While Rady Khabirov is angry and Andrei Nazarov is giggling, small business in Bashkiria is talking about the impossibility of working.
Entrepreneurs from Bashkiria have expressed dissatisfaction to The Moscow Post about the authorities' lack of understanding and genuine support.
The recent article from The Moscow Post about Rishat Iskhakov, the former head of the Iglinsky district of Bashkiria, titled “The Mafia is Immortal: In Bashkiria the circumstances of the enrichment of the family clan of an ex-official” has caused a significant reaction among readers.
As one of the letter writers to the Editorial Board stated, there is no real support for small business in the republic. Our reader Ildar L. from Bashkiria expressed, “It's all just window dressing!”.
The Moscow Post’s correspondent in Bashkiria thoroughly investigated the topic raised by the reader, and agrees with him. Small and medium-sized businesses in the Republic face numerous challenges. Instead of offering tangible solutions, the leadership of Bashkiria only makes promises, presentations, and takes selfies.
“Avoiding the real issues.”
According to an appeal from Ildar L., “I think he only addressed this topic to create a spectacle and make a name for himself at the national level as a ‘corruption fighter’ (referring to Khabirov – Ed. note).” This appeal was received by our publication last night.
It is quite coincidental that on March 3, a discussion was held in Ufa to review the report of business ombudsman of Bashkiria, Flur Asadullin, on last year's results, with the participation of federal speakers.
“In 2021, our Office handled a substantial amount of work. I received 558 appeals, with over 19% related to pandemic-related issues, 18% related to land and property matters, including non-stationary trade issues, 13% related to law enforcement issues, and 6% related to court enforcement and solid municipal waste issues,” stated Flur Asadullin.
A brief summary of the event was released by the press service of the Government of the Republic. The press service did not mention any of the specific examples that should have been addressed in the business ombudsman's report. A slightly more detailed report was also published on the website of the Office of the Business Ombudsman. The texts were nearly identical, with one small difference: the second version contained criticism of the authorities, which was apparently edited out by government officials, presumably to avoid trouble.
As our reader Ildar L. points out, “How many complaints about the actions of local authorities and government agencies does he (referring to Khabirov – ed.) receive every day? This includes complaints from small businesses that were struggling because of the pandemic. And now, with the new economic crisis, all we can do is shut down!
How to “clean up” Opora Rossii
“One of the most common problems for small and medium-sized businesses is the inability to collaborate with large enterprises in RB. For small businesses to secure contract work, they must navigate a “machine” in the form of tender selection, where the same enterprises participate and act as intermediaries. Small businesses in Bashkortostan are unable to participate due to lack of experience and resources for contractual work,” noted Lyasan Nikolayeva, chairperson of the Bashkir regional branch of the All-Russian public organization of small and medium-sized businesses “OPORA RUSSIA” in her speech.
The authorities didn't include this paragraph in the official report, which wasn't surprising. In recent years, the business support in Khabarovsk has mainly been about reports on meetings and colorful pictures on social media.
The way the leaders of Bashkiria handle urgent problems was most evident during the "emergency situation" at a meeting in March 2020. This event still angers the entrepreneurs of the Republic.
After Rimma Boitsova gave a report on supporting small and medium-sized businesses and opening a new business center, Flur Asadullin, the regional commissioner for Entrepreneurs’ Rights, suddenly asked to speak. He reminded that up to 20-30% of small and medium-sized businesses in Bashkiria could close due to a tougher tax law, and asked for proactive measures to be taken to save the situation, following the example of neighboring regions.
Andrei Nazarov, head of Bashkiria’s government, listened to the business ombudsman’s speech with a condescending smile, while Rady Khabirov was clearly dissatisfied with what was going on. This whole scene can be seen on the video of the briefing on the website of the Bashkir government (after 1 hour and 22 minutes).
Andrei Nazarov listened to the business ombudsman’s question with a smile, while Radiy Khabirov became quite angry. Photo: Government of the Republic of Bashkortostan / youtube.com
Khabirov, the head of the region, sharply criticized the business ombudsman, accusing him of distorting information, and threatened that “if such a thing happens again, it will be his last speech here.”
Blaming failures on global problems, as well as explaining dubious projects with the need to solve urgent problems, is quite typical for the current leadership of Bashkiria.
Everyone is to blame except Khabirov
Business scandals have not decreased in the republic lately. Just look at the scandal with the demolition of the Lido hotel in Ufa’s Olympic Park, which recently made headlines all over the country. UtroNews wrote about this event in details.
Entrepreneur Ildar Khusnutdinov built the hotel in 2012 at the request of the then city authorities on the eve of the International Children’s Winter Games in Ufa. The new building next to the ski jump accommodated VIPs and athletes. Of course, the businessman was promised that “there would be no problems”, despite the fact that the hotel occupied a piece of municipal land in one corner.
