World Bank Offers $150M to St. Pete

ST. PETERSBURG — The World Bank has announced it will provide a $150 million credit for reconstruction work in St. Petersburg's city center between 2002 and 2005.

Part of the credit, $50 million, will be administered through the federal budget, while the remaining $100 million will be channeled to the St. Petersburg city administration. The payment will be contingent on the city's adoption of a number of pending property and construction regulations.

This will be the second such loan the bank has granted the city. In 1997, St. Petersburg received a credit of about $100 million that was mainly targeted at improving city housing.

The new loan comes with a 17-year repayment term, which can be extended by another five years under an option clause. The federal part of the loan is targeted at renovations and upgrades to cultural and architectural objects of state significance, including the State Hermitage Museum, Palace Square, the Mariinsky Theater and Teatralnaya Ploshchad, according to Olga Melnikova, spokeswoman for the Investment and Construction Fund, an organization established by the city government to administer programs associated with World Bank credits.

"But these are only the four best-known examples on the list," Melnikova said. "The complete list contains a large number of other projects as well." In total, there are 24 projects included in the program.

"The federally administered part of the credit will be for specific projects," she added. "None of this money can be disbursed until the city administration has finished and presented final documentation of the plans."

And to receive the $100 million targeted for St. Petersburg's administration the city will have to do even more. The agreement requires the city to pass a group of six laws regulating the construction sector and another eight laws concerning property and land usage.

"In general, the reforms are aimed at liberalizing the construction and renovation processes," said Lev Sovulkin, a senior analyst with the Leontieff economic research center. "They're also intended to remove some of the bureaucratic formalities in the process of approving projects, allowing companies to enter the construction sector more easily."

He added that it would be difficult to judge the amount of time needed: "If the World Bank pins the credits on these reforms, then it has to audit the results, which will take time."

The specifics of the program will be ironed out in six days of talks between the city administration and a World Bank mission, which arrived in St. Petersburg on Thursday.

According to Melnikova, if the mission approves the city's reform program and gives the credit, it will be spent on works included in the city's investment program. But she could not provide specific examples of the projects involved.

"The money will definitely go to reconstruction projects in the city's historical center," she said. But as to "exactly which specific projects, that will be decided by the city administration."

Funds from the 1997 credit were used in a number of reconstruction projects in the city including the Cappella Courtyards, along the Moika River near the State Cappella, and city block 130, which is bordered by Nevsky Prospekt, Vosstaniya Ulitsa, Ulitsa Mayakovskogo and Ulitsa Zhukovskogo.

One part of the project involved modernization of the utilities infrastructure under Nevsky Prospekt, as well as improving lighting and traffic-control systems, and repaving the sidewalks.

World Bank representatives were unavailable for comment. But, in a March interview with The Moscow Times, Felix Jakob, project manager for the World Bank's Urban Project in Russia, said the bank's appraisals of the usage of previous funds was positive and the city had done a "good job" with the money.