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31 Aug, 2007 03:06

Private metro stations in Moscow?

The Moscow government opened a new central metro station on Thursday – a decade behind schedule and millions of dollars over budget.

Now analysts are pointing to a privately-financed station being built on the outskirts of the capital as a model for Russia's public transport system.

Construction of the long-suffering Trubnaya station, which finally opened its doors was started back in 1984 but the financial crises meant the project was repeatedly halted. Workers told RT that as much money was wasted on conserving the project in a dormant state as would have been need to finish building it.

In the West so called Public-Private Partnerships, or PPPs, have been used on the likes of toll roads in Ireland and the London Underground for years. A private company funds the investment, services or even runs the whole infrastructure in return for a percentage of profits.

The Moscow Metro admitted to RT that the idea makes sense.

“Finance for the station was provided by the government, which several times delayed and then completely halted building at the end of the '90s. It’s logical that businesses benefiting from customers brought to them by public transport  should contribute to its construction,” admitted Sergey Matrosov from Mosmetrostroy construction company.

Now the government has announced that Russia’s biggest exhibition centre, Crocus Group, will pay the $US 20 MLN construction costs for a metro station to service the expo from 2009. Analysts say this is the future.

“Russian Railways is an interesting example because a couple of days ago the Ministry of Transport announced it’s supporting a $US 536 BLN investment to 2030 which makes it $US 23 BLN per year which is a huge sum. According to that plan the government will finance 25% and the rest will come from private investors, and I think this is one of the largest PPPs,” shared Eduard Faritov, transport analyst of Renaissance Capital Group.

The argument for PPPs is that private companies tend to be more efficient at allocating and spending budgets than governments.

Influential daily Gazeta revealed this week that the Moscow government’s budget is now bigger than London's, spending billions of rubles on the city’s media, an airport in Nizhny Novgorod and even bankrolling twin-towns.

The Trubnaya station clogged up with water and dirt after the government ran out of money and had to be rebuilt which meant it went over budget. As scrutiny grows on government spending, and business competition makes public access a key differentiator, the future of Russia's infrastructure may lie in private, not public, hands.