Vegas Lex has announced that, acting on behalf of the Moscow Transport Hub Directorate autonomous nonprofit organization, it and subsidiary InfraOne participated in an April 7, 2016 “pre-roadshow” in Moscow involving a proposed a light rail high-speed off-street transportation system in the Moscow Region.
Road show participants included Russian and international investors, representatives of construction companies and design companies, and major Russian and international financial institutions, among others.
According to Vegas Lex, the “comprehensive project” involves “involves the development of a completely new type of public transport system, linking large municipalities, urban districts in the Moscow Region, and several airports of the Moscow air hub. This type of system is fast (average speed of 80 kmh), quiet, comfortable, safe and environmentally friendly.”
The consortium of consultants at the roadshow, which included Vegas Lex, the InfraONE infrastructure company, the SETEC group of companies, and NIiPI Urban Development of the Moscow Region, as well as the Moscow Transport Hub Directorate — the project organizer — presented the goals, investment objectives, and phases of the project to potential investors, elaborated on the financial and investment, organizational, and legal components of the project, the technical and economic parameters of the LRT system and rolling stock, and expected passenger flow statistics.
According to Vegas Lex, the project is expected to be implemented in four phases. The first (initial) line of the project will go through Podolsk and Domodedovo to Ramenskoye, with stops at Domodedovo and Zhukovsky airports to accommodate the highest demand and passenger traffic projections. According to Vegas Lex, “the project will be implemented as a public-private partnership with the involvement of a private investor (a consortium) to build the LRT lines, supply rolling stock and transportation systems, and operate the system.”
Other participants at the road show included Deputy Chairman of the Moscow Region Government and Minister of Investments and Innovations of the Moscow Region Denis Butsayev, Minister of Transport of the Moscow Region Mikhail Oleynik, and Director General of Moscow Transport Hub Directorate, Adviser to State Secretary, Deputy Minister of Transport of the Russian Federation, Alexey Petrov. A press release issued by Vegas Lex contained statements from all three.
“The LRT Project is a key strategic project for the Moscow Region, primarily aimed at building the kind of transport infrastructure that will provide for easier transit of passengers and workforce between Moscow’s expanding southern outer suburbs,” said Butsayev. “In this case, the main purpose of choosing the light rail option was to increase convenience for the residents of the area, so we focused on connecting the densely populated municipalities which have suffered from transport problems for a long time. People there had trouble getting anywhere at all, not just to Moscow.”
“The development of chord lines for public transit is very important. The LRT project is primarily aimed at developing this system, said Mikhail Oleynik. “We analyzed the current demand to find out that 94% of respondents in the suburbs are willing to use other options than inbound railway lines to get to other places. They are looking forward to this opportunity.”
“Moscow Transport Hub Directorate acts as the customer for the works under this project, from the development of the project concept to the organization of the tender to enter into a concession agreement on the first section, Podolsk-Domodedovo-Ramenskoye,” said Alexey Petrov. “It should be noted that the federal government, represented by the Ministry of Transport, and the city of Moscow are interested in this project and are closely monitoring its implementation.”
Other speakers at the event included Vegas Lex Partner Albert Eganyan (also the Chairman of the Board of Directors of InfraONE); Karen Arakelyan, Managing Director at InfraONE; Vladislav Gordiyenko, Head of Architecture and Urban Planning Department of the Moscow region; Artur Markaryan, Chairman of the Board of SETEC MO; and Alexey Vorontsov, Director General of NIiPI Urban Development of the Moscow Region.
“The project addresses a significant number of issues the Moscow Region is struggling with,” Eganyan noted in his speech. “The project is expected to resolve these problems by generating a significant amount of traffic, which also provides certain investment opportunities for the private partner. At the same time, we understand that a project of this scale is likely to lead to a significant capitalization of the areas adjacent to the currently underdeveloped towns.”
The second part of the road show involved one-on-one meetings with potential applicants for concession tenders and their funders. The consortium will conduct a feasibility study for the project in April, then — after approving the commercial, financial and economic parameters of the project — will develop the essential terms of the concession agreement in May. After that, also in May, an investment competition will be announced, and the winning bidder is expected to sign the concession agreement in the fall of this year.
Capital expenses will be split between three stages and distributed evenly for the next 11 years. In the first stage, which will end in 2022, the LRT link from Podolsk to Domodedovo airport will be built. In the second stage, which will be completed by 2026, Domodedovo will connect to Ramenskoye. Finally the Zhukovsky approach road will be built in 2028.
