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27 February 2017

The bridge-long dream

Or, the largest construction project of the Putin era

Every flight must inevitably pass over the Kerch Strait on its way from Simferopol to mainland Russia, as Ukraine’s airspace is closed to Russian airlines. One can therefore see the Kerch Strait Bridge under construction in all its glory from a bird’s-eye view. According to the Kremlin, the bridge will save the peninsula from all the evils that befell it following the annexation, namely, energy, transportation and other blockades. Despite the hopes vested in this construction endeavor, there are also concerns about the bridge’s durability, since even the Russian government’s most ambitious plans are usually undermined by the slovenliness and covetousness of its building contractors. In addition, understandably, the site’s poor natural condition is also alarming experts.

Ambitious plans

As of today, the piling is 50% complete, both offshore and onshore (7,000 piers in total are needed to complete the foundations). The project can be divided into several segments: the crossing across the main channel, which is approximately six kilometers long, and along the Tuzla Spit (6.5 km), along the dam and across the strait between the Tuzla Spit and Taman Peninsula (approx. 6.5 km). This is a total of 19 km of bridge. Currently, the longest Russian bridge in Ulyanovsk is only 5.8 km long.

Clearly, such monumental construction could only be entrusted to someone special, since an enormous sum of money is at stake: the cost of the construction works was estimated at 227 billion rubles, the equivalent of approximately 7 billion dollars, before the fall of oil prices and the ruble’s devaluation in late 2014. This sum was adjusted slightly several times, with an apparently final figure stated in July last year of 227.92 billion rubles. The sum given in the public contract, which includes the design and construction work – that is, the contractor’s costs – amounts to 223.143 billion rubles.

It also turned out that following the imposition of Western sanctions against Russian companies in the aftermath of the annexation of Crimea and the beginning of the war in eastern Ukraine, the choice of contractors was extremely limited. Initially, Gennady Timchenko was a frontrunner. His OAO Stroytransgaz was supposed to be the general contractor, and his other company, Most, a subcontractor. Eventually, Timchanko, an oligarch closest to Vladimir Putin, became scared of the risks involved and Arkady Rotenberg – another Putin crony – became the general contractor. Rotenberg, who was in fact given no choice after the government registered his company Stroygazmontazh (SGM) as the general contractor anyway, complained that he was making sacrifices and that this would be “his last project”, with which he had decided “to contribute to the development of the country”.

Construction of the bridge, railways lines and marking of the vehicle traffic lanes was to have been completed by late 2018. But at some point it was announced that the railway component wouldn’t be operational until 2019. Then, at the end of last year, it turned out that no Russian contractors could be found to build railroad sidetracks to the bridge from the Taman Peninsula. The Federal Railway Transport Agency announced a tender three times for contractors of 17 billion rubles – and all three times it was in vain: only Yakutian Railway, which had failed the pre-qualification stage, submitted an application.

Eventually, Rotenberg’s SGM was entrusted with construction of the railroad, bypassing the public procurement procedure. The company is now in charge of connecting the would-be bridge with the new deep-water port on the Taman Peninsula. The seaport is to be integrated into the international North-South transport corridor which is to connect European countries with Iran and India bypassing the Suez Canal.

The Ministry of Transport of the Russian Federation (RF) believes that the Vyshestebliyevskaya station needs to be reconstructed in order for these plans to be implemented. Moreover, the transport infrastructure of the Taman port also has to be renewed, as so far the Taman port cannot be considered a transportation hub on an international scale. According to the Ministry of Transport, the turnover of the port should increase nearly eight-fold (from its current 12 million tons of cargo a year to 90 million tons), following construction of the Kerch Strait Bridge and access roads. Hence, the Taman port would become the second largest port in Russia in terms of trans-shipment volume (it now holds 15th place), second only to the Port of Novorossiysk.

Sobering reality

Major construction and installation work commenced in February last year after the design of the bridge was approved by the Glavgosekspertiza (the Chief Expert Committee) of the RF. One month later, a Turkish bulk freighter rammed into one of the slanting legs of the bridge under construction, having already partially displaced several piers. At that moment, it turned out that the construction work was uninsured.

The crux of the matter is that projects of this kind are not limited to the national market, and are reinsured abroad. In this case, the Western reinsurance market was inaccessible to Russian businesses since the companies of the states supporting sanctions against Russia refused to cooperate, as part of the bridge project directly relates to the annexed peninsula.

