23 December 2011. VTB Capital, Gazprombank, the Bank for Development and Foreign Economic Affairs (Vnesheconombank), the European Bank for Reconstruction and Development (EBRD), and the Eurasian Development Bank (EDB) signed a memorandum with Magistral Severnoy Stolitsy that sets out the general principles and conditions of lending for the project to construct the Western High-Speed Diameter toll road.
In accordance with the memorandum, the banks will prepare the loan terms for Magistral Severnoy Stolitsy. The memorandum sets forth the preliminary conditions of project finance to be provided by the lenders. The money will be used to finance the construction of the central portion of the Western High-Speed Diameter road.
The Investment Fund of the Russian Federation will also finance the project.
The project is based on the principles of public-private partnership (PPP) and provides for entering into a PPP agreement between the government of St. Petersburg, the Western High-Speed Diameter company, and Magistral Severnoy Stolitsy, which is a consortium of investors including the VTB Bank and Gazprombank and the winning bidder in accordance with the laws of St. Petersburg.
Under the PPP agreement, Magistral Severnoy Stolitsy undertakes to build the central portion of the Western High-Speed Diameter road, to operate and maintain the central, northern and southern parts of the road, and to collect tolls on these sections which will be leased by Magistral Severnoy Stolitsy for thirty years.
The southern and northern parts of the Western High-Speed Diameter are being built by the Western High-Speed Diameter company (a 100% subsidiary of the city of St. Petersburg). Traffic was launched on the southern section in the end of 2010 and the northern section is planned to be completed by the end of 2012. This project is a part of the Federal Target Programme Developing Russia’s Transport System in 2010-2015. The project will help unclog the city centre during rush hours, provide high-speed access to main roads, develop the transport infrastructure in the city, and enhance it with the Big Seaport of St. Petersburg and the Sea Passenger Terminal on Vasilyevsky Island.
“The construction of this high-speed road is one of the main solutions to St. Petersburg’s transport problem,” Gennady Zhuzhlev, Deputy Chairman of the EDB Executive Board, said. “This project will help improve the attractiveness and competitiveness of the EurAsEC Northern Gates logistics centre, which is planned to be created in St. Petersburg within the Blueprint for the Formation of the Common Transport Space.”
