Igor Chaika to start billion-dollar tramway points business

Igor Chaika to start billion-dollar tramway points business
Igor Chaika

Currently, investors are looking for a site for the plant.

Businessman Igor Chaika, the youngest son of Yuri Chaika, Prosecutor General of the Russian Federation, will launch together with the Germany-based Vossloh AG the production of switch points in Moscow for tramway and Russian Railways, reports Forbes. The publication notes that the business may have billions of dollars in turnover.

Chaika’s Beteltrans (BET) and the German co-investors are currently picking up a site for the plant in Moscow. The purpose of the new business is to update the Moscow points made back in the 1960s. According to Forbes, switch points are where most of the carriages fall off the line.

The technology is indeed backwards, agrees the top manager of the Murom switch plant (MSZ), the main supplier of tramway points. Currently, Moscow trams are allowed to drive along the points at a maximum speed of 5 kilometers per hour. A source of the publication noted that the plant has modern developments as well, but the customers seem not to be interested in them. According to the source, Moscow allocates "a hand-to-mouth amount" for the tramway modernization.

There are exceptions, however: in 2018, Mosgortrans spent 1.8 billion rubles to overhaul the tram tracks. Contracts worth 800 million rubles were given to Stroyservis LLC, which the Anti-Corruption Foundation of the opposition leader, Alexey Navalny, links to the family of Arkady Rotenberg.

Mosgortrans promises to upgrade more than 30 kilometers of tracks in 2019. In total, 23 billion rubles were allocated for the development of tram infrastructure in 2018–2022. A part of this money is claimed by Igor Chaika’s new plant. The first stage of the plant is supposed to be launched by 2021.

According to Igor Chaika, the new production will cost 3.5 billion rubles. Most of the amount (70-80%) will be allocated by banks and the partners will give the rest. BET and Vossloh AG will receive equal shares of the joint venture.

The presentation of the project states that the plant’s products will allow a four-time increase of the average speed of trams, will double the service life of transfers and reduce the cost of their maintenance by 20%. Mosgortrans will be the main consumer. The plant wants to reach full capacity (100 points per year) by 2024, and profitability by 2027.

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