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. Last Updated: 07/27/2016

City Promises Funds For Manezh Project

The Moscow city government announced Wednesday a project to finance the construction of a colossal mall under Manezh square, promising to contribute $15 million in city funds toward the project's estimated $1 billion price tag.

The city is counting on foreign investors to pay for the rest of the ambitious project, which experts say, seems unrealistic.

Construction work on the 135,000 square meter "underground city" has already started. The mall would be six stories deep, and would include a museum, parking lots, restaurants and possibly casinos and office space, according to Irina Merenkova, an official of the city department in charge of Moscow's central area restoration.

Merenkova said that the mall, which will require the displacement of some 480,000 cubic meters of soil, would be completed before September 1996 and opened in honor of Moscow's 850th anniversary celebration. Igor Marinichev, head of the city's foreign investment department, said that under a decree signed last week by Mayor Yury Luzhkov, the city will create a joint-stock company, Manezhnaya Ploshchad, to build and run the underground mall.

Foreign investors will be offered shares in the company to raise money for construction, while the Moscow government will retain a 25 percent stake.

Financial experts expressed skepticism that the city would be able to attract the investment, saying that Luzhkov's tight control over city property and businesses will scare the money away.

"In order to attract foreign investors to that sort of project, foreign investors should be given very strong guarantees," said Omer Kukner, managing director of the Turkish-Russian Yapi Toko Bank.