Hunter, racer, or railman? St. Petersburg businessman becomes the champion of governmental contracts for Russian Railways
Governmental contracts are an inexhaustible source of wealth for companies having access to the state budget. Some of them thrive on tenders carried out by the state transport monopoly. Russian Railways is a bottomless coffer full of budget funds. The public is already aware how and to whom were awarded billion-ruble governmental contracts during the reign of Vladimir Yakunin. The most profitable and big contracts were signed only with friends of the President of Russian Railways; many such contracts had been awarded without tenders and on special terms. Neither audits nor criminal cases were launched due to these abuses.
In August 2015, Vladimir Yakunin, who was in charge of Russian Railways for 10 years, has resigned. Oleg Belozerov became the new President and Chairman of the Board of Russian Railways. The Belozerov’s team started clearing out the Augean stables of Russian Railways. But according to Vedomosti newspaper, the list of its primary contractors has changed insignificantly.
Based on the rating produced by Vedomosti, as of 2017, Transmashholding of Andrei Bokarev and Iskander Makhmudov still remains the largest contractor for Russian Railways and its subsidiary company RZDstroy. The biggest Russian transport machine building company used to be partially owned by Russian Railways – in 2008, the state monopoly had purchased 25% of shares in The Breakers Investments B.V. (the sole owner of Transmashholding Closed Joint Stock Company) from Bokarev and Makhmudov for 9.2 billion rubles ($159.3 million). But later this portfolio has been sold to Alstom, a French multinational company, for 12.6 billion rubles ($218.2 million) at the instigation of Vladimir Yakunin. The French company owns 33% of shares in the Russian holding; the remaining shares are distributed between structures of Iskander Makhmudov and Andrei Bokarev and owners of Transgrupp AS company (Andrei Bokarev, Iskander Makhmudov, and Sergei Glinka). Maksim Liksutov, Head of the Transport Department of the City of Moscow, claims that he has sold his share in Transmashholding Closed Joint Stock Company to the partners in 2012. However, based on the Panama Papers, he was (or may be, still is) a co-owner of Transmashholding via a number of offshore companies. In other words, in the past, Russian Railways used to receive a portion of the profits gained by Transmashholding from its contracts – but not anymore. For information: in 2017, the enterprise has received orders for the total amount of 29 billion rubles ($502.3 million).
The second most successful contractor for Russian Railways is 1520 Group of Companies belonging to Aleksei Krapivin and his partners. His father Andrei Krapivin (The CrimeRussia repeatedly wrote about him earlier) was a counselor for Vladimir Yakunin. At some point, the ex-President of Russian Railways told Vedomosti that Krapivin is his old friend having deep knowledge of the banking business. Structures belonging to Krapivin and his partners – Boris Usherovich, Vladimir Markelov, and Yuri Obodovsky – were the largest suppliers for Russian Railways in the past; in 2017, they have won tenders for the total amount of 22 billion rubles ($381 million).
Vladimir Yakunin, ex-President of Russian Railways
The third largest contractor is a new player – a company belonging to St. Petersburg businessman Vladimir Vasiliev. His R-industria corporation had already collaborated with Russian Railways in the past – but it never was among its largest providers. Now his R-vostok company joined the ranks of Russian Railways suppliers. The total amount of contracts received by it is 19 billion rubles ($329.1 million). However, these contracts were not directly awarded to R-vostok by the state monopoly – but assigned to it by a third party. The generous assignor is Yuri Reilyan, ex-Deputy Minister of Regional Development of the Russian Federation and ex-Deputy Minister of Construction, Housing, and Utilities of the Russian Federation. After the resignation from the governmental service in June 2016, he has purchased Sochi-based Spetstransstroy company. Founded in 2010, the company had specialized in residential and commercial construction and demonstrated decent financial results up until 2015.
It is unknown whether the company had been bankrupted prior to the sale on purpose or not. Initially, Reilyan had owned 51% of its shares, while the remaining 49% of shares belonged to his partner Viktor Pigina. Then the Reilyan’s share has increased to 99%. At that time, Spetstransstroy has purchased 55% of shares in Transyuzhstroy Management Company, another contractor for Russian Railways retained to lay railway tracks to the Kerch Strait Bridge from the continent. After doing that, Reilyan started winning other tenders carried out by Russian Railways and its subsidiary companies. However, the companies belonging to the ex-functionary were unable to perform all the governmental contracts awarded to them, and a portion of the portfolio has been assigned to structures of Vladimir Vasiliev. Reilyan explained that he has got rid of contracts pertaining to the East Polygon because his top priority is the South Polygon. He claims that the contracts have been assigned through an open tender – but there is no information about it in the open sources.
