September 26, 2018 / 4:56 PM / in 3 months

Russia businesses can help foot cost of high-speed rail development: Deputy PM

VLADIVOSTOK, Russia (Reuters) - Russian businesses could share with the government the financial burden of building high-speed railways and toll roads - projects high on President Vladimir Putin’s economic agenda, a senior Russian government official said.

FILE PHOTO: Maxim Akimov, Russian Deputy Prime Minister responsible for transport and communications, speaks during a session of the St. Petersburg International Economic Forum (SPIEF), Russia May 24, 2018. REUTERS/Sergei Karpukhin

The Kremlin in August called on Russian metals and mining firms, which have profited from a weak rouble and strong commodity prices, to invest in projects that would help the stretched state budget meet Putin’s decrees.

Putin’s new decrees set out ambitious economic goals for his new presidency - including transport infrastructure such as high-speed rail links - which will cost the budget at least 8 trillion rubles and should put the Russian economy among the top five world economies by 2024.

Deputy Prime Minister Maxim Akimov, in an interview with Reuters, said business could potentially invest in the development of high-speed passenger railways, which Russia does not have at the moment.

This was a sector which could provide demand for different metals, advanced technologies and IT-systems, he said.

“We are very much in support of investments by businesses. But it should be done where businesses see their own interests as well, not because someone has got on their backs,” Akimov said.

A draft government and Russian Railways plan forsees the development of a high-speed rail link to the town of Nizhny Novgorod worth more than 620 billion rubles ($9.40 billion) and one to the town of Vladimir worth 200 billion rubles.

Total Russian Railways development plan is estimated at 9.9 trillion rubles to 2025, according to document seen by Reuters.

“If the political decision to go ahead with this project (high-speed passenger railways) is taken, we will do our best to build up a model so that it would be attractive to investors,” Akimov said.

The government’s plan for total infrastructure development up to 2024 is worth 6.24 trillion rubles.

Around a half of that amount should come from the budget and another half - from so-called ‘non-budgetary’ resources, Akimov said. The plan, which he said may change, should be approved by Oct 1.

Akimov also said the government had added development of Northern Sea Route which now is mainly used to ship liquefied natural gas, to its infrastructure plan. The project will increase the capacity of seaports and the construction of a Europe-Western China highway.

Additional reporting by Gleb Stolyarov in MOSCOW; Editing by Katya Golubkova, Richard Balmforth

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