Two teams qualified for $1.7b Lena River bridge PPP project in Russia

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Two teams qualified for $1.7b Lena River bridge PPP project in Russia

Russia's Federal Road Agency, Rosavtodor, has announced that two teams have been qualified for the final stage of a tender process for the construction of a long-awaited multibillion dollar vehicular bridge across the Lena River in northeastern Siberia.

The tender, announced in July 2013, is for a concession to build a three-kilometer bridge over the river that separates the Siberian city of Yakutsk from the mainland, which is now only accessible via minor roads and the great waterway.

The total value of the contract is 56 billion rubles ($1.7 billion), with the government providing 75 % of the required amount and the remaining 25 % to come from private funds.

The successful bidder will have 6 years to construct the bridge and then be obligated to maintain it for 8 years. As the bridge is planned to be free of charge, the concessionaire will see a return on investment in the form of availability payments. The overall term of concession is 14 years.

Three consortia had submitted qualification documents:

  • OOO Yakutskaya mostostroitel'naya kompaniya: Chinese Railway Construction Company, LLC Stroygazconsulting and LLC NPO Mostovik;
  • OOO Transportnye kontsessii (Sakha): LLC Northern Capital Highway, VTB, VTB Capital and Istner Limited;

However, according to local sources, the consortium led by Vinci wasn't qualified because its qualification documents did not comply with tender documents.

Local sources comment that the Federal Road Agency had conversations with Japanese construction company Itochu, which could be interested in participating in the construction of the bridge. The Agency explained that the Japanese company still has a chance to get involved:

"Itochu can now either negotiate independently with one of the participants of the competition or after the results it can negotiate with the winner and become a sub-contractor."

The preselection results were known on 5 November 2013. Russia's Transport Minister Maxim Sokolov, said the winner of the tender process would be determined in the spring of 2014.

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