Press release

Total investment in infrastructure projects in Russia is expected to reach USD 969b by 2030

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  • Overall, 325 infrastructure projects have been announced for implementation by 2030; the majority are planned to be realized over the period of 2015 through 2020
  • The bulk of investment will go into infrastructure projects co-financed by the government and private businesses (PPP)
  • Sixty-nine percent of respondents say that ensuring transparency of tenders would make investment in Russian infrastructure more attractive

Moscow, 22 May 2014. Total investment in infrastructure projects in Russia over the period of 2009 through 2030 is expected to reach USD 969b[1], however legislative reforms and more transparent decision-making are required to facilitate growth, according to the results of EY's The road to 2030: a survey of infrastructure development in Russia. The survey was conducted by analyzing opinions of 150 respondents who represent businesses and government bodies and are key decision-makers with experience in infrastructure projects in Russia. 

According to the EY survey, 325 infrastructure projects have been announced for implementation in Russian through 2030. The majority (51%) are planned to be realized over the period of 2015 through 2020. At present, 59 projects have been completed, 189 are in progress and another 77 will be implemented in the future. 

Public investment in infrastructure projects will amount to USD 284.4b; overall, the government plans to finance 182 projects: 106 of them are in the power and utilities sector, 36 involve construction of roads and bridges, 22 relate to railway transport. In addition, public financing is intended for nine projects in air transport and nine projects in inland water transport. 

According to EY forecasts, by 2030 investment in infrastructure projects financed by Public Private Partnerships (PPP) will reach USD 676.7b. The bulk of this investment will go to infrastructure projects involving construction of roads and bridges (40), air transport (24), railway transport (21), inland water transport (14), power and utilities (13). 

Maximum investment - USD 462.4b by 2030 - is expected in railway transport infrastructure projects. Railway transport is the most attractive Russian infrastructure investment destination. 

Survey participants believe that project planning and regulation have to be transformed in order to raise the investment appeal of infrastructure projects. About 72% of respondents consider insufficiently transparent project decision-making to be a major obstacle hindering the industry's development. Meanwhile, 69% of survey participants share the opinion that ensuring the transparency of bidding procedures can make investment in Russian infrastructure more effective. Moreover, 68% indicate insufficient guarantees of recovering investments to be a major bottleneck hampering private investment in infrastructure projects. 

Survey participants are wary as to financing infrastructure projects. The majority of them (55%) consider that megaprojects should be based on careful and balanced planning of regional infrastructure; 52% of respondents believe that the National Welfare Fund should finance only those infrastructure projects which meet stringent criteria; and only 7% of survey participants are of the opinion that megaprojects should be implemented at any cost. 

EY experts note the importance of developing initiatives aimed at raising the investment appeal of infrastructure projects which contribute to economic growth in Russia. 

Joe Watt, EY Chairman of the Management Committee and Managing Partner for the CIS, says: "Infrastructure development emerges as a priority for Russian economic policy. At a time of deteriorating macroeconomic conditions, large-scale national investment is necessary to diversify the economy and make it less dependent on the extractive sector."

Alexander Ivlev, EY Managing Partner for Russia, says: "We are certain that investment in infrastructure projects can boost Russia's economic development in the nearest future. Favorable conditions for developing the infrastructure can contribute strongly to building a better business environment and raising living standards in Russia in general."  

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[1] EY's estimate based on data from open sources (mass media, white papers on government strategy and federal programs).