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VEGAS LEX helps sign concession agreement on 12-tons-plus project
On September 29, 2014, the Government of the Russian Federation and RT-Invest Transport Systems signed a concession agreement on one of the largest investment projects in Russia to introduce a tolling system for vehicles heavier than 12 metric tons.
The concession holder agrees to ensure, in the course of the next 13 year, a comprehensive implementation of the project including design, construction, launch and subsequent upgrades of the system. The Federal Road Agency (Rosavtodor) will act as the concession grantor on behalf of the government. The system is to go on stream in November 2015. According to estimates, the project will yield an income of around RUR1 trillion to the federal budget.
The project will help expand and improve the quality of roads and the related infrastructure in Russia. According to experts, the damage that one truck heavier than 12 tons does to road surface is equal to that done by 20,000 cars. Vehicle owners will also be equipped with special onboard devices free of charge.
Rosavtodor was represented by the so-called Advisers' Group, which includes the VEGAS LEX law firm (organizational and legal issues), the InfraONE First Infrastructure Company (investment and financial issues), the GLONASS nonprofit partnership (technical consultancy) and Navigator Group (technical supervisor).
The 12-tons-plus project, de facto launched with the Road Show on September 23, 2013, is one of the largest concession projects with no government co-financing. Over the past year, the project was fully prepared for implementation, while the concession agreement was worked out and coordinated in one month, which broke a record in the Russian and East European business practice.
The project will be fully financed with the concession holder's own and borrowed resources. Experts believe that a concession agreement that does not involve state co-financing will help improve the investment climate in Russia and attract more investment, in particular, to road infrastructure projects.
"This draft concession agreement effectively reflects a balance of the parties' interests," said VEGAS LEX Partner Albert Eganyan, who heads the Advisers' Group, chairs the VL Partners' Council and InfraONE Board of Directors. "I am glad that our team of consultants was of use to the project and the state. The signing of this concession agreement is an important step toward this project's implementation. We hope that the participants of the project will share a smooth and productive cooperation and will follow the most favorable scenario, because putting the new system into operation will require more of their joint efforts."
VEGAS LEX is one of the leading Russian law firms offering a wide range of services and a national leader among consultants for infrastructure and public-private partnerships, project financing, energy, anti-monopoly regulation and dispute resolution. VL annually ranks among the Russian top three companies in the PPP and infrastructure sector and has a record of 80 successful projects, including those in the transport industry. http://www.vegaslex.ru/en/
InfraONE (the First Infrastructure Company) specializes in full-cycle implementation of infrastructure financing and development projects, including those in the transport sector, from drafting a business plan and up to the project sourcing and management. The company focuses on social, transport and other infrastructure, project financing, PPP and other forms of investment in infrastructure. InfraONE also provides investment services for large infrastructure projects.
 In compliance with Government Resolution No. 1662-r of August 29, 2014.
 The fees are charged to compensate for the damage heavy vehicles do to federal roads.
 The Russian project to create a tolling system is one of the largest in the world. The new system will be unique in terms of the span of roads it will cover and the number of users.