April
2010
The high-speed Moscow - St. Petersburg rail (HSR) and European experience with Life Cycle Contracts in HSR
Albert Eganyan, Managing Partner of Vegas Lex, Evgeny Glumov, Project Manager of the PPP and Infrastructure Department, and Senior Attorney of the PPP and Infrastructure Department Irina Blokhina and took part in a series of working meetings between 31 March and 2 April held as part of an international conference organized by OJSC Russian Railways to present its high-speed rail (HSR) between Moscow and St. Petersburg and exchange experience with the foreign colleagues as regards Life Cycle Contracts employed in constructing HSR. The organizers, OJSC Russian Railways together with OJSC High-Speed Rail Lines, presented not only a high-status project, but a previously unknown method of implementing the same, namely, Life Cycle Contracts (LCC).
The development of the innovative Public-Private Partnership forms makes it possible for the Russian transport system to reach a new level adopting the best technological practice of the European countries and the given LCC mechanism ensures a new quality approach to implementing the integrated strategy for the international development of the country's transport industry.
The international conference concerning ‘Using life cycle contracts in constructing the high-speed Moscow - St. Petersburg line' was the major highlight of the three-day event held on 1 April 2010.
Denis Muratov, General Director of OJSC High-Speed Rail Lines, which is in charge of the LCC contract for the HSR, delivered a speech on the need of constructing a high-speed rail line connecting Moscow and St. Petersburg. According to Mr. Muratov, the social and economic benefits offered by HSR will be more than twice the costs necessary for its implementation, whereas its impact on the public and business interests cannot be overstated. In particular, the project will significantly increase the investment appeal of the areas adjacent to the rail line, ensure a shorter travel time and lower road traffic mortality rate (due to a re-distributed passenger traffic flow), improve the transport accessibility and mobility of the regions and create new employment opportunities.
The working meetings considered a number of the financial, economic, administrative and legal specifics of implementing HSR projects, including the HSR stages and sub-projects, the procedure for the state to subsidize the HSR infrastructure costs and life cycle contracts as the most effective model for HSR construction. The foreign delegates, in their turn, shared their ‘recipes' for successful completion of the project.
The active discussions were supported by the heads of LCC-based HSR projects in Europe, heads of dedicated ministries and agencies of the Russian Government, as well as OJSC Russian Railways and OJSC High-Speed Rail Lines.
According to Jan van Schoonhoven, Director for PPP, Ministry of Transport of the Netherlands, the use of LCC for the Amsterdam - Brussels HSR has proved to be a successful method resulting in the large-scale integration of LCCs in the Netherlands.
"As shown by the international experience, the way to the great possibilities promised by both HSR and LCC is full of rather expensive mistakes and disappointments", - says V.I. Yakunin, President of OJSC Russian Railways, - "The only way to avoid them is to learn carefully by the experience of those countries that have already implemented similar projects".