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Russian crisis raises Western fundind fears

CONSULTANTS AND contractors in Russia were this week bracing themselves for signs that Western funding for their projects could be cut off amid the country's economic and political crisis.

'The next two weeks are critical,' said Gibb chief executive Peter Brettell, whose company is earning pounds100,000 a month from its involvement with the St Petersburg Station and the related high speed rail line to Moscow.

Fears that Western agencies like the World Bank would cut their funding surfaced as US President Bill Clinton flew to Moscow for talks with Russia's President Boris Yeltsin about the crisis.

Taylor Woodrow, joint venture contractor on the project with Skanska, has so far been paid in US dollars for work on the $200M (pounds125M) ECGD- guaranteed project. On its other current Russian job, the British Embassy in Moscow, Taylor Woodrow earns Sterling.

'There is doubt about long term external funding as there is no way of paying it back,' said British Consultants Bureau chairman Clive Hardcastle.

'All bank transfers have seized up and so no-one can pay. Where there is any cash, people will have a prior use for the money.' Added to that was the problem of 'government in vacuum - no-one knows who can sign what,' said Hardcastle.

Halcrow's Europe region managing director Chris Green echoed concern about external funding: 'If the Americans put pressure on the World Bank to stop disbursements, that could cause a hiccup.'

So far Halcrow has had no payment difficulties on its WB funded North Caucasus water resources study, or on its European Union-supported Tacis project, Widening the environ- mental action plan. But Green said: 'There may well be a slowing down by the World Bank on new projects.'

Others were more stoical. 'Of course we are concerned, but in the context of Russian crises this is early days,' said Arup's director responsible for eastern Europe, Dave Whittleton.

Arup has maintained a Moscow office for 10 years and currently has 40 people working there - many of them busy with substantial office rebuilds for clients in the troubled financial and banking sector, and on construction of major infrastructure for external investors in manufacturing and distribution.

George Gamsmasakhourdia, Fugro's Moscow office general director, admitted to being: 'A

little distressed.' But he added 'It is not giving us a headache.'

Mike Winney

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