High-Speed Railway from Moscow to St. Petersburg: Project of the Century or Giant Fraud?

Nikolai Iakoubovski for OMRI

01/29/97

The 1997 budget, which the State Duma passed in the fourth reading on 24 January, includes a clause allocating 9.35 trillion rubles ($1.7 billion) to provide state guarantees for investors in a project to build a high-speed railway connecting Moscow and St. Petersburg. The day before the budget vote, however, Aleksei Yablokov, chairman of the State Commission for ecological inspection, accused the construction company of deceiving the public. Yablokov, who has long opposed the project, said he suspected that the railway will never actually be built and that the very project may be just a fraud to obtain state subsidies and compensation for investors, NTV reported on 23 January. The High-Speed Main Lines joint-stock company, which is 92% state-owned, plans to build the 659-kilometer railway, 100 kilometers of which will go through the Valdai National Park. According to Izvestiya on 26 September 1996, the project has the backing of Prime Minister Viktor Chernomyrdin, First Deputy Prime Minister Aleksei Bolshakov, Minister of Railways Anatolii Zaitsev, Moscow Mayor Yurii Luzhkov, and Anatolii Sobchak, the former mayor of St. Petersburg. Before they joined the cabinet, Bolshakov and Zaitsev served on the board of directors of the High-Speed Main Lines company.

Meanwhile, the Ministry of Economics, the State Duma Committee on Ecology, the World Bank, and the European Bank for Reconstruction and Development have all opposed the high-speed railway project. Ecologists argued that the project would significantly damage the protected areas in the Valdai National Park, where the Volga, Dniepr, and Severnaya Dvina rivers originate. The Ministry of Economics concluded that the railway will never earn enough to compensate for its construction expenses, which are estimated at up to $15 billion, Russian Public TV (ORT) reported on 12 September 1996. In addition, critics claim that a much less expensive plan to modernize the Oktyabrskaya railroad would have made travel between Russia's two largest cities almost as fast as a brand-new high-speed rail link.


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