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. Last Updated: 07/27/2016

Putin Hikes Road Spending by 25%

Ria-NovostiPutin with Ivanov, left, and Levitin speaking at a meeting on the transportation sector Tuesday in St. Petersburg.
The government will increase spending on building roads by 25 percent to $16 billion this year, Prime Minister Vladimir Putin said Tuesday on his latest trip to discuss the state's plans to support various industries.

Putin traveled to St. Petersburg, home to one of the country's most ambitious road programs, to announce that private investment has slid on the project and to discuss the outlook for the rest of the transportation sector.

He said the state will boost spending to support jobs and future economic growth.

The state will make up for private investors in the construction of the 50-kilometer toll road in St. Petersburg, Putin's native city, by allocating 20.6 billion rubles ($617 million) this year and next, Putin said.

"Unfortunately, private investors are not an option in modern conditions," Putin said.

The city of St. Petersburg said it would spend 6.6 billion rubles as previously promised on the road over the same two years.

The road -- called the Western High-Speed Diameter -- is scheduled for completion in 2013, contractors told Putin at the meeting, Interfax reported. Estimated to cost 213 billion rubles, it will be the first toll road in the country.

Construction started in 2006 and was originally planned to end in 2011.

A call to St. Petersburg's construction company Mostotryad No. 19, which leads a consortium of private contractors for the projects, went unanswered Tuesday afternoon.

As a measure to stimulate economic growth at a time when private investors are rolling back spending, the government increased the budget for road building by 100 billion rubles to 550 billion rubles this year, Putin said.

Similar measures will apply to a range of other industries as the state taps its huge cash reserve from the past oil boom, the Reserve Fund.

Putin has used meetings with representatives of various sectors -- such as Tuesday's event -- to announce efforts to support the economy. He has met aerospace, coal and oil managers and workers in recent weeks. Next in line is the nuclear power industry, which will come under discussion in the Tver region on Wednesday.

Putin said Tuesday that the government was considering proposals to provide an additional 100 billion rubles to the state-owned Russian Railways company for upgrading its rolling stock.

"There are various opinions and various approaches," Putin said. "However, we have to find some kind of solution. This would mean additional orders for domestic equipment makers and the preservation of thousands of jobs."

The government has already decided to increase the company's capital by 50 billion rubles as compensation for a partial freeze on transportation rates this year.

Participants at Tuesday's meeting included Deputy Prime Minister Sergei Ivanov, Transportation Minister Igor Levitin and company executives such as Russian Railways chief Vladimir Yakunin.