The road for billions of dollars

VSM Chelyabinsk - Ekaterinburg: who needs it, who will pay for it and how it will be built.
17.05.2018
Znak
Origin source
In Russia, a new expensive infrastructure project officially appeared. At a meeting with vice premiers, Russian Prime Minister Dmitry Medvedev announced signing of a document on the construction of a high-speed railway between Yekaterinburg and Chelyabinsk. It will cost more than 365 billion rubles.

"This is an important and serious infrastructure project, which should positively affect the development of areas through which the Ural highway will be stretched. The road should connect two neighboring agglomerations, so that people who live there, it was more convenient to travel and for their personal affairs, and, if necessary, to work. The entire journey between the two regional centers should take an hour or so to complete. This change is at the disposal of the Government, which changes the transport strategy precisely in this part. And of course, this highway should be integrated into the all-Russian network. We will also start work on this document, "Medvedev said.

The document, signed by Medvedev, is a change in the Transport Strategy of the Russian Federation until 2030. In Appendix # 6 this Strategy, which lists the largest investment projects, adds an item on the construction of a "new high-speed railroad Chelyabinsk-Yekaterinburg with a length of 220 kilometers with a travel time between the final points of 1 hour and 10 minutes."

The cost of the project is 365.9 billion rubles, the source of financing is public-private partnership. The construction is scheduled for 2019-2024.

Old project

The point about building a highway between Ekaterinburg and Chelyabinsk existed in the Strategy before. However, it looked completely different: it was planned not to build a new highway, but to organize a high-speed movement along the existing line with a length of 271 kilometers with a time for the trains of 2 hours and 55 minutes. Then the cost was estimated at 41.8 billion rubles, and the construction time - from 2020 to 2024. But to finance this project was offered only from the federal budget, without the participation of private funds.

In addition, earlier in the strategy near this point there was a footnote in the form of three stars. This meant that the project "requires additional consideration for making a decision on its implementation."

How did the new BCM

The project of the high-speed Yekaterinburg-Chelyabinsk highway is being discussed for several years, not even for the first decade. At one time, with such an idea, Sverdlovsk Governor Eduard Rossel spoke. However, the Chelyabinsk Region leadership breathed new life into the project: Governor Boris Dubrovsky became the main lobbyist of the highway. In February 2016, he presented the project to the experts of the club "15.01", immediately indicating the estimated travel time - 1 hour 10 minutes.

Since then, Chelyabinsk authorities have consistently engaged in the promotion of the project. In the government of the Chelyabinsk region, the curator of the initiative was the vice-governor Ruslan Gattarov - the former head of the Young Guard of United Russia, a former member of the Federation Council.

The Sverdlovsk region announced its readiness to join the project in April 2016. On behalf of this region, the project is overseen by Vice-Governor Alexander Vysokinsky. However, the first violin in the project is played by the Chelyabinsk region. In many ways VSM is an opportunity to "pull up" Chelyabinsk to the level of Yekaterinburg.

The main dispute was about whether it is necessary to organize high-speed (faster than 250 km / h) or simply high-speed (slower than 250 km / h) traffic. In the second case it would be enough to modernize the existing infrastructure. Apparently, the second variant won: the declared speed of the current project of the Ural SCM - up to 300 km / h.

The discussion also concerned where trains should stop and how many of them there should be. For example, it was originally planned to stop in Kasli, which could spur the development of Chelyabinsk municipality, one of the favorite dacha directions. However, the appearance of additional items greatly slows down the time the train moves. As a result, the VSM stop in Kasli was abandoned. However, it is possible that on the branch there will be both non-stop express trains and simply high-speed trains that will stop in several settlements along the road. The most important thing is that the SCM should connect the Chelyabinsk and Yekaterinburg airports, effectively turning them into a single transport system.

What has already been done

So far, organizational work has been done. The economic partnership "Urals Highway", founded by the governments of the Chelyabinsk and Sverdlovsk regions, industrial enterprises of Chelyabinsk Tractor Plant and RMK, as well as private investor RWM Capital, was created.

RWM Capital is the most mysterious participant of the project. Legally, the company is called VSM RWM LLC, and it belongs to RVM Capital CJSC, and that in its turn - the little-known consulting company Profit, which is a partner in a number of projects related to RZD. Some interlocutors of Znak.com suggest that RWM Capital can represent the interests of top managers of Russian Railways, including Vice President Alexander Misharin, who oversees VSM projects throughout Russia. The same company, by the way, is engaged in the creation of toll parking in Chelyabinsk.

The authorized capital of the Ural Expressway is now 250 million rubles.

"Ural Highway" conducted the tracing (paved the route), engineering and geodetic testing, aerial photography, held negotiations with Russian and foreign partners, commissioned a financial and economic model and a financial and economic feasibility study for the project. As reported, for several months in 2017 the company spent 800 thousand rubles for flights to Moscow.

What are the arguments for building the highway?

