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Auditors: Ring Road Millions Over Budget

Published: March 16, 2011 (Issue # 1647)


Overspending of nearly 500 million rubles ($17.45 million), including 200 million rubles ($6.98 million) on road repairs, has been uncovered in the accounts of the government agency responsible for overseeing the construction of St. Petersburg’s ring road.

The Accounts Chamber of the Russian Federation announced through its press department last Friday that an audit of the use of federal budget resources assigned during 2008-2010 to the Federal Government Agency “Directorate for the Construction of a Transport Bypass of St. Petersburg” (DSTO) had been carried out on March 5. The auditors discovered that DSTO had spent 218.7 million rubles ($7.63 million) to rectify rutting of the surface on parts of the ring road, in contravention of the contractual obligations of subcontractors. Moreover, the directorate assumed expenses of 300 million rubles ($10.47 million) for the relaying of four oil pipelines belonging to Peterburgtransnefteprodukt, which added further incidental expenditure to the budget.

The pipelines ran directly across the highway, explained a spokesman for DSTO. The extra expenditure on road repairs after last winter, meanwhile, was caused by the fact that subcontractors had not fulfilled their guarantee obligations on the sections of road they had laid, said the spokesman. According to him, this concerns three subcontracting companies that constructed sections in the region of the Vyborg Highway, the Murino Highway, and the cable-stayed bridge across the Neva River. The directorate is trying to recover the expenses from the three companies — Kosmos, Vozrozhdeniye and Mostootryad No. 19 — in court. According to information on the web site of the Arbitration Court of St. Petersburg and the Leningrad Oblast, between the end of December and the middle of February, DSTO filed claims for 65 million rubles ($2.27 million), 154 million rubles ($5.06 million) and 4.2 million rubles ($146,500) against the three companies respectively. The cases are still being reviewed.

However, a representative of Vozrozhdeniye claims that all the companies’ guarantee obligations in relation to the section of road in question expired before the beginning of last spring, and responsibility for the maintenance of the ring road lies with the directorate. A Kosmos employee, who asked to remain anonymous, said that the company could no longer guarantee the normal functioning of the elevated sections of the road, as the volume of traffic they carry is already significantly higher than that forecast in planning. An employee of Mostooryad No. 19 declined to comment for this article.

Instead of the predicted 110,000 vehicles per day, the road currently sees 180,000 automobiles, admitted the DSTO spokesman. Normally subcontractors give guarantees of between one and three years on similar construction projects, said Vladimir Kalinin, president of ABZ-1, a group of companies specializing in road construction. The guarantee periods can vary widely depending on the complexity of the project and the exact conditions of the contract.

Changes in the conditions of use of the structure could be grounds for the subcontractor to abdicate their guarantee obligations, said Maxim Kalinin, a partner at Baker & McKenzie.





 


ALL ABOUT TOWN

Monday, Nov. 24


Dr. Axel Schulte, Department Head at Fraunhofer Institute for Material Flow and Logistics in Dortmund, Germany, is the featured speaker at the SPIBA Industrial Committee lecture on “The Fourth Industrial Revolution: Digitalization of the Supply Chain.” The event begins at 4 p.m. at the Graduate School of Management at 3 Volkohvsky Pereulok and registration is required by Nov. 21 either by emailing office@spiba.ru or calling 325 9091.



Tuesday, Nov. 25


Tag along with AmCham during their “Industrial St. Petersburg” Tour program today. This incarnation of the ongoing series will visit Philip Morris Izhora and include an Environmental Health and Safety Committee meeting.


Find out how to expand your business east during the “Business With China” forum beginning today and concluding tomorrow at the Lenexpo convention center. The largest Russian forum dedicated to business with the Asian giant, topics that will be discussed include logistics, customs clearance, trade financing and many more.



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