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China investors may build bridge across Kerch Strait

May 05, 2014, 9:52 UTC+3 MOSCOW
This is primarily a political step which shows build-up of relations between Moscow and Beijing amid Western sanctions
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© ITAR-TASS/Alexander Ryumin

MOSCOW, May 05. /ITAR-TASS/. Chinese companies will be first foreign investors in economy of the Russian Republic of Crimea after the peninsula’s reunification with Russia.

A Chinese construction company and a private investment fund may be involved in construction of a transport corridor to Crimea across the Kerch Strait at the cost of $ 1.2-3 billion with some part of the project to be invested in yuan, Kommersant daily learnt.

This is primarily a political step which shows build-up of relations between Moscow and Beijing amid Western sanctions and China may also receive access to other major projects in the region, the daily sources said. But, in the view of experts, it will be difficult for Russian companies to participate in infrastructure projects in Crimea after Chinese companies enter the market.

The Transport Ministry prepares to conclude with Chinese companies a memorandum on building a transport corridor across the Kerch Strait which will connect southern Russia’s Krasnodar Territory and Crimea, sources said to the daily. A technical blueprint of the project is not approved yet, as this may be a combined motor-railway bridge or a bridge and an underwater tunnel. The memorandum may be signed during President Vladimir Putin’s visit to China in the second half of May, the daily sources said. China International Fund Ltd (CIF) is expected to fund the project and China Railway Construction Corporation (CRCC) will build it.

The Transport Ministry refrained from any comments. But sources close to the Transport Ministry and Russian motor road authority which is developing a feasibility study of the project confirmed the news report. “A final configuration of the project is still being developed, but it is quite real that a Chinese construction company may be involved in fulfilling a considerable part of works as the latter has an experience of implementing major infrastructure projects,” meanwhile, “there is an opportunity to fund the construction project in yuan partially,” a daily source said.

CIF positions itself as a private company which funds infrastructure projects, particularly major projects in Angola and Guinea. CIF does not disclose its financial results. State-run CRCC, one of largest construction companies in the world, builds railways and highways, bridges and tunnels. Along with China the company implements projects in Libya and Saudi Arabia. CRCC revenues reached $93.6 billion and its net profit - $1.6 billion in 2013.

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