THE CENTRAL RING ROAD OF MOSCOW REGION INFORMATION MEMORANDUM Construction, maintenance, current and capital repair of the Central Ring Road (CRR) of Moscow Region, start-up complex № 5 July 2014, Moscow Contents Introduction 3-4 Project goals and objectives Alignment with strategic industry development plans 5-8 Rationale for construction of the Central Ring Road Timeline for CRR project implementation Technical characteristics Overview 9-29 Design features Cultural heritage and environmental protection Key technical aspects Long-term investment agreement General provisions 30-33 Contractor’s obligations State Company’s obligations Commercial structure 34-40 Funding. Investment stage Funding. Operation stage Risk sharing 41-42 Tender criteria 43 Preliminary project schedule 44 This Information Memorandum is drawn up for the purpose of timely informing market players of the project and the key conditions for its implementation. Avtodor State Company reserves the right to amend this Memorandum. А-113 CRR, start-up complex No. 5 2 Introduction Construction and subsequent toll operation of the Central Ring Road of the Moscow Region А-113 (CRR) is a major investment project that the State Company Russian Highways (Avtodor State Company) proposes to implement on a public-private partnership basis. The preparations are currently being concluded for an open, single-stage tender for concluding a long-term investment agreement for construction, maintenance, current and capital repair of the Central Ring Road (CRR) of the Moscow Region, start-up complex No. 5 in the Naro-Fominsk, Odintsovo, Istra and Solnechnogorsk districts and the Zvenigorod Urban District of the Moscow Region. Key project information Location: Naro-Fominsk, Odintsovo, Istra, Solnechnogorsk districts and the Zvenigorod Urban District of the Moscow Region Sector construction length: 76.44 km Projected traffic*: 26,600 vehicles/day Road category: Outside population centres – II, within population centres – main road of city significance with regulated traffic Number of traffic lanes: 4 Total project cost:** 36.6 billion RUB (in relevant year prices) Contract type: long-term investment agreement Agreement term: 24 years Tender period: 2014 Construction period: 2015-2018 Maintenance and operation period: 2019-2038 * 2030 ** Total project cost is 41.3 billion RUB including Avtodor State Company expenses (4.7 billion RUB) А-113 CRR, start-up complex No. 5 3 Special aspects of project implementation A long-term investment agreement is one of the types of public-private partnership (PPP) agreement used by the Avtodor State Company. It is a mixed civil law agreement envisioning obligations of the private partner (Contractor) to build and operate (including current and capital repair and maintenance) the road for the term of the agreement, to co-finance construction using its own funds and (if applicable) raised borrowed funds. The State Company reimburses the Contractor for the costs of operating the road in the form of availability payments and reimburses, in instalments, the private capital invested at the construction stage, based on the standard returns on the invested capital envisaged by the agreement. In addition: the provisions of the long-term investment agreement require the Contractor to prepare the construction site, rebuild the utility networks within the construction zone, and to perform land cadastral work. The Contractor’s obligations include land-use planning and cadastral works including withdrawal of land plots for state needs, change of categories and types of permitted use of such land plots and formalisation of the title of the Russian Federation thereto. This work falls within the obligations of Avtodor State Company. the Contractor’s obligations under the long-term investment agreement include road operation upon its completion, including its maintenance, current and capital repairs. Start-Up Complex No. 5 is a non-express segment of the CRR and will be operated on a free-of-charge basis. For the given sector, the existing А-107 MMK road is to be reconstructed to bring its parameters up to a category II road with four traffic lanes outside population centres and to a population centre main street with regulated traffic. To optimise traffic management all along the CRR, the operation of the Start-Up Complex No. 5 Automated Traffic Control System (ATCS) is taken outside the scope of the long-term investment agreement and will be carried out by Avtodor State Company (an operator engaged thereby) under a separate operation agreement. А-113 CRR, start-up complex No. 5 4 Project goals and objectives ALIGNMENT WITH STRATEGIC INDUSTRY DEVELOPMENT PLANS The project is being implemented in accordance with the following transport sector strategic development documents: The Transport strategy of the Russian Federation up to 2030, approved by Government Decree of 22 November 2008 No. 1734-r Federal Program ‘Development of the Transport System’, approved by Government Directive of 15 April 2014 No. 319 Federal Target Program ‘Development of the Transport System in Russia (20102020)’ of 05 December 2001 No. 848 (as amended by Government Resolution of 15 May 2014 No. 445) Avtodor’s State Company long-term Activity Program (2010 – 2020), approved by Government Decree of 31 December 2009 No. 2146-r (as amended by Government Directive of 23 May 2014 No. 876-r). The construction of the Central Ring Road is in line with the Federal priority plans of developing the country’s transport infrastructure. The implementation of this large-scale project will directly improve the social, economic and transport conditions in Moscow and the Moscow Region. А-113 CRR, start-up complex No. 5 5 Project goals and objectives RATIONALE FOR CONSTRUCTION OF THE CENTRAL RING ROAD The purpose of building the Central Ring Road of the Moscow Region is to create the conditions for forming a modern transport infrastructure integrated into the network of international transport corridors, to unlock the transit potential of our country and to facilitate the servicing of traffic flows outside the central part of the Moscow transport hub, while reducing the traffic burden of its road network. The CRR construction project is included in the Avtodor State Company long-term Activity Program. On the national scale, the project is being implemented within the scope of the policy of facilitating economic growth, boosting competition in the Russian economy and improving the quality of life by building a network of main roads and express highways ensuring the requisite speed, reliability, safety and affordability for road users. Implementation of the CRR project will help in fulfilling the following key transport, social and economic tasks: To reduce