By Renfrey Clarke
MOSCOW — Want to make a pile in post-Soviet Russia? Now that privatisation is mostly complete, the readiest ways of having big roubles drop into your lap belong to the past. But riches can still be yours. The Russian government will give them to you, if your connections are right. You don't even have to present an economically credible project. And if the scheme you put up involves damaging a unique wilderness area, the chances are the environment minister will still give you his blessing.
These were perhaps the reflections of members of the Russian environmental organisation Rainbow Keepers, as they demonstrated in central Moscow on April 4 and were hauled away on charges of "hooliganism".
The Rainbow Keepers were protesting against a scheme, now close to initiation, for building an ultramodern high-speed rail line between Moscow and St Petersburg.
As projected by its backers, grouped in the firm High Speed Transit Line (HST), the rail link will pass through the cities of Tver and Novgorod, and will also bisect the Valdai National Park.
The latter is almost the only large tract of pristine nature left in western Russia. A heavily forested region of glacial moraines, studded with lakes and bogs, it contains a rich assemblage of primeval European plant and animal life.
HST was set up in December 1991 by 17 state-owned enterprises, including transport engineering firms and defence producers. Under plans announced by the company, the 654-kilometre rail line will be financed by Russian and foreign investors.
Details of HST's negotiations with financiers are shadowy, but British investors are believed to be key players. For this reason, the Rainbow Keepers called their April 4 action for the embankment outside the British Embassy, across the Moscow River from the Kremlin.
According to HST, the rail project will not involve any money from the Russian state budget. But the Rainbow Keepers cite government documents that appear to show the firm receiving state credits of 9.4 billion roubles (about US$1.7 million) in 1997, and larger sums in previous years.
More importantly, Moscow News on February 13 reported that documents confirmed the transfer of the government's stake in a number of military industrial enterprises to HST in the form of oil export rights. It thus appears that the firm has been handed the right to carry on a lucrative export business, in an area having no relation to railways.
So far, HST's activity has consisted mostly of beginning the construction of a US$200 million rail terminal, hotel and office complex in St Petersburg. This is expected to be finished and yielding profits long before the rail line goes into operation.
The economics of the rail link itself are problematic. During the 1980s, according to the Rainbow Keepers, the existing Moscow-St Petersburg rail line carried about 5.5 million passengers per year. This figure has since shrunk to about 2 million.
According to the European Bank for Reconstruction and Development, a high-speed rail link would need about 40 million passengers per year to be viable. HST itself reportedly cites a figure of 17.5 million.
The idea that the high-speed rail link will ever turn a profit thus seems almost fantastic. But HST's hotel and office complex will obviously be much more profitable with "bullet trains" arriving regularly. And the losses incurred by the rail line, it seems, will be met by the Russian taxpayer.
Moscow News explains that, should the rail project fail to break even on time, or ever, the debt, with interest, will have to be paid by the government. "And this is no small amount of money. According to who you talk to the transit line will cost $3-5 billion (HST's estimate) or $9 billion (Economy Ministry)."
Meanwhile, what about the Valdai wilderness? Russian environment minister Viktor Danilov-Danilyan was at first strongly opposed to HST's project, reportedly declaring: "There is simply too little relatively untouched environment in the European part of our country. It is worth more than all the high-speed railways in the world."
HST, however, reassured critics: "The trains will run on special elevated rails and will not violate the integrity of nature areas". Improbably, company spokespeople claimed the line would traverse the Valdai without the need even to cut down trees.
Late in 1995, an environmental study approved HST's project, and Danilov-Danilyan promptly dropped his opposition.
But environmentalists argued that the study had not consulted enough experts to satisfy nature protection laws. According to the Rainbow Keepers, the study has now been disallowed by the General Prosecutor's Office.
HST's scheme is also meeting with opposition from the regional authorities in Tver Province. "In Tver they believe that the line's construction will irreparably destroy the one-of-a-kind Valdai", Moscow News reported. "The local authorities are preparing a referendum on the question: 'Should the HST be in the Valdai?'"
If the rail link is stopped from going ahead, however, this is unlikely to be the result of environmental considerations. These are not noted for carrying much weight with the Russian state authorities — especially when business entrepreneurs and, no doubt, high-placed bureaucrats have fortunes at stake.
The key obstacle that HST faces is opposition from economic rationalists who, for once, have fallen prey to rationality. Former economy minister Yevgeny Yasin argues that HST's scheme would not necessarily recoup its costs even over 20 years, and has pledged to show that Russia simply cannot afford it.
As a relatively clean and quiet alternative to air travel, "bullet trains" have often been welcomed by environmentalists. The first Russian scheme of the type, however, has been conceived in contempt of environmental values. Not only that, but it provides a showcase for some of the worst characteristics of the new Russian "biznes".