Infrastructure Mortgages: Public-Private Partnership 2.0
15 February 2018
The Russian Investment Forum business programme continued with the roundtable ‘Infrastructure Mortgages: Public-Private Partnership 2.0,’ which was organized by the ROSINFRA Infrastructure Congress.
During the discussion, experts spoke about the advantages of a public-private partnership, the need to create new development mechanisms, and practices that have been implemented.
The roundtable was attended by Russian Prime Minister Dmitry Medvedev.
The discussion was moderated by Russian Minister of Economic Development Maxim Oreshkin. The minister noted that a balanced budget and low inflation allow for implementing new mechanisms to improve interaction between business and government. Added value is created using joint public-private partnership projects. However, the minister said that risks must be eliminated from business processes and the lowest possible cost of borrowing must be ensured. “A factor for success is to ensure positive socioeconomic effects,” Mr. Oreshkin said, emphasizing the importance and positive experience of the regions. As successful projects, he cited an airport in Rostov-on-Don, the Western High-Speed Diameter road, and Pulkovo Airport.
Keeping with the theme, Russian Minister of Transport Maxim Sokolov expressed support for public-private partnership mechanisms and concessions as a way to attract investment. He said that every rouble invested in transport generates some 5–6 additional roubles. “Transport is not only a service sector, but also a driver, a catalyst for other economic sectors, and a development multiplier,” Mr. Sokolov stressed. He said the transport industry leads the way in terms of the volume of investment. In 2017, the transport sector received a total of RUB 1.8 trillion, which makes up 2% of the country’s GDP and more than 11% of all investments in the domestic economy. Moreover, half of these funds came from extra-budgetary sources, while the rest was contributed by federal and regional budgets. Today, the country’s regions have come up with projects to improve transport infrastructure: the Northern Latitudinal Railway, the Kyzyl-Kuragino branch, Taman port infrastructure, and the Murmansk Transport Hub.
VTB Bank President Andrey Kostin said the government’s involvement guarantees a certain level of confidence in projects and lifts regulatory restrictions for attracting investments. He said banks participate in 60% of investment projects. “Unfortunately, we have a fairly large reserve of non-bank investments in our economy that remain ‘asleep’ for now, such as money from private pension funds and insurance funds. The goal is to revive these funds and involve them in infrastructure projects,” Kostin said, laying out actions for the future.
During the discussion, experts spoke about the advantages of a public-private partnership, the need to create new development mechanisms, and practices that have been implemented.
The roundtable was attended by Russian Prime Minister Dmitry Medvedev.
The discussion was moderated by Russian Minister of Economic Development Maxim Oreshkin. The minister noted that a balanced budget and low inflation allow for implementing new mechanisms to improve interaction between business and government. Added value is created using joint public-private partnership projects. However, the minister said that risks must be eliminated from business processes and the lowest possible cost of borrowing must be ensured. “A factor for success is to ensure positive socioeconomic effects,” Mr. Oreshkin said, emphasizing the importance and positive experience of the regions. As successful projects, he cited an airport in Rostov-on-Don, the Western High-Speed Diameter road, and Pulkovo Airport.
Keeping with the theme, Russian Minister of Transport Maxim Sokolov expressed support for public-private partnership mechanisms and concessions as a way to attract investment. He said that every rouble invested in transport generates some 5–6 additional roubles. “Transport is not only a service sector, but also a driver, a catalyst for other economic sectors, and a development multiplier,” Mr. Sokolov stressed. He said the transport industry leads the way in terms of the volume of investment. In 2017, the transport sector received a total of RUB 1.8 trillion, which makes up 2% of the country’s GDP and more than 11% of all investments in the domestic economy. Moreover, half of these funds came from extra-budgetary sources, while the rest was contributed by federal and regional budgets. Today, the country’s regions have come up with projects to improve transport infrastructure: the Northern Latitudinal Railway, the Kyzyl-Kuragino branch, Taman port infrastructure, and the Murmansk Transport Hub.
VTB Bank President Andrey Kostin said the government’s involvement guarantees a certain level of confidence in projects and lifts regulatory restrictions for attracting investments. He said banks participate in 60% of investment projects. “Unfortunately, we have a fairly large reserve of non-bank investments in our economy that remain ‘asleep’ for now, such as money from private pension funds and insurance funds. The goal is to revive these funds and involve them in infrastructure projects,” Kostin said, laying out actions for the future.
