Russia's government approved the construction of a new stretch of railroad, a port terminal and a water sanitation system worth 162 billion rubles ($6.23 billion), about a third of which will be paid for out of the federal budget.
The State Investment Fund will pay 37 billion rubles of the 98.8 billion-ruble cost of building rail tracks to join the Tyva republic, bordering Mongolia, and the coal-rich Krasnoyarsk region, Economy Minister German Gref told reporters in Moscow yesterday. This project is the „most significant” of the three, Gref said after a meeting of the committee that approves projects for Investment Fund financing. It will create 459.5 kilometers of rail road to facilitate the exploration of more than 3 million tons of coal deposits in Tyva, he said. The republic also has nickel, copper and other natural resources, Gref said.
The Investment Fund was set up to pour money into Russia's underfinanced infrastructure after fiscal revenue of the world's largest energy producer swelled with rising oil prices. Russia is entering its ninth year of economic growth, which will probably slow to 6.2% this year from a revised 6.8% in 2006 as oil prices decline, according to the Economy Ministry. The fund will also contribute 2.1 billion rubles of the 8.4 billion rubles it will cost to build a logistics terminal in the Ust-Luga port outside St. Petersburg, Gref said. The terminal is expected to process cars and other imports.
The third project is a water sanitation system in the southern Rostov-on-Don region. The Fund will contribute 4.35 billion rubles to build the system, while private investors will pay 16.2 billion rubles and the region's government will pay 1.5 billion rubles of the cost. The Investment Fund will begin transferring money for the three projects his year, Gref said. The Investment Fund totaled 69 billion rubles in 2006 of which it invested 9 billion that year, Finance Minister Alexei Kudrin said on March 21. It has 110 billion rubles to spend this year, according to Kudrin. (Bloomberg)