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Evraz, Kuzbassrazrezugol, Sinara discussing high-speed railway financing

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Evraz, Kuzbassrazrezugol, Sinara discussing high-speed railway financing

Steelmaker Evraz PLC, coal miner Kuzbassrazrezugol - Vzryvprom OOO and the investment arm of CJSC Sinara Group are discussing the potential financing of JSC Russian Railways' planned high-speed rail link between Moscow and Kazan, Russian RBC Daily reported Dec. 13, citing two anonymous sources.

Sinara and Russia's largest locomotive manufacturer, JSC Transmashholding, filed preliminary applications with Evraz and Kuzbassrazrezugol and are reportedly awaiting a final decision from the state on the amount, timing and procedure for co-financing for the project.

Evraz counts rails and wheels among its steel products, while major coal producer Kuzbassrazrezugol relies on Russian Railways to freight its output.

The connection between Moscow and Kazan to the east, expected to cover nearly 800 kilometers and originally set to begin in 2018, is the first segment of Russian Railways' proposed high-speed link between Moscow and Beijing.

Earlier in the year, Russia's Ministry of Economic Development included the long-awaited railway in a list of priority projects that would start by 2024, but the problem of financing remains unresolved.

Russian Railways estimates the cost of the Moscow-to-Kazan section of the 7,000-kilometer line at 1.695 trillion Russian rubles. The state is expected to invest 700 billion rubles in the form of a nonrefundable subsidy.

Despite plans to raise funds from commercial banks and Chinese investors, not a single binding agreement has been signed.

As of Dec. 12, US$1 was equivalent to 66.34 Russian rubles.