M-11 Moscow — Saint Petersburg, Stages 7-8

...

Duration: 27 years.

Property relations:

- Ownership of the highway belongs to the Russian Federation represented by “Avtodor”.

- “Avtodor” is obligated to provide the concessionaire the right to own and use the highway for operation for the period of the contract.

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Commercial structure of the project

Financing. The construction phase

The total cost of the construction of the facility is 84.4 billion rubles. In the prices of the relevant years including VAT, excluding other related costs at the construction stage. Financing for the construction of the highway will be carried out by the state and the concessionaire in the following proportion, respectively: 75% and 25%.

The amount of state support provided for the construction of a highway will be paid annually (million, ₽) to the concessionaire in proportion to the successful completion of the stages according to the following scheme:

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KEY PARAMETERS of project financing*

The calculation of the payment in terms of the return of extra-budgetary funding was based on the following assumptions:

Option

Meaning

Comments

The cost of construction:

84 400

- Capital grant funds

- The concessionaire's investments in the construction of the facility

63 300

21 100

75%

25%

Investments of the concessionaire in covering other expenses during the construction phase

3 377**

Costs of maintenance of the project company that carries out the functions of project management, the costs of servicing debt financing and establishment of reserves

Total investment of the concessionaire, including:

24 477

- Own investment

- Loan investments

5 531

18 947

Use of funds takes place over the construction period

Credit period

15 years

Floating rate of interest (construction phase)

6,0% + CPI

The floating interest rate on the loan is determined to take into account the consumer price index for goods and services and a fixed premium at the construction phase of 6%

Floating rate of interest (operational phase)

5,5% + CPI

The floating interest rate on the loan is determined to take into account the consumer price index for goods and services and a fixed premium at the operational phase of 5.5%

Refundable part of debt

Up to 50%

Term refinance

10 years

Floating rate of refinance

5,5% + CPI

The rate of borrowing at the refinancing stage is assumed to be the same as for the principal debt at the operation phase

Floating rate of shareholder return

8,5% + CPI

The rate of borrowing for the concession period in terms of equity financing

* To be specified at the contest

** Includes VAT refunds during the construction phase

Financing. The operational phase

Mechanism of the concession grantor payment

The concession grantor's fee is the annual regular payments for the road accessibility for users during the whole period of operation established by the agreement and compliance with technical and operational indicators. The concessionary's fee covers the financing of the concessionaire's activity on the operation of the highway, as well as expenses of the concessionaire for the creation of a highway, taking into account the return on the invested own and borrowed capital.

Tolls collected by the concessionaire independently in favor of the concession grantor.

Payments to the concessionaire will begin after the highway will be put into operation. *

Organization the financing – operational phase

OPERATIONAL PHASE

(Maintaining, repairing, capital repair)

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*Concession agreement will establish detailed parameters of payment to the concessionaire for services rendered at the stage of operation of the highway.

Risk Allocation

The advantage of using the public-private partnership model for project implementation consists in the optimal, balanced and cost-effective risk allocation related to the project implementation between the parties to the concession agreement.

At the heart of the optimal allocation of risks is the principle that risks that are beyond the control or competence of the concessionaire are vested in the state. All other risks are transferred to the concessionaire. This principle is reflected in the draft concession agreement, which is part of the bidding documentation.

The main risks of the project:

Risk

Description