Economic viability of China-Russia-Europe railway project remains under question (Exclusive)
Baku, Azerbaijan, July 17
By Ali Mustafayev - Trend:
Economic viability of China-Kazakhstan-Russia-Europe railway project is not clear, and the project may be risky for the Chinese side as the core country for the One Belt, One Road initiative, James M. Dorsey, a political analyst, senior fellow at Singapore’s Nanyang Technological University, told Trend.
“The railroad’s fate is hanging in the balance. At this point, it has two strikes against it. On the one hand, China is looking much closer at the economic viability of Belt and Road-related projects. While it still is investing on a large scale, China is concerned that loss-making or not viable projects will impact its economy,” said Dorsey.
He added that China may also be concerned about the ability of countries to shoulder the financial burden involved. As a result, China has so far this year invested less in the Belt and Road compared to last year.
Previously, CREEG announced that Beijing-Moscow-Berlin high-speed railway project will not pay off for investors at a market credit rate (above 5.75 percent, this percentage is taken as the basis for calculating the financial model) and the share of attracted financing at 60 percent.
The document with the data of the corporation was presented in September 2017, and at the moment it remains the last actual financial evaluation of the project from the Chinese side.
Russian President Vladimir Putin, in turn, stated following the results of the plenary session of the XIV Forum of Interregional Cooperation between Russia and Kazakhstan that the launch of a new railway from China to Europe through the territories of Russia and Kazakhstan could positively affect the industry and logistics of the countries.
The Russian president also stressed the positive effect of this project from the point of view of logistics and transit development.
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