PRESS: German co may give 1.5 bln euros on Russian high-speed rail

MOSCOW, Jul 21 (PRIME) -- The German Initiative Consortium may allocate at least 1.5 billion euros on construction of infrastructure for Russia’s high-speed Moscow–Kazan railway and at least 700 million euros on purchases of high-speed trains, business daily Kommersant reported Thursday citing sources.

Previously, Russian Railways First Deputy CEO Alexander Misharin said that the consortium, which includes industrial conglomerate Siemens, may allocate up to 2 million euros on the project.

A source told the business daily that the management of Russian Railways and Dietrich Moller, head of Siemens Russia, held a meeting on July 6 and discussed the consortium’s offer, which only covers the second, Nizhny Novgorod–Kazan section of the railway. The section’s total cost is estimated at 501.4 billion rubles, and the construction concessioner’s equity is expected at 75 billion rubles, Kommersant reported.

Russian Railways also received a letter from Jochen Eickholt, head of the Mobility Division at Siemens, in which he confirmed the German Initiative’s readiness to provide more than 2 billion euros of financing secured by Euler Hermes export credit agency, to enter the equity of the concession company, and to ensure transfer of technologies and localization of rolling stock production, the business daily said.

The 1.068 trillion ruble 770-kilometer Moscow–Kazan railway, part of a planned 7,000-kilometer railroad between Beijing and Moscow, is supposed to reduce the travel time to 3.5 hours from 11.5 hours by regular railway. China earlier agreed to lend an equivalent of 400 billion rubles for the project and will also provide 52 billion rubles of equity financing and an additional U.S. $1 billion.

(63.4183 rubles – U.S. $1)

End