Yuri Reilyan, ex-Deputy Minister of Construction, Housing, and Utilities of the Russian Federation
Prior to the governmental service, Yuri Reilyan was a businessman. He used to be a co-owner of Armstroi Group; in 2007–2009, worked in Basic Element and Transstroy companies belonging to Oleg Deripaska; and then became a civil servant. Yuri Reilyan had supervised the Department of Urban Planning and Architecture of the Ministry of Construction, Housing and Utilities responsible for the implementation of governmental policy in construction, architecture, urban planning, construction materials industry, and technical regulation; he had also supervised urban planning zoning, land planning, land tenure, and construction of Olympic facilities in Sochi. In his declaration for the year of 2014, Reilyan, then-Deputy Minister, has reported an income of 2.9 million rubles ($50.2 thousand), several land lots with the total area of 3.5 thousand square meters, residential home with the living area of 364.4 square meters, and two apartments. Reilyan prefers to drive Porsche 911 built in 2003.
The income of his spouse was 3.3 million rubles ($57.1 thousand). Reilyan did not submit a declaration for the year of 2015 – although he has resigned from the government only in early 2016. According to Vedomosti, annual salaries of top managers in Basic Element may reach $10–20 million. The purchase cost of Spetstransstroy and Transyuzhstroy was never disclosed.
Vladimir Vasiliev is known as the President of Rus (Russia) Holding Company, co-owner of FC Rus Saint Petersburg playing in the Second Division of the Russian Football Championship, candidate master of sports in kettlebell lifting, and pilot and founder of G-Force Motorsport team. According to the official information, Vasiliev is the head of 21 organization and cofounder of 71 company.
Vasiliev is a world-famous rally racer. A priority list pilot of Fédération Internationale de l'Automobile (FIA). World Rally Championship winner in rally raids in the team event (2012). Winner of Italian Baja-2012 international race (a stage of the World Rally Championship). Vice Champion of Russia in rally raids (2012). Many-time participant and medalist of stages of the Russian Rally Championship and Russian Rally Cup-2012 in the classic rally.
It is unknown whether Reilyan and Vasiliev know each other personally; it is known, however, that the St. Petersburg businessman is familiar with Yakunin. The ex-President of Russian Railways once said that a construction company where Vasiliev was a junior partner has built a log house for him in the Leningrad region in the 1990s. Apparently, this refers to notorious Ozero (Lake) Cottage Cooperative whose members, in addition to Yakunin, were Vladimir Putin, Nikolai Shamalov, Yuri Kovalchuk, Vladimir Smirnov, Viktor Myachin, Andrei Fursenko, and Sergei Fursenko.
Vasiliev has offered Yakunin to become a cofounder of a hunting enterprise in the Priozersk district – Mel’nikovsky Hunting and Fishing Society. Nikolai Shamalov also was among its cofounders. Apparently, the passion for wildlife shooting has brought together the two businessmen.
“Hunting allows to rest from the subordination. In the hunting field, similarly with a bathhouse, there are no generals. They may give you a good drubbing for misbehavior or a lost trophy. They may tell you everything – about the politics and your own work, – Yakunin wrote in his blog. – The hunt attracts me not only by trophies but also by the bliss to be with one on one with the nature and turn off the cell phone. I always do this, but once I have forgotten. This was in 2002. I was standing waist-deep in the snow and aiming at the moose coming at me. As of a sudden, the telephone rang in a pocket of my hunting jacket. It must be said that it was a historical call – I was told that I have to become a railman. But the moose, of course, ran away...”
During the reign of Yakunin, companies belonging to Vasiliev were winning tenders carried out by Russian Railways on a regular basis – although the President of the transport monopoly had claimed that the longtime friendship and common passion for hunt do not help Vasiliev and his R-industria corporation to receive governmental contracts.
In addition to the friendship with Yakunin, Vasiliev has another source of pride: in October 2016, he became a partner of Kovalchuk and another shareholder of Rossia (Russia) Bank – Mikhail Shelomov. They have launched a joint project – construction of a race track near Igora mountain ski resort located not far from St. Petersburg. German architect Hermann Tilke is the author of the project; he is known for designing Formula One tracks, including the one in Sochi. Together, they have established Igora Draiv Limited Liability Company where Vasiliev and Kovalchuk own 25% of shares each, while Shelomov owns 50% of shares.
Race track near Igora
It is known that the construction site for the future track has already been marked out and some media sphere installed there – it works and shows videos. Some enthusiasts have filmed it in January–February 2017. No more information about the race track construction is available.
Video: Media Sphere by Igora
It is necessary to note that the funds to develop Igora resort have been lent at 1% annual interest rate by an offshore company indirectly linked with cellist Sergei Roldugin mentioned in the Panama Papers.
After the resignation of Yakunin, it was expected that the fortune at governmental tenders turns away from his hunting companion. However, Vasiliev still continues getting his piece of the budget pie – even though through third parties
Investigative Committee General Nikandrov, accused of taking a particularly large bribe, married in jail
The Deputy Head of the Main Investigative Directorate (MID) of the Investigative Committee of Russia (ICR) for Moscow, Denis Nikandrov, stated in court that he had married in 2017, although he has been in the pretrial detention center for over a year on suspicion of bribe-taking.
Maxim Lapunov - the first victim in the case on the persecution of gays in Chechnya who revealed his name and surname - opened up at a Moscow press conference on torture and unlawful detentions of people of nonstandard sexual orientation in the republic.