Russian president Vladimir Putin unveiled plans to spend nearly $14 billion on three large rail and road projects to ease transport bottlenecks and stimulate a slowing economy.
The trans-Siberian railway, which links Moscow to the port of Vladivostok in Russia’s Far East, will be upgraded to become the main artery linking Europe to the Asia-Pacific region, Putin announced at the St. Petersburg Economic Forum.
European rail operators and freight forwarders have increased use of the railway over the past year, but it has an extremely small share of the Europe-Asia market and has failed to entice major shippers to switch from ocean shipping because of limited capacity and failure to ensure reliable transit for freight trains.
The Kremlin also plans to build an orbital highway around Moscow and lay a 500 mile high speed rail track between the Russian capital and Kazan, the main city in the Tatarstan region.
“Our key challenge in the coming years is to remove many infrastructure constraints that literally stifle our country and prevent unlocking the potential of entire regions,” Putin told the forum.
Putin said Moscow is committed to using up to half of an $88 billion reserve fund for investment in infrastructure projects.
The focus on improved transport links coincides with a sharp slowdown in the Russian economy amid stalling prices for oil and gas, the nation’s main exports, and a deepening European recession.
The economy, which grew at an average of around 7 percent annually in the mid-2000s, grew by 3.6 percent in 2012 and only 1.6 percent in the first quarter of 2013, the slowest since 2009.