the load of truck and transit traffic on radial exits from Moscow and on the city’s street network; To rationalise the freight distribution structure, provide the infrastructure for meeting the demand for the services of logistics complexes in the Moscow area by developing cross (direct) transport links, and to intercept large trucks at remote approach roads to Moscow, re-sort the loads and distribute them to other areas in small batches; To create the road component of international transport corridors (ITC) crossing the Moscow Region: No. 2 (London - Berlin - Warsaw - Minsk - Moscow - Nizhny Novgorod) А-113 CRR, start-up complex No. 5 6 No. 9 (Helsinki - St Petersburg - Moscow - Kiev - South-East Europe) ITC North-South ITC Helsinki - Moscow - Nizhny Novgorod. To facilitate comprehensive development of the infrastructure and territory of Moscow and of the Moscow Region, as well as the adjacent Tver, Yaroslavl, Vladimir, Ryazan, Kaluga, Tula and Smolensk regions on the back of the multiplier effect of building the CRR; To intensify the social, economic, inter-district and international links, increasing the mobility of the population and market players; To improve road traffic safety and the quality of services rendered to road users; To cut the cost of carriage, and transport costs for freight consigners; To reduce the environmental footprint by decreasing the load on the advance sections of radial roads in the Moscow Region; To optimise the budget of the construction stage by attracting extrabudgetary investments into the project under concession and long-term investment agreements; To optimise the budget of the operating stage by involving the contractor in road maintenance expenditures; To provide the transport infrastructure for implementing comprehensive development programmes for part of the Moscow Region without funding from the budget of the Russian Federation. А-113 CRR, start-up complex No. 5 7 Project goals and objectives TIMELINE FOR CRR PROJECT IMPLEMENTATION 2003 : 2004 : 2005 2006 : 2007 Resolution of the Moscow Region Government of 30.12.2003 No. 743/48 ‘On approval of the key avenues of sustainable urban development of the Moscow Region’ Decree of the Government of the Russian Federation of 29.12.2004 No. 1724-р 'On development of the pre-design documentation for construction of the Central Ring Road of the Moscow Region’ Investment feasibility study for the CRR construction project (OOO IP Development , Macquarie, CMS Cameron Mc Kenna, OAO Lengiprotrans, Obermeyer, PricewaterhouseCoopers, Steer Davies Gleave, NIiPI Urban Planning of the Moscow Region) Approval of the concept for the project by the Expert Council for PPP under the Ministry of Transport of the Russian federation Resolution of the Government of the Moscow Region of 11.07.2007 No. 517/23 ‘On approval of the scheme for territorial planning of the Moscow Region – key provisions for urban planning’. Clause 3.1.1. ‘Establishing the boundaries of the CRR zone’. Decree of the Government of the Russian Federation of 23.06.2008 No. 897-r ‘On approving the charter of the investment project ‘Development of the design documentation for implementation of the project for Construction of the Central Ring Road of the Moscow Region” implemented with state support out of funds from the Investment Fund of the Russian Federation’’ Development of the design, financial and legal documentation for the project (OAO Soyuzdorproekt, OAO CRR, OOO Soyuzdorproekt, OOO KIK Transproekt, Ernst & Young, Freshfields Bruckhaus Deringer, Steer Davies Gleave, OOO Spetsmetroproekt, ZAO Institute Promos, OOO Rosekostroy, OOO Ekoproekt+) 2008 2008 2013 2009 Inclusion of the project in the Federal Target Programme “Development of the Transport System of Russia (2010-2015)” (as amended by Resolution of the Government of the RF of 20.05.2008 No. 377). Came into effect on 1 January 2010. Inclusion of the project in the Avtodor State Company Long-term Activity Program (2010-2020), approved by Directive of the RF Government of 31.12.2009 No. 2146-r (as amended on 24.04.2013 No. 672-r) 2011 : 2012 : 2013 Conclusion of an agreement for preparation of the construction site for the Moscow Region CRR, start-up complex No. 3 (27.12.2011) Order of the President of the Russian Federation of 12.04.2012 No. Pr-930 ‘On launching the construction of the CRR’ Conclusion of an agreement for preparation of the construction site for the Moscow Region CRR, start-up complex No. 4 (03.04.2013) Order of the President of the Russian Federation of 05.07.2013 No. Pr-1474 ‘On co-financing the project for construction of the Moscow Region CRR with the means of the National Wealth Fund’ Order of the President of the Russian Federation of 12.08. 2013 No. Pr-2028 ‘On implementing projects aimed at developing the Moscow and Moscow Region transport infrastructure’ 2014 The Tender Commission announced OOO Stroygazconsulting as the winner (29.04.2014) of the open, single-stage tender for a long-term investment agreement for construction, maintenance, current and capital repair of the Moscow Region CRR, start-up complex No. 1, first construction segment. А-113 CRR, start-up complex No. 5 8 Technical characteristics OVERVIEW Route The 76.44-kilometre road segment under construction, constituting Start-Up Complex No. 5, will become part of the Central Ring Road А-113 (CRR). Construction of the А-113 Central Ring Road to St. Petersburg, Helsinki М10 А104 М8 to Riga Dmitrov Klin Sergiev Posad Solnechnogorsk М11 А103 to Riga Krasnoarmeysk Zelenograd М9 Korolev Zvenigorod to Minsk, Berlin to Nizhny Novgorod, Ekaterinburg М7 Mytichi Istra MOSCOW Noginsk Pavlovsky Posad Lubertsy Bolshie Vyazemy Troitsk Domodedovo М1 Ramenskoe Podolsk to Kiev, Bucharest А130 М3 Section 1 Section 4 Section 3 Airports to Ryazan, Samara М4 М2 to Voronezh, Krasnodar М5 Section 5 Railway ITC Sector No. 5 (first construction phase) passes through the Naro-Fominsk, Odintsovo, Istra and Solnechnogorsk districts and the Zvenigorod Urban District of the Moscow Region. А-113 CRR, start-up complex No. 5 9 Technical characteristics CRR TRANSIT THROUGH THE SITE OF START-UP COMPLEX NO.5 Legend: Start-up Complex No. 1 Start-up Complex No. 2 Start-up Complex No. 4 Moscow Kolomna Populated Areas Rivers and other bodies of water Istra Railroad Zvenigorod Bolshiye Vyazyomy Moscow Ring Road According to the design documentation, Start-Up Complex No. 5 of the CRR (first construction phase) starts at km 1 (Posts 19+14) and ends at km 84 (Posts 841+00), including the following segments: km 1 – km 18 across the Naro-Fominsk District (16.83 km) km 18 – km 36 across the Odintsovo District (25.80 km) km 36 – km 43 across the Zvenigorod Municipality (7.2 km) – Zvenigorod bypass. km 43 – km 50 across the Odintsovo