Western High-Speed Diameter Highway

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Western High-Speed Diameter (WHSD) Highway project was a high-speed highway linking St. Petersburg's trade seaports with the national road network. To the north it would provide a connection to the "Scandinavia" motorway and it would connect the north-western, southern and central parts of St. Petersburg. The bid for building the eight-lane central section of the WHSD (11.7 km) which crossed the Ekateringofka and Bolshaya Neva river, and foroperating and maintaining the southern and northern sections was won by the Northern Capital Highway (NCH) Consortium comprised of VTB capital (lead equity investor), Gazprombank (equity investor), IC-Astaldi (contractor, a Turkish-Italian joint venture). They outbid their competitor the Highway consortium by requesting a lower minimum revenue guarantee US$344 million (RUB 9.67 billion), as opposed to US$575 million (RUB 16.15 billion)and by having more competitive CAPEX and EPC terms. NCH consortium would also pay 90% of the excess toll revenue to the city. The 30-year concession agreement was signed in December 2011, and pursuant to the contract, the NCH Consortium would build and operate the central section of the highway and operate and maintain the northern and southern sections.Construction of the initial sections of WHSD began in September 2005. Tolling on the completed sections began on May 14, 2011.According to the consortium's winning bid, the total estimated cost of the project was US$3.9 billion (Rb120 billion). Financing was secured on December 21. 2012. Five MLAs came together and provided debt worth US$1.95 billion (Rb60billion): Vnesheconmbank US$812.5 million (Rb25 billion), Eurasia Development Bank US$325 (Rb 10 billion), VTB Capital US$276 million (Rb8.5 billion), Gazprombank US$276 million (Rb8.5 billion)and EBRD US$266.5 million (200million euro in rubble equivalent - Rb8.2 billion). The Russian government is supporting the project with a US$1.6billion (Rb50 billion) loan. Equity contributions totaling US$325 million (Rb 10 bilion) were made by the project sponsors: VTB Capital (58.5%0 and Gazprombank (41.5%). The senior debt has a tenor of 12 years. The ruble loans are lent a fixed rate with average pricing margins of 11.4% (a balloon payment will be due at the end of year 12 when margins may increase), while the euro loan (EBRD) has a floating rate - Eurobor+3% margins. The federal government loan was provided by the State Investment Fund and the city of St. Petersburg was to be pain to the sponsors in milestone construction payments. The revised concession agreement was also signed on December 21, 2012. % private = 56.7%(%private Gazprombank)* 41.5%(share Gazprombank) + 25.4%(% private VTB group)* 58.5%(share VTB Group)=38.3% Sponsor1 is Gazprombank, 56.7% private. http://www.gazprombank.ru/eng/about/shareholders/ Sponsor2 is VTB Capital, part of VTB Group, 25.4% of its shares are free floating on MICEX-RTS VTB Capital & Gazprombank are also debt providers. Their debt contribution was filled out as follows: VTB Capital (US$276 million) as local public bank funding (since it is 75% SOE) and Gazprombank (US$276 million) as private debt funding (since Gazprombank is 56.7% private). VTB's equity was also listed under "Government funding" given it is 75% SOE.