“Rubicon” proceed to docking

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The bridge to China across the Amur river should be built in 24 months.

Rubicon has started construction of the Russian part of the cross-border bridge across the Amur river at a cost of about 9 billion rubles, and a contract has been signed with USK MOST. The railway bridge crossing between the village of Nizhneleninskoye in the Jewish Autonomous region and the city of Tongjiang in the Chinese province of Heilongjiang should be completed in 24 months. The project is unique, because its launch required a combination of Russian and Chinese technical standards and regulations. Now it is necessary to coordinate the work of many controlling and Supervisory structures, “except, perhaps, for cosmonautics,” says Dmitry Astafyev, General Director of Rubicon LLC.

– Dmitry Alexandrovich, what role does Rubicon LLC play in this project today, what functions and powers are assigned to you by the shareholders?

– “Rubicon” is a customer company that currently holds the rights to all documentation, land, and the project itself for the construction of a cross-border bridge across the Amur river. Rubicon will Finance the construction project, and in 24 months, after the project is completed, the company will own and manage the bridge. Together, perhaps, with Russian Railways. In other words, in the future we will be the copyright holders of what we will build.

– It is assumed that the source of profitability will be a special tariff for the transport of goods over the bridge…

– Yes, there is a mechanism for returning investment in the form of charging a tariff rate for the passage of goods over the bridge. The scheme and mechanism for charging fees are currently being considered. Probably, with the participation of Rubicon and Russian Railways, a special structure will be created that will manage the bridge crossing and charge a fee.

– It was even assumed that the bridge itself would also be built by the railway in the person of JSC “RZD Stroy”. However, in the end, the General contractor was chosen JSC “USK MOST”, why?

– In fact, USK Most was one of the first companies to Express a desire to participate in this project. Indeed, there was a fairly complex process of selecting a contractor, and the Chinese company China Civil Engineering Construction Company was considered as such. Its division, in fact, built part of the bridge on the Chinese side. It was logical for us that they should complete the second part, since they already have people, equipment, a cement plant and other necessary equipment and materials on the site.

But negotiations with the Chinese side have stalled due to the appreciation of the dollar, which resulted in a sharp jump in value. As a result, at one of the meetings in the Ministry of transport, a proposal was made to entrust the construction to the structure of Russian Railways. But when RZD Stroy made an estimate, their cost was much higher than a certain limit of 9 billion rubles.

In addition, despite the state importance of the bridge over the Amur, you need to understand that this project is an investment one. And one of the conditions for investors, our shareholders – the Russian-Chinese investment Fund and the Far East development Fund – is a return on investment. Accordingly, the cost of construction is important. “USK Most” of all potential participants gave the lowest amount. Moreover, it is significantly lower than that of RZD Stroy.

– You don’t give specific figures?– I would not like to, this is the competence of our shareholders. I can say that we fit into the pre-agreed framework of 9 billion rubles. Despite the jump in the dollar, and new economic realities. At this fixed price, we signed the contract.

– How complex is the technological aspect of the issue, how will the two parts of the same bridge built by the Russians and Chinese be connected?

– I was engaged in this project for five years, while still being the Deputy Governor of the EAO, head of the regional government’s representative office under the government of the Russian Federation. The representative office, as you know, is located in Moscow, and the main issues regarding the future construction were resolved there. Even then, it was obvious how many Federal agencies were involved, and how difficult it would be to coordinate everything. But when I started working as the CEO of Rubicon, and went deeper into the production process, it turned out that everything is much more complicated.

The project is unique, this has never happened! It is cross-border, connecting from both sides, and you need to immediately understand that Russia and China have different railway tracks. The Chinese have already (1435 mm-Eastrussia), we have wider (1520 mm – Eastrussia). At the same time, the Chinese have a wider rolling stock than we already have. Accordingly, we spent a lot of time trying to adopt and approve the common technical parameters of the project. So that we can then put this facility into operation for our supervising and Supervisory structures, so that it meets all our state Standards, technical requirements, and regulations.

