After almost two years of discussions, a concession agreement for the construction of the Northern Latitudinal Railway was signed. The document was signed by JSC “Russian Railways” and “Northern Latitudinal Railway” company, established specially for the project.
The purpose of the road is to reduce transportation and time costs for the delivery of hydrocarbons from the fields of western Siberia to ports on the coast of the Arctic Seas. The road is necessary for the reducing the routes from the fields in western Siberia to ports of the Baltic, White and Barents Seas.
Specifically, “Northern Latitudinal Railway ” will allow to connect the Northern and Sverdlovsk railways, reduce the transport leg for the consignors of the Urals Federal District, and partially free up the Trans-Siberian Railway.
The project has great importance for the development of transport infrastructure in the Yamal-Nenets Autonomous District and Arctic area in Russia.
The interest of private sector is connected with the performance of construction works. Specifically, the project involves the construction of a bridge across the Ob River with railway approaches, the Salekhard-Nadym railway line and a bridge across the Nadym River. The concessionaire also provides financing, construction and operation of the Obskaya-Salekhard-Nadym railway line.
The total length of the road under the concession is 353 km, its cost is 113 billion rubles. The entire road, including the construction and reconstruction of adjacent areas, is estimated at 236.7 bln rubles.
The result is a market concession, where the concessionaire expects that the infrastructure services he offers will be in demand by the carrier and consignor. The state promised to hedge the investor in case the cargo is not enough to pay off the road.