From roads of ruin to roads to prosperity
The Transport Ministry says its new strategic plan will bring order to the system and ownership of all Russian roads. The new state entity will use budget money and hold auctions to build and manage toll roads. By 2020 the government plans to double the number of kilometres under asphalt, investing over $US 250 billion in building and reconstruction.
“Just three years ago Public Private Partnership was a bad term in Russia. Now we have already set up pilot projects in which private business invests into infrastructure projects owned by the government. We are already building toll roads. So we are seeing investment, though maybe just not as much as we want so far,” said Aleksandr Misharin, Deputy Transport Minister.
First Deputy Prime Minister Dmitry Medvedev confirmed that a state joint-stock company would oversee the construction projects and would be financed by issuing transport bonds.
Meanwhile, experts say half of Russia lacks roads. Five regions have no access to federal routes at all. Altogether, ineffective roads are costing Russia’s economy up to 10 per cent of GDP.
Dmitry Luchshy, owner of a distribution company, says the cost of transportation adds as much as 50 per cent to the cost of final products in Russia. That’s three times more than in developed countries.
“A few kilometres from Moscow and the roads are not lit up at all, you go into complete darkness. The transport system here is dangerous. We still have lots of bandits on the roads. In some regions some racketeers just approach the driver and ask for a hundred dollars because he passes their territory. There is no any control, any unified system and the drivers themselves lie about their expenses on the way, cheating on the businesses they work for,” he said.