8 July 2010 | By: Charmaine Tan

Russia is seeking private businesses to invest in the development of its airports. Russian Prime Minister Vladimir Putin said that the aviation industry will benefit from public-private partnerships.

Putin announced that in the past two years, Russia has spent about RUB47 billion (*S$2.1 billion) to modernise its airports.

Russia’s airports need to expand their capacities with the recent increases in air travel. Air travel rose 32 per cent from January to May this year. For the first five months of 2010, the number of passengers was greater than that of the entire year of 2008.

The majority of all flights in Russia are being served by Moscow. The recent road congestion problems on the Leningradskoye Highway leading to Moscow’s largest international airport, Sheremetyevo Airport highlighted the infrastructure problem. Officials are looking to airports in other regions as transfer stations in order to lessen the burden on Moscow. 

Chenchnya’s Grozny airport recently commenced handling international flights after being disrupted for 15 years. The resumption of international flights will boost the economy of Chechnya.

The state plans to pump in more than RUB306 billion to develop ground and air transportation infrastructure over the next five years. However, the state’s financial abilities are limited and the Russian government is looking to private investors to ease the cost of developing its aviation sector. 

Russia’s state bank, VTB won the concession last year to rebuild and run Russia’s fourth-busiest airport, Pulkovo airport for 30 years. The development is collectively funded by VTB Capital, Germany’s Fragport and Greece’s Copelouzos Group.

*Exchange correct as at 8 July 2010