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long-awaited Moscow-Kazan HSR before connecting to an existing rail line to Nizhny Novgorod. The project, at an estimated cost of 621.5bn rubles ($9.5bn), will receive 200bn rubles ($3bn) from the budget and 200bn from RZhD. The remaining 221.5bn rubles ($3.4bn) will come from private business.
● The Selikhin-Nysh bridge and Sakhalin port, estimated to cost 589.3bn rubles ($9bn), are not expected to receive any government financing. RZhD plans to finance construction through a concession. There are currently no contenders.
Authorities have offered Russia’s most expensive highway project, Dzhubga-Sochi —previously deemed premature by MinTrans—to private investors from Belousov’s list. The Ministry's reversal on backing the highway mega-project linking Abkhazia to Crimea depends largely on attracting private investors. This project is still at the trial balloon stage, but it's likely MinTrans is trying to piggyback onto the compromise over the Belousov windfall tax proposal to bring in private sector money. Further, the regional authorities and businessmen in Krasnodar would benefit, particularly as Krasnodar is a hub for food imports and exports. Watch costs, local news out of Krasnodar, and lobbying support to expand exports via Novorossiysk to get a sense of the weight behind the proposal. In August, the Ministry of Transport estimated project costs at a record 1.6 trillion rubles ($24.3bn) before deciding it was too difficult to implement for technical reasons. Since its revival, the project may become even larger and more expensive than originally planned. Also included on MinFin’s list of projects for private investors are new highways from Kerch to Dzhugba via Novorossiysk and from Sochi to the border of Abkhazia. This will allow tourists to travel from the Crimean bridge to the Abkhazian border—currently an 8.5-hour drive—in less than half the time. Commenting on the project’s revival, an official from MinTrans notes that technical difficulties become secondary when private investors are involved. He claims that both Yuri Reylyan and Arkady Rotenberg’s companies are vying for the project.
Russian Railways (RZD) proposes to set up a united South railway station for all southern destination on the base of Paveletsky railway station , RBC business daily reported on September 4 citing the internal company materials. Currently Kazan and Kursk railway stations serve southern destinations from the capital, while the new station would be a united hub for all trains leaving southwards, including Crimea. The investment required could amount to RUB100bn ($1.5bn). RZD representatives told the daily that clustering of rail destinations would allow at minimal costs to improve the speed and cut travelling times. Paveletsky railway station is already up refurbishing that could cost up to RUB2.5bn.
Rosatom signed memos with VTB and Sberbank about financing a new fleet of "Leader" class nuclear-powered icebreakers to keep the Northern Sea Route open year-round. Sberbank and VTB will have to finance Rosatom if Moscow hopes to make use of the Northern Sea Route without letting China, or any other major shipbuilder for that matter, have a large say in business negotiations. The agreements signal faith that the route, despite numerous challenges, can be profitable. But the "Leader" icebreaker design has a host of problems: unclear capabilities and (since contracts have been funneled to Rosneft's Zvezda facility) and not even a completed shipyard ready to build. These memoranda are most likely favors and seem to be rewarding First Deputy Sergei Kirienko's network surrounding the Presidential Administration.
93 RUSSIA Country Report October 2018 www.intellinews.com