Russian PM says yes to road to Kazakhstan

RUSSIA / FSU POLITICS - In Brief 09 Jul 2019 by Alex Teddy
A new road called the Meridian Highway has been given the go ahead by Russian Prime Minister Medvedev. This will be a toll road that will run from the EU across Russian territory en route to Kazakhstan. The 2000 km long road will start in Belarus. The total cost is estimated at USD 9.4 billion by the Russian Government. That is widely suspected to be an underestimate because bridges and overpasses have not been taken into account. The Russian Government has a habit of underestimating costs. The government shall now assist the structure responsible, Russian Holding Company, in securing investments. The government will not be picking up the bill, however. The idea is that this will be the first solely Russian project of this nature. Russian Holding Company wants the government to promise it at least USD 550 million per annum if, due to unforeseeable circumstances (such as closed borders) revenue dries up. The head of Russian Holding Company suggests that the road will take 600 trucks a day. Again, this is an optimistic estimate intended to make the project alluring to investors. Russia's 2018-24 national projects are continuing in various guises - though they are already running into some difficulties. As we said before, they are overambitious and have already been scaled back - at least seemingly until the National Wealth Fund is formally topped up to 7% of GDP. Moscow is not keen on underwriting yet another massive project that could turn out to be a white elephant. Therefore it is seeking private investors to pony up. The downside of this project is, if it is completed, it might cause the government to neglect other roads in the region, in that Meridian provides the n...

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