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Last Updated: Friday, 2 July, 2004, 10:08 GMT 11:08 UK
Oligarchs eye symbols of old Russia

By Sarah Rainsford
BBC correspondent in St Petersburg

Alexei Palace
The state cannot afford to renovate the palaces
On an overgrown patch of land beside the river Moika in St Petersburg, a former Romanov residence lies close to ruin.

It was once the palace of Grand Prince Alexei - uncle of the last Russian Tsar. But the building hasn't been renovated properly for a century.

The tall iron gates are tightly locked, but decades worth of damage to the palace are clearly visible from a distance. Plaster is falling from the walls in great chunks; the neglected metalwork is twisted and rusting.

Officials charged with protecting more than 7,000 historic monuments in Russia's second city say they can't afford the maintenance bills any longer.

Prolonging life

Led by Governor Valentina Matvienko, they are pushing for a change in legislation to allow them to sell the property - which includes dozens of dilapidating palaces - before it's too late.

"The situation is becoming more critical every year. Our buildings are in urgent need of investment," says Vera Dementyeva, head of St Petersburg's Committee for State Protection of Monuments.

Of course privatisation will not solve everything, but it will prolong the life of many of our palaces.

The Alexei Palace was let to a Moscow businessman 12 years ago on the understanding he would carry out specific repairs.

But the only change has been for the worse.

Vera Dementyeva believes buying rather than renting a property will give investors the incentive they need to embark on restoration work. So her committee has already identified 26 potential sites for sale.

Finding buyers should not be difficult.

Status symbol

Like Moscow, St Petersburg has caught real-estate fever. Russia's new rich are snapping-up property here in droves.

Across town from the committee's office, builders lay the gravel path to another modern apartment complex for the elite.

Company director Ivan Romanov has been busy reaping the rewards of the building boom. Now developers like him are eyeing an exciting new market in palaces.

What better status symbol after all, than a mansion once frequented by the Tsars?

Businessman Valery Bely
Valery doubts Russia's oligarchs will keep palaces better than the state
"I think the new law would open up lots of new opportunities for my company, and for many others," says Mr Romanov.

"And I'm sure the market demand is there."

"I think most of them will be bought as head offices for big companies, but some will definitely serve as palaces for the rich."

The pale yellow summer estate of Alexander Bezborodko is likely to be a popular choice on the provisional 'for sale' list. Catherine the Great is said to have been a regular visitor here, dropping in during outings on the River Neva.

Those days of grandeur are long gone. Today the crumbling colonnades and balconies are in desperate need of attention.

But not everyone is convinced that selling protected properties is the best way to preserve them.

Businessman Valery Bely admits he would not risk any such investment in the current climate.

"The state privatises today," he says. "Then tomorrow, they want it back."

But Mr Bely believes others will be less cautious with their fortunes and he's worried Russia's new rich are not ready for the responsibility.

"Our businessmen will either do no repairs to the buildings at all, or do it all in their own bad taste.

"They'll add Jacuzzis and barbecue patios!" he says.

"Even though these palaces are in a terrible state now, I think there should be a freeze on selling them until the mentality of Russia's rich people improves."


The governor's proposal has raised other doubts too.

St Petersburg heritage buildings
Some fear the new buyers will add their own touch of 'nouveau riche'
Privatisation remains a dirty word in Russia after the crony-ridden factory sell-offs of the early 1990s.

Vera Dementyeva insists the city wants these sales to be transparent.

"People here think privatisation means free distribution," she admits.

"But that hasn't happened for years.

"There will be proper tenders for these palaces, like in any other country."

Posing in front of the Winter Palace, a Peter the Great look-a-like twirls his moustache at the tourists.

"St Petersburg's palaces just don't look as good as they should," the city's founder reflects between photographs.

"If the state doesn't have the funds to look after them, I think selling them off is probably for the best."

The city authorities say they have been left with little choice if they are to save the buildings for the next generation of sight-seers.

But there are still some things even the richest Russian oligarch can't buy.

Landmarks like the Hermitage are not for sale - however tempting the bid.

The BBC's Sarah Rainsford
"Not everyone is convinced that putting that property into private hands is a good idea"

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