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Deutsche Bank to lend $422 mln to Russian Railways

Deutsche Bank will lend €292.1 million ($422 million) to Russia’s rail monopoly Russian Railways (RZD) to refinance the purchase of high-speed trains from Germany’s Siemens, RZD said on Tuesday. Russian Railways won Saudi project tender.

Russian Railways signed a contract for the purchase of eight high-speed trains worth €276 million ($399 million) from Siemens in May 2006. Under the contract worth a total of €600 million ($867 million), Siemens will also provide maintenance and servicing for high-speed Velaro RUS trains for 30 years. The loan comes in two tranches: the first portion of €249.8 million ($360 million), which the Russian railroad monopoly has already received, matures in 13.5 years while the second stage of €42.3 million ($61 million) has to be repaid in seven years, RZD said. Velaro RUS trains, capable of traveling at 250 km per hour (155 miles per hour), or even faster after an upgrade, will be initially used on the Moscow-St. Petersburg route. Each train will consist of 10 cars and will be designed to carry 600 passengers. Velaro-RUS trains are expected to run along the Moscow-St. Petersburg route in late 2009.

Russian Railways announced on Monday it had won an $800 million tender to build a 520-km (323-mile) rail line in Saudi Arabia. “The company received an official letter of invitation to talks today from the Saudi Finance Ministry for a contract worth around $800 million,” the Russian railroad monopoly’s press service said yesterday. The Russian company will build a line from Al Zabirah to the King Khalid international airport (Riyadh) in central Saudi Arabia, which will make up over one fifth of the North-South rail line in the Mideast state, which will have a total route of 2,400 km (1,500 miles). The North-South project was launched in Saudi Arabia in 2005 to develop phosphate and bauxite deposits in the country’s north and reduce the economy’s dependence on oil exports. The entire project is expected to cost over $2 billion and is expected to be finished in 2010-2011. In June 2006 Russian Railways was authorized to participate in tenders to build sections of the North-South line. The company submitted its tender application on October 2007 to the state investment fund under the Saudi Finance Ministry. (