Moscow to Privatize Metro

Posted on by

May 14 – Moscow City Hall is considering privatizing the city’s metro system to further develop the capital’s infrastructure, according to the project titled, “The Strategy for Socio-Economic Development of Moscow until 2025.”

The document, posted on the website of the city’s economic policy and development department, proposes “attracting private investment from outside the [city] budget for metro system development, including by corporatizing the metro system.”

According to the strategy, the Moscow Metro (now a state-own enterprise) would be run by a private-public partnership “while preserving a controlling stake for Moscow.”

The document covers urban planning through 2025, but doesn’t specify a date for planning privatization.

Moscow Mayor Sergei Sobyanin’s administration recently announced an ambitious expansion plan for the city metro, in particular 150 kilometers of new track and 70 new stations to be built by the end of 2020 to expand the existing network into the Moscow region and improve its capacity.

One of the main ways to do this is to take some of the pressure off the very popular Garden Ring of the city metro and build another ring just outside it.

The first station of the new ring will be completed in two years’ time. By 2014, there will be six new stations built to the north of Moscow.

In order to be completed in accordance with the entire plan, seven to eight stations and 17 kilometers of track have to be built each year until 2020, which could hardly be afforded by the city budget alone.

The active development of the metropolitan subway is a part of efforts to combat enormous traffic jams which have become typical in Moscow over the last decade.

There is one example of a privately financed line in Moscow. The line is being financed by Crocus Group, a private investment firm which has established a metro line operating all the way to one of their department stores. The company has invested 600 million rubles (more than US$20 million) into this. According to the agreement, they invest this money into building the station, whereas authorities actually build the railway and the railway structure to the shopping mall, which is a good example of future investment.

Another private enterprise, Russkoye Zoloto LLC, contributed to the financing of the construction of an additional exit for the Mayakovskaya metro station.

Moscow Metrostroi, the company that builds and maintains the metro, was auctioned off for about US$255 million to a company called Tsentrstroi in December 2010, RIA-Novosti reported at the time.

“I think the projects that will be of most interest to private investors are those related to construction of light metro trains and lines that will connect Moscow airports or other important transport facilities. These projects can actually be profitable,” Sergey Shishkarev, head of the State Duma Committee on Transportation, said to Russia Today channel.

As many as 9 million passengers on average use the system every day, according to the Moscow Metro web site.

As of 2011, the Moscow Metro has 185 stations and its route length is 305.7 kilometers (190 miles). The system is mostly underground, with the deepest section 84 meters (276 feet) below ground at the Park Pobedy station. The Moscow Metro is the world’s second most heavily used rapid transit system after Tokyo’s twin subway.

Leave a Reply

Your email address will not be published. Required fields are marked *

Dezan Shira & Associates

Meet the firm behind our content. Dezan Shira & Associates have been servicing foreign investors in China, India and the ASEAN region since 1992. Click here to visit their professional services website and discover how they can help your business succeed in Asia.

Never Miss an Update

Subscribe to gain even better insights into doing business in Russia. Subscribing also lets you to take full advantage of all our website features including customizable searches, favorite, wish list and gift functions and access to otherwise restricted content.

Scroll to top