Alexander Ryazanov will reach China in his own way

The company of the former deputy chairman of Gazprom has spent hundreds of millions of rubles on the road for the new Silk Road. What can stop her?
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In early spring of 2013, his partner Roman Nesterenko went to the office of the owner of the Russian Holding Company, the former deputy chairman of Gazprom, Alexander Ryazanov. He brought traffic calculations and tariffs of the Suez Canal, from which it turned out that if you redirect to the future toll highway from China to Western Europe at least 3.5% of cargo going through Suez, the project for its construction will pay off. In April, the partners registered the company Meridian, which is to build a new road from Kazakhstan to Belarus for 594 billion rubles.

Ryazanov became interested in road construction in the late 1990s, when, as director of the Surgut gas processing plant, he got an internship at the Massachusetts Institute of Technology and traveled from Boston to Florida along the I-95 highway. He was struck by the quality of the road and the huge number of goods transported by trailers. When in the early 2000s Ryazanov worked at Gazprom, he had a conversation with the government’s deputy chairman Alexei Kudrin. “Oil and gas prices have gone up, the budget is swelling, why are we not building the infrastructure, which will give the economy a huge boost?” Ryazanov asked. Kudrin allegedly replied that the main task at that time was to compress the money supply and, in order not to accelerate inflation, not to make serious public infrastructure investments (Kudrin did not respond to the Forbes request). “They missed the golden time,” Ryazanov regrets, “when the land was almost no man’s land and for the construction of roads it could be bought for a penny.”

Meanwhile, the eastern neighbors did not wait. In 2004, during his visit to China, the President of Kazakhstan, Nursultan Nazarbayev, signed an agreement with the PRC President Hu Jintao on the “effective link of transport networks”. Four years later, construction of a highway began in Kazakhstan - the embodiment of the long-standing idea of ​​the Chinese and Central Asian states about the new Silk Road, along which camel caravans used to carry goods to Europe. Kazakh companies began to reconstruct old roads, rebuild two-lane highways to six-lane highways, build new ones. In some areas, the PPP mechanism was used. More than 60 companies from Kazakhstan worked on the construction, financing came from the state budget, as well as from foreign banks: International and European banks for reconstruction and development, the Asian Development Bank and other investors allocated $ 5 billion under government guarantees. Part of the transport corridor made paid.

In 2013, Chinese leader Xi Jinping at the International Forum “One Belt, One Road” in Kazakhstan announced the creation of an economic belt of the Silk Road. In the same year, the co-owners of Meridian went with their idea through the ministries, Ryazanov says. “Probably, out of respect for my past, we were received, smiled,” he recalls, “but they answered that there is no experience in the world in the construction of payable roads without state participation.” All that partners had then was a financial model and a route map for eight regions of Russia: Orenburg, Samara, Saratov, Tambov, Lipetsk, Oryol, Bryansk and Smolensk. And yet they asked for an appointment with the first deputy chairman of the government, Igor Shuvalov. He, according to Ryazanov, supported them, but asked to check the calculations made by Nesterenko. Six months later, the consulting company from the “big four” (Ryazanov does not name its name) confirmed their findings.

The path of goods through the Suez Canal from the East Asian ports to European recipients takes 40–45 days and costs $ 4,300 for a 40-foot container. Transportation of such a container by train takes about 25 days and costs $ 8,000, and delivery of the same amount of goods by plane takes three to five days and $ 38,000. A heavy truck will travel all the way, 9,400 km, in 10-11 days. If we take the European fare per kilometer ($ 1.18) for trucks that hold 1.8 40-foot containers, the container transportation along the “Western China - Western Europe” route will cost $ 6,107. It is more expensive than through the Suez Canal, but cheaper than by rail. And taking into account the savings in travel time and cost of working capital, according to the calculations of "Meridian", the final price of transportation by land equals the sea, if the cost of goods in a container is about $ 550,000. There were 3.5 of such goods in the statistics of the Suez Canal %, since then their volume has been increasing annually by 4 percentage points.

