international
construction
november 2014
REGIONALREPORT
22
Major challenges lie ahead
excavators and skid steers, have also been sold to important
Russian road and rail companies this year to help in major
infrastructure projects.”
The spokesperson added that the company added that the
company “did not expect a fast recovery in 2015,” with the
market remaining similar to that of this year.
Political instability
Jean-ClaudeDoucene, regional salesmanager forManitowoc in
Russia and the CIS, also said its business had been affected by
political instability.
In his opinion, among the largest areas of concern within
the sector had been dealing with exchange rates and levels of
inflation –which had now risen to around 8%.
As he explained, demand for equipment in the CIS had
remained stubbornly weak in the past
year, withmore than 90% of its business
centring onRussia.
Inside Ukraine, he believed that issues
surrounding the weakened value of its
currencywerehavingamarked impact on
the economy, including its construction
sector.
Mr Doucene said, “The geopolitical
situation inRussia andUkraine is having
an effect on business, which has been
increased by the exchange rate between
the Euro and Ruble being poorer as a
result of the sanctions there.
“Because the market is not so secure,
companies are finding it more expensive
to do business. Rental companies
are buying cranes to be used for the
construction market – but the problem
is that they are buying them in dollars
and getting rental inRubles, with cranes
becomingmore expensive as the economy is decreasing.”
Another key factor in Russia is corruption. Russian political
opposition figures including former Deputy Prime Minister
BorisNemtsov say claims of large-scale corruption surrounding
contracts for the Sochi Winter Olympic Games have gone
uninvestigated.
The original cost of the event was put atUS$12billion, but it
eventually came in at more than four times that figure, making
it themost expensiveOlympic event ever staged.
Indeed, global corruption watchdog Transparency
International, found in its last survey that corruption inRussia
was still a significant problem, with the country perceived to be
the 133
rd
most corrupt nation out of 174 surveyed.
Hope for Russia
The backdropof political instability has placed further strainon
the infrastructureplanning and venue construction for the2018
World Cup. However, in FIFA’s first evaluation of preparation
for the event, it said itwas satisfiedwith the rate atwhich the 12
venues for the tournament are progressing.
Hosting the event will cost around US$ 20 billion according
to the Sports Ministry, although concerns have been raised
about potential overspend. This has already been seen with
the Stroytransgaz, the company working on the stadium in
NizhnyNovgorod threatening topull out unless the budgetwas
increased fromRUR 15 billion (US$ 350million) to RUR 17
billion (US$ 397million).
However, one venue that has been deemed a definite success
has been the development of the new SpartakMoscow stadium,
whichwas formally opened in September.
As a lateentrant into theRussianWorldCupbid, itsdevelopers
Aecomhave hailed theUS$293million facility as a triumph. It
R
ussia’s largest railway construction company has bought a JCB JS220 tracked
excavator to carry out constructionwork on a key project nearMoscow.
Purchased by RZhDStroy, themachine is responsible for preparatory groundwork
in the construction of a new railwaywhichwill run alongside one of the busiest roads in the
Moscow region, the Yaroslavskoe highway.
The new JS220model is part of a large fleet of RZhDStory’s JCB excavators currently
working on a stretch of the new railway between Zheltikovo and Kostino.
Railway excavator
JCBmachine bought for keyMoscow line
>
ABOVE: Political instability in Ukraine
has affected its construction sector,
but housing projects such as Kiev’s RC
Green Island 2 have continued.
The Evolution Tower inMoscow’s
financial district is one of a number of
key construction sites in Russia.