District (6.75 km) km 50 – km 72 across the Istra District (21.4 km) km 72 – km 84 across the Solnechnogorsk District (11.75 km). The design documentation developed for the construction of Start-Up Complex No. 5 of the CRR (first construction phase) has received a position opinion from Federal State Agency General Board of State Expert Review (Glavgosexpertiza) of Russia (25 А-113 CRR, start-up complex No. 5 10 December 2012 No. 1217-12/GGE-6683/04, 25 December 2012 No. 1223-12/GGE6683/10) with respect to the technical part and the estimated costs, respectively. The construction is funded with Federal budget subsidies and extra-budgetary finance sources. For more detail on the technical documentation, go to the Avtodor State Company website at: http://www.russianhighways.ru/about/technical_documentation/ А-113 CRR, start-up complex No. 5 11 Technical characteristics Key technical and economic indicators of Start-Up Complex No. 5 (first construction phase): Type of construction Road category New construction reconstruction II Length, including: 76.44 km - new construction 28.33 km - reconstruction 48.11 km Estimated speed 80/70 km/h Traffic lanes 4 Roadway width 2х7m Median strip width 3m Shoulder width 3m Pavement type Heavy duty Surface type Asphalt-concrete Bridgeworks, No./m 26/2,380.06 Two-level pedestrian crossings, No./m 5/220.09 Retaining walls, No./m 4/515.66 Multi-level traffic interchanges 5 Area of hard pavement 1.8 mln. sq.m. Total lane length 305 km Projected average traffic in 2030 Construction period 26,600 vehicles/day and 2015-2018 А-113 CRR, start-up complex No. 5 12 Technical characteristics DESIGN FEATURES The design documentation was prepared by OAO Soyuzdorproekt, one of Russia’s leading institutes for road design and survey work. For the given facility, Special Terms of Reference were prepared for developing the design documentation for construction of the CRR (STR), the requirements of which have been reflected in the design solutions. In addition, technical terms issued by the holders of transport facilities crossed and utilities to be modified were obtained and taken into consideration. In developing the design documentation, an economic and feasibility study of the project were fulfilled. The following factors were taken into account in designing the road route options: Geological, hydro-meteorological, geo-technical and ecological conditions Location of special use regime territories, including specially protected natural territories (for the purpose of minimising environmental footprint) Local urban planning schemes Possibility of drawing maximum transport flows and launching Start-Up Complexes independently of one another Protection of archaeological heritage and burial grounds Bypassing households and garden allotments or, if this proves impossible, their minimal demolition for construction purposes. Based on the analysis of different road route options, the optimal one for the project goals was chosen. The optimal option meets the requirements of a minimum impact on the natural environment, including natural protection complexes, water protection zones of water bodies, nature reserves and preserves. Being located relatively close to the existing А-107 (MMK) road, the given option allows the existing transport links within the Moscow Region to be preserved and takes account of the future development of the Moscow and Moscow Region transport infrastructure. А-113 CRR, start-up complex No. 5 13 Technical characteristics CULTURAL HERITAGE AND ENVIRONMENTAL PROTECTION Cultural heritage Avtodor State Company focuses particularly on preserving historical memories when implementing highway network projects. For this purpose, it has developed and implements a complex of measures aimed thoroughly studying the territory intended for road construction. According to clause 2 Article 40 of Federal Law No. 73-FZ of 25 June 2002 ‘“On Cultural Heritage Items (Monuments of History and Culture) of the Peoples of the Russian Federation’, construction work on the CRR must be preceded by scientific archaeological rescue work (excavations) on the territory of archaeological heritage covering an area of 1,500 sq.m., and archaeological supervision must be conducted during construction of the roadbed. The kilometre-wide zone of potential impact from Start-Up Complex No. 5 includes 14 recreational facilities, 5 sites of historical and cultural heritage, and 2 archaeological monuments: XI-XIII c. Burial mound Renewed Labour, Istra District, covering an area of 1,500 sq.m., 25-30 m from the permanent dedication (excavations) XIV-XVIII c. ancient settlement Ignatevskoye – 2, Odintsovo District, within the permanent dedication (archaeological supervision). In addition, within the kilometre-wide zone, there are three architectural facilities: Petrovskoye Manor (formerly, a luxurious XVIII c. estate) located in the village of Petrovskoye Vyazomy Manor (XVI c.) at Bolshiye Vyazyomy Vvedenskoye Manor (XVIII c.) in the village of Vvedenskoye (Zvenigorod Urban District). 1 historical monument: Soviet Army war grave at Bolshiye Vyazyomy, awarded state protection by Directive of the Ministry of Culture of the Moscow Region No. 205 of 18.04.2007. Obelisk on the grave of Soviet Army soldiers killed or fatally wounded defending Moscow in 1941. А-113 CRR, start-up complex No. 5 14 Since the architectural monuments identified in Start-Up Complex No. 5 are located at a considerable distance from the CRR, the road will not have any negative impact on them. The route of Start-Up Complex No. 5 of the CRR does not touch on any specially protected natural territories of federal, regional or local significance. Environmental protection The road will run mainly through densely developed areas. The design solutions for environmental protection are determined proceeding from the contemporary ecological requirements set by the legislation of the Russian Federation. The design envisages measures for protecting ground and surface waters, the air, flora and fauna against the physical impact by the road. The design for construction of Start-up Complex No. 5 of the CRR provides for measures reducing the negative impact of the road on the environment, including: noise-protection screens and noise-protection glazing in areas of high noise level local purification plants for 100% purification of the run-off from the road surface: local collector type purification plants hydro-botanical areas or mesh filters local flow-type purification plant special-purpose artificial structures – environmentally friendly crossings for animals (ecoducts). А-113 CRR, start-up complex No. 5 15 Technical characteristics KEY TECHNICAL ASPECTS Preparation of the construction site В accordance with the design