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Russia’s first light rail PPP project launched

Russia's first light rail PPP project launchedThe Government of St. Petersburg and LLC Transport Concession Company (TCC) signed on the 31st of May a concession agreement for the construction, upgrade and operation of the tramway system in Krasnogvardeysky district of St. Petersburg. TCC is a joint venture of LSR Group and Leader Investment Company (Pension fund asset management company), the financial arranger of the concession.

The project includes the construction of 14 km of new tramway lines and platforms on all the major streets of Krasnogvardeysky district up to Ladozhsky Rail Terminal, the construction of a rolling stock depot. TCC is also expected to launch the acquisition of at least 21 tramways. According to local press, the company will soon announce a tender for the purchase of 15 five section tramways, with a capacity of 380/400 passengers. Annual passenger total is estimated at 33.2 million.

The total value of the investment, including construction of a new tram network and its operation over the period of 30 years, reaches at RUB 32.7 bn (EUR 448 million). In particular, RUB 12.7 bn will be invested in the construction and maintenance of the tramway network. The revenue will be generated from providing transportation services and from receiving governmental subsidies for transportation of welfare beneficiaries.

Permission for construction of the first tramway section from Ladoga station to Khasanskaya street will be issued in August. This tramway section is expected to operate at full capacity in September 2017. The construction of the tram network is to be completed in 4Q 2018.

“This is the first project in Russia for construction of all-inclusive transportation system of an entire district. We are going to carry out a complete reconstruction, raise the quality of public transportation services for those who live in Krasnogvardeiskiy district: tramway lines will be made using noise reduction technologies and the trams will be able to accommodate more passengers. Overall, we expect to seriously improve transport accessibility of Ladozhskiy train station and decrease the burden of other means of transportation”, commented Sergey Okutin, head of TCC.

Andrey Novakovskiy, Liniya Prava management partner and head of project finance and PPP practice commented on the signing of the concession agreement: “This project can very well be described as innovative. For the first time in Russia a concession tender has been held in the area of urban above-ground electrical transportation which will lead to creation of district tramway communication in a city of federal importance. We are glad to play a part in development of St. Petersburg transportation system”.


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