Railwayman: Rotenberg family laying hands on Russian Railways? 

Railwayman: Rotenberg family laying hands on Russian Railways?
The company of Igor Rotenberg suddenly started winning Russian Railways tenders Photo: The CrimeRussia

During the ten years of Vladimir Yakunin’s rule, Russian Railways has become one of the most corrupt companies in Russia. The resignation of the notorious railwayman had offered a hope for a turn for the better – but in vain. In the past, the lion’s share of governmental contracts had been awarded to structures controlled by Gennady Timchenko, but now brothers Rotenberg have superseded him.

Permuting the summands of a sum…

The demonstrative war on corruption in Russian Railways Open Joint Stock Company – that had started with a vaudevillian resignation of Vladimir Yakunin – has finished with a total farce. The contractors have been replaced, while the corruption level still remains the same. In the past, the lion’s share of governmental contracts had been awarded to structures controlled by Gennady Timchenko, but now brothers Rotenberg have superseded him. 

Looking at the steady change of contractors – that has started immediately after the appointment of Oleg Belozerov the President of Russian Railways – it is hard to believe that the very first announcement of Yakunin’s resignation was a prank by some elusive hackers.


In July 2013, Russian news agencies received – allegedly, from the mailbox of the governmental press service duty_press@aprf.gov.ru – an urgent message: Medvedev has dismissed Yakunin and appointed Aleksander Misharin to his post. After half an hour of mess and confusion, Russian Railways and the White House have issued refutations. The investigation has found that it was a work of hackers. Yakunin resigned from the post of the President of Russian Railways only in August 2015. Oleg Belozerov, Deputy Minister of Transport, has been appointed to that position. 

Arkady and Boris Rotenberg had unanimously recommended Belozerov for that chair. His gratitude for the patronage was swift, and, apparently, it has no limits. GLOSAV (Global Automation Systems) company belonging to Igor Rotenberg (son of Arkady Rotenberg ) suddenly started winning tenders conducted by Russian Railways. Within two months of 2016, contracts have been signed between GLOSAV and Russian Railways for the total of 691 million rubles.


Oleg Belozerov, the President of Russian Railways 

Although all the contracts are dated June and July 2016, the official web site of GLOSAV had announced the successful shipment of tachographs for Russian Railways back in the end of 2015. The cost of a contract to supply 2.2 thousand units of equipment and perform start-up and pre-commissioning procedures could not be lower than 100 thousand rubles. So why has not this deal been posted on the governmental acquisitions portal? It can’t be ruled out that there were no actual shipments of tachographs at all. The sole purpose of the press release was to create an image of a reliable partner of the state corporation. In addition, in May 2015, Igor Rotenberg has sold 63.63% of shares in Mostotrest company to Blagosostoyanie (Welfare) Non-Governmental Pension Fund co-owned by Russian Railways. This deal could be an initiation fee – payment for the membership in the railroad club. Financial experts unanimously note that Blagosostoyanie Non-Governmental Pension Fund is an extremely non-transparent organization. Transstroymechanizatsia controlled by Mostotrest has already won tenders carried out by RZhDstroy to build a railway to bypass Ukraine for 2.5 billion rubles ( tender № 1, tender № 2). Both tenders had been conducted on a sole source basis. Taking the complicated ownership schemes in these companies, it is impossible to locate the ultimate beneficiary of that deal.

Other novice members of the elite contractors’ club are also pretty well-known. For instance, Spetstransstroy company belonging to Yuriy Reylyan, the former Minister of Construction, has won in 2016 a number of tenders carried out by RZhDstroy and a Russian Railways tender to build a dead-end track and a passenger platform on the Dagomys–Sochi section at the cost over 783 million rubles. As usual, the majority of the tenders had been conducted on a sole source basis. The total cost of contracts awarded to Spetstransstroy exceeds 8 billion rubles. According to Vedomosti newspaper, the list of new favorites of Russian Railways also includes companies belonging to Igor Levitin, the Aide to the President of the Russian Federation for Transport, Aleksey Zolotarev, and Vitaly Bril. The total amount of contracts awarded by Russian Railways to their structures is over 15 billion rubles. 

Highway functionaries

It is necessary to specially note FORATEC company, whose real beneficiary reportedly is Alexander Misharin, a former Governor of the Sverdlovsk Region and currently the First Vice-President of Russian Railways. Before the resignation of Vladimir Yakunin, contracts between FORATEC and the Russian Railways were pretty minor – by the state monopoly’s standards. But after the high-profile resignation, the situation has changed drastically – FORATEC is now getting numerous multimillion contracts totaling several billions. Interestingly, the roots of FORATEC lead to two offshore companies – in Cyprus and in Luxembourg.

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Finally, the main winner of this year is Mosgiprotrans Design and Survey Institute Joint Stock Company– who earlier had to be grateful for even small contracts with Russian Railways. As of a sudden, the company has got a contract worth 22 billion rubles in the framework of the construction of a high-speed network Moscow–Kazan–Yekaterinburg. And the person, who supervises high-speed lines in Russian Railways, is the above-mentioned Alexander Misharin. Although Misharin is not a direct beneficiary in that deal, there are some people close to him in the Mosgiprotrans management: Vladimir Ampilogov, the Chairman of the Board of Directors, and Oleg Zhabin, the Member of the Board of Directors. In 2009, Ampilogov was a deputy of Misharin, then-Director of the Department of Industry and Infrastructure of the Russian Government. Oleg Zhabin, who used to be the Head of Uralvagonzavod-Trans, had been invited in 2010 by Governor Misharing to become the Head of Oblkommunenergo. Now, this trio have laid their hands on the railways.

The former favorites of Russian Railways have not been forgotten, too. There is a rule in the Russian corruption: Do not leave its own behind. The key bane of corrupt officials is public awareness. First, it became known that OSK 1520 (United Construction Company 1520) – cofounded by Aleksey Krapivin, son of a counselor to Vladimir Yakunin, – is a major contractor for Russian Railways. This was not a catastrophe yet – after all, Aleksey Krapivin used to be the freelance counselor for Russian Railways because, according to Yakunin, he was an expert in the most important for the railroads field – banking. But then Krapivin junior has shocked the public by his links with colonel Zakharchenko, whose arrest had become a new symbol of the war on corruption. But OSK 1520 continues winning tenders; the cost of the last one is almost 800 billion rubles. This is because these people do not leave their own behind – instead, they sell to their own bridges, roads, etc.



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