documentation, the Contractor prepares the road construction site, including: updating the technical conditions and other documents updating permits required for preparing the construction site transferring utilities clearing the land plots of real estate and other objects in the way of construction. The list and scope of the construction site preparation work are established on the basis of the design documentation and specified by the Contractor during development of the detailed design documentation. Land dedication for permanent and temporary use Start-Up Complex No. 5 of the CRR crosses the Naro-Fominsk, Odintsovo, Istra and Solnechnogorsk Municipalities and the Zvenigorod Urban District through population centres, agricultural, industrial and forest fund land. Permanent right-of-way of Start-Up Complex No. 5 of the CRR State forest fund about 51 % Agricultural land 15.81 % Residential development areas, including: 18.87 % - population centres 4.52 % The route has been agreed with all the municipalities crossed by the road and included in the Moscow Region Territorial Planning Scheme. Total area required for construction of Segment No. 5, including: 586.17 ha for permanent use 365.56 ha for temporary use: 220.61 ha А-113 CRR, start-up complex No. 5 16 Temporary dedication, including: Forest fund land 102.47 ha Agricultural land and allotments 36.11 ha Industrial and transport territories 19.5 ha Population centre land 22.55 ha Unclassified lands 39.97 ha Reinstallation of utilities Any utilities within the construction zone of the road and traffic interchanges are subject to reinstallation. The Contractor shall develop detailed design documentation for reinstallation of the utility networks as per the design documentation and engineering survey materials provided by Avtodor State Company. All the technical solutions for removing the utilities must be developed as per the updated technical conditions of the utility owners and must comply with the requirements of the applicable regulatory documents. Reinstalled utilities including: 457 facilities Communications cables, /km 309/690.67 Heat pipelines, /km 1/0.102 Sewage, /km 6/1.532 Water main, /km 3/0.856 Railway communications, segments 6 Low-pressure gas distribution pipelines, /km 11/15.8 High-voltage electric power cables, /km 103/46.118 Gas mains, /km 9/3.453 Petroleum product pipelines, No./km 9(3х3)/2.39 Soil and geological conditions; road pavement The route of the Central Ring Road lies in climate zone II; in terms of the nature and degree of moisture exposure, this area is classified as type 1, 2 and 3. For its soil and geological conditions, it is suitable for construction of an express highway. А-113 CRR, start-up complex No. 5 17 Based on the road category and the future traffic, a heavy-duty road surface is envisaged all along the CRR, covered with stone matric asphalt-concrete. Results of engineering and geodesic surveys The planned route crosses the Smolensk-Moscow upland in the west and the Moskvoretsk-Oksk plain in the south. The border between the districts is vague, mostly following the valley of the Nara River. Tectonically, the territory is located within the Moscow depression of the East European platform. The region is classified as tectonically stable. The geological structure of the region consists of Quaternary, Cretaceous, Jurassic and Carboniferous formations. Carbonate, predominantly covered limestone and dolomite karst dating from the Middle Carboniferous is widespread on the territory. А-113 CRR, start-up complex No. 5 18 Cross section of the road surface Roadside reinforcement with 0.15 mm gravel Roadside reinforcement with 0.15 mm gravel Main roadbed slope reinforcement h at least 0.3 m h at leasr 0.3 m Main roadbed slope reinforcement Roadside filling in with sand Roadside filling in with sand Graded gravel laid by gravel blocking (gravel M 600*) (GOST 8267-93) 0.15 Dense asphalt concrete of type “B” grade I hot coarse gravel mixture (GOST 9128-2009) on granite gravel with M of at least 1200 -0.06 Gravel mastic asphalt concrete (CsMA-15) (GOST 31015-2002) on granite gravel with M of at least 1200 using PAV (using adhesive additive) -0.05 Roadbed soil Separation layer of thermobonded (thermostrengthened) or mechanically strengthened geotextile “Dornit” with a breaking strength of noless than 7.5 kN/m (ODN 218.046-01 p.2-16 and ODM 218-5.003-2010) in the cave. [Введите цитату из документа или Sand additional base layer lower layer with Cf ≤ 2 m/day (GOST 9736-93) in the cave. краткое описание Sand additional base layer lower layer with Cf ≤ 2 m/day (GOST 9736-93) in the embankment. интересного Additional base layer upper layer of gravel-sand mixture S-5 or S-6 (sediment gravel with M of at least 600 (25607-2002). события. Надпись Finite gravel-sand mixture of 6%-8% reinforced Portland cement M-75 (V-5; bending tension -15; F-35) (GOST 23558-94) можно поместить on sediment gravel with M of at least 600; consolidated concrete M-75 (V-5; bending tension -15; F-35) (GOST 2663391*). в любое место Porous asphalt concrete of grade 1 hot coarse gravel mixture (GOST 9128-2009) on granite gravel with M of at least 1000 or документа. Для sediment gravel with M of at least 1200. изменения Crack stopping layer of geotextile SSNP 50/50-25(400) – Highway (ODN 218.5.003-2010) Dense asphalt concrete of type “B” grade I hot coarse gravel mixture (GOST 9128-2009) on granite gravel with M of at least форматирования 1200 or sediment gravel with M of at least 1200. надписи, А-113 CRR, start-up complex No. 5 Gravel mastic asphalt concrete (CsMA-15) (GOST 31015-2002) on granite gravel with M of at least 1200 using PAV (using содержащей adhesive additive). броские цитаты, используйте вкладку 19 Lanes The design of Start-Up Complex No. 5 provides for construction of 4 traffic lanes. Bridges and fly-overs Construction of 26 bridge structures is planned for sector No. 5. Bridge structures, including: 26 2,380.06 m Bridges 8 638.83 m Fly-overs 12 959.39 m Ramps 6 781.84 m Aggregate table of bridge structures All the bridge structures, including big bridges, relate to responsibility level two (GOST R 54257-2010 ‘Reliability of construction structures and foundations. Main regulations and requirements’). Bridge structures, length m Number Bridges up to 100 m 5 Bridges 100 - 200 m 3 Overpasses and eco-crossings 6 Fly-overs up to 100 m 10 Fly-overs 100 - 200 m or more 2 Small artificial structures For the purpose of organising surface drainage, the design provides for 337 reinforced concrete culverts totalling 9448 m in length, including: Culverts 337 (length: 9,448 m) including: Rectangular reinforced concrete pipe with a 2.0х2.0 m 1 (length: 92 m) opening circular reinforced concrete pipes with 2 and 2х2.0 m openings 