Russian Prime Minister Vladimir Putin will discuss joint projects in rail transport with the chief executive of Germany’s Siemens, signalling new lucrative deals for the German firm in Russia.

The government said that Putin will inspect a new electric locomotive with asynchronous traction drive designed at Ural’s Locomotives plant, a joint venture between Siemens and a Russian firm Sinara, controlled by steel tycoon Dmitry Pumpyansky.

The governement said Putin and CEO Peter Loescher will discuss further cooperation in rail transport. It said the government was reviewing a joint production of Lastochka regional passenger trains based on Siemens’ Desiro model.

Russia is Europe’s largest railway market with over 85,000 kilometres (52,820 miles) of track, carrying some 1.3 billion passengers and 1.3 billion tonnes of freight each year but the rail infrastructure and machinery are outdated.

The joint venture between Siemens and Sinara plans to build 221 locomotives worth $1.4 billion for the country’s railroad monopoly Russian Railways between 2011 and 2016. The venture aims to manufacture 70 percent of parts in Russia by 2014.

Siemens is competing with French firm Alstom which has an option to buy a 25 percent stake in TransmashHolding, Russia’s biggest rolling stock and locomotive maker.

Russia is trying to diversify its oil-focused economy through partnerships with leading global firms. Siemens has diverse business interests in Russia and Loescher is a frequent guest of Putin. (Reuters)