Russia Plans World's Longest Tunnel, a Link to Alaska
April 18, 2007 - Yuriy Humber - Bloomberg.com
Russia plans to build the world's longest
tunnel, a transport and pipeline link under the Bering
Strait to Alaska, as part of a $65 billion project
to supply the U.S. with oil, natural gas and electricity
from Siberia. The project, which Russia is coordinating
with the U.S. and Canada, would take 10 to 15 years
to complete, Viktor Razbegin, deputy head of industrial
research at the Russian Economy Ministry, told reporters
in Moscow today. State organizations and private companies
in partnership would build and control the route,
known as TKM-World Link, he said. A 6,000-kilometer
(3,700-mile) transport corridor from Siberia into
the U.S. will feed into the tunnel, which at 64 miles
will be more than twice as long as the underwater
section of the Channel Tunnel between the U.K. and
France, according to the plan. The tunnel would run
in three sections to link the two islands in the Bering
Strait between Russia and the U.S. ``This will be
a business project, not a political one,'' Maxim Bystrov,
deputy head of Russia's agency for special economic
zones, said at the media briefing. Russian officials
will formally present the plan to the U.S. and Canadian
governments next week, Razbegin said. The Bering Strait
tunnel will cost $10 billion to $12 billion, and the
rest of the investment will be spent on the entire
transport corridor, the plan estimates. ``The project
is a monster,'' Yevgeny Nadorshin, chief economist
with Trust Investment Bank in Moscow, said in an interview.
``The Chinese are crying out for our commodities and
willing to finance the transport links, and we're
sending oil to Alaska.'' In Alaska, a supporter of
the project is former Governor Walter Joseph Hickel,
who plans to co-chair a conference on the subject
in Moscow next week. ``Governor Hickel has long supported
this concept, and he talks about it and writes about
it,'' said Malcolm Roberts, a senior fellow at the
Anchorage-based Institute of the North, a research
policy group focused on Arctic issues. Hickel governed
Alaska from 1966 to 1969 as a Republican and then
from 1990 to 1994 as a member of the Independence
Party. Alaska's current officials, however, are preoccupied
with other issues, including a plan to develop a pipeline
to transport natural gas from the North Slope to the
lower 48 U.S. states, Roberts said. The U.S. government's
Federal Railroad Administration isn't directly involved
in talks about the link, agency spokesman Warren Flatau
said today. Finance Agencies Tsar Nicholas II, Russia's
last emperor, was the first Russian leader to approve
a plan for a tunnel under the Bering Strait, in 1905,
38 years after his grandfather sold Alaska to America
for $7.2 million. World War I ended the project. The
planned undersea tunnel would contain a high-speed
railway, highway and pipelines, as well as power and
fiber-optic cables, according to TKM-World Link. Investors
in the so-called public-private partnership include
OAO Russian Railways, national utility OAO Unified
Energy System and pipeline operator OAO Transneft,
according to a press release which was handed out
at the media briefing and bore the companies' logos.
Russia and the U.S. may each eventually take 25 percent
stakes, with private investors and international finance
agencies as other shareholders, Razbegin said. ``The
governments will act as guarantors for private money,''
he said. The World Link will save North America and
Far East Russia $20 billion a year on electricity
costs, said Vasily Zubakin, deputy chief executive
officer of OAO Hydro OGK, Unified Energy's hydropower
unit and a potential investor. Transport Electricity
``It's cheaper to transport electricity east, and
with our unique tidal resources, the potential is
real,'' Zubakin said. Hydro OGK plans by 2020 to build
the Tugurskaya and Pendzhinskaya tidal plants, each
with capacity of as much as 10 gigawatts, in the Okhotsk
Sea, close to Sakhalin Island. The project envisions
building high-voltage power lines with a capacity
of up to 15 gigawatts to supply the new rail links
and also export to North America. Russian Railways
is working on the rail route from Pravaya Lena, south
of Yakutsk in the Sakha republic, to Uelen on the
Bering Strait, a 3,500 kilometer stretch. The link
could carry commodities from eastern Siberia and Sakha
to North American export markets, said Artur Alexeyev,
Sakha's vice president. The two regions hold most
of Russia's metal and mineral reserves ``and yet only
1.5 percent of it is developed due to lack of infrastructure
and tough conditions,'' Alexeyev said. Cluster Projects
Rail links in Russia and the U.S., where an almost
2,000- kilometer stretch from Angora to Fort Nelson
in Canada would continue the route, would cost up
to $15 billion, Razbegin said. With cargo traffic
of as much as 100 million tons annually expected on
the World Link, the investments in the rail section
could be repaid in 20 years, he said. ``The transit
link is that string on which all our industrial cluster
projects could hang,'' Zubakin said. Japan, China
and Korea have expressed interest in the project,
with Japanese companies offering to burrow the tunnel
under the Bering Strait for $60 million a kilometer,
half the price set down in the project, Razbegin said.
``This will certainly help to develop Siberia and
the Far East, but better port infrastructure would
do that too and not cost $65 billion,'' Trust's Nadorshin
said. ``For all we know, the U.S. doesn't want to
make Alaska a transport hub.'' The figures for the
project come from a preliminary feasibility study.
A full study could be funded from Russia's investment
fund, set aside for large infrastructure projects,
Bystrov said. To contact the reporters on this story:
Yuriy Humber in Moscow at yhumber@bloomberg.net ;
Bradley Cook in Moscow at bcook7@bloomberg.net .
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