Sea Facade, about which little is known, is expecting to get some $90 million of federal financing to cover part of the project's cost and has the backing of Governor Valentina Matviyenko. Another $130 million is to come from private investors, Bogun said at a meeting in City Hall last week.

"The project aims to improve the shipping channel by deepening it to 10 meters, building 10 berths, which would be able to serve big passenger ships up to 1,300 meters long and a small berth where local ships up to 200 meters long could dock," Interfax quoted Bogun as saying Thursday.

The $90-million deepening of the channel is to start in spring 2005, he said, while by October this year the company is going to complete the investment plan for the passenger port complex that will be able to service 1.2 million passengers annually.

With an annual capacity of 1.5 million passengers expected to visit the city by sea by 2010 the new port would pay back the investments in six or seven years, Bogun said.

The project looks "quite realistic and the city needs it," said Mikhail Nikolayevsky, deputy director of LemorNIIproyekt, an organization that has been drafting plans for the St. Petersburg Passenger Port development for the last few years.

A likely site for the development is an area near to the Pribaltiiskaya hotel located on Vasilyevsky Island, Nikolayevsky said Wednesday.

"They would need a deeper channel there," he said in a telephone interview. "I think they would use federal money to excavate it."

But Boris Vishnevsky, a member of Yabloko faction in the Legislative Assembly, said he has no knowledge of the federal government allocating $90 million for the project.

"It seems to be quite unlikely they would get it," he said. "It could come from a presidential reserve fund or something. It's the first time I have heard of it."

The passenger port management has also never heard of Sea Facade.

Last year 350,000 passengers came to the city by sea, 225,000 of which were served by the St. Petersburg cargo port.

Matviyenko hailed the plans for the new passenger port as "the city's only project of the 22nd [sic] century."

Sergei Korneyev, head of the city branch of the Russian Tourist Industry Union said that this year tourist numbers could double because of a growing attractiveness of the Baltic sea region.

"Tourism is booming in the whole Baltic sea region," he said Wednesday. "There is no terrorism in these territories and, thank God, nothing like SARS. Tourists are concerned about their safety."

Also last week, Matviyenko and the recently appointed Transportation and Communications Minister Igor Levitin reached an agreement that construction of the western freeway, which will connect the southern part of the ring road with its northern part via the cargo and passenger ports could be financed using the same scheme as the sea port, using both federal and private investment.

"It is particularly important to build this road that will not intersect with busy city streets, but will connect major city highways with the ring road and the port," local media quoted Levitin as saying April 28.

The Western Freeway joint-stock company was set up by City Hall in 1996, but after spending tens of millions of city budget rubles on designing the $1.14 billion road, nothing has been built.

"The agreement that the government is ready to act together with private investors is a sign that the real cost of the project is far more than initially planned," Vladimir Yeryomenko, the Legislative Assembly deputy in the Mariinsky faction, said Wednesday.

"This is a common practice in other countries, but it is too early to discuss specifics before the government has determined the terms for investors," he said. "For instance, some land along the road could be allocated for private ownership."

Levitin promised the city would get 24 billion rubles ($826 million) in 2004 and in 2005 for work on the ring road.

The eastern part of the road is scheduled to be completed next year.

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St Petersburg Times, May 6, 2004