Install

Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

Yakunin Urges Fast-Track Spending

Itar-TassPutin addressing Vladimir Yakunin, far right, during the railways meeting at his Novo-Ogaryovo residence on Tuesday.
NOVO-OGARYOVO, Moscow Region -- Russian Railways, or RZD, will need to invest about 10 trillion rubles ($390 billion) by 2030 to support existing infrastructure and build new railway lines, company president Vladimir Yakunin said Tuesday.

Speaking at a meeting with President Vladimir Putin, Prime Minister Mikhail Fradkov, Economic Development and Trade Minister German Gref, presidential aide Igor Shuvalov and other officials, Yakunin presented a strategy to develop railways through 2030. RZD will be able to provide about $204 billion of the required amount, Yakunin said, without specifying where the money would come from.

Under the two-phase plan, the country will see a complete modernization of rail transportation by 2015. The second phase includes the creation from 2016 to 2030 of more than 20,000 kilometers of new tracks, including a link between Sakhalin and the mainland, Yakunin said, according to a transcript posted on his company's web site.

Yakunin argued that the existing railway network could serve to hinder economic development by 2011.

Putin said at the meeting RZD needed to attract private investors that could help upgrade infrastructure as well as create and float subsidiaries to attract capital. Raising tariffs -- an approach RZD has advocated in the past -- would not help, he said.

"We need to attract private investors, finding wider application for private-public partnerships," Putin said, adding: "People should not be paying for the industry's restructuring out of their pockets."

Yakunin said his company hopes to get partial financing for some of its projects from the state budget. He added that $140 billion would be required to expand the Trans-Siberian Railroad, a sum that will not be covered by funds allocated for infrastructure projects out of the state investment fund.

Speaking about future subsidiaries, Yakunin said RZD would first create a subsidiary to test the process, adding he hoped it would raise from $2 billion to $4 billion on the market.

At the meeting, Yakunin, who is considered by some analysts as a presidential hopeful, sought to emphasize the role of the railway network, saying one of the railroads' functions was to protect "national sovereignty and the country's security." Replying to a reporter's question about the company's projects in 2012, Yakunin retorted that he could not guarantee he would be "a railroad employee until 2012."

Yakunin also set out plans for the construction of a high-speed railroad between Moscow and St. Petersburg and, possibly, between Moscow and Sochi, to be completed between 2012 and 2014.

Yelena Sakhnova, a transport analyst at Deutsche Bank, was optimistic about the possibility of the Moscow-St. Petersburg link being completed by 2014.

"Given that we are now in 2007, I think it could be done even quicker. Six years for building a high-speed route between Moscow and St. Petersburg even seems too much," she said.

Yakunin said he had consulted on the possible cost of building the high-speed railroads with Italian firms, who told him it would cost about 100 million euros ($134 million) per kilometer.

"I think it will be cheaper here," Yakunin said.

Staff Writer Max Delany contributed to this report.