«High-speed Railway»
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13 october

Russia and China execute a Memorandum of Cooperation in high-speed railway sector

The parties will design Moscow-Beijing Eurasian High-Speed Transport Corridor. MOSCOW, October 13. /TASS/. Russia and China are going to cooperate in the field of high-speed railway development. The Memorandum was signed today by the Ministry of Communications of the Russian Federation, Russian Railways, National Development and Reform Commission of China, and China Railway Corporation, says the Russian Railways' communication. According to the document, the parties will design Moscow-Beijing Eurasian High-Speed Transport Corridor to include Moscow-Kazan high-speed railway line (HSR) as a high priority project. In particular, the Memorandum contemplates cooperation in design, construction, maintenance, equipment supplies, investment and financing. The Chinese party is willing to consider the participation on a PPP basis, through equity or debt financing, and may propose appropriate technologies and localisation of train and spare part production in Russia. The Russian party is willing to consider the use of Chinese high-speed communication, construction and equipment production technologies. As Alexander Misharin, First Vice President of Russian Railways, said earlier, Chinese investors are willing to invest RUB400 bn in the Moscow-Kazan HSR project. In July, Russian Railways negotiated the HSR construction with Chinese investors. Potential project partners include China Investment Corporation, who, beside Moscow-Kazan HSR project, is also a potential partner to the overall Moscow-Beijing Eurasian High-Speed Transport Corridor project. Also negotiations were carried with representatives of CREC, a Chinese construction engineering company, and its subsidiary CREEC. Moscow-Kazan HSR. Moscow-Kazan line will be about 770 km long with trains travelling at speed of up to 400 km/h and stations at each 50-70 km. Travel from Moscow to Kazan will be 3.5 hours against the current 14 hours. The total value of construction is estimated at RUB1,068.5 bn, including infrastructure and train costs. Russian Railways proposes to use a concession framework for Moscow-Kazan construction. Concessioners' share of the project equals RUB684.4 bn. The concession will provide for RUB317  bn of budget subsidies at the construction phase. It is assumed that concessioners will invest RUB43 bn of own funds and raise RUB225 bn of loans. Infrastructure bonds issue will generate RUB100 bn. Payback will be ensured by infrastructure charges payable by carriers. Russian Railways' share of the project equals RUB384.1 bn. Is it planned to invest the Sovereign Wealth Fund's money in RZD's privileged shares to raise RUB150 bn. Issue of RZD's debt securities secured by the Russian Pension Fund should generate RUB139 bn, and a contribution to RZD's authorised capital will equal RUB95 bn (including RUB64 bn from the federal budget and RUB31 bn of RZD's own funds).

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