China to lend expertise and money to help Russia build its first-ever high-speed rail link between Moscow and Kazan

Russia has agreed a memorandum of cooperation with China to begin construction of a long-planned high-speed railway between the cities of Moscow and Kazan, with the deal set to be signed later today, Kommersant understands.

The news agency said Russian officials had agreed to a key demand of the Chinese -- that the new line will be built using Chinese equipment. Thus, the Beijing government has achieved its main priority of opening new markets for its engineering products.

Kommersant says Russian and Chinese officials have reached agreement on the amount each party will invest in the project, as well as each country's basic obligations. However, the specifics of the deal are still to be ironed out, hopefully by the end of the year.

Russian Railways (RZD), the state-owned railway operator, refused to comment on the negotiations, and it remains unclear how much China is ready to invest in the project. Russian officials have already committed to investing $5.9 billion in the project, while Beijing could provide an additional $1 billion towards construction, subject to unspecified guarantees being met.

Talks concerning the construction of Russia's first high-speed railway link have been ongoing for several years, but the huge estimated cost of the project has proven to be a major obstacle. Initial projections estimated the total cost at $19 billion, forcing Russian officials to look for outside investment in the project.

Once constructed, the new railway is expected to reduce travel time between Moscow and Kazan from 11.5 hours to about 3.5 hours, Kommersant reported.

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