Wrosk at the Kerch bridge Photo: Sergey Bobilev/TASS
Originally appeared at Svpressa, translated by Mona Lita exclusively for SouthFront
There are no problems with financing the Kerch Bridge construction, and for 2016 all necessary means are allocated from the federal budget, but it will be spent only after the treasury supports the state contract. Russia’s Ministry of Construction has circulated the information on June 8th of this year.
It is important to know why the country’s main construction department is being forced to come up with excuses and find an explanation for the bridge’s construction across the Kerch Strait.
“Forbes” magazine recently published an article, “The Bureaucratic Pit. Kerch Bridge is Left Without Funding”, according to which, the last time the company’s “Stroygazmontazh” general contractor Arkadiy Rotenberg received money from the state was in December of 2015, and a new portion in the amount of 65.4 billion rubles, although has been allocated, is “suspended in midair”.
Forbes insists that the bridge’s construction is undergoing insurmountable difficulties due to the obvious lack of money. The publication is referring to a letter from the general director of the company “Stroygazmontazh” Andrei Kirilenko, Russia’s assistant Minister of Transport Eugene Dietrich and the head of the Federal Road Agency, Roman Starovoit.
Too bad, Forbes is concerned, that “the terms of bridge’s construction are being sabotaged, necessary high-priced equipment is not being purchased and the contractor no longer has funds to continue the construction”.
On June 8th, as reported in RIA “Novosti”, the Press Secretary Head of State, Dmitri Peskov stated that he couldn’t exactly say whether there are problems with the construction of the bridge, and suggested that all questions be addressed to the government, because he “has no information”. In addition, Mr. Peskov said that the bridge’s construction is controlled by the Head of State, who is “keenly interested” in its progress. The Press Secretary reassured the press at the end of his speech:
“But even if there are some rough patches, there is no doubt that they will be resolved in the near future”.
On their part, the Ministry of Transport confirmed that there are no problems with financing the construction, and money being provided for the project this year is being secured by the budget of 2016.
Their spenditure will begin after the treasury supports the state contract. Relevant documents for the state contract transfer are being forwarded to the Russian government. Any changes will be approved before the end of June”, said the agency.
It is known, that in February of this year, the assistant Prime Minister Dmitry Kozak stated that the government had decided on the treasury service contracts with the goal objective being the effective spending of resources. The government is making a radical decision; we are talking about the fact that in 2016, large state construction projects like for example, the space station Vostochny or the construction of facilities in preparation for the football World championship in 2018 be moved away from an old banking system to a treasury. With the current form of funding, the general contractor, contractors and suppliers are all opening treasury accounts, which enables regulatory authorities to better monitor disbursement of funds.
The Kerch Bridge, the length of which will be 19 kilometers, will be the longest in the Russian Federation. Transportation Minister Maxim Sokolov has repeatedly stated that it will be open to traffic until December 2018. The complete commissioning of the planned construction must occur exactly in 3 years, in June 2019.
By the way, a “channel span”, which is the longest and one of the most difficult elements in the bridge project across the strait will gather on the Kerch shores. A special technological platform, which will later become a part of the main structure, is already set up to mount the design. The Ministry of Transport is clarifying in this matter that the builders are planning to start the building of the arch itself before the end of June this year. But the road and railway bridge channel spans will be constructed throughout the year.
The span over the Kerch-Yanikalsky channel fairway will provide ships to pass through a space that is 185 meters deep and 35 meters high. The span length is 227 meters. More than 10 thousand tons of metal will be needed for the construction of this part of the bridge.
“A construction of slipways where works on the assembly of arch span structures of the navigable part of the bridge will be carried out was completed on the Kerch technological platform. We are waiting for the first delivery of steel structures for the arched spans in June”, assured the head of the Federal Road Agency Roman Starovoit.
“Judging by everything, incidents with the Kerch Bridge’s financing may occur due to excessive “diligence” (which can be called a bureaucratic approach) in the execution of anticorruption legislation”, says the Assistant Director of the NRU Center for Development “Highest School of Economics” Valeriy Mironov.
The current legal framework requires that a lot of documents are collected and submitted for the allocation of money on certain projects. These procedures often unnecessarily formalize the funding and simply slow down its process. A well-known example of an Investment Fund is instructive in this regard, where a relatively prosperous, pre-crisis period is mentioned during which unnecessarily strict requirements for obtaining money was used very ineffectively, because those Russian companies that were in dire needs of the funds did not receive the necessary funds.
“I would not exaggerate the scale of the problems that have been identified in the Ministry of Transport reports”, says a senior researcher at the Institute for Strategic Studies Nikolay Troshin.
“As stated in the Ministry of Transport certificate, most likely the question is purely about technical delays of payment transfers to the Treasury. I think this hold is not a coincidence, since in recent years, after the implementation of major public projects, quite serious complaints about undue expenditure of treasury funds were often voiced at the public level and in the press. Based on this, the government decided that it was necessary to increase the transparency of such projects, especially ones so significant and strategically important as the construction of the Kerch Bridge. Please note that in spite of hints from the company’s “Stroygazmontazh” contractor about the alleged lack of funding, work has not stopped nor has it lost its momentum. Therefore, it is too early to make a far-reaching conclusion that there is not enough money in the budget to build”.
“Are you not permitting a conspiracy theory when the topic on a financial deficit of this strategic object surfaced thanks to the stakeholders that are primarily affiliated with contractors, in order to eventually allocate for themselves new sums from the budget?”
“But if you do follow conspiratorial methods then let us highlight this interesting fact: who was the first to release this information? May I remind you, it was Forbes – an American magazine. In this regard, it is seen as a desire to cause harm to our country’s image in the lead up to the EU’s decision to extend anti-Russian sanctions. In a broader context, this was done with a consideration that Russia is quite successfully gaining ground in its confrontation with the United States”.
It appears that much ado circles around the fiat system of money. This system is designed for manipulation and non transparency, especially in the West. It is very likely that NATO buildup is a warning to the Duma and to Putin that the West will not tolerate Russia being in control of its own banking system. Note that Russia’s banking system is the western model and also that Hussein and Gaddafi both were moving into nationalized banking and they were thus eliminated. Is Russia strong enough to nationalize their banking system – do they even have the desire to setup an independent system. BRICS looked like the answer but is being sabotaged and even has connections with the western system. So . . . who controls the economy of Russia? A good analysis of this situation would be worth reading.