Russian firm Mostotrest is a leading contender for the next tender for the Moscow-St Petersburg highway and the company is headed by Arkady Rotenberg and his brother Boris
Interest is strong in one of Russia’s premier projects for road infrastructure - Eugene Gerden reports
The State Company Russian Highways (3974 Avtodor) has officially announced a tender for the construction of the sixth - and longest - section of the Moscow - St Petersburg highway. Avtodor is Russia’s leading company in the field of development of national road infrastructure, while this is one of the largest and most controversial projects in Russian road building in recent years.
The 6th section of the road will be at the 334-543km distance, while the maximum amount of the contract is estimated at 152.8 billion rubles (US$5 billion). Some 90% of funds for the project will be provided from the federal budget, while the remaining 10% will be allocated by a private investor.
According to Avtodor, which is responsible for the implementation of the project, this is the largest contract in the Russian road building industry for the last few years, both in terms of its cost and the length of the road.
Amongst the potential bidders for the tender are several large Russian road building and engineering companies. One in particular is2450 Mostotrest, which is controlled by brothers Arkady and Boris Rotenberg, well-known Russian businessman and are reportedly close to the country’s president Vladimir Putin.
This will be a toll road and the contract will be signed for 26 years. It is planned that under the terms of the contract, in addition to building the road itself, the contractor will be responsible for its maintenance, ensuring its timely repair, as well as ensuring efficient operation.
The 6th section will be built during 2014 - 2018 and has to be completed prior to the World Cup in 2018, while it will measure 217km long. The road will pass through the Tver and Novgorod regions of Russia and the contract also involves building up to 100 bridges as well as several major junctions. The section is expected to feature four lanes and will be designed for highway speeds.
The project will be implemented on the basis of a long-term investment agreement, which is one of the forms of public-private partnerships and which will be the most suitable for the building of such kind of projects.
According to the official representative of the Russian Ministry of Transport, a long-term investment agreement involves more convenient, simplified competitive procedures and mechanisms for closing of transactions, compared with concession contracts. The main advantage of such a scheme is the fact that the contractor will not be obliged to eliminate all the encumbrances of the territory before the start of construction, as would be the case for a concession agreement. According to Avtodor, signing of the concession agreement would significantly delay implementation of the entire project, due to imperfection of Russian legislation in the field of land allocation. And it is planned that the official agreement for the tender will be signed in December 2013.
Interest in the tender from major Russian and international companies is enormous. In addition to Mostotrest, among the potential bidders there are likely to be well-known Russian road building and engineering companies and consortia. These include Metropolitan Tract, Roads Construction Corporation, Magistral and an international construction company, Korsan Corviam Construction. Russian analysts believe that Mostotrest has the biggest chance to win the tender however.
Mostrotrest has expressed major interest in building the Moscow - St Petersburg highway. Two years ago the company won a tender on the construction of the 258-334km adjacent section of the highway, which bypasses the town of Vishny Volochek in Tver Oblast. At that time Mostotrest was the only company to submit an application for the RUB 46.5 billion ($1.55 billion) project. In addition, Mostotrest is currently building the 15-58km section of the motorway.
An official representative of Mostotrest has confirmed the company’s plans for participation in the tender for the building of the 6th section of the road. A representative from Mostotrest’s press office commented, “This project is certainly of interest to us. The company’s management decided to participate in the tender in accordance with the proposed terms, however other details are currently not being disclosed.”
Russian analysts believe that Mostotrest currently has probably the best road building portfolio in the country. In addition to building of the two sections of the Moscow-St Petersburg motorway (and big chances to build the third) the company currently implements a project, which involves building of the roads around Skolkovo, a rural locality in Odintsovsky District of Moscow Oblast, located 2km west of MKAD near the Setun River, which will be a base for Skolkovo Innovation Center, a planned high technology business area. The amount of the contract, which was provided to Mostotrest on a non-competitive basis, is $2 billion.
The order for granting of the Skolkovo contract to Mostotrest was signed by Russia’s then president Dmitry Medvedev in April last year, just before his departure from the post.
Under the terms of the contract, Mostotrest will focus on the construction and reconstruction of six sections of Skolkovo road infrastructure, among which is the southern section of the North-West chord, three junctions at the intersection of Skolkovo, Mozhaiskogo highways and General Dorokhova street with MKAD and some other projects.
In addition to this, Mostotrest currently implements another ambitious project for the building of the second and third stages of the relief road of Kyrortny Prospect in Sochi, the city’s main highway, in accordance with the contract valued at $2 billion.
The second stage involves building of a two-lane highway with the total length of more than 5.5km in each side. As part of the project, 13 bridges, overpasses and viaducts with a total length of 4.8km in both directions, as well as six tunnels with a total length of more than 4km will be built. At the same time the third phase of the project involves building of the two-lane highway with a length of 5.3km in each direction, which will connect the rivers of Sochi and Psakhe.
Finally, among other large projects the company are building is the combined motor and rail road Adler - Alpica Service, as well as one of the sections of the Moscow Fourth Ring Road.
According to earlier statements from Russia’s President Vladimir Putin, the Moscow - St. Petersburg highway is just one of the first in a series of large-scale road building projects which will be implemented in Russia by 2020. Total volume of investments in their implementation, according to estimates of the Russian government, is about €500 billion.
