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PPP projects in Belarus

Reconstruction of M-10 highway: the border of Russian Federation (Selische) - Gomel - Kobrin, km 109.9 – km 195,15

Location of the object: Gomel region
Project initiator: The Ministry of transport and communications

Gist a project

The project involves the reconstruction of the M-10 road section (km 109.9 - km 195.15) with upgrading to category I, as well as its subsequent efficient operation on a paid basis. In addition, the project provides for an increase in the number of lanes from two to four, an increase in the permissible axle load from 10 to 11.5 tons, an increase in the speed limit for cars from 90 km/h to 120 km/h, for trucks from 70 km/h to 100 km/h. 

Project includes
Reconstruction of the M-10 road section (km 109.9 - km 195.15) with upgrading to category I Operation of the facility, its technical and functional service for the entire duration of the PPP agreement

Estimated PPP model

“Design-Construction-Funding-Operation”. After the construction, the private partner is entitled to manage and maintain the facility during the term of the agreement, after which it is handed over to the public partner.

Preliminary capital expenditure: 200 million U.S. dollars. The financial model, sources of financing and return of investment have been determined at the stage of preparing the justification of value for money (best price / performance ratio and quality) within the framework of the feasibility study of the project and approved by the Presidential Decree

Advantages of PPP for the state

  1. Attracting private resources for the project realization in terms of the lack of budget financing - volume of the capital expenditure does not allow to realize project with the use of the budget resources (average annual amount of the Republican road Fund is about 35-40 million U.S. dollars, that makes it impossible to implement the project without private investments);
  2. Long-term implementation of the project - part of the risks is in the area of private partner's responsibility during the term of the agreement;
  3. Socio-economic feasibility of the project - improving road safety, provision of the shortest transport link between European Union, the Republic of Belarus and the Russian Federation, increase in transit traffic.

Advantages of PPP for business

  1. Stable and long-term return on invested capital;
  2. Enhancement of the company's image;
  3. Building good credit history and growth of the credit rating.

Current stage

An assessment of the technical feasibility of the project has been carried out, architectural project and design estimates have been developed. This documents have successfully passed the state construction expertise. As part of an agreement with the European Bank for Reconstruction and Development, the project is being prepared for implementation on the principles of PPP with the involvement of external consultants. As of March 2019, feasibility study, draft PPP agreement, project passport have been prepared.The project received a positive opinion and was approved as a pilot project by the decision of the Interministerial Infrastructure Coordinating Board, and then by the Presidential Decree of the Republic of Belarus. After official approval the project`s presentation was carried out in London, EBRD Headquarters. The main conditions for the implementation of the project, which cannot be change, the specifics of holding a competition and concluding an agreement on PPP, as well as other conditions were presented to the international community. On 29 April, 2019 The Ministry of Transport and Communications of the Republic of Belarus acting on behalf of the Republic of Belarus as the public partner announced the launch of the prequalification under the project.