«High-speed Railway»
Рус / Eng


25 may

Infrastructure: the Mission is Feasible

It's unlikely that somebody will argue about the fact that Russia today has to modernize its infrastructure. However, Russia with few exceptions can’t attract required foreign investments.

At that, there are still several pressure points deserving attention:
  • Procedures of delivery contracts formation are aimed foremost on a price but not on competence of a contractor and, in general, countenance an excessive risk in conditions when there are no adequate penalty system for sub-quality work;
  • During projects development methods of financing are not considered. As a result projects are created which can’t attract investments;
  • The importance of a project discipline and control mechanism is underrated.

In future even more fundamental changes are waiting for us, The most essential change concerns the basis of Russian economics and floating. The main result of the global financial crisis is the change in the international bank regulation (Basel-3). Acceptance of these regulations will make long-term projects financing profitless for regulated banks without government support (for example, in the shape of export-credit guarantee). Such guarantees are provided only on projects conforming specific conditions and can’t cover all demands for financing. More than that, according to new regulations for receiving of Western financing the biggest part of design works should be executed by non-Russian contractors.

And here Russia has an opportunity to solve three problems at once: to connect investment programs of retirement funds, emergency funds assets forming through the income from oil sale and the demand for infrastructure projects financing. Two new government regulations (No. 1016 and 1017) create a basis for such relation providing state guarantees, for example, for infrastructure projects obligations. Retirement funds can buy these issues because they conform investment standards of mutual investment funds. 

These are just light signs of changes in the world of project financing where it is necessary to pass from talks to real results.

Source: “Vedomosti

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