Lobbyists of the project give many arguments in his favor. Yekaterinburg and Chelyabinsk are the two most closely located cities with a million population. The construction of the VSM will actually turn them into a single agglomeration with a population of about 4 million people, creating a powerful synergetic effect. The result should be rapid economic development of the two regions (experts promise hundreds of billions of rubles in GRP growth and tens of billions of direct revenues to the regional budget). A new powerful center will appear on the map of Russia, "balancing" Moscow and St. Petersburg.

The appearance of the SCM should give impetus to housing construction, raise the payroll in populated areas, reduce the number of bus and automobile emissions, which will positively affect the environment.

The authors of the project believe that the highway will unite the legacy of the SCO 2020 summit in Chelyabinsk and EXPO-2025 in Yekaterinburg. However, if the SCO summit in Chelyabinsk passes exactly, EXPO-2025 in Yekaterinburg is still under big question.

The construction itself should be supplemented by additional orders from Ural enterprises: Mechel and NTMK will produce rails, Ural locomotives will be rolling stock (although the company does not know how to build high-speed trains, but its shareholder Sinara Group is already considering the question of creating a profile Joint venture with the Chinese).

What are the arguments against?

There are many of them, too. For example, a representative of the company "Ural Locomotives", speaking at a meeting on the construction of the VSM, said that even now from Ekaterinburg through Kamensk-Uralsky one can start a train that will cover the distance in 2 hours 30 minutes - is it worth starting a new, fabulously expensive project?

Many doubt that train travel will be in demand, given that it takes only about two hours to transfer by car from Yekaterinburg to Chelyabinsk or vice versa: it may be better to invest in expanding the highway to make it four-lane all along (now part of the road remains two-lane)?

Experts also say that large-scale construction of VSM will have a detrimental effect on the ecology of the region, and this neutralizes the positive environmental effect from the reduction of automobile emissions.

But the main issue is the financial justification. Transport experts, for example Yakov Gurevich, also say that there is no economic sense in isolated VSM between the two cities: the project will make sense only if a high-speed highway from Moscow reaches the Ekaterinburg highway. However, Dmitry Medvedev, at a meeting with vice prime ministers, mentioned that the project of the new SCM will be integrated into larger infrastructure schemes.

The former governor of the Chelyabinsk region, Mikhail Yurevich, in an interview with Znak.com, said that the highway project would never pay off: "Here you need to imagine how much the ticket for the train will cost. Let's say 500-1000 rubles. People will not go to work for him. High-speed lines are needed to connect two large agglomerations. The Chelyabinsk and Sverdlovsk agglomerations are not so large. You try to drive along the highway Chelyabinsk - Ekaterinburg. It is not heavily loaded, there are not many passenger buses on it. Accordingly, and the highway will be underloaded. And there is a giant infrastructure that needs to be maintained. Trains should go at least once in half an hour. Between Moscow and St. Petersburg VSM works. If there were 5 million inhabitants in our cities, a high-speed highway would definitely be needed. So far, they have 1.2 million people, and it will not pay off, "he said.

365 billion - is it expensive or normal?

From the outset, different estimates of the cost of the project were given. Initially Chelyabinsk authorities, for example, talked about 165 billion rubles. Experts talked about the amount of not less than 200 billion. Later, there was an amount of 365 billion (about $ 6 billion at the current rate). It is approved in the resolution of Medvedev. It turns out that one kilometer of the new road will cost about $ 30 million. Earlier, transport expert Yakov Gurevich said that the construction of VSM in the world costs at least $ 15 million per kilometer.

According to RZD, the cost of the Frankfurt-Cologne (Germany) and Shinxansen-Toku (Japan) routes was 32 million and 35 million euros per kilometer, respectively. The 119-kilometer (191 kilometer) BCM site in California is estimated at $ 10.6 billion ($ 55 million per kilometer). Thus, the declared cost of construction does not seem too high.

Who will pay?

Where will take 365 billion for the construction of the highway, yet unheeded. Public-private financing in the form of a concession is supposed. That is, the owner of the SCM will be the state, but the investor company, which has given money for construction, will rent the highway for a certain time and make profit from it. While it is a question of the term of the concession in 32 years, it is said in the presentation of the project (available to Znak.com).

Now the economic partnership "Ural Expressway" is trying to coordinate with the Ministry of Transport a draft concession agreement. His terms are still unknown. Under such a large project, funds from various sources can be attracted - for example, loans and other types of loans. The Chelyabinsk authorities do not exclude the issue of bonds to finance the project.

For example, the Moscow-Kazan SCM worth more than 1.2 trillion rubles by about 40% should be financed by private investors from China, and the rest of the money will be attracted as loans and public investments.

Chelyabinsk Vice Governor Ruslan Gattarov said: "The main sources of funding we see bank lending and export financing, it is not less than 60% of the target value of the project, (...) convertible loans will be up to 30%, share capital - up to 10%."

As far as is known, while the private partner for the construction of the Ural SCM is not defined. Urals entrepreneurs are involved in financing the preliminary activities of the Ural Expressway, but the general investor is not yet visible. We are talking about very large amounts, so an investor can act as a consortium of several companies, including foreign ones. The interest in the Ural SCM was previously stated in the South Korean Hyundai Rotem, and the large Chinese company China Railway Group Limited even signed an agreement on cooperation.

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