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Highway section may be renovated with Chinese loan, official says

A highway section linking Homyel and Zhlobin may be renovated with a Chinese loan, Alyaksandr Halawnyow, a departmental chief at the transport ministry's road maintenance and construction department (Belawtador), told reporters in Minsk on March 30 as quoted by BelaPAN.

He said that the initial condition of China's loan was that 70 percent of all equipment and materials to be used in the project should come from China, something that Belarus was opposed to.

"We have construction enterprises and an industry of our own, which would be not involved if such conditions were accepted. At the current stage the Chinese side is ready to lend us around $1 billon at a soft annual interest rate of three percent, as well as on new conditions, whereby up to 70 percent of the equipment, materials and labor may be of the Belarusian origin. We are ready to cooperate on such conditions, but this is not a commercial but a social loan. A study has established that even if tolls are introduced on this road upon its renovation, the project will not pay off," Mr. Halawnyow said.

He noted that the section was used by between 4,000 and 6,000 vehicles per day. The authorities will not be able to introduce a higher toll than the one collected from drivers using the Brest-Minsk-Russian border highway, he noted.

The official called for a cautious approach to loans for road construction. "Of course, roads must be built, but if the state has no money to repay the loans, we run the risk of repeating the fate of Ukrainian colleagues who are now taking new loans to repay their old ones," he said.

"In this context I like more our work with the World Bank. It provides a loan at an annual interest rate of three percent but does not set conditions of foreign company involvement in the project. We are renovating the Asipovichy-Babruysk road with these funds."