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Market Overview

Russian Transport Infrastructure Construction Market, 2010-2018, RUB billion (excl. VAT)
201020112012201320142015201620172018
591.8660.1654.7648.8623.8594.5737.1916.0803,4

Source: PMR and EMBS Reports

Market Structure

Russian Transport Infrastructure Market Structure in 2018, RUB billion (net of VAT), %
Roads and bridges548.868%
Railways181.923%
Airports and airfields47.46%
Ports and other infrastructure25.33%
Total 803.4


Roads and Bridges

2018 saw the completion and commissioning, following construction and reconstruction, of 560.4 km (2017: 347.4 km), of federal roads, including 299.5 km (2017: 230.7 km) through the Federal Road Agency and 260.9 km (2016: 116.7 km) through the Avtodor State Company.

Public-Private Partnership (PPP) Road Network Development

June 2018 saw the completion and launch of toll-based operations on the longest section of the M-11 Moscow St. Petersburg Highway (km 334 - km 543, Stage 6 construction in the Tver and Novgorod regions) with a total length of 217.1 km. The new section’s speed limit of 150 kmh is designed to correspond with those of Category 1A highways. The four-lane highway includes 107 bridges and other elevated structures with a total length of 8.2 km, and is fully lit and equipped with recreation areas.

In 2018, construction of the M-11 Moscow – St. Petersburg Highway km 58 - km 97 section with a total length of 43.8 km was completed in the Moscow region (including a 5.6 km km approach road).
Consequently, the total length of completed sections of the Moscow - St. Petersburg Highway in 2018 was 428.6 km.

As at the end of 2018, 18 toll-based highway sections with a total length of 1,071.0 km were operational in Russia. In 2018, toll-based operations started at the 2 sections of the M-11 Moscow-St. Petersburg Highway mentioned above. 2018 revenue from toll sections of highways managed by Avtodor SC totalled RUB13.1 billion.

In 2018, Avtodor SC put into operation 54.6 km of reconstructed and 396.8 km of repaired federal roads.

In absolute terms, total funding for road and bridge construction, repair and maintenance, the key segment of transport infrastructure development, totalled RUB548.8 billion, a mere 1% increase year-on-year, mainly driven by an increase in the cost of highway repair and maintenance.

Tenders

132 tenders were conducted in 2018 (2017: 103), for a total amount of RUB323.8 billion , a 40% decrease year-on-year. The Federal Road Agency and the City of Moscow respectively accounted for 52% and 45% of all tenders held. The largest project was the City of Moscow contract for construction of the new Salaryevo-Stolbovo section of the Moscow Underground Sokolnicheskaya line (RUB40.8 billion). In 2018, Avtodor SC signed 6 new investment contracts for a total amount of more than RUB8.71 billion.

Average tender size , RUB million (incl. VAT)
201020112012201320142015201620172018
2,7563,2443,5104,0055,7908,58529,1045,2382,453

Source: The Official Russian Federation public procurement information website http://zakupki.gov.ru

Railroads

2018 saw completion and commissioning of 263.2 km (2017: 248.7 km) of additional mainline track and new railway lines including:   

  • 103.6 km of track commissioned as part of the project “Comprehensive Reconstruction of M. Gorky – Kotelnikovo – Tikhoretskaya - Krymskaya Section, Including Krasnodar Hub Bypass” under the Investment Project “Development and Renovation of Railway Infrastructure on Approaches to Azov Sea - Black Sea Basin”
  • 10.0 km of track commissioned under the Investment Project “Moscow Transport Hub Development”, on the Likhobory - Rostokino railway section (Stage 3)
  • 8.4 km of track commissioned under the Investment Project “Integrated Development of Krasnoyarsk Railway Mezhdurechensk - Tayshet Section”
  • 45.8 km commissioned under the Investment Project “Tobolsk – Surgut - Korotchayevo Railway Section Development”
  • 52.4 km of track commissioned as part of priority measures to develop the Eastern Railway Network (BAM and Transsib)
  • 43.0 km commissioned as part of development and renewal of railway infrastructure on the approaches to the North-Western Basin sea ports.

In preparation for the World Cup, two underground projects were commissioned in 2018 in the cities of Nizhny Novgorod and t. Petersburg, making 3 new underground stations available to commuters in the two cities.

In 2018, investment in railway infrastructure development decreased by 25% year-on-year to RUB181.9 billion, following budget and extra-budgetary funding cuts for a number of large-scale projects, including those mentioned above, due to completion stage or postponement of implementation.

