Thursday, February 12, 2009

Window on Eurasia: Highway Construction has Become Russia’s Very Own ‘Bridge to Nowhere’

Paul Goble

Vienna, February 12 – Massive corruption, outdated standards and poor construction techniques mean that Moscow’s plan to spend massively on new highways over the next few years is unlikely to improve that part of Russia’s infrastructure, even though it is virtually certain to continue to enrich those involved in the process.
According to an article in this week’s “Argumenty nedeli,” Russia’s road-building “was and remains the real ‘black hole’ of [the country’s] economy,” one into which massive sums of money end up not in new and better highways but in “the deep pockets” of officials in the public and private sector (
Statistics tell the story, the article continues. In 2000, Russia added 6600 kilometers of new roads at a cost of 60 billion rubles (1.8 billion US dollars). Six years later, however, it added only 2400 kilometers but spent a total of 220 billion rubles (6.8 billion US dollars).
That means, the investigative journalists of “Argumenti nedeli” say, that “the price per kilometer of new road [in Russia over that six year period] went up by a factor of ten. But what in fact increased, was not that so much but rather the amount of the funds intended for that purpose that were stolen.”
Those interested in pocketing money intended for highway construction have developed a variety of means to do so. Sometimes, they simply overcharge the state for what they do. At others, they use substandard materials rather than the ones they charge for. And at still others, they get local officials to certify that they have completed roads that in fact have not been built.
The amounts of money available for theft are set to rise astronomically. According to the government highway construction program for 2009 to 2015, Moscow and the regions will spent 6.7 trillion rubles (200 billion US dollars). Unless things change, the weekly said, “a large part of these grandiose means will end in the pockets” of dishonest construction companies.
What makes the situation even worse, the magazine argued, is that those who build roads in Russia are “vitally interested in ensuring that the state of roads remains poor,” because they will make more money by repairing roads than by building new ones and will be able to pocket a larger share of it.
To that end, Russia’s highway construction companies “consciously build roads which quickly become unsuitable for use.” On the one hand, they do not build roads that can stand up to the weights of trucks today; instead, these firms use norms from the 1950s when the size of trucks and the weight they carried were much less.
And on the other, Russian road builders unlike those in Europe do not use all-season polymer-based asphalt. As a result, Finland where the climate is not better than Russia’s repair a road once every ten years, while in Russia, firms have to repair – and thus get paid for repairing – roads every five to six years.
Some people in Russia think that this kind of construction material is “a very new technology,” but they are mistaken, the magazine notes. Germany used it in the 1930s for its autobahns, other countries have adopted it since that time, but Russia to this day does not manufacture or use this material.
“What should be done?” “Argumenty nedeli” asks. Acknowledging that the problem is “complicated” and there is no magic bullet available, the magazine’s writers suggest that one thing the government could do was to require companies to certify the roads they build as being ready for traffic and then go after their assets if the roads failed.
The risk of course is that such an arrangement would simply lead these firms to adopt yet another form of theft from moneys intended for road building: They would pocket their usual take, build substandard roads, and then, when officials came after them, simply declare bankruptcy or disappear.
The stakes in this struggle are enormous: roads carry 83 percent of the goods and 60 percent of the passenger traffic in the country, even though Russia has far too few highways – 40 percent less than needed, Moscow says – and even though more than three out of every five kilometers are substandard.
As a result, Russian firms must spend roughly twice as much on transportation costs as do their competitors in Europe, and the Russian economy, “Argumenty nedeli” concludes, is losing, as a result of poor roads alone, at least six percent of GDP or some 1.6 trillion rubles (44 billion US dollars) every year.

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