Formula for Good Roads Found in the Perm Krai

19.06.2009 — News

THE PERM KRAI.

The European standards for road construction and repair can be adopted in the Perm Krai. They are going to follow the "Life Cycle Model" used in the Netherlands, Germany and UK.

As RusBusinessNews was informed in the Perm Krai Road Agency, the contractors will spend borrowed or own funds for construction and repair. Moreover, they are free to choose the materials and technical solutions. The Oblast authorities will pay them by installments - providing that the road will meet the established quality standards for a long time. The payment can be spread over a period of 10 years.

The profitability of road work under the new schedule is 8-10%. Before the crisis, it was as high as 12-15%. Nevertheless, the interest of contractors for the innovation is guaranteed. The choice they currently face is either contracts whereby payment is deferred but steady, or basically none of these at all. In 2009 the funding of road construction in the Perm Krai was decreased by 30% - down to 5.7 billion roubles.

PricewaterhouseCooper took part in development of the "Life Cycle Model" for the Dutch Ministry of Transport, Public Works and Water Management. In August 2009 representatives of the company will arrive in Perm to negotiate with the regional authorities.