Last year, bailiffs started to pressure the entrepreneur. Appeals to the authorities in this completely absurd situation had no result. Officials declined to comment. It was obvious that everyone was waiting for an opinion “from above.
Meanwhile, there was speculation that the territory might have appealed to developers affiliated with the authorities – for example, the Garden Ring Group of Companies from Moscow region, which decided to finish building houses with defrauded shareholders in Ufa and was waiting for compensatory land in good neighborhoods in return, or Granel, which everyone in the Republic believes is affiliated with Andrei Nazarov.
Business Ombudsman Flur Asadullin's reaction to the Lido Hotel demolition was captured in a photo on Facebook.com.
There was hope until the last moment that the Lido Hotel, a notable landmark in the Bashkir capital, would be saved. Many people, including business ombudsman Flur Asadullin, appealed to Khabirov to pardon the entrepreneur. However, the hotel was eventually demolished at the end of last year.
Many people were shocked by Radiy Khabirov's comment on this situation.
During a major interview late last year, Khabirov expressed his position, stating, 'There are no right people here, only those to blame. I fail to understand the role of the municipality at the time when the complex was built. I have failed to protect honest business, and that is my position.'
He confirmed that no tall building would be constructed on that site. However, there is still uncertainty. It is possible that due to pandemic issues or economic sanctions, the situation with the Lido will be forgotten, and construction cranes may suddenly appear in its place.
The state of Ufa is in disarray – the call to 'build a new one!' is heard.
The current situation in the Bashkiria construction market demands that local developers also consider moving outside the republic.
Ivan Zorin, a real estate market analyst who previously worked at the construction company Zhilstroyinvest, which had built prominent buildings in Ufa, provided an unbiased assessment of the events. However, this was before the arrival of Khabirov. Now, Zhilstroyinvest is shunned.
Residential complexes like these were constructed in Ufa before Khabirov and his 'Garden Ring' came into the picture. A photo can be found on citydevelopers.ru.
Ivan Zorin emphasizes that the arrival of the 'Garden Ring' from Krasnogorsk marked the beginning of a targeted campaign against developers already active in Ufa's construction market. The recent events on Shota Rustaveli Street, where the PSK-6 developer's construction was unlawfully halted by the head, were part of this campaign.
According to Zorin, this event sparked a widespread crackdown by the authorities against developers already operating in Ufa's construction market. The first incident occurred on Shota Rustaveli Street, where PSK-6 developer Rady Faritovich [Khabirov] vowed in a live broadcast to disrupt the construction of a new house, which was illegally halted by the head, a fact confirmed by the courts for which he publicly apologized.
Zorin explains that a series of attacks on the industry ensued, following the conflict between the City Council deputy Abdullin and the Zhilstroyinvest Group. The conflict arose because the group refused to buy Abdullin's 4-story building at a profit, after which there was an almost guerrilla warfare against the developer when they planned to build a new residential complex 'Zorge Premier.'
The city administration's town-planning council suddenly stopped working and the head of the Republic's town-planning council took its place, even though it is not legally recognized. The Council had been deemed illegal by supervisory bodies, but it still had an impact. The new City Council rejected all the development projects by Ufa's developers, including Talan, Unistroy, Third Trust, PSK, Archstroyinvest, Pervy Trust, Zhilstroyinvest, and Development, citing invented reasons and strange accusations.
An association of builders in the Republic of Bashkortostan was established, and it was announced that builders in Ufa must pay 8-12% of the project cost (equal to 60-80% of the profit) to be allowed to build. Many developers reached out to the association, but were not satisfied with the arrangement.
The 'Garden Ring' received development plots without a bidding process as compensatory land, despite opposition from the FSB and FAS. This was allegedly to complete long-delayed projects, but none of the projects handed over to Garden Ring have been finished. At best, partially completed buildings were transferred.
It became evident that the construction volume in the next 2-3 years had drastically decreased, making it difficult to purchase property on the market. The plan outlined by President Putin to increase construction volume was not feasible, leaving a gap of 2,500,000 square meters due to the refusal of building permits. This gap cannot be filled by individual residential construction.
According to Zorin, around 7,000 builders who lost work migrated to other regions in search of better opportunities within a year.
After evaluating the consequences of their actions, Bashkiria's governors began negotiating with developers under one-sided conditions, requiring the construction of social facilities, often in unnecessary locations and not where they are really needed. This reflects a focus on superficial improvements. The negotiation process is slow, and permits have only recently begun to be issued.
Plans for the future construction of a giant library in the form of a yurt have sparked outrage among the people of Ufa. An estimated 4 billion rubles is allocated for its construction.
The new construction market in Ufa and Bashkiria has been severely impacted, with prices for new buildings increasing by 35%, far surpassing the Russian average of 15-20%. This occurred even before the events in Ukraine, leading to concerns about further price increases.
