01.08.2019
The agreement on public-private partnership on the creation and operation of the non-public Bovanenkovo-Sabetta railway line was signed on December 30, 2015. The Government of the Yamal-Nenets Autonomous District (public partner) and OOO VIS TransStroy (part of VIS Group, private partner) were the parties to the agreement. The terms of the agreement included the design and development of detailed project documentation and the construction of a railway line using VIS Group’s own and borrowed funds.
The idea of creating the northernmost railway to connect the village of Bovanenkovo with the port of Sabetta belonged to the Yamal-Nenets Autonomous District authorities. For VIS Group, the project was initially interesting both from a business point of view, and as an opportunity to participate in the development of the Arctic transport infrastructure. During the elapsed time, our joint work drew attention to the project at the highest state level. The construction of the Bovanenkovo-Sabetta railway line meets the strategic development goals of the Arctic region. This project, conceived as a regional one, has largely become a catalyst for a large-scale national project, which is today assigned to the priorities of the development of Russia's transport infrastructure - the creation of the Northern Latitudinal Railway.
To date, a large-scale set of works has been carried out to prepare for the construction of the Bovanenkovo-Sabetta line. Land plots were allotted, lease agreements were concluded, design and estimate documentation was developed and passed state expert review. In addition, topographical and geotechnical surveys were carried out, and the development of detailed documentation has started. Technical consultants carried out the research work on the justification of the project for the development of transport infrastructure and the volume of traffic. All these works, which amounted to approximately 1 billion rubles, were financed exclusively by VIS Group.
Today, the issue of a unified railway project has become poignant, with the branch connecting Bovanenkovo and Sabetta referred to as Northern Latitudinal Passage-2. This implies that the project’s status is converted from a regional to a federal one, which requires a different configuration of participants and format for its further implementation.
A comprehensive analysis, with regard to the requirements for synchronizing a PPP project with related infrastructure projects, as well as financial risks and a balance of interests, demonstrated that the concession mechanism is the optimal format for further implementation of the Bovanenkovo-Sabetta line project. In order for the project, which is important for the development of the Russian Arctic, to develop further, the partners decided to terminate the existing Public-Private Partnership Agreement. This will allow to start preparing a package of documents for the registration of a concession.
The work conducted by public and private partners during the term of the agreement will make it possible to use the already developed design solutions, research results and reduce the time spent on the preparation of the concession project. As part of the agreement, the region will buy out the prepared documentation for future use.
“VIS Group, together with the district government, did a great job, thanks to which the project came into the focus of attention of the federal government and became a logical development of the Northern Latitudinal Railway. The Group invested exclusively its own funds in the project. This is our contribution not only to the railway line project, but also to resolving the large-scale task of the development of the Russian Arctic. Our holding is focused on investments in large infrastructure projects that make a significant contribution to the development of the economy and improve the people’s quality of life,” said Igor Snegurov, Chairman of the Board of Directors of VIS Group.
Government of the Yamal-Nenets Autonomous District and VIS Group resolve to terminate the agreement on the construction of the Bovanenkovo-Sabetta line
The idea of creating the northernmost railway to connect the village of Bovanenkovo with the port of Sabetta belonged to the Yamal-Nenets Autonomous District authorities. For VIS Group, the project was initially interesting both from a business point of view, and as an opportunity to participate in the development of the Arctic transport infrastructure. During the elapsed time, our joint work drew attention to the project at the highest state level. The construction of the Bovanenkovo-Sabetta railway line meets the strategic development goals of the Arctic region. This project, conceived as a regional one, has largely become a catalyst for a large-scale national project, which is today assigned to the priorities of the development of Russia's transport infrastructure - the creation of the Northern Latitudinal Railway.
To date, a large-scale set of works has been carried out to prepare for the construction of the Bovanenkovo-Sabetta line. Land plots were allotted, lease agreements were concluded, design and estimate documentation was developed and passed state expert review. In addition, topographical and geotechnical surveys were carried out, and the development of detailed documentation has started. Technical consultants carried out the research work on the justification of the project for the development of transport infrastructure and the volume of traffic. All these works, which amounted to approximately 1 billion rubles, were financed exclusively by VIS Group.
Today, the issue of a unified railway project has become poignant, with the branch connecting Bovanenkovo and Sabetta referred to as Northern Latitudinal Passage-2. This implies that the project’s status is converted from a regional to a federal one, which requires a different configuration of participants and format for its further implementation.
A comprehensive analysis, with regard to the requirements for synchronizing a PPP project with related infrastructure projects, as well as financial risks and a balance of interests, demonstrated that the concession mechanism is the optimal format for further implementation of the Bovanenkovo-Sabetta line project. In order for the project, which is important for the development of the Russian Arctic, to develop further, the partners decided to terminate the existing Public-Private Partnership Agreement. This will allow to start preparing a package of documents for the registration of a concession.
The work conducted by public and private partners during the term of the agreement will make it possible to use the already developed design solutions, research results and reduce the time spent on the preparation of the concession project. As part of the agreement, the region will buy out the prepared documentation for future use.
“VIS Group, together with the district government, did a great job, thanks to which the project came into the focus of attention of the federal government and became a logical development of the Northern Latitudinal Railway. The Group invested exclusively its own funds in the project. This is our contribution not only to the railway line project, but also to resolving the large-scale task of the development of the Russian Arctic. Our holding is focused on investments in large infrastructure projects that make a significant contribution to the development of the economy and improve the people’s quality of life,” said Igor Snegurov, Chairman of the Board of Directors of VIS Group.