It is very difficult to tell which of the supervising structures is not involved in our project. And the main difficulty is to ensure the interaction of a large number of all these structures, and this – customs, border guards, technical supervision, and the railway – can be listed for a long time. We only have nothing to do with cosmonautics, perhaps! Moreover, consolidation of efforts is necessary both at the construction stage and in the subsequent operation of the bridge.

So, here’s about the docking. Two tracks will be laid across the bridge. Chinese and Russian. Rolling stock from the people’s Republic of China on its track will enter the territory of the Russian Federation, pass customs clearance, be unloaded, or Vice versa loaded, and sent back. The same situation is absolutely mirrored on our side. If, for example, we compare it with the existing railway border crossing in Grodekovo (Primorye territory-Eastrussia), our rolling stock did not enter the territory of China there.

When discussing the technical side of the project, an option was considered in which the wheel pairs of trains are replaced to switch to a new track. This experience has been tested at other junctions with different road widths. But this is a very complex and expensive option. And the solution we have chosen provides the greatest economic feasibility. Again, we have unique logistical advantages in the region-120 km and we get to the Transsib and BAM, our “entry point” is 1 thousand km closer to the far Eastern ports. In the future, it is planned to create one of the largest logistics hubs linked to the Northern part of China.

– What do you see as the main difficulties of the construction process?

– Very strict deadlines for the delivery of the object – 24 months from the date of signing the contract. It’s signed. But it will take a month or two for us to get involved in navigation, and it will be possible to place surfacing equipment for earthworks and construction work. And we are already entering August, with only two months left until the end of navigation. And there is spawning – and again for almost a month it is impossible to work in the Amur riverbed. Then an ice-break, an ice-break, and again in a circle. In total, it turns out almost six months!

However, construction work on the site should not stop, and we are working on an engineering solution that will allow us to not depend on the river regime. Consultations with the contractor are currently very busy. In this regard, we are glad that the chosen company has extensive experience in the Far East and is used to working in our difficult climatic conditions. This is not the first bridge built by her in the Amur riverbed. A bridge was built across the Bolshoy Ussuriysky island, and it was completed ahead of schedule. USK Bridge was built in Vladivostok, and the bridge is unique, and it was delivered on time. To date, there are no claims to these objects, the company also provides warranty service.

So, despite the tight deadlines, we do not doubt the competence of the performer. Consultations are underway with the designer and technical supervision. By the end of June, we should be provided with a schedule for approval, within which the General contractor should work.

– How does the interaction with the regional authorities work?

Governor Alexander Levinthal took an active part from the first day of his appointment, then as the acting head of the Jewish Autonomous region (in February 2014 – Eastrussia). According to him, this construction can give an impetus to the further development of the region. The project is significant, and it should become a locomotive for the region’s economy.

In this regard, the Governor expressed the wish that those divisions that will work on the territory of the EAO should be located in its tax field. Because the subject should feel the effect not after the bridge is completed, but from the beginning of the project implementation. Alexander Borisovich set a task to consider the possibility of attracting local forces to this construction site. There are no major bridge companies in the EAO that could take on a large sub-contract or carry out any major construction work. But in any case, we will insist that companies that pay taxes on the territory of the Jewish Autonomous region be involved in auxiliary work and subcontracts.

Reference
Rubicon LLC was established in 2007 by Petropavlovsk as a customer for the construction of a bridge railway crossing over the Amur river. This project was enshrined in the Russian-Chinese intergovernmental agreement of October 27, 2008. In 2014, the Russian-Chinese investment Fund (a structure of the Russian direct investment Fund) and the Far East development Fund became the owners of the company. On a return basis, they Finance a construction project worth 9 billion rubles.

Talked To Vadim Pasmurtsev

The SK MOST Group of Companies

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