Airports

In 2018, similarly to the previous year, 6 runways and other airfield infrastructure facilities became operational following reconstruction at 8 airports.2018 Completions:

  • Reconstruction of airfields completed and runways put into operation at the airports of Kaliningrad (Khrabrovo), Nizhny Novgorod (Strigino), Samara (Kurumoch), Baratayevka (Ulyanovsk). In addition, airport infrastructure at Saransk and Sakkyryr airports and runways at Norilsk and Ulan-Ude airports were put into operation
  • Reconstruction (construction) completed and individual elements of airfield infrastructure put into operation at the airports of Moscow Sheremetyevo (apron, parking places), Norilsk (taxiways, part of apron) and Ulan-Ude (taxiways)
  • New air terminals completed at the airports of Volgograd, Saransk, Simferopol, Khrabrovo and Moscow Sheremetyevo (Terminal B).

Major upgrades and modernization of airfield infrastructure were carried out at 13 airports in 11 Russian cities (Moscow, Kaliningrad, St. Petersburg, Nizhny Novgorod, Volgograd, Kazan, Samara, Saransk, Rostov-on-Don, Sochi and Yekaterinburg) in the run-up to the 2018 World Cup.

A total of RUB47.4 billion was allocated to construction and reconstruction of airports in 2018, a 48% decrease year-on-year, due to completion of a number of large-scale projects, including the World Cup infrastructure, challenges during construction And issues with contractors including bankrupty and failure to deliver contracts.

Seaports and Inland Waterway Infrastructure

In 2018, throughput capacity of Russian seaports increased by 36.3 million tons, driven, among others, by the following investments:

  • Sabetta Seaport construction (Stages 2 and 3) (+ 11.5 million tons)
  • Vostochny Port coal terminal construction (Stage 3) (+ 7 million tons)
  • Construction of regasification terminal in the Kaliningrad region (+ 2 million tons)
  • Construction of additional railway approaches to Vysotsk Port terminal (+ 0.8 million tons)
  • 4 new anchoring berths for agricultural products transhipment at Caucasus Port (+ 2 million tons)
  • Reconstruction of Food Ingredients LLC intraport infrastructure at Taman Seaport (+ 1 million tons)
  • Construction of LK Volga LLC offshore transhipment complex at Murmansk Seaport near Cape Filinsky (+ 12 million tons).

In 2018  comprehensive steps taken to increase safety of navigable waterway infrastructure included:

  • Next stage of the White Sea - Baltic Sea waterway infrastructure reconstruction (Gateways 8 and 17) completed
  • Construction and installation works completed under the Volga Basin waterway infrastructure renovation project (Samara Hydroelectric Complex Gateways 21–24)
  • Construction of Bagaevsky Hydroelectric Complex launched (Preparatory Stage 1)
  • Work is underway to develop project documentation for Nizhny Novgorod Low-Pressure Hydraulic System Stage 2 construction.

In 2018, total investment into the development of ports and inland waterways continued to decline and amounted to RUB25.3 billion, a 31% decrease year-on-year.

2019 Industry Outlook

Federal Road Network Development 

In 2019, following completion of construction and reconstruction, 543.3 km of federal roads are expected to be commissioned (-3% to the reporting year), including 188.5 km of PPP roads.

Important projects will be the construction and reconstruction of federal highways linking economic growth centres with other administrative centres of Russia (total length of road sections expected to be commissioned in 2019 following construction and reconstruction: 234.5 km), federal highways facilitating development of road approaches to seaports of the Azov Sea - Black Sea, Caspian, Baltic and Far Eastern basins, as well as the Western and Eastern Arctic regions (construction and reconstruction of sections with a total length of 107 km scheduled for completion in 2019).

The implementation of road network development programs in 2019 will bring the length-based share of roads complying with regulatory standards to 85% (2018: 83%).

In 2019, Avtodor SC expects to commission 201.8 km (-59 km to 2018) of roads, including certain sections of the M-11 Moscow-St. Petersburg Highway, with a total length of 194.7 km.

At the end of 2019, the length of toll sections of highways managed by Avtodor SC is expected to be 1,459.0 km.

Additional Main Tracks and New Railways Development

524.1 km of additional main tracks and new railway lines (2018: 263.2 km) are expected to be commissioned in 2019, including the following projects:

  • Kerch Bridge railway traffic launch
  • Reconstruction of Mezhdurechensk - Taishet section (Stage 1 of Eastern railway network development)
  • Development of approaches to ports of Azov Sea - Black Sea basin
  • Implementation of core works to develop railway infrastructure on the approaches to ports of North-Western Basin and Moscow Transport Hub, to build Saratov Hub bypass and develop Tobolsk - Surgut - Korotchayevo section.

Airport Network Development

2019 targets:

  • Launch 14 airfield (airport) infrastructure reconstruction projects
  • Launch 14 design projects and complete reconstruction of redesigned Begishevo Airport Complex (Stage 2) in Nizhnekamsk, Republic of Tatarstan.

A total of 4 runways are expected to be put into operation following reconstruction.

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1 Including VAT. Customers: Avtodor, Federal Road Agency, City of Moscow. RF official public procurement website http://zakupki.gov.ru.