Bloomberg News

VEB May Invest Russian Pension Cash in Infrastructure Overhaul

February 01, 2012

Lyuba Pronina and Ekaterina Shatalova

Feb. 1 (Bloomberg) -- Vneshe?onombank, the Russian state development bank known as VEB, may steer pension money into infrastructure after freight logjams delayed coal and metals shipments from Siberia last year.

“Infrastructure is among our top priorities,” Chairman Vladimir Dmitriev said in an interview in Davos, Switzerland. VEB, the biggest manager of Russian pension savings, is prepared to invest the funds into transport projects to boost returns and overcome congestion at railways, he said.

The investment will help contain growth in rail tariffs without additional budget expenditure, Dmitriev said. The lender signed an agreement last month with producers and OAO Russian Railways, the state monopoly and operator of the world’s longest train network, to help finance and develop the rail system to meet industrial demand.

“Some coal miners are facing a threatening situation,” Dmitriev said. The bank may channel “tens and hundreds of billions of rubles” into railroad development, he said.

Coal supplies in Kuzbass last year reached a record of more than 186 million metric tons, and exports doubled in the last eight years, Russian Railways data show.

Low rail shipping capacity resulted in late deliveries for Russian steelmakers, coal miners and gas producers last year, according to the Kommersant newspaper.

--Editors: Paul Abelsky, Zoe Schneeweiss

To contact the reporters on this story: Lyubov Pronina in Davos, Switzerland at lpronina@bloomberg.net; Ekaterina Shatalova in Moscow at eshatalova@bloomberg.net

To contact the editors responsible for this story: Matthew G. Miller at mmiller144@bloomberg.net; Mark Sweetman at msweetman@bloomberg.net


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