The Kola Bay. Photo: Atle Staalesen

Lack of infrastructure hampers development, says Murmansk Governor Kovtun

The Russian Arctic region faces increasing troubles in financing its flagship project, the Murmansk Transport Hub.
June 04, 2018

The Arctic will not be a game-changer in Russian development unless investments are made in the regional infrastructure, Marina Kovtun made clear in a speech delivered last week in the Russian Federation Council.

The address was made as the governor’s great regional infrastructure project - the Murmansk Transport Hub - appears to experience major problems in getting needed financing. The 46 km long new railway line, which is to lead to Lavna on the western shore of the Kola Bay, will cost an estimated 45 billion rubles and be completed in year 2020.

Marina Kovtun talks Arctic developments with Artur Chilingarov in the Federation Council. Photo: gov-murman.ru

That deadline might come too soon for the project developers. The project is now one-third finished and about 15 billion rubles have been spent, Kovtun told the members of the Federation Council.

«It is of utmost importance that proposed substantive decisions on the development of huge infrastructure projects in the regions are taken in close interaction between the federal executive power and regional authorities,» Kovtun underlined, and added that new transport corridors significantly will enhance economic connectivity in the country.

The speech came as the federal Ministry of Transport is grappling to find money for the Murmansk project. According to Kommersant, the ministry now proposes to take 300 million rubles originally earmarked for the Lavna coal terminal project and transfer it to the railway construction.

A total of 1,2 billion rubles will be invested in railway construction in 2018, the newspaper reports. That leaves as much as almost 29 billion rubles to be invested in 2019-2020.

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Marina Kovtun’s visit to the upper house of the Russian parliament coincided with a visit from the Norwegian parliament, the Storting. It was the first Norwegian visit of the kind to Moscow in more than seven years. The Norwegians have not been much present over the last years neither in neighboring Murmansk.

However, judging from Governor Kovtun, there is more than enough reason for the Norwegians to look towards the Russian North.

According to Kovtun, her region is now the 6th best in the country in terms of investment growth. Last year, more than 110 billion rubles were invested, a 30 percent increase from 2016, Kovtun says in a press release. The investors are attracted with major tax exemptions, she made clear.

Among the industrial projects which have got regional support is Novatek’s Kola Yard, which got a favorable deal on land lease.

According to Kovtun, also Rosneft is in the process of getting started in the region. The company has developed a business plan and signed a project agreement on the development of an oil service base in Roslyakovo, near Murmansk City.

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