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Kazan plane crash highlights troubled topic of Russian transport infrastructure Kazan bound flight from Moscow crashed Sunday night near Kazan airport. The accident took lives of 50 people including son of Tatarstan president Irek Minnehanov and head of Tatarstan FSB Alexander Antonov A catastrophe in Kazan is tragic. By coincidence it occurred at a time when the policy makers are discussing Kazan transport routes. Whether or not to build a rapid train track link and to launch fast train service between Moscow and Kazan. Alternative project is ironically focuses on connecting distant Russian parts by air and to invest into airport infrastructure and airlines. A discussion is very heated as lots of money at stake. Head of Russian railways Vladimir Yakunin who was a target of email scam last summer, that made public believe that Yakunin was fired, connected the scam to the discussions around infrastructure including spending on Kazan rapid train link to moscow. Just less then 2 weeks ago at a discussion hosted by Russian president, the decision to finance the rapid rail link to Kazan was postponed. Igor Shuvalov commenting to Kommersant journalist said that part of the problem with Kazan railway link its ballooning budget which grew from 800bn Rub to 1.03 trln (almost US$30 bn) The same meeting focused on financing by the national welfare fund of a competing infrastructure project renovation of airport infrastructure. The key players owning Russian airport infrastructure are Airports of Russia owned by billionaire Viktor Vekselberg, and Novaport owned by a shadow tycoon Roman Trotsenko. The decision has not been taken yet, but it looks like airport lobby is getting an upper hand in getting its projects financed. Russia is switching into investing mode. The infrastructure under spending of the 90ties totaled to almost 700bn$ US (including road infrastructure). This money will need to be replaced. Unfortunately, most of the capex that needs to be spent will not generate additional revenues but will be able to secure existing business in the same manner as new Gazprom’s pipelines to europe. The projects that generate additional revenues are more difficult to find and approve. Midlincoln Research research@midlincoln.com | |