WINNER: Herbert Smith Freehills

The Russian office of Herbert Smith Freehills (HSF) took the lead role for the Government of St Petersburg on the world’s largest PPP toll road project, the Western High Speed Diameter (WHSD).

The project went out to tender in September 2011 and closed financially in December 2012. It is currently being implemented. HSF used a number of innovations to make the project happen, particularly on the financing side.

The structure combines cashflow from both the regional and federal budgets, a corporate securities issue by the St Petersburg subsidiary that controls the project, loans from creditors and subordinated debt from sponsors, and a minimum revenue guarantee payable by the City of St Petersburg when the road is finally up and running. The total value of investments reached RUB 212.7bn ($6.4bn).

The firm also drew up a complex regime for compensation on early termination above and beyond existing project financing deals in Russia, which addressed the risk that loopholes in Russian law would enable the sponsors to claim more than what is expressly due to them.

HSF also came up with a solution to deal with the varying ownership and leasing situations for land plots, by writing an access right into the contract.

HSF has secured ongoing work for the contractor building the road and the team is also part of the federal executive committee drafting Russia’s first federal PPP law. It helped the infrastructure team in Moscow increase revenue by 77 per cent between July 2012 and July 2013, and the seven-strong team is also working on a number of other key infrastructure projects across Russia.


  • Ashurst
  • White & Case