Budget fails to keep pace with transport development

An updated Transport Strategy 2030 was prepared by the Ministry of Transportation that seems to jump the gun as the ambitious program is not secured by funding, was presented before approval of the Budget strategy for the same period.

In search of money

Recently, the Russian government has discussed Transport Strategy of Russia until 2030, prepared by Ministry of Transport.  Prime Minister Dmitry Medvedev highlighted among the most important tasks the creation of competitive “good performance and capacity” transport corridors. He also noted that the Northern Sea Route development has also "good outlook".

Russian Transport Minister Maxim Sokolov who made a report at the meeting said the most important initiative in the updated strategy is the focus shifting on inland waterways. The delivery of commercial goods via inland waterway network of the country is expected to grow by 60%.

Besides, the projected modernization of port infrastructure with the creation of the so-called echelon of ports, such as ports on the Taman peninsula, Ust-Luga, in Novorossiysk and on a number of other directions.

"We plan to implement more ambitious projects in line with the strategy, such as upgrading the Trans-Siberian and Baikal-Amur Mainlines, building of throughways and the further development of the Northern Sea Route," the minister added.

He also stressed that the strategy is consistent with other related public policies. However, as it turned out, the Transport Ministry has outpaced the Finance Ministry, which is preparing a fiscal strategy until 2030. Since the major transport projects are to be funded through the federal budget, without its integration with the Budget strategy the transportation reforms will be stuck.

"All of these strategic documents requiring budget funding should be matched with the budget strategy, which will be prepared on the basis of a new long-term prognosis, on the basis of fiscal policy, which will be approved for the period until 2030, and our financial capacity", said Finance Minister Anton Siluanov.

Deputy Prime Minister Arkady Dvorkovich commented that the strategy has long been developed, and in that period of time there had been new projects initiated. Although they are taken into account in the updated strategy, their financial security is dependant from of adoption of the relevant federal law on the federal budget for the three-year periods, as well as the approval of the Budget strategy.

"So we propose to record in the Strategy as part of the protocol solutions that eventually it will be approved after submission of the draft federal budget to the State Duma after its the consideration by the Russian Government. Otherwise, we will have discrepancies between funds volumes allocated in the budget and those approved in the Strategy", Mr. Dvorkovich was quoted as saying.

According to Dvorkovich, the key question is the presence, at least at the political level, of mutual obligations between the state government, the regions, and investors or consumers of transport services. "We are talking about long-term rates, in some cases, about guaranteed volumes of traffic. This concerns the railroads and ports. Only such mutual commitments will contribute to the long-term investment," the official said.

Eventually, the government meeting decided to endorse the updated Transport Strategy. The ministries of Transport, Finance and of Economic Development of Russia to present a relevant act amending the Transport strategy to the government in the two week period, after the submission to the State Duma a draft federal law "On Federal Budget for 2014 and the planning period of 2015 and 2016".

Most likely the government means a three-year budget. We will be more or less clear about what will happen with the financing of projects after 2016, only after the approval of the Budget Strategy 2030.

Earlier we have reported that Rosmorport also prepared the Strategy of Port Infrastructure Development until 2030.

Vitaly Chernov.