Step forward for Russian road project

By Sandy Guthrie24 July 2015

The financing and construction contract for sections 7 and 8 of the Moscow to St Petersburg motorway in Russia have been finalised by Two Capitals Highway, the concession company comprising Vinci Concessions (40%) and VTB Group (60%).

Investment during the construction period will amount to RUB97.8 billion (€1.6 billion), and the Russian Federation will finance 75% of the cost of construction. The works, with a value of €1.1 billion, will be carried out by the ICA consortium – a joint venture between the Turkish Ictas and the Italian Astaldi construction companies.

In 2014, Two Capitals Highway signed a public-private partnership contract with the Russian Federation, represented by Avtodor (the state company that operates Russia’s motorways). The 27-year contract – three years of construction and 24 years of operation – covers financing, design, construction, operation and maintenance of a 138km toll motorway starting at the Saint Petersburg ring road.

The private non-recourse financing amounts to RUB23.2 billion (nearly €400 million). Vinci said the concession company raised the entire debt through a bank loan from VTB Bank and project bonds.

A company made up of VTB Group (55%) and Vinci Highways (45%) will operate and maintain the infrastructure. Major upkeep and repair works will remain the responsibility of the concession company.

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