Russian PPP road deal is a tangled offshore maze

CEE Bankwatch Network, an international non-governmental organisation (NGO) focusing on Central and Eastern Europe, has a fascinating new study looking at the financial arrangements behind the massive and controversial Moscow–St. Petersburg motorway public-private partnership (PPP). Agreement for a first phase is due to be signed in May. Recently the global protest movement Avaaz has garnered (and is still garnering) tens of thousands of signatures to reroute the highway and save the centuries-old and ecologically unique Khimki forest, which the road will damage beyond recognition.

As the press release says:

An opaque web of offshore companies and oligarchs behind the controversial Moscow–St. Petersburg motorway public-private partnership provides new grounds for the Russian government to re-examine the project.

The concession-holder - the North West Concession company (NWCC), led by French construction giant Vinci - consists of a whole network of companies, ending up in the British Virgin Islands, where it is impossible to obtain information about shareholders", explains Pippa Gallop, Bankwatch's Research Co-ordinator. "These complex set-ups seem to be aimed at hiding the true beneficiaries of NWCC's lucrative contract, which is unacceptable enough in any case but especially in a publicly funded infrastructure project."

"Nevertheless, the research has confirmed the involvement of Prime Minister Putin's reported associate Arkady Rotenberg", she continues. “This obviously raises questions about the integrity of the 2008 tender process, in which only one bidder qualified, and about the Russian government's December 2010 decision to continue with the disputed routing through Khimki Forest near Moscow, after President Medvedev had called a halt to preparatory works in late August."

Download the full report, Vinci – a cover for oligarchs and tax havens in Russia's first road PPP. It is a fascinating but unpleasant study looking at the nexus between money, political power, tax havens, environmental and human rights issues.

All these things are interconnected, via the tax havens. For those who have copies of Treasure Islands, turn to pp149-150 of the English edition, or pp131-2 in the U.S. edition, to see just what we mean.