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. Last Updated: 07/27/2016

The Next Big Thing: A Tunnel to Sakhalin

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The government is talking of reviving a grandiose Stalin-era project to build a 10-kilometer tunnel under the Pacific Ocean to connect the mainland to the island of Sakhalin and then adding a 40-kilometer bridge over the ocean to connect Sakhalin to Japan.

Officials from President Vladimir Putin on down have been talking up the project and suggest it could be underway by the end of next year.

They are doing so despite an unusually sour Japanese response to the idea, including Japan’s firm insistence that it will not put a dime into what Moscow says would be a $50 billion affair.

Railways Ministry officials say the ultimate plan is to lay rails from Japan to England. Valery Yudin, a spokesman for the ministry, said "several business plans" regarding the venture would be presented next month to the ministry’s top officials.

Railways Minister Nikolai Aksyoneko went a step further, telling Interfax this week that by the end of next year, his ministry "really will start construction of the tunnel under the Tatarsky Straits, which will connect the mainland with Sakhalin."

A tunnel under those straits, which are about 10 kilometers across at their most narrow point, was begun in the 1940s, and apparently workers made it almost to the half-way point.

But the project was abandoned after Stalin’s death and it was not clear this week if the digging done half a century ago could still be used.

After the tunnel is built, the plan is to hang what would be the world’s largest bridge, stretching 40 kilometers across the Pacific, from Sakhalin to the Japanese island of Hokkaido. At the moment, the world’s largest bridge is the Seti-Ohashi, a 14.5-kilometer span between the Japanese islands of Honshu and Sikoku.

Railways Ministry officials say the massive infrastructure investments would pay for themselves in 15 or 20 years. Thanks to the certain increase in cargo transit between Europe and Japan alone, Railways Ministry officials told Itar-Tass, the Russian budget could earn 20 billion rubles (about $750 million) annually.

German Gref, the economic development and trade minister, told Itar-Tass that the project would probably attract $10 billion in new foreign investment from countries looking to invest in Asia, including Japan and the United States, in the nearest future.

If so, that would dwarf the $4.78 billion in foreign investment Gref’s ministry says Russia earned in the first half of this year.

But Japan, for one, is not clamoring to participate.

"Russian-Japanese relations can be characterized by one word: stagnation," stated Japanese Foreign Minister Yohei Kono, on a visit Thursday to Moscow.

Kono had come for talks with top Russian officials about trade and also about the Kurils — islands next door to Sakhalin that were seized by the Soviet Union in the final days of World War II. Japan wants them back.

A foreshadowing of Kono’s blunt talk of stagnation was offered last week in an unusually critical interview in Segodnya newspaper with Yasahuri Kawamura, a Japanese Foreign Ministry official: Kawamura said foreign investment in Russia is all but impossible because of red tape, punitive taxes and a lack of transparency in business deals.

"The government of Japan does not intend to participate in the elaboration of this [tunnel-and-bridge] idea," said Akira Imamura, a consular official with the Japanese Embassy, in a telephone interview Thursday. "The tunnel needs very big investments. Investors need confidence in its repayment, but there is no confidence yet.

"Japan is very interested in this project, but relates to it as a dream. Let’s see what can come of it at the Railways Ministry."

Imamura added that the real problem with moving cargo from Japan to England via Russia was not a lack of monster tunnels and bridges, but everyday problems with the Trans-Siberian Railway.

"Due to big problems with safety, stability and security, Japanese companies do not want to use the Transsib. If all these problems are resolved, the Transsib could be a shorter, easier, cheaper and real route from Japan to Europe," said Imamura.

Some observers of the Russian economy expressed strong skepticism of the Tatarsky Straits tunnel and the Sakhalin-Hokkaido bridge.

"All of it is unreal," said Alexei Zabotkin, an economist at the United Financial Group brokerage.

"That sounds impossible," agreed Nina Pautova, an economist at the Russian-European Center for Economic Policy.

"It is hard to believe the reality of this project," said Yaroslav Lissovolik, an economist from the brokerage Renaissance Capital. He added that the only thing harder to believe would be that foreign investors would ever step up to finance it.