IRKUTSK — Competing rallies on Saturday were held in Irkutsk over plans to relaunch the Baikalsk Paper and Pulp Mills, a day after majority owner Oleg Deripaska announced that he was planning to divest the controversial asset.
The government, which owns a 49 percent stake in the plant, agreed Jan. 13 to reopen the facility and allow it to dump waste into Lake Baikal so that it could resume output of its most profitable products. The plant is the main employer in Baikalsk, a single-industry town of 16,000 on the lake's shore.
Deripaska, who controls the remaining 51 percent through Continental Management, a unit of his Basic Element holding, said Friday that the decision to reopen the plant was based on social considerations and that he would hand over his stake to the city as soon as the mill became profitable.
"Relaunching the facility is a social project, not a commercial one. From the moment it was stopped a year and a half ago, we, as a private investor, have spent more than 1 billion rubles [$33 million] of our own funds to pay salaries and pensions and to maintain the heating, without which the city would have simply frozen," Deripaska said in an interview to Interfax circulated by Basic Element's press office.
Some of the funds were also used to prepare for the relaunch, he said.
"Statements about how the decision to restart the [station] was made for the sake of the private shareholder are complete nonsense," Deripaska said.
He said the company was in talks with the Baikalsk city government about handing over "our remaining stake" once the mill is operating at a profit, which he said could be as soon as May. Basic Element is planning to create 200 jobs in the town unrelated to the mill to help the city diversify, he added.
In a separate statement, Basic Element said Continental Invest, controlled by businessman Nikolai Makarov, was obtaining from Continental Management a 25.07 percent stake in the Baikalsk Paper and Pulp Mills.
The statement did not disclose terms of the deal, saying only that Continental Invest would start participating in the plant's management. Deripaska and Makarov formed Continental Management in 2002 through a merger of their forestry assets, the statement said.
The Moscow Times was unable to reach Makarov for comment.
Deripaska plans to hand over his remaining stake of 25.02 percent to the city for free after restarting the plant, Oksana Gorlova, a spokeswoman for Continental Management, said Sunday. She declined to comment on how the handover would comply with restrictions in the Budget Code that keep municipal structures from owning private companies.
"Solutions allowing that to happen will be found while the plant is being restarted," she told The Moscow Times.
Deripaska earmarked the 1 billion rubles "to support the plant's infrastructure" over the period from October 2008 to December 2009, Gorlova said. She declined to elaborate on how the money was spent, saying only that the last 189 million rubles was allotted in November to finance preparations to restart the facility.
The changes at the plant came a day before more than 2,000 people gathered for an environmental rally Saturday to protest the reopening. Nearby, about 1,000 people rallied in support of Prime Minister Vladimir Putin's decree allowing the plant — the city's main employer — to restart.
"People should be offered employment that does not pollute Baikal, they have nowhere to go because the government does not want to create alternatives,” said Mikhail, who was holding a sign reading "We are 70 percent made of Baikal water."
"I am sure Baikal has other ways to develop, without the plant,” said Marina Rikhvanova, coordinator of Baikal Wave, one of the groups that organized the rally.
Irkutsk has experienced rallies of several thousand in the past when people protested plans to lay a Transneft pipeline along the shore of Baikal. The pipeline was subsequently moved about 400 kilometers away.
Activists were also gathering signatures Saturday for a petition seeking clean employment alternatives for Baikalsk residents. The petition, asking President Dmitry Medvedev to cancel Putin's decree and posted on the web site Babr.ru, has more than 31,000 signatures.
“We only have one Baikal,” said Natalya Tumureyeva, an activist from Ulan-Ude, the capital of Buryatia, who came to the rally late.
The van in which she was traveling “was stopped seven times, at every traffic police station. They were trying to stop us from participating,” said Tumureyeva, who is a member of Green Russia, a faction in the Yabloko party in Buryatia.
While most of the signs around the square were politically neutral, some protesters were chanting for Putin to resign.
“Moscow! Siberia is not a dump!” one sign read. Others promoted tourism as an alternative for regional development or criticized Deripaska.
The plant stopped production in the fall of 2008 after announcing that it had switching to closed-cycle production.
Closed-cycle production, which reuses water instead of releasing polluted water into the lake, can only be used to make cheaper nonbleached cellulose. Continental Management said at the time that the plant was halting production because of a lack of money and nonprofitability of nonbleached cellulose.
Deripaska said Friday that the mill would try to have technology in place within three years to keep it running in an environmentally safe way. Analysts have said starting a new business there from scratch could be cheaper than trying to renovate the Soviet-era mill.
Workers said that even with the decision to restart the plant, they feel insecure about their futures.
“I'm hired on a seven-month contract,” said Valery Sinitsin, a plant worker holding a United Russia flag at the rally supporting the reopening.
He was among about 1,000 people who gathered a few blocks away from the protest. Baikalsk Mayor Valery Pintayev, Irkutsk Deputy Governor Vladimir Pashkov, as well as party representatives and factory workers spoke to the crowd.
The rally, which coincided with the Maslenitsa holiday, included blinis, tea and a folk performance after the speeches.
“If the government gave me a different job, I would go to that, but there is no other employment,” Sinitsin said.
He said the Baikalsk employees traveled to Irkutsk on a charter train organized by the factory and state-owned Russian Railways.
Flags from pro-Kremlin youth group Young Guard, the Liberal Democratic Party and the Just Russia party could also be seen among the banners, with slogans like: “Putin, save the workers of Baikalsk Mills!” “Say yes to Deripaska!” and “A full ecologist does not understand a hungry worker.”
Staff writer Irina Filatova contributed to this report from Moscow.