On December, 18th German Siemens signed a contract, totaling €380 million, with TAIF Group under which it undertakes to deliver to Tatarstan SGT5-2000Е gas turbines, SST-600 steam turbine and the power distribution equipment for the 495-MW combined cycle power plant. It is expected, that the new object, working on synthetic gas – by-product of “Nizhnekamskneftekhim”, – will be started in May, 2021. Within this project the German company will act as the general contractor, and Turkish company ENKA – as the subcontractor.
After contract signing Siemens focused attention that the company would carry out the strict control over deliveries and equipment installation. Probably thus the company’s management hopes to secure itself against the situations similar to recent juicy scandal, connected with delivery to the annexed Crimea of the German equipment bypassing the European sanctions.
After media reported information on illegal import to Crimea of four turbines Siemens for power stations under construction in Crimea, representatives of the company stated that this equipment intended absolutely for other purposes. Because of the stirred up conflict Siemens declared a time suspension of equipment deliveries to the Russian companies, and went to law with the claim to terminate installation of turbines in Crimea and to return to the original destination – in Taman'. The Russian officials were clumsily to justify Russian actions, saying, turbines had been manufactured in Russia and purchased in the secondary market, therefore there were no infringements. As a result, on December, 14th, 2017 the Arbitration court of Moscow rejected Siemens’s claim and in Crimea builders reported on installation of the first turbines on power stations.
It is necessary to note, that the Russian private business in every possible way avoids working in Crimea in connection with high risk of sectoral sanctions imposition. The interdiction concerns the export to the peninsula of goods and technologies intended for use in the field of transport, telecommunications, power etc. As a result Russia simply is not able to provide the transport connection with the illegally annexed peninsula, and also to provide power supply, to solve a problem of the fresh water, the food stuffs etc.
The necessity to resolve these pressing problems in the conditions of the international sanctions from which the Russian economy has seriously suffered, forces the Kremlin to search for the support of foreign investors and to use any loopholes for attraction the foreign companies in projects on the annexed peninsula. Thereby the Kremlin aspires to kill two birds with one stone: bypassing economic sanctions to solve problems of the peninsula life sustenance and to attract foreign business in realization of projects in Crimea, to achieve step by step legitimization of annexation.
The situation with the known German company caught with the international sanctions infringement, confirms once again that the Kremlin’s stake on prevalence at management of some companies of business interests over values and democracy priorities – has proved to be true. It confirms, in particular, the fact that despite public scandal around Siemens and the following judicial proceedings with all came to nothing, Siemens’s management declared, that it wouldn’t suspend its business in Russia.
Actually all statements by Siemens as far as suspension of cooperation with the Russian companies under the government management have been made to calm public opinion and to hush up the scandal. In practice Siemens also was not going to leave the Russian market. Signing of the new contract on delivery for Russian “Nizhnekamskneftekhim” of gas turbines of the same model being the cause of inflamed scandal became an acknowledgement of that. Today still there is no confidence that the equipment manufactured by Siemens will not appear again on the annexed peninsula. But in such a case the German company hardly will manage to avoid sanctions. At the same time the foreign companies, continuing to work in Russia, should realise that infringement of sanctions and continuation of cooperation with an aggressor is toxic for their business reputation. Certainly, business is business, but it is also obvious that observance of international law norms, adherence to democratic values, all-European solidarity should prevail over reception of momentary benefits.