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Last Updated:  Thursday, 6 March, 2003, 14:14 GMT
Loan links Russian east with west
Russian highway
Russians are increasingly taking to their cars
Russia's dream of a highway linking its Pacific coast with Western Europe has taken another step forward.

The Transport Ministry says it has been granted $290m by the European Bank for Reconstruction & Development (EBRD) for the completion of a stretch of road in the far east of the country.

When finished, possibly by the beginning of next year, the route will allow drivers to travel the 5,000 miles from Vladivostok to Warsaw, Berlin and beyond on the same highway.

It will also represent a major step forward in integrating isolated Siberia with the global economy.

East and west

The EBRD has not formally signed off on the project, but has supported a string of similar initiatives in the past.

Its board is likely to approve the financing in June.

Although the deal is far from the largest EBRD grant to the region, it is among the most significant.

By linking Russia's far east with the rest of Siberia, it is progress towards a genuine pan-European transport network - an ambition of policymakers since the fall of the Berlin Wall.

Up to date

It also helps fulfil the Russian Government's ambitions of constructing a modern transportation network.

While Russia expands its road network, its train system is plunged in financial crisis

The ministry is spending almost $12bn this year on transport infrastructure, most of which will go towards road-building.

Over the past decade, Russians have increasingly preferred car travel to the train, and vehicle ownership has boomed.

But the country's roads have not kept pace, especially in remote regions, where few roads are metalled, service stations are rare and outright banditry is common.

Russia's road network is only one-tenth the length of that in the EU, despite the fact that Russia is many times larger than the whole of Western Europe.

Join the club

At the same time, Russia's lack of complete integration with international transport networks has hampered trade and investment.

Russian highway
Carrying goods by road is risky and slow

Thanks to Soviet-era controls, border crossings are few and inefficient, especially between Russia and its Asian neighbours.

Most companies ship their goods around Russia's vast hinterland on the railways, but rail freight is expensive and occasionally unreliable.

A true Siberian highway, Moscow policymakers hope, will encourage foreign firms to invest east of the Urals - still a largely inaccessible zone for firms outside the petroleum industry.

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