11 (length: 636 m) circular reinforced concrete pipes with 1.5 and 2х1.5 m 179 (length: 6,218 m) openings circular reinforced concrete pipes with 1.0 m openings 137 (length: 2,430 m) circular reinforced concrete pipes with 0.5 m openings 9 (length: 72 m) А-113 CRR, start-up complex No. 5 20 Transport interchanges Traffic interchange No. 28 Location: km 21 Traffic interchange No. 34-1 Location: km 39 Traffic interchange No. 34-2 Location: km 42 Traffic interchange No. 30 Location: km 62 Traffic interchange No. 35 Location: km 74 Traffic interchange No. 31 Location: km 84 Intersection with the M-1 Belarus road Start of the Zvenigorod bypass On the Zvenigorod bypass Intersection with Volokolamsk Highway Intersection with Pyatnitskiy Highway Intersection with the М-10 Rossia road А-113 CRR, start-up complex No. 5 21 Technical characteristics CRR transit through the site of Start-Up Complex No. 5 CRR TRANSIT THROUGH THE SITE OF START-UP COMPLEX NO.5 Legend: Start-up Complex No. 1 Start-up Complex No. 2 Start-up Complex No. 4 Moscow Kolomna Populated Areas Rivers and other bodies of water Railroad Istra Zvenigorod Bolshiye Vyazyomy Moscow Ring Road А-113 CRR, start-up complex No. 5 22 Technical characteristics Traffic interchange No. 28 At the intersection of the CRR and the М-1 Belarus, construction is envisaged of transport interchange No. 28 (Km 21). On the construction plan for Start-Up Complex No. 5 (first construction phase), transport interchange No. 28 has 5 ramps: Ramp No. 1 provides for traffic movement from Mozhaisk Highway (through Golitsyno) to the M-1 Belarus (in Москву) Ramp No. 2 links the M-1 Belarus (from the Region); MMK (М-3 Ukraine) – Golitsyno (Golitsyno station) Ramp No. 3 links the M-1 Belarus (from the Region) MMK (in the direction of Mozhaisk Highway) Ramp No. 4 links SMR (М-3 Ukraine) – М-1 Belarus (towards the Region) Ramp No. 5 links the М-1 Belarus (from Moscow) – SMR (towards the М-3 Ukraine). KOBYAKOVO А-113 CRR, start-up complex No. 5 23 Traffic interchange No. 34-1 Traffic interchange No. 34-1 is located at the start of the Zvenigorod bypass (km 39). The interchange is a ‘trumpet’ design. On the construction plan for Start-Up Complex No. 5 (first construction phase), transport interchange No. 34-1 has 4 slip-roads: Traffic Interchange No. 34.1 limit Ramp No. 1 links SMR (М-1 Belarus) with Zvenigorod Ramp No. 2 links SMR (М-9 Baltia) with Zvenigorod Ramp No. 3 provides for exit from Zvenigorod to the beginning of Start-Up Complex No. 5 in the direction of Mozhaisk Highway and the M-1 Belarus highway Ramp No. 4 is the approach road to the local cemetery (category V road). Traffic Interchange No. 34.1 limit (Points 387 + 80. А-113 CRR, start-up complex No. 5 24 Traffic interchange No. 34-2 Traffic interchange No. 34-2 is located on the Zvenigorod Urban District bypass (km 42). The interchange is a ‘trumpet’ design. On the construction plan for Start-Up Complex No. 5 (first construction phase), transport interchange No. 34-2 has 4 ramps: Ramp No. 5 provides for exit from Zvenigorod to SMR (in the direction of Mozhaisk Highway) Ramp No. 6 links SMR (Mozhaisk Highway) with Zvenigorod Ramp No. 7 links SMR (М-9 Baltia) with Zvenigorod (sector of the existing road (SMR)) Ramp No. 8 is the approach road to Zvenigorod resort (category IV road). А-113 CRR, start-up complex No. 5 25 Traffic interchange No. 30 At the intersection between the Volokolamsk Highway, construction is planned of traffic interchange No. 30 (km 62). The traffic interchange is located at the Vysokovo-dachnoye population centre. It is an urban-type interchange in a densely developed area. Junction A On the construction plan for Start-Up Complex No. 5 (first construction phase), transport interchange No. 30 has 4 ramps: Ramp No. 1 links Moscow – SMR (in the direction of the М-10 Rossia) Ramp No. 2 links SMR (М-9 Baltia) in the direction of Moscow Ramp No. 3 links Volokolamsk Highway (Region) – SMR in the direction of М-9 Baltia Ramp No. 4 links SMR (М-10 Rossia) – Volokolamsk Highway in the direction of the Region. А-113 CRR, start-up complex No. 5 26 Traffic interchange No. 35 Traffic interchange No. 35 is situated as the intersection between Pyatnitskoye Highway and the CRR at km 74 in the Solnechnogorsk District. On the construction plan for Start-Up Complex No. 5 (first construction phase), transport interchange No. 35 has 4 ramps: Ramp No. 1 links the southern direction of the CRR with the western direction of Pyatnitskoye Highway Ramp No. 3 links Pyatnitskoye Highway with the northern direction of the CRR (М-10 Rossia) Ramp No. 5 links the northern direction of the CRR (М-10 Rossia) with the eastern direction of Pyatnitskoye Highway (Moscow) Ramp No. 7 links Pyatnitskoye Highway (Region) with the southern direction of the CRR in the direction of Volokolamsk Highway. А-113 CRR, start-up complex No. 5 27 Traffic interchange No. 31 Traffic interchange No. 31 is situated at the intersection of the М-10 Rossia highway in the vicinity of the Durykino village (km 84). On the construction plan for Start-Up Complex No. 5 (first construction phase), transport interchange No. 31 has 4 ramps: Ramp No. 1 links the CRR (from the direction of Pyatnitskoye Highway) with the М10 Rossia highway in the direction of St Petersburg Ramp No. 2, 11, 12 links the М-10 Rossia (from the direction of Pyatnitskoye Highway to the М-10 Rossia highway) with v. Radishevo, v. Lipounikha, v. Shishovka and also provide for the local connections of the localities on the both sides of CRR. А-113 CRR, start-up complex No. 5 28 Technical characteristics Technical means for traffic control To ensure traffic safety and organisation on the road, all the requisite measures are planned in accordance with GOST R 52289 (‘Technical means for traffic organisation. Rules for use of road signs, markings, traffic lights, road barriers and guidance systems’). Tolling system Start-Up Complex No. 5 is not an express sector of the CRR and will be used free of charge. Installation and tuning of automatic traffic control system equipment does not constitute part of the long-term investment agreement and will be performed by an operator retained by Avtodor State Company. The given intellectual traffic systems may also be operated by an operator retained by Avtodor State Company. А-113 CRR, start-up complex No. 5 29 Long-term investment agreement GENERAL PROVISIONS Legal framework – the long-term investment agreement is a type of public-private partnership agreement. It is a mixed civil law agreement including elements of different types of agreement envisaged by the effective legislation of the Russian Federation (construction contractor agreement, performance of road maintenance, current and capital repair). The long-term