Russia – China: investing in major projects through concession

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Head of VEGAS LEX PPP and Infrastructure
practice Denis Shtirbu moderated the session on transport cooperation and logistics
at The Moscow Times conference, Doing Business
with China. New Horizons for Business Cooperation: Russia – China
.

On February 17, 2017, Moscow hosted the conference, Doing Business with China. New Horizons for Business Cooperation:
Russia – China
, which focused on the current status and priorities of Russian-Chinese
cooperation in key sectors of the economy, and some practical issues of doing
business between Russian and Chinese companies.

Head of VEGAS LEX PPP and infrastructure practice Denis Shtirbu moderated the first session,
Transport cooperation and logistics.

In his opening remarks, Mr. Shtirbu drew attention to the fact that the
Chinese partners have always considered investment in Russia only under state
guarantees, which are stipulated in the budget law and actually lead to
constraints, because the government cannot issue an infinite number of
guarantees. All the currently discussed projects, such as the Moscow – Beijing high-speed
rail project, are large-scale projects that require huge funding. For this
reason, investment through concession is a good choice, as concession projects
also involve the government’s obligations (including risk-taking and debt compensation)
but are not regulated by the budget law.

The participants also discussed the development of
new global infrastructure, transcontinental land transportation across Russia,
transport and logistics infrastructure in Russia's eastern regions, the new
principles of financing of infrastructure projects, and the construction of high-speed
rail infrastructure for the Moscow – Beijing project.

***

For more information on VEGAS LEX’s public-private
partnership projects in the defense industry, please go here.

For more information on VEGAS LEX’s transport and
logistics projects, please
go here
.

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