Russian Industry Outlook

Despite the downturn in the economy, market stability in Russia should return by 2010 with growth expected for 2011. Federal and public-private partnership investments will fund projects in roadway, rail, airport and power plant construction and modernization.

The U.S. Commercial Service notes Russia’s need for new equipment: "The construction equipment market is characterized by a shortage of inventory and a high degree of equipment wear and tear. Depending on type, the share of worn out equipment varies from 45% to 75%. Local manufacturers suffer from insufficient investment in R&D; the result is a lack of modern technology, poor management and the absence of government support. As a result, the import of construction machinery continues to grow; about 50% of the equipment used by construction companies is foreign, either new or used."
(Source: U.S. Russia Trade Office)

Infrastructure

• Federal program will drive modernization of Russia’s transport system by 2015- total investment of $420 billion of which $147 billion is federal funding.
• $1.5 billion contract for construction of the first section of highway between Moscow and St. Petersburg
• In July 2009, the European Bank for Reconstruction and Development (EBRD) approved $500 million 10-year loan to Russian Railways (RZD) for upgrades to its rail network.

Commercial Construction

• The port city of Vladivostok in eastern Russia will host the Asia-Pacific Economic Cooperation (APEC) summit in 2012 which will require dramatic expansion of the hotel industry
• Preparations for the Sochi 2014 Winter Olympics may well exceed $20 billion, the majority to be spent on the construction and modernization of roads, railways, tunnels, airport facilities, power infrastructure, and sports venues.

Utilities

• New energy strategy approved through 2030 to reduce the country’s dependency on fossil fuels while increasing the use of atomic energy, hydroelectricity and renewable resources.
• $1.2 billion reconstruction of the Sayano-Shushenskaya Hydroelectric Power Plant and the construction of several nuclear power plants.

(Source: U.S. Russia Trade Office; Senior Construction Analyst - PMR Publication)