Last week at the St. Petersburg Economic Forum, President Vladimir Putin announced plans to uncork the National Welfare Fund, or NWF, and spend 450 billion rubles ($13.6 billion) on three major infrastructure projects in the near future.
One of them is a new high-speed rail line to connect Moscow and major cities to the east: Vladimir, Nizhny Novgorod, Cheboksary and Kazan.Right now one can find flights between Moscow and Kazan for $69. We wonder how the financing plans will fare with that reality;
Russian Railways ... officials stress that at this point what they have for the project is preliminary calculations and political will. As for financing, it is clear that even if the whole sum announced by President Vladimir Putin were to materialize for the Moscow — Kazan rail line, it will only cover roughly half of the needed amount.
Seventy percent of the total sum required to build the line is meant to come from state funds, and the rest is to be provided by private investors, banks and other sources.....The money could originate from other sources as well, officials have said. This includes budget funds, money coming from the NWF, the Pension Fund, the Russia Direct Investments Fund, investments from companies — Russian Railways being one of them — as well as loans from state and private banks, said Alexander Misharin, first vice-president of Russian Railways and head of Skorostniye Magistrali, a subsidiary of the state rail monopoly which is in charge of high-speed rail development.
"We have to start the project and then the cash will grow around it," Misharin said.Of course, that's the way it always happens, build it and they will come. Says so in all the prospectuses for business ventures--which is what a railroad is.