investment agreement (in contrast to a concession agreement) is not subject to special legislative regulation in the form of a separate federal law and is regulated by the general rules on agreements of the civil legislation of the Russian Federation. The parties to the long-term investment agreement will be: Avtodor State Company and the Contractor determined through an open tender. Project finance is provided under the Avtodor State Company long-term Activity Programm for 2010 – 2020. The project implementation conditions stipulate obligations of Avtodor State Company and of the Contractor to co-finance construction of the road in the scope determined by the terms of the long-term investment agreement. Construction of the agreement facility will be financed by Avtodor State Company (state finance) out of federal budget subsidies granted thereto and funds of the National Wealth Fund, and by the Contractor out of its own and borrowed funds (Contractor investments). At the same time, Avtodor State Company will finance the operating stage of agreement fulfilment out of its own toll revenues. Purpose of the agreement – to create and provide for due operation of the road throughout its life-cycle in accordance with the latest technical operational parameters, ecological and traffic safety requirements. Facility – Start-Up Complex (construction stage) No. 5 (first construction phase) of the Central Ring Road, including, as specified by the design documentation: Land plots within the boundaries of the dedication and structural elements of the road and road structures located thereon Road and engineering structures of the transport infrastructure (roadbed, road surface, bridges, culverts, fly-overs, overpasses, technical means for traffic control, other road facilities and components of the road system). Agreement term: 24 years from conclusion of the agreement Property interests: Title to the road will belong to the Russian Federation The road will be handed over for trust management by Avtodor State Company. All the agreement materials shall be prepared in Russian. Russian shall be the official project language. А-113 CRR, start-up complex No. 5 30 Project implementation PREPARATION AND HOLDING OF THE OPEN INVESTMENT TENDER 2014 SITE PREPARATION AND CONSTRUCTION 2015-2018 Conclusion of the long-term investment agreement Road commissioning OPERATION 2019-2038 Maintenance of the road, current and capital repairs (maintaining target traffic use indicators) 24 years А-113 CRR, start-up complex No. 5 31 Long-term investment agreement CONTRACTOR’S OBLIGATIONS ИСПОЛНИТЕЛЯ In accordance with the long-term investment agreement, the Contractor shall: perform land-use planning and cadastral work develop detailed design documentation prepare the construction site build and commission the road up by 20.12.2018, all construction work at the facility to be completed by 01.11.2018 perform work and render services to obtain all the requisite permits, consents from state bodies, municipal bodies, operating organisations, for performance of land-use planning and cadastral work, preparation of the construction site, construction and road start-up provide part of the finance for work performance in the amount of 4,125.3 mln. RUB maintain the road and perform current and capital repairs during the operating period ensure compliance by the road with the requirements on its maintenance, traffic use indicators, and access indicators during the operating period fulfil warranty obligations in relation to the road following termination of the agreement. А-113 CRR, start-up complex No. 5 32 Long-term investment agreement STATE COMPANY’S OBLIGATIONS In accordance with the long-term investment agreement, Avtodor State Company shall: take the following steps based on the results of the land-use planning and cadastral work: provide the Contractor with the documentation on planning the construction site change the category and type of permitted use of the land plots, as required for construction and operation of the road condemn, including by purchasing, land plots for state needs formalise the title of the Russian Federation and the long-term lease rights of Avtodor State Company in relation to the withdrawn land plots accept the land-use planning and cadastral work, detailed design documentation development, construction site preparation and construction performed by the Contractor and also pay for the given works make investment payments providing for stage-by-stage compensation for (return of) the amounts invested by the Contractor during the investment stage of agreement fulfilment, including paying for the interest accrued on the given investments make operational payments for performance of works/services to maintain, current repair, capital repair and operate the road. А-113 CRR, start-up complex No. 5 33 Commercial structure For project implementation purposes, the following stages of state support are envisaged: State finance at the road construction stage Operational and investment payments by Avtodor State Company at the road operation stage. FINANCING: INVESTMENT STAGE The maximum cost of the works under the agreement at the investment stage amounts to 36,627.7 billion RUB in the relevant year prices, including VAT. Avtodor State Company and the Contractor will finance construction of the road in the following proportion, respectively: 32,502.4 billion RUB and 4,125.3 billion RUB Tender start conditions* 4,125.3 mln. RUB Cost of work under the agreement at the investment stage = 36,627.7 billion RUB* 32,502.4 mln. RUB The state support provided for construction of the road wil be paid to the contractor monthly, on the basis of the works performed by the contractor and accepted by Avtodor State Company (log of work scope and cost). Project finance structure (mln. RUB) State finance Investment by the contractor finance А-113 CRR, start-up complex No. 5 * In relevant year prices, including VAT 34 Commercial structure KEY PROJECT FINANCE PARAMETERS* Avtodor State Company payment to return extra-budgetary finance was calculated based on the following assumptions: Parameter Cost of works under the agreement at the investment stage: Value Comment 36,627.7 - State finance 32,502.4 - Investment by the contractor in construction 4,125.3 including: - Borrowed funds 2,062.65 Constitutes the basis for payment of the irreducible investment payment - Own funds 2,062.65 Constitutes the basis for payment of the reducible investment payment Term for repayment of borrowed funds 11 years Term for return of own funds 20 years Average rate of return on investments by the potential contractor 5.5% + CPI Floating rate of return determined in consideration of the Consumer Price Index for goods and services and a fixed