Skip to main content

Key Russian PPP project

The Northern Capital Highway (NCH) consortium has been named the preferred bidder in the tender for the central section of St Petersburg’s Western High-Speed Diameter (WHSD) project. Should NCH win the tender process it will build and then operate the entire stretch of the toll road. The consortium comprises VTB Capital and Gazprombank from Russia in partnership with Italian company Astaldi and Turkish firm Ictas Insaat.
April 18, 2012 Read time: 3 mins
RSSThe Northern Capital Highway (NCH) consortium has been named the preferred bidder in the tender for the central section of St Petersburg’s Western High-Speed Diameter (WHSD) project. Should NCH win the tender process it will build and then operate the entire stretch of the toll road. The consortium comprises VTB Capital and Gazprombank from Russia in partnership with Italian company Astaldi and Turkish firm Ictas Insaat.

The WHSD is a key project for St Petersburg as it will help the city to develop its role as a major international transport hub. The new link is of major significance and will also be the first toll road operated within city limits in Russia, while it is Russia’s largest PPP project.

NCH’s bid proposes a minimal WHSD toll revenue guarantee of US$336.6 million/year (€234 million/year). Should the project revenue exceed this amount, NCH will pay 90% of the excess to the city. It is expected that once the road is open to traffic, toll revenues will soon reach the minimum income guarantee level. This would rule out the need for the city authorities to provide funds to support the project.

WHSD’s central section is the most technically complex to build part of the road and includes three bridges, two of which will feature a cable-stayed design, and a tunnel.

The expected investment is estimated by NCH at approximately $4.3 billion (€3 billion) and will be financed through a combination of debt and equity, as well as a federal grant of some $1.776 billion (€1.234 billion). The consortium has already received debt financing proposal from Russian banks VTB and Gazprombank and NCH hopes to sign the PP agreement with St Petersburg in December 2011. Infrastructure investment is one of VTB Capital’s strategic priorities. The Western High-Speed Diameter project is in line with VTB Capital’s plans to develop infrastructure projects in Russia utilising public-private partnership mechanisms. VTB Capital is also the lead investor in the Northern Capital Gateway consortium which has won the deal to modernise and operate Pukovo Airport in St Petersburg.

Meanwhile, construction of a complex of structures protecting St Petersburg from floods has now been completed. The complex is 25.4km long. The protective dam connects the Northern and Southern shores of the Gulf of Finland across Kotlin Island, with a road on the dam forming the last section of a ring road. Construction of the dam began in 1979 but work was interrupted when the project was 70% completed in 1987. Work resumed in 2005. The investment in the project stood at $34.36 million (€24.06 million) in the 1979-2005 period and $3.79 billion (€2.64 billion) since 2005.

Related Content

  • US economic stimulus package highlights ITS technology
    July 17, 2012
    US Secretary of Transportation Ray LaHood talks to ITS International about economic stimulus funding and the absolute need to maintain and increase the use of technology in transportation. Of the total of $787 billion of funding announced under the American Recovery and Reinvestment Act (ARRA), the economic stimulus package which was signed into law by US President Barack Obama on 17 February 2009, $48.1 billion will go to the US Department of Transportation (USDOT). Of that, $27.5 billion is for highway in
  • Campaign calls for full funding for metropolitan transport
    February 9, 2015
    A US pressure group is pushing for full funding for metropolitan transport, with a campaign that could have implications for other public transport systems. The Move NY team campaign aims to bring a faster, safer, fairer transportation system to the greater New York metropolitan region. The Metropolitan Transportation Authority (MTA) is responsible for public transportation in the US state of New York, serving 12 counties in south-eastern New York, along with two counties in south-western Connecticut und
  • Reauthorization 2012: the facts laid bare
    September 12, 2012
    A reauthorization bill for transportation came into law in July 2012, rubber stamping federal funding increases through the 2014 financial year, among other things. The new bill presents the good, the bad and the ugly of transportation infrastructure in the US, writes Pat Jones On June 29 this year, the US House of Representatives and Senate both approved the conference report on the ‘Moving Ahead for Progress in the 21st Century Act’ or MAP-21. President Obama signed this legislation into law on July 6.
  • Scottish company produces motor fuel from whisky
    March 2, 2015
    A Scottish company has become the first in the world to produce biofuel capable of powering cars from residues of the whisky industry. Edinburgh-based Celtic Renewables now plans to build a production facility in central Scotland after manufacturing the first samples of bio-butanol from the by-products of whisky fermentation. Celtic Renewables, in partnership with the Ghent-based BioBase Europe Pilot Plant (BBEPP), has produced the first samples of bio-butanol from waste using a process called the acetone-b