16 Mar 2010 14:30

Govt provides guarantees on three road construction projects

NOVO-OGAREVO. Mar 16 (Interfax) - The companies taking part in three road construction projects will receive government guarantees under a resolution signed by Prime Minister Vladimir Putin.

The projects include a road bypassing Odintsovo outside Moscow, the Moscow-St. Petersburg highway and the Western expressway in St. Petersburg.

"The resolution that has been signed provides guarantees to the companies that are participating in construction of state infrastructure together with the government. This means roads, railroads, ports, airports, and runway installations. This resolution opens up opportunities for operations by the state and the private sector under concession agreements," Putin said at a meeting with Transportation Minister Igor Levitin in Novo-Ogarevo on Tuesday.

"The resolution includes attachments detailing the financing arrangements for three specific [road construction] projects," he said.

The government guarantees will enable the concessionaire to conclude an agreement with the Finance Ministry to place state-guaranteed financial instruments on the market, Levitin.

Russian and foreign banks are eligible to participate in the program, he said.

Levitin said he hoped the interest rate on borrowing by the concessionaire would make it possible to meet the terms of the concession agreement, "because the concessionaires won the tenders based on a specific trip cost," he said.

The private investor participating in the project should invest no less than 25% of project costs, Putin said.

Putin warned against cutting corners during project implementation. "I ask that you closely monitor compliance with Russian law in implementing infrastructure projects, including compliance with environmental legislation. All the required studies must be carried out as scheduled," Putin said.