The road to 2030: a survey of infrastructure development in Russia

Published: 21 September 2016
Infrastructure development has been placed at the center of the Russian policy-maker's agenda.

In our survey we analyzed the current state of infrastructure investment in Russia and the ways to improve it, presented a series of case studies highlighting infrastructure investment projects from around the world.

Moreover, we included in-depth interviews with some of today's leading experts on infrastructure in Russia, who provided insight and analysis, while placing individual experiences in the context of the broader national infrastructure strategy.

Key highlights

1. Transparency is considered as the most important factor for improving the efficiency of infrastructure investment in Russia

69% of respondents say that ensuring that tenders are transparent and competitive would make investments in Russian infrastructure more effective. 72% of respondents indicate that insufficiently transparent decision-making in regard to projects is one of the main obstacles to the development of infrastructure in Russia.

2. Inadequate guarantees of a return on investments is a chief obstacle to obtaining private investments for infrastructure

82% of respondents share the same opinion. However, it is expected that the Government will provide assistance (at least in the initial projects) to achieve a predictable rate of return, for example through the mechanism of availability payments.

3. Regions support

42% of respondents believe that regional projects should receive federal financing. However, an even greater proportion of the respondents (47%) believe that before providing such financing, other important pre-conditions of project success should be put in place, such as methodological support of the regions that initiate infrastructure projects. Of note, 49% of the respondents mention the absence of a regional infrastructure investment policy as a major issue.

4. Balanced planning and strict criteria for the use of the National Welfare Fund

Only 7% of respondents believe that megaprojects are needed at any cost. The majority believe that such projects should be part of a thorough and balanced planning of regional infrastructure. Likewise, most survey participants believe that the use of the National Welfare Fund to finance investment projects should not be automatic, but subject to strict criteria.

5. Clear government strategy

Detailing and clarifying government strategy was highlighted by the majority of respondents as a way of making infrastructure projects more attractive for private investors. The Government should deliver clear messages about key priorities in infrastructure development and provide a pipeline of forthcoming projects.

6. Foreign business has little motivation

The survey results demonstrate that, while foreign involvement would be welcome, the respondents do not believe that there are currently sufficient incentives to entice international companies to invest in Russian infrastructure projects. Interested international players should look for a reliable local partner to help build a long-term strategy for investing in Russian infrastructure.

Source: EY