Agency offers 2 Md. firms aid for Russian projects

June 29, 1995|By Will Englund | Will Englund,Moscow Bureau of The Sun

MOSCOW -- Two Maryland companies, Marriott International Inc. and Earth Observation Satellite Co., are among nine American firms that have been chosen to receive partial U.S. financing for projects in Russia.

The projects were announced here yesterday by Ruth R. Harkin, president of the Overseas Private Investment Corp. (OPIC).

Marriott will receive $93 million in financing and political risk insurance toward the construction of a new hotel in Moscow. Earth Observation Satellite -- a joint venture of Lockheed Martin Corp. of Bethesda and Hughes Aircraft Co. of Arlington, Va. -- will receive $600,000 in political risk insurance for a project designed to convert Russian military satellite photographs to commercial use.

OPIC, a government-owned agency that is active in 140 countries, was created to foster U.S. business activity in countries where private lenders might be wary.

OPIC financing is repayable at market rates, and last year the agency turned a profit of $167 million, Ms. Harkin said.

Other OPIC-financed projects announced yesterday include financing or insurance for logging, gold-mining, food-processing and telecommunications projects, as well as $1.9 million for a Russian edition of Reader's Digest.

The total for the nine projects is $350 million, on top of $2.5 billion that OPIC has previously committed in Russia.

One of the reasons OPIC has become involved in Russia, Ms. Harkin said, is the difficulty of doing business in the face of obstacles ranging from an excess wage tax to political instability to government corruption to crime.

"But the overriding obstacle," she said, "has been the lack of reliability in investment laws."

The second major concern, she said, are Russia's complicated, conflicting and stiff taxes.

"We're trying to demonstrate to the government," she said, "that there is a line you can cross where taxes become so high that you can't make a profit."

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