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. Last Updated: 07/27/2016

Mayor Unveils Moscow of the Future

Imagine a Moscow where tree-filled parks stretch across the street that was once the traffic-jammed sprawl of Novy Arbat. Imagine an underground three-story complex running beneath that greenery, complete with parking spaces and tunnels to carry the traffic that once blocked the street.

Imagine as well an underground shopping complex that stretches from Manezh Square up and along the length of Tverskaya - and you'll begin to get a notion of just some of the big ideas that Moscow's most imaginative citizen, Mayor Yury Luzhkov, is capable of.

In fact, in a presentation of the Moscow government's so-called "general plan" for 2000 to 2020 entitled "Moscow - a Step into the Third Millennium," there was only one project that Luzhkov said his city of dreams wasn't yet able to afford.

"We don't have enough money to build Disneyland yet," the mayor said, in answer to the hopeful inquiry of a 12-year-old journalist from Pionerskaya Gazeta at a news conference Friday.

"But we still have 300 hectares in reserves," he added. "If we find a site that has potential maybe we'll start."

The city government proudly proffered its shiny architectural vision for 21st-century Moscow at the exhibition's Friday opening. Row upon row of architectural models cram the hall of the Manezh exhibition complex - just one of the speedy reconstruction feats completed by the city this decade. Among the exhibit items are mapped-out plans for condominiums combining housing with sports complexes, spanking-new glassy apartment buildings paired with on-site trade centers on the outskirts of Moscow, and a new business site to replace the smoke-belching riverside headquarters of Mosenergo.

And the funds for all this architectural progress? Amid the po mp and circumstance of Friday's presentation, the usually vociferous mayor adopted a tight-lipped stance regarding the city budget's crushing debt burden and the hefty repayments Moscow has to make on over $600 million of foreign debt falling due next year.

"Any talk about [the city government] having to fold our construction plans next year is sheer speculation," he thundered Friday. "Meeting external debt payments will have no impact on the rate of construction next year."

Luzhkov's words may hold some weight. City Hall is currently steamrolling through construction projects at a rate of 300 million hectares a year.

Luzhkov, a self-styled khozyaistvennik who prides himself on getting things done, has staked his political reputation on Moscow's progress, using the city's transformation as a trademark of his can-do leadership.

But while he threatened even higher construction rates for next year, City Hall officials admitted privately later that the government was going to have difficulty making ends meet.

"Next year is going to be very tough for the city," said Yury Roslyak, the city government's deputy premier and the head of the City Hall department for economic policy and development.

"But it has less to do with our ability to pay off our debts than with the federal government's announcement of default last year. That made things a lot more complicated for us with our foreign investors," he said in an interview.

Moscow is due to make payment in full on a $500 million Eurobond that matures in May. The acting head of the municipal debt committee, Sergei Pakhomov, said in a recent interview with Kommersant that the city could face default on the Eurobond next year.

"It is almost impossible to reach agreement on restructuring a Eurobond," he was quoted as saying. "That means the only way left for us to meet our obligations is to issue new bonds on international markets."

While Pakhomov admitted that these talks had so far failed to get off the ground, Roslyak said Friday that the government had already started issuing debt paper internally to domestic buyers to help fund "the general plan."

"We've planned to issue 9 billion rubles' [$343 million] worth of city paper to fund the Moscow government's share of the construction plan for next year," he said.

Other funds are set to be found from the city's road fund, its housing fund - which has been created by ploughing profits earned through the government's commercial construction projects into an account earmarked for the building of municipal housing - and from private investors, Roslyak said.

While private investors usually provide about 50 percent of the funds required to realize Luzhkov's grand schemes, crisis has left an impact on several landmark projects Luzhkov had planned - the $12 billion city business center project among them. The 60,500-square-meter complex - dominated by a glass tower reaching heights of 38,100 meters - was originally due to be completed in part by this year.

But as the city government has searched its pockets to find more funds to push through construction, private investors have been few and far between.