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Government Move to Expanded Moscow in Doubt

In what might be the death knell for Prime Minister Dmitry Medvedev's plan to relocate federal ministries to Moscow's newly adjoined land, Kremlin insiders have said the plan is being reworked, with one official saying it has already been scrapped.

In its place, officials are now considering a government hub near the Kremlin to bring the ministries and government departments currently scattered throughout the city center under "one address."

Vladimir Kozhin, head of the Office of Presidential Affairs, told state-controlled newspaper Rossiiskaya Gazeta that the plan to move federal offices will be redrawn from scratch.

"Everything has to be thought through all over again," Kozhin said in an interview published last week.

On Friday, President Vladimir Putin's spokesman, Dmitry Peskov, told RIA-Novosti that "decisions on this matter aren't yet formalized," while Izvestia cited a "high-placed source in the Kremlin" to report that Putin's administration had completely dismissed the idea.

"It has been given up on … let's put it that way," the anonymous source said.

Putin's administration "concluded that a large-scale relocation of government institutions beyond the Moscow Ring Road won't bring about a [positive] economic effect," he said.

The financial burden of rebuilding offices and transferring property for numerous departments could be enormous, with the Finance Ministry estimating that the move would cost 500 billion rubles ($16 billion), Izvestia reported.

The administration instead is now promoting its own plan.

It needs "to work out in detail the possibility of creating a so-called government quarter within existing Moscow city limits," Kozhin told Rossiiskaya Gazeta, in an apparent reference to the city's borders prior to the expansion.

He added, "Theoretically, that means next to the Kremlin."

"The government quarter presumes the concentration of the presidential administration, key ministries and government departments in one place so as to reduce the traffic between departments around Moscow," he said. "Every ministry will finally be able to be located at one address."

Medvedev's June 2011 proposal called for expanding Moscow's boundaries into the Moscow region and using the added land to build offices for the country's global financial center project, and to transplant government offices in an effort to reduce congestion in the city center.

The capital's borders were officially enlarged July 1, adding 150,000 hectares and 232,000 residents.

The same month, however, Izvestia reported that a presidential commission was reviewing the proposal to relocate ministries and would either continue or kill the plan.

The government appears to have backtracked on its plan to hold the G8 Summit in 2014 at the Skolkovo Innovation Center on Moscow's western edge.

Though Kozhin already had named Skolkovo as the site of the 2014 conference, which Russia will host, the presidential aide now says he doesn't know what town it will be held in.

In April, he told RIA-Novosti that the innovation city begun by Medvedev would play host to the G8, which convenes heads of state from eight major economies, as well as thousands of aides and journalists.

"It will impart a very serious, global significance to the Skolkovo center and will give impetus to its development," Kozhin said at the time.

In the Rossiiskaya Gazeta interview, however, Kozhin said he "won't say yet" where the 2014 G8 will be held, adding only that it will not be in St. Petersburg, Kazan or Moscow.

As of this summer, the Skolkovo site had only one completed medium-size office building, a few roads and some lots under construction.

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