PRESS: Govt suspends construction of Northern Latitudinal Railway

MOSCOW, Mar 17 (PRIME) -- The Russian government has suspended construction of the Northern Latitudinal Railway due to a worsening economic situation, Kommersant business daily reported on Thursday citing minutes of a March 9 government meeting chaired by Deputy Prime Minister Marat Khusnullin.

The project has a 300 billion ruble deficit of financing, and there are risks for a concessioner to borrow money. Taking into account the high risks for raising the necessary financial resources under the current macroeconomic conditions, the project has to be delayed, the daily reported.

The government also plans to redirect a 50 billion ruble infrastructure loan, which was already approved, to other priority infrastructure projects.

Still, the work on the Northern Latitudinal Railway will not be suspended entirely. The government ordered the subsidiaries of Russian Railways and Gazprom to continue designing parts of the railway and receiving reviews of the state expert review board. The Transport Ministry was ordered to analyze the cargo base taking into account the ongoing redistribution of cargo flows.

The Northern Latitudinal Railway encompasses construction of a 292.3 billion ruble railway in the Arctic zone to transport 23.9 million tonnes of cargoes per year. The 3-year investment program of Russian Railways envisages a 45.5 billion ruble investment in the project, including 13.5 billion rubles from the National Wealth Fund and 24 billion rubles from the Yamalo-Nenets Autonomous District.

(108.0521 rubles – U.S. $1)

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