PRESS: Russia may delay 131 bln rbl Northern Latitudinal Railway

MOSCOW, Nov 30 (PRIME) -- Russia may delay construction of a 130.5 billion ruble Northern Latitudinal Railway, or the Obskaya–Salekhard–Nadym railway, as the government has delayed financing of land purchases for the railway, Vedomosti business daily reported on Friday citing sources.

The Federal Railroad Agency has signed a concession agreement to build the Northern Latitudinal Railway with several companies, including Russian Railways and gas giant Gazprom, in October. Under the deal, the agency should buy lands for the railroad, but the recent amendments to the 2019–2021 budget draft left the agency with no money for that, and spending might be delayed till after 2021, sources told Vedomosti.

A source, who participated in the government meeting said that the government earmarked 900 million rubles for the lands, not a large or critical sum, so the government may be able to find them, or a project company or Russian Railways may raise a bridge loan. EY Partner Dmitry Kovalyov told the business daily that if a concessioner has to work on financing, it will take much time and delay the project.

A syndicate of Sberbank, VTB Bank, Gazprombank, VEB.RF, and the Eurasian Development Bank are to provide the bulk of financing for the project, which needs a 97.2 billion ruble loan.

A representative of VTB Bank said that the bank will discuss possible solutions with other banks of the syndicate if the information about additional 900 million rubles is true, while a representative of the EDB said that it is ready to work on a bridge loan or other financing if the concessioner asks for it.

(66.6342 rubles – U.S. $1)

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