Finmeccanica, Russian Railways Sign Deal

MILAN, Italy (AP) -- Italian defense company Finmeccanica SpA said Friday it had signed a memorandum of understanding with state-owned JSC Russian Railways for the creation of a high-speed rail link between Moscow and St. Petersburg.

Italy's state-owned railway operator Ferrovie dello Stato also signed the memorandum.

Finmeccanica and Ferrovie dello Stato did not provide any financial details nor did the company say when construction would begin.

"We hope to sign the binding agreement in March," said Ferrovie dello Stato Chief Executive Mauro Moretti.

Finmeccanica said in October it had signed an agreement with JSC Russian Railways to work together on the production, technical assistance, and marketing of rolling-stock and rail infrastructure in Russia.

Moretti said the three-way partnership also aimed to develop high-tech railway products to export to international markets, especially in Eastern Europe.

The partnership is watching with interest a tender to build a US$2 billion (euro1.54 billion) railway in Saudi Arabia, in which Russian Railways is participating, he said.

The winner of the tender was expected to be announced at the start of 2007, according to a Russian press report. It will be the longest railway in the Middle East.