VLADIMIR PUTIN
ARCHIVE OF THE OFFICIAL SITE
OF THE 2008-2012 PRIME MINISTER
OF THE RUSSIAN FEDERATION
VLADIMIR PUTIN
ARCHIVE OF THE OFFICIAL SITE
OF THE 2008-2012 PRIME MINISTER
OF THE RUSSIAN FEDERATION
VLADIMIR PUTIN
Transcript of the beginning of the meeting:
Vladimir Putin: Mr Kostin, we have repeatedly discussed this issue at government meetings. It is a globally accepted practice to sign a management contract for the entire service life of an infrastructure facility, such as a highway. I know that your company is considering signing such contracts including construction and maintenance of a facility during its entire service life.
How is this work proceeding?
Sergei Kostin: Mr Putin, I would like to report that we have thoroughly studied international experience in this area. Taking a highway as a continuous project including design and construction and long-term use, an investor could save up to 25% on the costs of infrastructure construction and maintenance.
Vladimir Putin: What is most important is that a company which knows it will have to manage and service a facility it is building, will naturally do a better job.
Sergei Kostin: We don't have this experience now. We are just now planning this kind of a project - the M1 Russia-Belarus highway. We are drawing up the paperwork to hold a competitive bid next year.
It is true, we have no experience, but we are learning. We will probably have to make changes to the legislation. When we gain this experience, we will use it with other highway projects.
Vladimir Putin: When is your company planning to issue long-term leases or concessions on roads?
Sergei Kostin: The government issued a resolution last year placing several roads under our management. I would like to report now that the government instruction has been fulfilled: three highways, the M4 Don and Moscow-Novorossiisk as well as the road linking the city of Moscow with the Belarusian border are in the trust management of Avtodor since April 30. On May 1, we began performing our duties as the customer.
Vladimir Putin: How will it help you?
Sergei Kostin: One of our objectives is to modernise the highway and upgrade it. This will involve service facilities and toll sections on the highway. We will hold a bid for operating contracts this year.
Vladimir Putin: What additional possibilities will you have if this road is officially under your long-term management?
Sergei Kostin: In the long term, we would like to expand the limits set by the programme. We have a programme adopted for 2010 through 2015. But any continuous contract including right of way acquisition and preparation and construction will go beyond that period. Difficulties may be faced at the design phase which takes two years. Right of way preparation is another two or three years. The next phase is construction. We would like the time limits to be expanded to 15-20 years.
If this is done we will be able to work with interested investors. Let me repeat that our company has created a lot of interest. There are construction companies interested in operating contracts, including Chinese, Turkish and European firms. But the problem is we do not have a long-term programme.
Vladimir Putin: ...which would inspire confidence in a return on investment.
Sergei Kostin: Yes. There are problems. Two concession agreements will be handed over to contractors soon. An executive order to entrust the Odintsovo bypass project to Avtodor has been submitted for your signature, and so has another one, concerning a St Petersburg project, which is bigger. It involves the transfer of existing utilities and soil. This is why I am insisting a longer right of way preparation period be stipulated in the programme. We at the company have already changed the approach to property management. We begin negotiating with the owners of facilities which would have to be relocated and with the land owners at the earliest possible phase of project design. But still, it requires more time. Now we are pressured to build the road faster, which eventually results in higher costs. To prevent this, we should begin right of way acquisition earlier.
Vladimir Putin: Do you mean this will lower project costs?
Sergei Kostin: Absolutely. There will be no pressure, and the costs will be lower.
Vladimir Putin: Good. Tell me about the progress of the Moscow-St Petersburg project.
Sergei Kostin: I have already reported on marker section 15-58 of this highway. Now we are working on the next section, 58-149, the link to Tver. We are preparing the right of way there. We also plan to sign a concession agreement for that section. Next, we plan to go on to two more sections, the Vyshny Volochek bypass and the St Petersburg access. The bypass will be difficult because it will have to cross through a town. We are planning the property acquisition and the transfer of existing facilities for this year.
Vladimir Putin: What about the timeframe for the three sections you mentioned?
Sergei Kostin: We will do our best to complete the right of way acquisitions by the end of next year, and then open a bid.
There was a problem on the 58-149 section, which was to cross the Zavidovo natural reserve. However, we eventually managed to plan a bypass between the railway and the reserve. This was one of the most complicated problems we have faced. There are more, but the project design is close to completion.
The design of marker section 58-97 has been submitted for appraisal. We expect the conclusion in June, and will get down to property issues as soon as we have it. The 97-149 project design will probably be ready by autumn.
Vladimir Putin: You mean autumn 2010?
Sergei Kostin: Yes.
Vladimir Putin: And you are saying you'll be ready to announce a bid by the end of 2011?
Sergei Kostin: Yes.
Vladimir Putin: Good.
