Travellers driving to Moscow’s Sheremetyevo Airport dread the short stretch of road near the sprawling Mega shopping mall. “Things are getting worse and worse,” says Georgy Idrisov, who flies from here regularly for his research into national economic development. “It took one-and-a-half hours to drive these couple of kilometres last month.”

Since Russia’s economic rebound the number of airline passengers has been soaring, so much so that the government has signalled it will spend hundreds of millions of dollars in the next few years on a new runway for the state-owned airport. The revival of the plan, which had more or less been abandoned during the recession, suggests that federal coffers are set to open wider, at least as far as transport facilities are concerned.

“Airports are in the worst situation,” says Vadim Dubovik, a Deloitte infrastructure expert in Moscow. “This holds back traffic between regions very much.” To upgrade the airports of the world’s largest country, he adds, the government needs to invest more in the next five to seven years than it has done in the two decades since the Soviet Union collapsed.

There is good reason to hurry, however. Sheremetyevo and the two other airports around Moscow — Domodedovo and Vnukovo — handled more passengers in 2010 than they did in their previous busiest year, 2008, according to industry researcher Oleg Panteleyev. The rapid build-up in passenger traffic means the new, third runway has to be operational in 2015, he says.

The government is determined to turn Moscow into a global financial centre, but because runways have to remain state property by law, the plan cannot involve

Moscow’s traffic jams are among the world’s worst private capital. Already, Prime Minister Vladimir Putin has warned that the airports are on the verge of reaching their combined annual capacity of 65 million people. Ultimately, he wants them to be capable of handling 100 million by 2020 — twice as many as last year.

In a bid to ensure that the airports’ development is better coordinated, the federal government is buying 75% of Vnukovo from the Moscow city authorities for upwards of €1bn. Under the auspices of Moscow’s new mayor, Sergei Sobyanin, the money will go into another blighted area of public transport: the city’s subway, which is currently bursting at the seams.

Sobyanin wants 53km of new lines by 2015 – almost as much as the city has built since 1991, when the USSR’s demise led to an easing of travel restrictions and an influx of people into the capital. This year alone, City Hall is forking out €1.4bn on the work, more than twice what it spent in 2010. (The downside is that the subway – famed for its palatial stations, decked out with mosaics and chandeliers – will lose much of its lustre, since the extensions are being built to a standard design.)

The knock-on effect, city officials hope, will be an easing of the congestion above ground. Out of 20 major world cities, Moscow’s traffic jams are the worst,

according to a study last year by IBM, and Dubovik says they are damaging Moscow’s business. “I have to use the subway increasingly often,” he adds, “otherwise, an appointment may take three to four hours.”

The problem is so severe that the Kremlin ordered Sobyanin to sort things out when it appointed him mayor last October. In 2011 the city plans to spend a further €3bn on road-building alone, and the establishment of a Federal Road Fund this year provided more evidence of the Russian government’s resolve.

Signed into law by President Dmitry Medvedev in April, the ring-fenced fund, devoted strictly to road construction, will draw on €6bn from the federal budget this year and an additional €2bn, according to transportation minister Igor Levitin, from a fuel tax that recently came into force.

If the government completes several other road programmes as planned, overall federal spending in this area could exceed €11bn, setting a new record for Russian investment in roads. According to official figures, it spent roughly €4.5bn last year.

Idrisov, an infrastructure expert at think tank the Gaidar Institute for Economic Policy, puts the planned spending spree down to the national parliamentary and presidential elections this December and next March respectively. “It’s more about politics than the economy,” he says. But if it happens as intended, the plan won’t exactly hurt Siberia and the other eastern provinces, where lack of roads cuts at least 30,000 settlements offfrom the rest of the country.

The regions’ inadequate roads are hampering private businesses, including those helped by the World Bank’s private- sector lending arm, the International Financial Corporation (IFC). As these firms grow, they need a link to markets elsewhere in the country and abroad, according to Snezana Stoiljkovic, IFC director for Eastern Europe and Central Asia in Moscow.

“Let’s take agribusiness as an example,” she says. “If you really want to make this sector a priority, you don’t only need to produce things – you also need to store them, transport them and export them.”

Russia expects to reclaim its role as a leading grain exporter once it recovers from the droughts that devastated last year’s harvests. Stoiljkovic believes the government needs to encourage more public-private partnerships but is being held back by insufficiently developed legislation.

In addition to extra money, teaming up with private investors would bring better technology and financial discipline, says Alexander Yerofeyev, an Ernst & Young partner in Moscow. And the cash for such deals would not be hard to come by, according to Deloitte’s Dubovik. “Investors and banks are looking for projects,” he says. Indeed, IFC and the European Bank of Reconstruction and Development (EBRD) had no difficulty raising €200m from eight foreign commercial banks for an airport expansion in St Petersburg last year in what the EBRD called a “heavily” over-subscribed transaction.

The Pulkovo Airport expansion is Russia’s first public-private partnership project; as well as private investors, the government’s development bank, VEB, is also contributing to the overall debt package of €716m. Northern Capital Gateway, the company in charge of the expansion, won a concession from the St Petersburg authorities in 2009 to operate the airport for 30 years. However, the venture won’t have to invest in Pulkovo’s runway, because the government upgraded it before the concession was finalised.

Whatever happens, the government will have to bear the brunt in financial terms. Even when the global economic crisis hit, it was committed to carry on spending, since it cannot postpone the 2014 Sochi Winter Olympics or the annual meeting of the Asia- Pacific Economic Cooperation forum in Vladivostok next

year. Russia sought to host these events, in part, to use preparations for them as a catalyst for the regional economies.

The federal government and state-owned Russian Railway Company are investing at least €8bn jointly, according to the latest estimates, on comfortable travel facilities for Olympic athletes and spectators.

These expenses – a third of the bill that the government and private investors are having to pay to prepare for the Black Sea resort’s Games – have helped to make the event one of the most expensive in Olympic history. The total costs are more than triple those of the previous winter Games in Vancouver, Turin and Salt Lake City combined.

In fact, the roads – passing over rivers and through mountain tunnels – will also be some of the world’s most expensive. The 50km car-and-railway route, Adler- Krasnaya Polyana, will cost €6bn alone if you include a few railway stations. Spending on the other, 17km relief road for Kurortny Prospekt will reach €2.5bn.

A major Russian construction company involved in the projects, Mostotrest, floated its shares on Moscow’s stock exchange in November, raising $388m. Putin’s former judo partner, Arkady Rotenberg, is the company’s largest shareholder with a stake of 34.4%.

Meanwhile in Vladivostok, two bridges are being built for a combined €1.4bn. One of them, straddling the Eastern Bosporus Straits, will have the longest cable-stayed span in the world, stretching 1,104m.

The country will have to unleash even more rubles a couple of years later to comply with its 2018 World Cup status. But at airports such as Sheremetyevo, visible improvements don’t have to cost a fortune. “The service quality is steadily growing to European levels,” says Idrisov. “Picking up your baggage has been much faster in the past two years.”