$190m overspend revealed on Moscow-St Petersburg highway PPP

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$190m overspend revealed on Moscow-St Petersburg highway PPP

According to Russian newspapers, construction cost of the km 258 - km 334 (Vyshny Volochek Bypass) segment of the Moscow - Saint Petersburg Highway (M11), the first public-private-partnership (PPP) project signed in Russia, has shot up by 6.6 billion rubles (US$190 million) to more than 50 billion rubles (US$1421 million).

Additionally, the Russian Audit Chamber estimated that toll revenue over the 18-year period through 2033 will be 34 billion rubles, while operational and repair costs will total more than 43 billion rubles. This means that toll revenues will not even be enough to pay maintenance costs.

The reports raises doubts about the good use of the public-private partnership model the government is using for the 684 kilometer-long Moscow-St. Petersburg highway.

Mostotrest, the company that will run road, won the right to build the the section in a 2011 tender in which it was the only participant. It is contributing 10% of the 50 billion ruble (US$1421 million) needed for construction. Under a concession agreement, the company will operate the section after its completion in 2015 as a toll road for 18 years.

The Vyshny Volochek Bypass Road is an integral part of the new M11 Moscow - Saint Petersburg Highway, currently under construction on commission from Avtodor State Company.

The Moscow - St. Petersburg M11 project is a 650km long toll motorway under construction in Russia. The motorway will ease the traffic and serve as an alternative route to the existing M10 Highway.

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