Foreign Firms to Develop Moscow’s Metro

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Nov. 30 – Moscow mayor Sergei Sobyanin suggested attracting foreign firms to construct the city’s new underground transportation lines.

As he said at the city hall meeting, attracting foreign builders would ensure stability in enforcing contracts and improve the quality of work.

“I request that not only two to three homegrown companies work in this field, but that an international tender be announced to attract the largest international organizations that specialize in this area,” he said at a separate city hall meeting.

The funds that city hall plans to spend on constructing the metro lines are huge at roughly US$48 billion and would theoretically be enough to attract foreign builders, Andrei Tretelnikov, a transportation analyst at Rye, Man & Gor Securities, said to The Moscow Times.

“But they should be very long-term projects,” he added.

“The metro is the most large-scale transport system in the city. Unfortunately, the construction has slowed down in the last few years. I believe that 15 kilometers of new lines should be built every year. We will need around US$1.5 billion annually for this purpose,” Sobyanin said at a meeting on transport problems chaired by President Dmitry Medvedev on October 28.

He also said earlier this month that city hall planned to build more than 50 kilometers of new metro lines by 2015. Next year, Moscow will get only 4.3 extra kilometers of metro.

According to the company’s web site, the Moscow subway, inaugurated in 1935 when Josef Stalin ruled the Soviet Union, now counts 182 stations and more than 185 miles of track.

The system is the second-busiest in the world after Tokyo’s subway, according to the New York Metropolitan Transportation Authority. Moscow’s subway carried 2.4 billion passengers in 2009 and as many as 9 million riders a day, according to the operator’s web site.

General requirements to participate in a tender include having an efficient track record and using modern equipment.

“If a builder’s construction efficiency is two to threefold lower than the market, it shouldn’t win the tender, or must at least upgrade its equipment and resources,” Sobyanin said.

He said the projects put to tender should be sufficiently large enough to demonstrate the potential to provide work for participants “for several years ahead” and ensure profitability of the equipment they buy.

Deputy Mayor Vladimir Resin said “all big foreign firms” would be invited to the tenders.

Sobyanin says he wants to move away from Stalin-era grandeur when constructing new stations in order to speed up construction and cut building expenses by at least 20 percent.

Meanwhile, the Federal Property Agency announced last week that government wants to privatize the 79-year-old company that built Moscow’s subway.

OAO Moscow Metrostroy will be sold at auction on December 23. Bids will start at US$70.5 million and rise in increments of around US$6.6 million.

Foreign bidders will be allowed, Vladimir Ryzhkov, a spokesman for the property agency, said to Bloomberg.

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