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City news
City Cancels Bombardier's Project
07.16.2004 12:33

monorail By Sophia Kornienko


The city government has turned down Canadian Bombardier's $527 million monorail project, as one that St. Petersburg can no longer afford.

The decision was made after Moscow refused to extend any financial assistance to several other city construction projects last weekend.

The first 20-kilometer long section of express monorail, called the Overland Express, connecting the city's expanding southern districts with Obukhovo metro station, had been included in St. Petersburg's general development plan earlier this year as the most efficient way to relieve the city's worn and crowded subway system.

The Overland Express' automatically driven carriages were to make 12 stops along the route, carrying 260,000 passengers per day. Bombardier, a Canada-based transportation manufacturer, had completed similar projects in several cities around the globe, such as Kuala Lumpur, Malaysia, and Vancouver, Canada.

Bombardier had been aiming for the project in St. Petersburg since 1998. The first agreement of the company's intended cooperation with the city was signed in 2002 under former Governor Vladimir Yakovlev. In April this year, Bombardier submitted a two-volume report on technological and economic feasibility of the project to the city government. The Overland Express was expected to pay off within 11-15 years.

"The Canadian project is of high quality, but expensive, and the city needs to save money," an anonymous source at the city government's committee on investments told Delovoi Peterburg on Wednesday. "There are also other companies in the market," the source said.

According to Delovoi Peterburg, one of the companies most likely to take part in the project at the engineering stage is the Moscow-based state construction institute Metrogiprotrans, which built the so-called light or overland Butovskaya metro line in Moscow.

Another source at the city government told Interfax on Tuesday that it is more sensible for the city to build new metro stations, as the St. Petersburg subway is maintained by a state organization submitting its profits to the city budget, while Bombardier is a private company.

Some of the metro's new stations to be built in Frunzensky district can be constructed as overland stations, which should reduce the costs by half, Governor Matviyenko said earlier.

"I strongly support the idea of attracting private companies to take part in the project on the basis of a public-private partnership," said Pavel Brusser of the investments committee on Thursday. A number of proposals from other Western companies is being reviewed by the city government, but it is too early to make any predictions, he said.

While it will be private investments covering the monorail's construction, the city will provide its share of the project by extending a series of concessions to the tender winner, such as land, Brusser said.

Smolny was counting for federal support in its other major construction initiatives, such as the Western Express Diameter and the new passenger marine terminal, worth a total of over $1.7 billion.

Bombardier's proposal was rejected after Economic Development and Trade Minister, German Gref visited the city last weekend. Gref said that no federal financing will be allocated to St. Petersburg until its construction projects are overseen by large Western consultants.

Meanwhile, Gref promised to provide 1 billion rubles ($34 million) to develop the Ust-Luga port in the Leningrad Oblast.

The investments committee said that the rejection of Bombardier's project is not connected with Gref's visit.

The city government was originally expected to reach a decision about Bombardier's proposal only in autumn this year.

One kilometer of subway construction is estimated at $80 million, while one kilometer of Bombardier's Overland Express would amount to about $21 million. The light metro in Moscow cost $17 million per kilometer. Overland monorail is the most environment and infrastructure friendly of the above, experts say.

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