At the same time, despite the declared investment projects, analysts of the Russian Ministry of Transport Industry believe that domestic road building may face serious difficulties during the next several years, due to a lack of competition in the industry. It remains to be seen whether more firms will enter the Russian market, particularly with the presence of large international players competing for future tenders.
The State Company Russian Highways (
The 6th section of the road will be at the 334-543km distance, while the maximum amount of the contract is estimated at 152.8 billion rubles (US$5 billion). Some 90% of funds for the project will be provided from the federal budget, while the remaining 10% will be allocated by a private investor.
According to Avtodor, which is responsible for the implementation of the project, this is the largest contract in the Russian road building industry for the last few years, both in terms of its cost and the length of the road.
Amongst the potential bidders for the tender are several large Russian road building and engineering companies. One in particular is
This will be a toll road and the contract will be signed for 26 years. It is planned that under the terms of the contract, in addition to building the road itself, the contractor will be responsible for its maintenance, ensuring its timely repair, as well as ensuring efficient operation.
The 6th section will be built during 2014 - 2018 and has to be completed prior to the World Cup in 2018, while it will measure 217km long. The road will pass through the Tver and Novgorod regions of Russia and the contract also involves building up to 100 bridges as well as several major junctions. The section is expected to feature four lanes and will be designed for highway speeds.
The project will be implemented on the basis of a long-term investment agreement, which is one of the forms of public-private partnerships and which will be the most suitable for the building of such kind of projects.
According to the official representative of the Russian Ministry of Transport, a long-term investment agreement involves more convenient, simplified competitive procedures and mechanisms for closing of transactions, compared with concession contracts. The main advantage of such a scheme is the fact that the contractor will not be obliged to eliminate all the encumbrances of the territory before the start of construction, as would be the case for a concession agreement. According to Avtodor, signing of the concession agreement would significantly delay implementation of the entire project, due to imperfection of Russian legislation in the field of land allocation. And it is planned that the official agreement for the tender will be signed in December 2013.
Interest in the tender from major Russian and international companies is enormous. In addition to Mostotrest, among the potential bidders there are likely to be well-known Russian road building and engineering companies and consortia. These include Metropolitan Tract, Roads Construction Corporation, Magistral and an international construction company, Korsan Corviam Construction. Russian analysts believe that Mostotrest has the biggest chance to win the tender however.
Mostrotrest has expressed major interest in building the Moscow - St Petersburg highway. Two years ago the company won a tender on the construction of the 258-334km adjacent section of the highway, which bypasses the town of Vishny Volochek in Tver Oblast. At that time Mostotrest was the only company to submit an application for the RUB 46.5 billion ($1.55 billion) project. In addition, Mostotrest is currently building the 15-58km section of the motorway.
An official representative of Mostotrest has confirmed the company’s plans for participation in the tender for the building of the 6th section of the road. A representative from Mostotrest’s press office commented, “This project is certainly of interest to us. The company’s management decided to participate in the tender in accordance with the proposed terms, however other details are currently not being disclosed.”
Russian analysts believe that Mostotrest currently has probably the best road building portfolio in the country. In addition to building of the two sections of the Moscow-St Petersburg motorway (and big chances to build the third) the company currently implements a project, which involves building of the roads around Skolkovo, a rural locality in Odintsovsky District of Moscow Oblast, located 2km west of MKAD near the Setun River, which will be a base for Skolkovo Innovation Center, a planned high technology business area. The amount of the contract, which was provided to Mostotrest on a non-competitive basis, is $2 billion.
The order for granting of the Skolkovo contract to Mostotrest was signed by Russia’s then president Dmitry Medvedev in April last year, just before his departure from the post.
Under the terms of the contract, Mostotrest will focus on the construction and reconstruction of six sections of Skolkovo road infrastructure, among which is the southern section of the North-West chord, three junctions at the intersection of Skolkovo, Mozhaiskogo highways and General Dorokhova street with MKAD and some other projects.
In addition to this, Mostotrest currently implements another ambitious project for the building of the second and third stages of the relief road of Kyrortny Prospect in Sochi, the city’s main highway, in accordance with the contract valued at $2 billion.
The second stage involves building of a two-lane highway with the total length of more than 5.5km in each side. As part of the project, 13 bridges, overpasses and viaducts with a total length of 4.8km in both directions, as well as six tunnels with a total length of more than 4km will be built. At the same time the third phase of the project involves building of the two-lane highway with a length of 5.3km in each direction, which will connect the rivers of Sochi and Psakhe.
Finally, among other large projects the company are building is the combined motor and rail road Adler - Alpica Service, as well as one of the sections of the Moscow Fourth Ring Road.
According to earlier statements from Russia’s President Vladimir Putin, the Moscow - St. Petersburg highway is just one of the first in a series of large-scale road building projects which will be implemented in Russia by 2020. Total volume of investments in their implementation, according to estimates of the Russian government, is about €500 billion.
At the same time, despite the declared investment projects, analysts of the Russian Ministry of Transport Industry believe that domestic road building may face serious difficulties during the next several years, due to a lack of competition in the industry. It remains to be seen whether more firms will enter the Russian market, particularly with the presence of large international players competing for future tenders.