premium of 6.4% Including: Floating rate of return on borrowed funds of the potential contractor 4.65 % + CPI Floating rate of return on own funds of the potential contractor 8.5 %+CPI** Floating rate of return on the borrowed funds of the potential contractor determined in consideration of the Consumer Price Index for goods and services and a fixed premium of 4.55% Floating rate of return on the own funds of the potential Contractor determined in consideration of the Consumer Price Index for goods and services and a fixed premium of 8.30% * To be specified during the tender **8.50=4.65+3.85, where 4.65 – value of premium bid at the tender А-113 CRR, start-up complex No. 5 35 PAYMENT UNDER THE AGREEMENT AT THE OPERATION STAGE The payment is made by Avtodor State Company and covers the following of the contractor’s expenditures: return and servicing of raised finance for construction of the road in consideration of returns on the invested own and borrowed capital road operation expenditures. Payment of operating costs Availability payment Return of investments Investment payment Reimbursement of own investments Tender start conditions : 9.23 billion RUB* Income on own investments Reimbursement of costs of servicing and returning borrowed funds Debt principal Interest on borrowed funds* Tender start conditions : 7.065 billion RUB** Reducible part (may be reduced by fines for violating the road quality requirements) Road maintenance Scheduled-preventive work on artificial structures Current and capital repairs Insurance Irreducible part Indexed to inflation (may be reduced by fines for substandard operation) * In relevant year prices (without VAT in accordance with the project assumptions). Since the project is structured with floating returns of raised finance (tied to inflation), the actual payment of interest on the debt principal and incomes on own capital will be adjusted in consideration of the ratio of the actual to the forecast inflation. ** In 2014 prices (without VAT). Indexed to consumer price inflation. А-113 CRR, start-up complex No. 5 36 Commercial structure FINANCING: OPERATION STAGE MECHANISM FOR PAYMENT BY THE STATE COMPANY AT THE OPERATION STAGE Avtodor State Company payments are regular payments set by the agreement at the operation stage. The payment made by the State Company consists of an availability payment* and an investment payment**. Payments to the contractor begin from launch of the operation stage of the project. The actual amount paid by Avtodor State Company is determined in consideration of deductions made from such payments in the event of failure by the potential Contractor to fulfil the requirements set by the agreement. Funding scheme – operation stage OPERATION STAGE (maintenance – current repair – capital repair) Avtodor State Company payment under the agreement Operating costs Contractor Return of investments * Covers the costs of maintaining and repairing the road ** Includes repayment of investments raised by the potential Contractor with returns А-113 CRR, start-up complex No. 5 37 AVAILABILITY PAYMENT AND PAYMENT FOR REPAIRS The availability payment and payment for repairs constitute a component part of the payment of Avtodor State Company, covering the potential Contractor’s costs of operating, current and capital repairing of the road. As the initial value, a sum is set of 7,065.4 mln. RUB without VAT for the entire term of the long-term investment agreement in prices Q1 2014 prices. The starting conditions of the long-term investment agreement provide for periodical payments for current and capital repairs, including prior to the schedule time for such repairs. Road maintenance Current repairs Capital repairs Preventive repairs on artificial structures Road insurance, in relevant year prices (VAT excl.) Availability payment dynamics* The terms of the long-term investment agreement will provide for provision to the Contractor of bank guarantees securing performance of its obligations to make scheduled repairs and ensure the quality of such works. * In Q1 2014 prices (without VAT) The terms of the agreement envisage an increase in the cost of maintaining the road in the event of an increase in traffic. Actual daily average traffic intensity on the road*, vehicles/day 7,000 – 10,000 1.016 10,000 – 20,000 1.040 20,000 – 50,000 1.080 Over 50,000 1.120 The actual daily average traffic intensity on the road is determined for the 12-month period ending on 1 December of the previous operating year of of performance under the Agreement. А-113 CRR, start-up complex No. 5 38 INVESTMENT PAYMENT The investment payment constitutes a component of the payment by Avtodor State Company covering the return and servicing of the potential Contractor’s funds utilised during the investment stage of agreement fulfilment. The total investment payment includes a reducible and an irreducible part in consideration of the returns thereon. The investment payment takes account of capitalised interest on the potential Contractor’s investments during construction as utilised in the project during the investment stage of agreement fulfilment. Investments by the potential Contractor are fixed and not subject to adjustment during the open investment tender. The base sum of the investment payment is 9,230.7 mln. RUB (not subject to VAT) for the entire term of the long-term investment agreement in relevant year prices. Investment payment dynamics Borrowed funds Own funds А-113 CRR, start-up complex No. 5 39 System for accrual of demerit points/ reducing sums of the availability and/or investment payment Demerit points are accrued and a commensurate reduction made in the availability and/or investment payments for violation/failure by the contractor to observe the requirements set by Avtodor State Company on the traffic accessibility indicators of the road, traffic use parameters of the road and requirements on maintenance and operation of the road. Violation of the requirements on road maintenance and operation Violation of the requirements on road maintenance Violation of the requirements on traffic accessibility and traffic use parameters of the road Failure to observe the traffic accessibility indicators Violation of the traffic use indicators of the road, in particular: evenness (longitudinal/latitudinal), coefficient of adhesion with the road, surface durability Violation of the traffic use indicators of artificial structures, in particular: compliance with the standard load class, longitudinal strength, defects in and wear on junctions deforming seams Reduction of availability payment Reduction of investment payment А-113 CRR, start-up complex No. 5 40 Risk sharing The advantage of using the public-private partnership model for implementing the project