Developers Hope for November Bailout

bloombergConstruction firms met with government officials last week in hopes of securing funding for the troubled industry.
Retailers and property developers hope to secure government support by early next month, industry sources said, as officials met top players from the crisis-hit industries.

Last week, First Deputy Prime Minister Igor Shuvalov, seen as one of the main crisis troubleshooters in the government of Vladimir Putin, held separate meetings with industry leaders, but few concrete details emerged following the talks.

"The meeting was of a very general character. Some concrete decisions could be taken at a later stage," one of the participants said.

His words were confirmed by five other participants, who said they expected concrete details to emerge in a week or two.

The meetings with retailers were attended by executives from X5, Dixy, Sedmoi Continent and Magnit. Companies such as PIK, Sistema-Hals, Glavstroi and Inteko attended the meeting with developers.

A spokesman for Shuvalov said the meeting with developers focused on "measures to maintain the pace of development of Russia's construction sector next year."

With retailers, Shuvalov discussed "a package of measures aimed at supporting the industry," the spokesman said.

A real estate crisis would badly affect many industries, from steel to cement makers, and jeopardize Prime Minister Putin's plans to invest as much as $1 trillion by 2020 in one of the world's biggest infrastructure reforms.

Slower growth among retailers would hit the agricultural sector and hinder government plans to maintain healthy economic growth rates, which have been around 5-8 percent in recent years.

A failure to build residential property on time could also result in social discontent, as some 150,000 to 300,000 Russians are waiting for new apartments, according to various estimates.

Some real estate firms and retailers have capped their growth plans because of declining consumer demand and warned about possible staff cuts.

Reuters, MT