However, the absence of insurers did not put the Kremlin off. It became known in the summer of last year that the thus-far unheard of Crimean First Insurance Company (KPSK) had received approximately 1 billion rubles to insure the construction of the Kerch Strait Bridge. The amount of fees for the insured property collected by the KPSK from legal entities reached 1.06 billion rubles in the first quarter of 2016, compared to 11.7 million rubles in 2015. Still, the majority of market participants think that one of the top ten insurance companies should be insuring the project. The Russian authorities, however, are not discouraged by the fact that the KPSK was unknown to anyone before 2014 – they were chosen, in fact, so that construction works could continue no matter the risk.

These risks do seem serious, mind you. Intense shipping in a strait with only a narrow fairway is only one of them. Moreover, construction is located in an area with an estimated seismicity of 8-9 points (the 1927 Crimean earthquakes reached a magnitude of only 6), which is a threat to all the sites around the Kerch Strait Bridge. On top of that, Force 9 gales occur every five-seven years in the Kerch strait and adjacent areas of the Sea of Azov, which is generally considered notorious for its violent temper. Together with the cold winters when the average ice thickness in the strait reaches 30 cm and maximum ice thickness 64 cm, nature itself poses a direct threat to the bridge structure.

The importance of the natural conditions is exemplified by the fact that the first bridge across the Kerch Strait survived only a few months: it was erected in late 1944 - early 1945 by the Soviet construction workers using construction materials brought here earlier by the Nazi troops. In February 1945, 15 spans of the bridge were destroyed overnight and as many as one third of the slant legs were destroyed by the end of the month after a strong gale and ice drift in the strait from the Sea of Azov. The idea of the bridge sunk into oblivion. Truth must be told, the former mayor of Moscow Yuri Luzhkov was an ardent supporter of projects of various crossings which were not supported by experts who pointed at difficulties related to construction. The ideas were not welcome either by the government of Russia or Ukraine put off by exorbitant costs related to these risks.

The stability of the bridge’s piers, which will need to withstand the squalls of nature, is yet another problematic issue. The crux of the matter is that the bottom of the strait is covered with mud salse, and the mud layer reaches dozens of meters in some places. For example, dense indigenous soils can be found at a depth of more than 60 meters around the Chushka Spit. Consequently, some of the piers should be at least 100 meters deep, especially those along the fairway. But as of now, 70-meter piers are installed. The estimated height of the bridge is 35 meters. According to experts, this could severely hamper ship movement during storms or in poor visibility, creating the potential for more incidents similar to what happened with the Turkish ship.

Clouded prospects

Let us imagine that the bridge project has been successfully completed and Krasnodar and the Taman peninsula are connected to Crimea. How is this traffic meant to operate should it get stuck on the Kerch roads, which can compete with the Russian regional roads in terms of impassibility? So far, the Russian authorities have no answer to this question, although some of the solutions may appear in February: the construction of the federal highway, named the “Tavrida”, is being launched then (to be completed by 2020). This is the first federal highway in Crimea, and has been designed to connect the town of Kerch and the bridge with Sevastopol via Feodosia and Simferopol.

CJSC VAD from Saint Petersburg will be in charge of the construction of the “Tavrida”. Millionaires Valery Abramov and Viktor Perevalov are among the owners of the company. They were allocated the 128-billion ruble contract for the construction of the “Tavrida” outside the tender procedure, i.e. in line with the latest Russian traditions. However, the decision was not made by Moscow, but by the Crimean authorities. Sergey Aksyonov (Prime Minister of the Republic of Crimea) initially estimated the cost of construction works at 85 billion. However, the experts who studied the terrain and identified the mountains in Crimea increased the sum 1.5 times.

The government of the republic, which is in fact the party that ordered the road, has never before dealt with such a large amount of money. Concerns stem from the fact that in the past, even construction of memorials and kindergartens has been as fraught with corruption as the construction of roads. If, according to the proposal voiced by the State Duma, local materials are to be used for construction of the “Tavrida”, more room for ploys will be created. One can assume that Console, the largest construction company, which belongs to the speaker of the local parliament Vladimir Konstantinov, will suddenly become a subcontractor on the infrastructural projects related to the new highway. Console has owed a billion hryvnas to Ukrainian banks since Crimea was cut off from Ukraine.

The Ministry of Finance has no doubt that the construction of the Kerch Strait Bridge is going to meet the deadlines set by the government. The delay caused by the search for subcontractors for the railroad sidetracks will not delay the overall completion of the project. All the work is so far still on schedule (in the fall last year, the Russian media even announced that the works were ahead of schedule). Still, the future of the bridge will be as uncertain as the fate of the peninsula itself, even if it is completed and declared operational on time, despite the fears of the experts, the vagaries of the local nature and stagnation of the Russian economy. From the point of view of the international community, Crimea is in a legal vacuum which devours all projects undertaken on its territory.

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