Battleship the game (of politics). Senators clash over salmon
A serious and not at all political clash of interests is taking place at the Russian Federation Council. Kamchatka senators Valery Ponomarev and Boris Nevzorov are failing at deciding how to divide the Kamchatka water resources; both men make millions of dollars off of them every year.
Winners are grinners (for now)
Unlike Russian deputies, Russian senators are not very public. They stay in shadow most of the time, quietly representing their regions. One of the few occasions on which they succumb to scrutiny of the public eye is when annual tax returns are published. Kamchatka always looks like one of the most prosperous Russian regions in this regard. Valery Ponomarev – one of its senators – became the wealthiest members of the Russian Federation Council with 2.6 billion rubles ($46.2 million) made in 2016. Boris Nevzorov – another Kamchatka senator – made significantly less than that, namely 173.7 million rubles ($3.9 million). He was still the fourth wealthiest Council member that year, though.
Senator Valery Ponomarev
It was no coincidence Ponomarev and Nevzorov volunteered to represent Kamchatka: both own leading local fishing companies. It is worth mentioning that Nevzorov does not even try to hide this and cannot be bothered to at least entrust his shares to a manager. As for Ponomarev, he even made it to the federal level, stealing the show from such fishery mogul as Russkaya Rybopromyshlennaya Kompaniya Maksima Vorobyeva y Gleba Franka. Meanwhile, Kamchatka itself is not as well-off. It placed 32nd in regard to standards of living in 2016. The wealthy senators have forgotten about their constituency, it seems. In a twist, the only thing Nevzorov and Ponomarev have on their minds it – surprisingly – Kamchatka, or rather how to divide it.
Senator Boris Nevzorov
A tender for the right to sign a rent contract for a fishing area ended in Petropavlovsk-Kamchatsky in late January, 2018. The winner was allowed to fish salmon at the 60 hectare-area for the next 20 years. About $100-120m could be made off of the area during this time, experts say. It sounds even more impressive when expressed in terms of money, not years or hectares, does it not? Only three companies competed for the right to profit off of this treasure trove. It is worth mentioning that two of them belong to Kamchatka senators. Delta Fish Ltd affiliated with Valery Ponomarev and Boris Nevzorov’s Ustkamchatryba were the main contenders. It is worth mentioning that the two men’s respective bids correlated with their respective income levels: Ustkamchatryba bid 60 million rubles ($1 million) a year, while Ponomarev was willing to bid 340 million rubles ($6 million) a year.
Senators fight for salmon
As strange as it may sound, the 100-million-dollar tender organizers cared about things other than how much money participants could offer. The Russian Federal Fishery Agency factored in how much fish would be fished (the more a potential lessee would catch the better) and how much locals are involved in a company’s activities. Nevzorov’s Ustkamchatryba is more than happy to fish out all there is to catch underwater, judging from its application. It employs 232 locals, while Delta Fish Ltd only has 32 local employees. Ustkamchatryba fishes 15% of all sockeye salmon that is fished in Russia. And it won the tender. Now, Ustkamchatryba can expect to increase its share of the salmon market.
Fisherman always sees another from afar?
Valery Ponomarev is not going to just let the competitor dominate the Kamchatka market; Delta Fish Ltd lawyered up and filed a complaint concerning the tender results with Russian Federal Fishing Market Players’ Association president German Zverev. The company claimed Nevzorov had not proved the number of local employees that gave him the edge. This means both the Association and Russian Federal Antimonopoly Service are likely to get involved in the feud between the two senators. The one to have the most political and economic influence will come out on top. It will be a tough battle for Nevzorov.
Ponomarev’s Okeanrybflot ranks 4th largest Russian fishing company. It is worth mentioning that Ponomarev has begun aggressively extending his market footprint. Ponomarev’s Okeanrybflot bought Dalintorg and Ogni Vostoka, the two largest Russian Far East fishing companies, late last year. The plants could very well have ended in Russkaya Rybopromyshlennaya Kompaniya’s portfolio. However, Maksim Vorobyev y Gleb Frank did not see eye to eye with its former owners; they failed to agree on a price for the plants. Senator Ponomarev was not shy about throwing money at the problem and paid 60 million rubles ($1 million) for the plants and their fleet.
Okeanrybflot ships. Company's official site.
Okeanrybflot ended up being one of the largest sponsors of United Russia during the latest Russian State Duma elections. The party in power returns the favors by looking the other way quite a lot. Not noticing Ponomarev having Znak shares is one such example. Znak has made 4 billion rubles ($70.9 million) off of state contracts.
Top-10 Znak customers
Moreover, he had remained the owner of a luxurious castle and one of the Spain’s largest wineries for a year after becoming the Council member.
Ponomarev’s real estate in Spain
It would seem Nevzorov does not stand a chance against his opponent. However, he is famous for being able to find a way out and make a lot of money in the process. He is a former employee of the Socialist Property Theft Directorate. He had suddenly quit in the early 1990s. He joined the ranks of those he had previously despised. He even partnered with the infamous Obshchak gang, according to some reports. Some even say the gang helped him illegally seize the RKZ-66 fish-canning plant. Whatever happened back then, Ustkamchatryba is the successor to RKZ-66. It is worth mentioning that the list of Ustkamchatryba incorporators could very well pass for the Nevzorovs family tree.
Nevzorov soon got used to the private sectors rules. Fastforward 10 years, he decided to try and get into politics. He was elected the Ust-Kamchatka district head and local United Russia office secretary in 2000. He had become the Kamchatka Legislative Assembly chairman by the time he attempted to disband the Petropavlovsk-Kamchatsk City Duma and cancel municipal elections in 2008. His initiative did not go unnoticed; he was appointed a Council member several years later. He is now solving Russian business community’s problems working there.
Whatever the outcome of wars between the Kamchatka oligarchs, the means by which they are being fought have been established. There will be a number of mutual exposures resulting in interesting leaks. What is behind the scenes of the fishing industry?
The situation on international markets is worsening because of trade wars and protectionist policies. However, Dmitry Medvedev noted that the Government expects the expansion of the Russian economy until 2024.