Herbert Smith Freehills has advised the Government of St. Petersburg on its Western High Speed Diameter (WHSD) Toll Road project with the LLC Northern Capital Highway consortium (OJSC Gazprombank and VTB Group), financed by a syndicate of banks comprising VTB Capital Plc, OJSC Gazprombank, Vnesheconombank, EBRD and Eurasian Development Bank. It reached financial close on 20 December 2012.
The banks will provide funds to Northern Capital Highway to build the central section of the toll road. The funds amount to approximately RUB 70 billion (US$ 2.29 billion), which will be partly funded by the Russian Federation and St. Petersburg. This makes WHSD the world’s largest public-private partnership (PPP) project in the toll road construction sector. The PPP agreement is valid for 30 years and the total cost of the project exceeds US$6.96 billion.
WHSD is Russia’s first toll road in a city. It is a 46-kilometer highway, consisting of three sections connecting the north, centre and south of St. Petersburg. The central section of WHSD is the most complex, including the construction of three bridges and a tunnel. The purpose of WHSD is to reduce traffic on urban highways by diverting trucks from the Seaport districts to the federal highways, as well as improving connections between the city centre and Pulkovo airport. The project involves the most advanced technologies and information systems in traffic management, including a toll e-payment system using stickers on vehicle windscreens.
Herbert Smith Freehills is the legal adviser to the Government of St. Petersburg and has been working on the project for over two years. The firm’s role includes advising the Government on structuring the project under St. Petersburg’s local legislation while ensuring compliance with Russia’s federal legislation and regulations, drafting tender documents and the PPP agreement, and providing assistance throughout the tender procedure and on the negotiation of the PPP agreement. The President of Russia Vladimir Putin, who was then the Prime Minister, attended the signing ceremony when the deal reached its commercial close in December 2011.
The WHSD project has recently won Road Deal of the Year, awarded by Project Finance International.
The Herbert Smith Freehills Moscow team is led by Olga Revzina, assisted by Roman Churakov, Grigory Smirnov, Anastasia Davydova and Olga Davydava.
Olga Revzina commented:
“We are very proud to be playing a key advisory role in the WHSD project, which is one of the most complicated PPP projects in Russia. Our involvement in this deal once again demonstrates the firm’s leading position in the Russian infrastructure market.”
Roman Churakov added:
“WHSD is one of the most high profile PPP projects in Russia, with a number of other large projects in the pipeline to be announced soon. The success of the WHSD project has set a good example for PPP projects in other regions of the country.”
