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Private companies have retained unyielding interest in infrastructure projects – although, admittedly, they are not ready to join such projects “from scratch,” as leading expert at Finam Management Dmitry Baranov said in his interview aired on RBC TV.

The recent crisis has worked no miracles in Russia. The nation failed to take advantage of the hard time to settle its infrastructure problems. Some experts attribute this largely to the lack of political will and money. “In our estimates, if we consider the aggregate revenue of Russian companies engaged in the infrastructure sector, construction is likely to have slumped 30-35 percent in 2009,” IFC Metropol analyst Andrei Rozhkov said.

Meanwhile, experts point out that the authorities were able to support the real economy through infrastructure projects. The problem is that it is almost entirely the government’s task to ensure material support for infrastructure, and the already weak public-private partnership mechanism gave way. Private companies are ready to invest, but only after the government does first, and with more modest contributions. To make things worse, legislative barriers have not been removed.

According to Rozhkov, the processing of documents and determination of terms and conditions for strategic investors to take part in such projects also raise many questions. The payback periods, which are currently rather long, add to the problems for concessions.

Last year, a special fund was set up to finance infrastructure projects in Russia and the CIS. Although it already had EUR 200m on its accounts by August 2009, it abstained from any large projects. In general, the idea of creating special infrastructure funds is commendable, some experts say. Yet, it should be made perfectly clear that the success of such projects is not always dependent on the amount of money involved. For the fund to work, a streamlined system should be developed: what investments should be made, and in what projects, and what kind of return is to be expected. China has set an example to follow, since last year it led the world in the construction of infrastructure facilities, and by all appearances, it does not plan on stopping anytime soon.

Analytical department of RIA RosBusinessConsulting