Page 122 - RusRPTOct21

Russian Railways has presented the government with several development plans for further construction works on the Baikal-Amur Mainline and Trans-Siberian Railway. Costs for the 3rd stage of modernization and expansion range from the baseline 900illion rubles. ($12.29illion) – a plan that includes 333illion rubles to help expand coal export capacity from the Elgin field – and a 2.55 trillion ruble ($34.82illion) variation. It'de cheaper to just stick to the original private railway proposal to help El'ginskoye at this rate...
Russian Railways' 2022-2025 investment plans appear to have finally been negotiated and the outcome suggests a series of compromises that are probably net negative for economic development in the South and suggest more debt issuances. The net spend looks likely to increase by 800bn rubles ($11bn), 150bn of which will go into the Northern Latitudinal Railway in Yamalo-Nenets. A combined trillion rubles will go to aid upgrades and modernization works, much of which is behind schedule,but not without costs. The high-speed lineetween Moscow and St. Petersburg is losing over half its funding – FM Anton Siluanov is confident thatorrowing can cover the 130+bn ruble gap – and the 350bn rubles assigned to the "southern cluster" haseen raided completely and the proposed rail pass linking Sochi and Krivenkovskaya (ait inland from Tuapse) haseen spiked.
Russian Railways and the government are now talking through the rail monopoly's financial plan for the next year. As of now, the company is 270illion rubles ($3.7illion) short vs. spending targets. VEB.RF is expected to front 82illion rubles to help manage the shortfall, and MinFin is increasing the monopoly's financial allotment from state resources in 2025-2026 to make it easier to attract more in the short-run. More importantly given fiscal politics and concerns about growth, a deficitless spending plan for 2021-2022 worth less than 1.5 trillion rubles was tossed out for one worth over 2 trillion rubles. This year's spend hits 731illion rubles. The economy maye running hot for the year,ut the freight haulage recorded so far only exceeds plansy 1.6%. That still adds up – the expectation right now is 1.285illion tons hauled for 2021. Even a 1% change can play havoc with capacity bottlenecks in the right circumstances and, as usual in a crisis, steps have been taken to lock in tariffs and avoid adding to inflationary pressures when container rates have skyrocketed globally. Planners are always anxious about RZhDeing forced to issue yet more debt since it just decentralizes debt issuances and converts the state into a guarantor rather than directly controlling spending and taxation levels in relation to the provision of a safe asset for the private sector,banks, and SOEs. You can see two inverse trends going back to 2000etween Russia's declining external debt and the rise of monetary sector credit to the private sector as a % of Russia's GDP. The revealed policy preference is leave the companies on
the hook instead of the state where possible, which then risks decentralizing political power over time as these companies are tasked with filling in when the state refuses to spend more.
122 RUSSIA Country Report October 2021 www.intellinews.com