High speed investors
Evraz companies, Roman Abramovich and his partners, Kuzbassrazrezugol and Transmashholding, Andrei Bokarev, as well as the Sinara group of Dmitry Pumpyansky, are discussing possible participation in financing a project to build a high-speed highway (VSM) from Moscow to Kazan. RBC was informed about this by two sources close to the working group on promoting the implementation of new investment projects created at the Ministry of Finance on the initiative of presidential aide Andrei Belousov.
Sinara and Transmashholding, which have been announcing plans to join the High-Speed Railway as concessionaires or suppliers of locomotives for several years, have now filed preliminary applications with Evraz and Kuzbassrazrezugl the project, said the interlocutors of RBC.
Representatives of Railways and Evraz declined to comment. In the press services of Kuzbassrazrezugol and Transmashholding, as well as Sinara did not respond to the request of RBC.
The Moscow-Kazan High-Speed Railway (the first section should follow the Zheleznodorozhny-Gorokhovets route with a further extension to Nizhny Novgorod and Kazan) is a long-term project of the Russian Railways, in the summer of 2018 it was included in the list of priority projects of the Ministry of Economic Development, which should start until 2024. But the problem with financing is still not solved. Russian Railways estimated the cost of the High-Speed Railway Moscow-Kazan at 1.695 trillion rubles, which follows from the presentation of the company at RBC’s disposal. Of this amount, the state should invest 700 billion rubles. The same figures were called at the St. Petersburg Economic Forum in May 2018, the first deputy head of Russian Railways, Alexander Misharin, who oversees the issues of the Supreme Council of Ministers. It announced plans to raise funds in commercial banks, from a strategic foreign partner (including the Chinese) by issuing infrastructure bonds, the presentation said. But so far, not a single binding agreement with investors has been signed.
At the end of November 2018, at a meeting with President Vladimir Putin, Belousov announced the “very big interest” of the business to the Moscow-Kazan project. He also noted that this project is the most ready for legal registration. However, in the presentation of November 21 prepared by the working group at the Ministry of Finance on the eve of the meeting with Putin, the Supreme Council of Ministers does not appear among the main projects.
Why does business need high-speed highways?
All four companies that have applied for participation in this project are already working with Russian Railways. The Sinara Group and Transmashholding supply rolling stock to the company, Evraz is the largest supplier of rails in Russia, and Kuzbassrazrezugol is one of the largest freight forwarders of Russian Railways.
The interest of Transmashholding and Sinara to the construction of the road was reported back in 2014. Both companies in the consortium were going to become concessionaires for the construction of several sections of the high-speed rail line, Vedomosti reported. In 2016, the then president of Siemens in Russia, Dietrich Möller, noted that the German company and Sinara are ready for trilateral cooperation with Chinese companies and offer rolling stock, as well as interested in automation, signaling, and power supply for the high-speed rail network. The fact that the Sinara Group, together with a Chinese company, will prepare trains for the high-speed highway (VSM) Moscow-Kazan, was also reported by TASS.
“They, of course, would be extremely profitable to supply both locomotives and rails, therefore they are ready to consider investments in the project,” notes Maxim Khudalov, director of the corporate ratings group at ACRA. The Supreme Council already transferred several times, and there are big doubts about the project’s realism, but the main thing is that the business has shown the authorities readiness to participate in state projects, and whether it will be implemented or not, this is a separate story, the expert concludes.
Even Vladimir Putin doubted the feasibility of building a high-speed rail section from Moscow to Nizhny Novgorod, Vedomosti reported in early November. The publication indicated that in terms of the development of backbone infrastructure, there are already three projects of communication with Nizhny Novgorod: in addition to the high-speed rail, this is the reconstruction of the M7 highway, as well as the construction of a toll road that will become part of the Europe-Western China transport corridor.
The president then instructed to once again assess the economy and the validity of the SCM. On December 8, Transport Minister Yevgeny Dietrich told reporters that the Ministry of Transport plans to discuss at the government meeting the results of an additional analysis of the effectiveness of this project.
Work on attracting business to state projects began with an August letter from Belousov with a proposal to withdraw more than 500 billion rubles. super profits. This money is needed for the fulfillment of Putin’s May decree, he wrote. But the business was able to enlist the support of First Deputy Prime Minister Anton Siluanov, who translated the discussion on exemptions into a discussion of the conditions under which private money would be attracted to government projects. The measures of state support now being discussed promise business invariance of tax and non-tax conditions, as well as tax refunds.