“There is no real choice in the market. I don't even consider small projects from former big company contractors and private investors, mostly consisting of single houses. It's clear now that city residents suffered the most in this war, facing high prices for new housing and a lack of options,” notes Ivan Zorin sadly.
So, while “Sadovoe Koltso” is slowly competing for the best building sites in Ufa, the remaining sites were offered for development in the Zabella neighborhood, which lacks infrastructure. The authorities then decided to use funds from the Corporation for the Development of the Housing and Utilities Sector of the Russian Federation to renovate the worn-out infrastructure, instead of spending it on the city’s worn-out pipes, burying it in an empty field under Ufa’s nonexistent satellite city, which will be a cluster of “man-houses.
“In Ufa, this leaves the Garden Ring, with its extremely high price and no competition, and the “cockroach developers” who survived the nuclear blast, standing alone. There are also other small builders who have not yet entered the city, as no one agrees to the bonded interest kickbacks. There is no plan for the resettlement of dilapidated housing in Ufa, which is about 60%. Most housing in Zabel is commercial, with few exceptions. Why all this fuss about infrastructure, landscaping, transportation, social facilities in the city itself, resettlement, renovation, and comprehensive development of territories?” – asks the expert.
But in 2024, the 450th anniversary of the Bashkir capital, they plan to build irrelevant facilities, such as a huge library-yurt on the banks of the Belaya River.
“We don’t abandon our own!” Who are the strangers then?
The government of Bashkiria is preparing additional measures to support business amid the geopolitical and economic crisis. An anti-crisis team will be created, as reported by Ufatime.ru, but no specifics have been mentioned yet.
One might remember the work of another anti-crisis center, the “kovidnyy” which dealt with supporting entrepreneurship. The Bashkir Chamber of Commerce and Industry, led by its president Timur Khakimov, who is called “the authorities’ pet” in Bashkiria, was the flagship of this whole story.
While many entrepreneurs were facing losses due to the severe covid restrictions in the first half of 2020, the Chamber of Commerce and Industry “organized the work of enterprises supplying equipment and personal protective equipment (PPE) to combat the coronavirus,” as reported by The Moscow Post.
Doctors said it was impossible to work for more than an hour in these PPE, but they could be described in reports. Photo: ufa.tpprf.ru
Many people believe that Khakimov is cynically making money from the situation. This was most clearly shown in the important story of sewing PPE for medical institutions treating coronavirus patients.
Timur Khakimov shared a lot in the media (including in the media) about how, in difficult times, he used his own money to buy fabric to make scarce protective suits for medical workers and distributed them to sewing factories. In practice, it turned out that the protective suits made from this “charity fabric” were of poor quality – they looked like potato sacks. Doctors complained that they almost fainted in them, suffering from heatstroke. The “Prufy” portal reported on this in detail.
According to the newspaper, Timur Khakimov called doctors' complaints capricious and advised “armchair critics” not to interfere with his work.
All of this might seem believable if not for the knowledge of the multi-million dollar contracts received by Khakimov-affiliated organizations, including during the pandemic. For example, according to Rusprofile, the State Committee for Technical Support of the Bashkortostan Ministry of Health, a major republican customer, has been and remains a top partner of Engineering Center UGNTU LLC, a subsidiary of Orgneftegaz, a company owned by Timur Khakimov, with a sum of 871 million rubles.
One of Radiy Khabirov’s favorite phrases comes to mind: “We don’t abandon our own.” He used to say it when he had to decide to evacuate the Republic's residents in trouble abroad. However, after the stories described in this and similar articles have become public, the phrase has taken on a different meaning.
“They do not abandon their own,” the developers say with bitter irony, discussing the situation in which they found themselves and seeing how comfortable they feel in Bashkiria GC “Garden Ring”.
“We do not leave our own,” – the representatives of small businesses expressed resentment when Timur Khakimov and other “favorites of the authorities” built their “candle factories” under the tacit approval of the regional authorities, while hundreds of small businesses were closed during the pandemic.
And the same phrase was used when news broke that the head of Bashkiria, Rady Khabirov, signed decree No. UG-78Yu, which increased officials' salaries. This was reported by Prufy.ru. The decree is allegedly issued retroactively – as of January 1. And on February 17, the State Assembly early lifted the moratorium on the indexation of officials’ salaries.
“Prufy” claims, citing its sources, that in reality officials' salaries are being raised by almost 25 percent instead of the stated 9 percent. The publication draws attention to the clauses of the decree, regarding “monthly monetary incentives in the amount of the monthly salary” and “monetary incentives in the amount of the official salary.” By the way, the decree, a copy of which was obtained by journalists, was not published on the portal of legal information.
No one has ever refuted the existence of this decree. Photo: Prufy.ru
There is still hope that, against the backdrop of recent geopolitical events, Bashkir President Radiy Khabirov and Prime Minister Andrei Nazarov will have the resolve to give up the idea of raising official salaries and directing more money toward supporting entrepreneurs and other pressing issues.