According to the estimates of “Meridian”, about 600 transit trucks will pass through the Kazakhstan-Russian border per day (from the Sagarchin border point in the Orenburg region to the Red Stone point on the Belarusian border). The cross-border traffic (from Kazakhstan to Russia and back) can be about 700 trucks, and domestic Russian traffic - 3500. For trucks, the fare will cost 15 rubles / km, for cars (2500 cars per day) - 2 rubles / km. With such traffic, the project will pay off in 12 years after the completion of the motorway construction.

By the beginning of 2019, Meridian bought 100% of the land in the Samara and Tambov regions, 96% in the Smolensk region, 90% in the Orenburg region. A total of 2023 km of the future highway purchased land in a corridor 1371 km long. According to estimates of Forbes, on the basis of the price information provided by the analytical center "Sovekon", the ransom cost the company about 300 million rubles.

Serious difficulties arose only in the Bryansk region, where so far nothing has been possible to buy. There, the most convenient route passes through the grounds of the Miratorg company, where breeding gobies graze. The co-owner of Miratorg, Viktor Linnik, flatly refuses to sell the land, because the track will interfere with its bulls. It was not possible to get a comment from Linnik, but an agrarian familiar with him conveyed his position: “Companies should not break the production process on farms, and without compensation for losses, the land will not be sold to them”.

Nesterenko says that the drones took a survey along the entire length of the route, on the basis of which a terrain model was made. Preliminary design of the route was carried out taking into account the passage of longer (up to 50 m) freight trucks, which are now being tested in Europe, and unmanned cargo trucks, because they need wider turning and driving radii.

For the "Meridian" scientists of the institute "MADI-Project" have developed special construction conditions agreed upon in the Ministry of Construction. Now the company is officially allowed to use some European regulations, for example, the project has a lower embankment. After all, the requirements to make it high appeared when the roads from snow were cleaned by low-powered ZiLs that could not cope with drifts. “Reducing prices by changing standards is a slippery question,” said Mikhail Blinkin, director of the Institute for Transport Economics at the Higher School of Economics. “It can turn out to be a road with a very primitive geometry, and then it will have no speed, no competitive advantage.”

In May 2018, Shuvalov became chairman of the VEB.RF state development corporation. He has not forgotten about the project “Meridian”, his acquaintance tells. In June, during Vladimir Putin's visit to China, Shuvalov signed an agreement with the China Development Bank to provide VEB with 65 billion yuan (600 billion rubles) to finance projects that are part of the “One Belt, One Way”. As Ryazanov tells and acquaintance Shuvalov confirms, after a trip to China, he invited Ryazanov to submit a project to VEB. The press service of VEB said that the corporation "is exploring the possibility of participating in the financing of the project."

The owners of "Meridian" negotiate with the management company "Leader", which has experience in concessions for the financing and construction of road facilities. The "Leader" did not respond to a request from Forbes.

So far there is no legislation in the country that allows private companies to carry out road construction without state participation. Ryazanov hopes for the adoption of a new package of laws on special investment contracts or the Agreement on the protection of investors' rights. Both documents would guarantee investors the immutability of the tax burden and the possibility of shifting some of the risks to the state. For example, Ryazanov says, "political force majeure, under which transit traffic may stop."

In the meantime, the project needs institutional support. In August 2018, the Ministry of Transport officially objected to including the project in the federal plan for the main infrastructure. But in January 2019, a representative of the ministry answered a question from Forbes that the agency “is considering the possibility of recognizing the private Meridian motorway as part of the“ Western China - Europe ”transport corridor. “The hypotheses that they have laid out seem to me too courageous,” estimates the project Mikhail Blinkin from the HSE. “But there are so few roads built in Russia that if any enthusiast builds a freeway even despite my fears and objections, I will only be glad.”