Russian government to outline medium-term infrastructure spending plans

Russian government to outline medium-term infrastructure spending plans

Today, Moscow will approve its infrastructure budget for the next five years. A large portion of the funds will go

Russian President Putin delivers his annual state of the nation address to the Federal Assembly in Moscow

Photo: Reuters/Maxim Shemetov

Today, Moscow will approve its infrastructure budget for the next five years. A large portion of the funds will go towards Russia’s transportation sector through projects such a high-speed passenger rail.

Although some classify the Sapsan line, which runs from Moscow to St. Petersburg, as a high-speed train, it is nearly half as fast as rails in other countries. President Putin has laid out ambitious goals to change this, pledging new and faster trains by 2024.

The new lines would likely bridge towns like Nizhny Novgorod and Vladimir to populous dense centres like Moscow. As Russia is one of the most sparsely populated countries in the world—with an average of only 9 people per sq. km—such connections are especially critical to maintain economic growth.

Indeed, the project would cost about $100 billion, a level of government investment that could bring Russia’s GDP up to 5th in the world. Such projections, however, are dependent on significant contributions from private industries which the Kremlin has called upon. If the project turns unprofitable, expect decreased support and an extended timeline.

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