September
2013
VEGAS LEX consults project to introduce fees for 12-plus ton vehicles
The 12-plus ton project, one of the largest public-private projects under which fees will be introduced for heavy vehicles to compensate for the damage they do to the surface of federal roads, was launched on September 11, 2013.
It provides for using the mechanism of public-private partnership in the form of a concession agreement. The government has decided that the Federal Road Agency (Rosavtodor) will act as the concession grantor under this project.
«It is the first project of this scale. It is designed to create a standard system that will be applicable throughout the country to compensate for the damage done by heavy vehicles to road surface and [to use the receipts] to build a large number of new European-class roads», said Rosavtodor head Roman Starovoit.
Ivan Grigorovich, head of the Federal Road Agency’s federal pubic enterprise Russian Highways, said that the priority task at this stage is to ensure the transparent choice of the best consortium of private partners for the duration of the project and to create conditions for maximum competition among applicants.
Preliminary calculations show that deductions to the federal budget during the 13-year-long project should reach about 1 trillion rubles (over $28 billion at the current exchange rate). These funds will be used to develop the road system, including timely and quality repairs of road surface, and also to increase the roads’ throughput capacity.
Private investors are expected to contribute about 180 billion rubles ($5 billion).
Modern technology will be used for the transfer of funds and for monitoring this process, including GLONASS/GPS. The details of this technology are to be determined at the technical phase of the competition.
The first phase of the project provides for choosing a private partner, or rather a consortium of private partners, which will compete with each other by presenting their investment, financial, technical and legal proposals. The tender for the right to sign a concession agreement, the criteria of which are stipulated in Government Resolution No. 531-r of April 6, 2013, will be maximally open and based on the staged system, beginning with the preliminary choice of applications and ending with the choice of a winner. The consortium will finance, design, build and provide maintenance services for the proposed system.
A project consultant will be chosen following the tender for the most effective financial scenario and the best technological solution. This task has been assigned to a consortium of consultants consisting of VEGAS LEX (institutional and legal aspects) and First Infrastructure Company InfraONE (investment and financial aspects). They signed a state contract for this project on September 16, 2013, and will represent the interests of the concession grantor. In particular, they will prepare a concession agreement, analyze current legislation to increase project efficiency, provide comprehensive support at the stage of preliminary choice of applicants and the competition stage, and will also support the concession grantor during the signing of a concession agreement and financial close documents.
«Efficient work by the investment and legal consultant within the framework of the government mandate will ensure quality implementation of the project from the competition stage to project completion,” said consortium head Albert Eganyan. “It will also help create a positive precedent in the use of PPP for the development of Russia’s road system, and will set a good example for encouraging the regional authorities to create a similar system for regional roads».
The concession grantor announced a competition for signing a concession agreement on September 11, 2013.
The project’s road show is planned for September 23, 2013. The details of the event will be announced later.
For details about the work of the consortium, phone Marina Zhegulina of the consortium’s press service at +7 (495) 933 0800.
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Transport vehicles with the maximum authorized mass (MAM) of more than 12 tons are vehicles the weight of which (the maximum load plus the weight of the driver and passengers), according to the vehicle registration certificate, exceeds the gross combination weight (12 tons). The weight of articulated trucks is given without the load as per registration certificate. The MAM of trucks with trailers (semitrailers) is calculated as the combination weight of the truck and the trailer (semitrailer).
The 12-plus ton project includes several stages: the announcement of the competition, a road show, preliminary selection of applications, the analysis and assessment of their proposals, the choice of a winner, the signing of a concession agreement, the signing of loan contracts between the private partners and the authorized banks aimed at creating the required system, and the creation and exploitation of this system throughout the concession agreement.
Government resolution on collecting fees from 12-plus ton vehicles to compensate for the damage they do to federal roads was adopted in June 2013 and will come into force on November 1, 2014. The fee will be 3.50 rubles ($0.10) per kilometer (to be adjusted annually in accordance with changes in the consumer price index).
VEGAS LEX is one of the leading multi-faceted law firms and the national leader in legal consultancy for infrastructure projects, public-private partnerships, project financing, energy, anti-monopoly regulation and dispute resolution. It I annually listed as a top three Russian consultants in PPP and infrastructure projects and has an impressive record of over 80 successful projects, including those in the transport industry.http://www.vegaslex.ru/
The First Infrastructure Company, InfraONE, specializes in full-cycle organization of projects involving the financing and construction of various infrastructure facilities (including transport facilities), from the project concept to funding and management. The company focuses on public, social, transport and other infrastructure development, project financing, public-private partnership and other forms of infrastructure investment. It also provides large infrastructure project investment services.http://www.infraone.ru/