantine” as he makes the transfer from being an entrepreneur into a bureaucrat, the entrepreneur said. He added that if the process of privatization is to be reversed, the state will need qualified managers such as Kogan.
The Chairman of the Federation Council Sergei Mironov at the end of November proposed the idea that a state construction corporation be created in order to control price rises in the housing sector in the event of the state providing support to mortgage schemes.
“Demand will develop, but if we can’t increase supply, prices will simply take off,” Mironov said.
In order for Kogan to occupy a senior position within the government, he will have to build up a track record in state administration, the source at the Banking House said. This will take up to a year.
“Rosstroi, for Kogan, is a step up the career ladder,” agreed a representative of the Presidential Social Chamber. “This is a very ambitious man, and in the same way that he became one of the most powerful bankers, he can now do the same in government service.”
“An entrepreneur that has sold his business to the state has two options — he can go abroad or get involved in the implementation of major state projects,” said Alexei Makarkin, an analyst with the Center for Political Technologies.
News source: times.spb.ru
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