consists in an optimal, balanced and economically effective distribution of the risks associated with project implementation between the parties to the long-term investment agreement. The optimal risk distribution is based on the principle that risks beyond the control or competence of the contractor are borne by Avtodor State Company, which, in this project, is the public partner. Project implementation on the basis of the long-term investment agreement mechanism allows the volume of investment by the contractor to be reduced, which, accordingly, reduces its financial risks. Main project risks: Risk Risks of delayed provision of land plots prepared for construction Risks of delayed preparation of the construction site Design risks Description Contractor State Company Change in the project schedule as a consequence of delayed withdrawal (purchase) of land plots, formalisation of the Russian Federation’s title thereto, change in the category and type of permitted used thereof, as well as violation of the deadlines for provision of the land plots for construction as a consequence of violation of relevant obligations by the State Company Change in the project schedule as a consequence of violation by the Contractor of its obligations to perform earth and cadastral works and prepare the construction site Likelihood of errors in design solutions and construction work plans А-113 CRR, start-up complex No. 5 41 Risk of delayed completion Increased construction times Risk of increased construction costs Actual project construction costs exceed the estimates, in particular, due to increases in construction material prices or bad faith on the part of Contractor organisations Ecological risks Damage to the environment as a result of the contractor’s actions during construction and operation of the road Ecological risks associated with the design documentation Road maintenance risks Increase in actual road maintenance and repair costs due to changing cost of materials (the public partner compensates the Contractor for the increase in the given costs within the bounds of inflation) Risks of changing demand for use of the road Drop / increase in demand for use of the road compared to the estimated level Risk of bankruptcy/insolven cy of the bank providing the guarantee securing performance of the Contractor’s obligations under the long-term investment agreement Bankruptcy / full or partial insolvency of the bank granting the bank guarantee during construction and/or operation Risks of the need to change the road’s technical characteristics during operation Widening of the road or interchanges А-113 CRR, start-up complex No. 5 42 Tender criteria Legal framework The tender is held in accordance with Federal Law No. 223-FZ of 18 July 2011 ‘On procurement of goods, works and services by particular types of legal entities’, the procedure for the procurement activities of State Company Russian Highways and decision of the Management Board of Avtodor State Company approving the tender documentation and holding of tender on its basis. Amendment of the tender documentation Avtodor State Company is entitled to amend the tender documentation at any time prior to expiry of the deadline for submitting bids. In addition, Avtodor State Company may place information about the holding of the tender in the media and on the company website. Estimated change in the Parameters of tender criteria Amount initial value of a criterion Qualitative criteria* (for quantitative criteria) Organisational and technical proposals on the investment project Quantitative criteria Cost of road construction under the agreement Sum of basic annual payments at the operating stage Basic bonus to inflation** Qualifications of tender participant 36.627 billion RUB in relevant year prices 7.065 billion RUB in 2013 prices 4.65 as a percentage Financial stability 0.81 billion RUB Experience 11.2 billion RUB Weighted value of the tender criteria 0.4 Reduction 0.3 Reduction 0.1 Reduction 0.1 Increase 0.1 Total 1.0 The tender winner will be entitled to conclude a long-term investment agreement with the State Company on the conditions of the tender proposal meeting the requirements of the tender documentation. * In accordance with the expert assessment ** Under the terms of the long-term investment agreement, returns tied to inflation will accrue on the Contractor’s investments, which are divided into two equal parts. The first part is interpreted as investments financed out of borrowed finance, on which returns are accrued in the amount of inflation + bonus. The second part is interpreted as investment out of the contractor’s own funds, on which returns accrue in the amount of inflation+bonus+3.85% А-113 CRR, start-up complex No. 5 43 Preliminary project schedule Dates Key stages 23.07.2014 20.08.2014 20.08.2014 – 20.10.2014 Public discussion of the tender terms and draft tender documentation Publication of the official announcement of the tender and the tender documentation Submission of tender bids, familiarisation of potential procurement participants with the materials of the design documentation on the basis of relevant requests Open presentation of the project Tender bid envelope opening Consideration and assessment of the tender bids, summarisation of the results of the tender Provisions by the tender winner of a signed LTIA Agreement with the Supervisory Board of Avtodor State Company conclusion of the LTIA with the tender winner (major transaction) 03.09.2014 20.10.2014 20.10.2014 – 10.11.2014 17.11.2014 – 24.11.2014 27.11.2014 – 11.12.2014 18.12.2014 Signing of the long-term investment agreement with Avtodor State Company 2015 - 2018 2019 - 2038 Construction period Operation period А-113 CRR, start-up complex No. 5 44 CONTACTS Address 109074, Moscow, Slavyanskaya Square, d. 2/5/4, bldg. 3 Web www.russianhighways.ru E-mail [email protected] Telephone +7 (495) 727-11-95 Fax +7 (495) 784-68-04 This document does not constitute an offer, official announcement of the holding by Avtodor State Company of biddings, auctions, tenders or any other documents of similar status that might create any obligations for GK Avtodor. The document is executed exclusively for information purposes. Avtodor State Company reserves the right at any time, without any prior warning, to amend, delete or otherwise, including materially, change the information contained herein and does not bear any obligations to notify any party of such changes. Avtodor State Company does not, under any circumstances, bear liability for the accuracy, completeness, relevance, timeliness or content of, demand for or compliance with reality of any information contained herein. А-113 CRR, start-up complex No. 5 45
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