Plato Is Invincible, or, The Fix Is In for RTITS

Russian Government Could Pay for Protests Against Plato Road Tolls System
Olga Adamchuk
Vedomosti
January 8, 2019

“No to Rotenberg’s extortion” read stickers on long-haul trucks in early 2017, when highways were blocked [sic] in protest against the introduction of the Plato road tolls system. An agreement that would establish an automated weight-and-size monitoring system on federal highways, fining overweight trucks, would protect its likely operator, RT Invest Transport Systems (RTITS) from problems associated with such manifestations of dissent.

Currently, RTITS is 23.5% owned by Igor Rotenberg [son of Putin crony Arkady Rotenberg], 50% by RT Invest, 19% by Andrei Shipelov, and 7.5% by Anton Zamkov.

If there are rallies, demonstrations, meetings, and marches near the automated weight-and-size monitoring points, even if these events were authorized, and they hindered the construction or operation of the Plato system, incurring extra costs to the operator, the Russian government would be obliged to compensate the operator for these expenses, according to a draft concessionary agreement, published December 28 on the official Russian government bidding information website torgi.gov.ru. The operator would be able to bill the government not only for actually incurred losses but also for expected losses.

The government will wait for other bids until February 12. If other bids are submitted, there will be a tender for the contract. If there are no bids, the agreement will be signed on the current terms.

However, downtime in the operation of the scales will have no effect on the operator’s revenues, which will be supplied not by Russian truckers, but by the Russian government. For installing and maintaining the system, the operator will be paid 8.64 billion rubles annually [approx. $129 million] (VAT not included) over eleven and a half years. The government will shell out a total of 118.45 billion rubles [approx. $1.7 billion] (VAT included) to the system’s operator. The concessionaire would pay fines for the glitches for which it was responsible. An appendix to the agreement stipulates the system must identify three quarters of violators.

The agreement features a long list of special circumstances in which the operator can demand additional payments from the government, including when inflation is twice as high as was expected, and if the project goes over budget by ten percent or more.

The government would also permit the system’s operator to use the property it builds and installs, which remains state property, for any purpose, including commercial ends.

A concession deals insider notes this stipulation has usually not been part of projects in which the grantor made payments to the concessionaire, since, if there were an opportunity to earn money, it should reduce the fee paid by the grantor. The agreement also lacks the routine stipulation that key subcontractors must be approved by the grantor. Our source wondered why the government was thus willing to forfeit oversight of the project. If the concessionaire had managed to obtain cheap financing, the government could reduce its fee: the state and investors would usually share benefits equally, but there is nothing of the sort in the proposed agreement.

Currently, there are 28 weight-and-size monitoring points operating on Russian federal highways. After the new system has been completely installed, in 2024, there will be 387 automated weigh stations. Under the terms of the project application, eighty-eight of these weigh stations will be built by way of improving the current Plato road toll system, the Russian Transport Ministry has reported.

Investors are also protected in case the agreement is terminated. The Russian government shoulders a greater payout to the concessionaire than it would in similar agreements, said Sergei Luzan, director of PricewaterhouseCoopers Russia (PwC Russia). Even if the project never gets off the ground, the concessionaire can incur two billion rubles in expenses and have them repaid by the Russian government. Such conditions are possible in concessions, but the government usually only pays costs that have been itemized and authorized in advance, and at a discounted rate, Luzan said.

In 2017, protesters demanded the government terminate the concession agreement for the Plato road toll payment system. Andrei Bazhutin, [chair of the Association of Russian Carriers or OPR], said truckers were planning to protest the launch of the weight-and-size monitoring system as early as February. According to Bazhutin, Russia’s independent truckers had been engaged in serious discussions.

Alexander Kotov, chair of the Truck Drivers Trade Union, also confirmed discussions were underway, but he refused to say when protests could begin. He said carriers would like to see shippers bear the cost for overloaded vehicles.

Having to pay for an overloaded vehicle that travels through several weigh stations could simply ruin a small trucking company, but it would also go bust if it refused to dispatch the overweight vehicle, explained the head of a major logistics company, because the shipper would hire another carrier.

As cited by the Transport Ministry, the RADOR Association (a national organization of local road authorities) has claimed that overloaded trucks cause 2.6 trillion rubles in damage to highways annually. According to statistics, there are no longer any problems with federal highways, since they are in between scheduled overhauls. But the president has ordered an overhaul of regional roads, which are still in a state of chaos.

The truckers and spokespeople of truckers associations surveyed by Vedomosti were unhappy with the current weigh stations. Bazhutin said that, compared with the Plato system, the weight-and-size monitoring system still had numerous shortcomings, for example, the fact that weather conditions had a huge impact on the accuracy of scales. He also noted that drivers do not see whether they are running overweight when they drive over the scales, and so when they receive a fine of between 100,000 rubles and 500,000 rubles [$1,500 to $7,500] in the mail, it is a complete surprise to them. If a trucker fails to pay the fine, his or her account is blocked.

“It’s just like with Plato. It doesn’t matter whether you were running empty or loaded. You have to pay whether you were overweight or not, since the system registered a violation. It’s impossible to dispute a fine. Since this whole business puts pressure on self-employed carriers, there will likely be protest rallies and marches,” said Bazhutin. “But we’re unlikely to set up a protest camp next to a weight station in Yaroslavl Region, say, when it is the federal authorities who are making the decision.”

Kotov argued that, since the bulk of cargo in Russia is shipped by trucks, this new financial burden would ultimately be passed on to consumers.

Political scientist Abbas Gallyamov argued the state of public opinion is currently such that things could kick off anywhere whatsoever. Any action by the authorities that is deemed unjust is capable of setting off a wave of protests. Gallyamov notes that Russian truckers have demonstrated their willingness to fight back and their capacity for coordination; moreover, they did so in circumstances in which public opinion was generally much more inclined to side with the regime. Given this past history, the chances of Russian truckers rising in protest again were great, he concluded.

Spokespeople for the Transport Ministry and RTITS told that the terms of the agreement were standard.

Translated by the Russian Reader. Photo courtesy of dangerousroads

Unionized Independent Russian Truckers Persecuted by Putin Regime

Opponents of Plato Road Tolls System Complain to European Court of Human Rights They Have Been Victims of Political Persecution
Their Organization Was Earlier Ruled a “Foreign Agent”
Anastasia Kornya
Vedomosti
December 26, 2018

The Association of Russian Carriers (OPR), an organization of independent truck drivers the Russian Justice Ministry placed on its list of “foreign agents” late last year, has filed a complaint with the European Court of Human Rights (EHCR) in Strasbourg, claiming its right to freedom of association had been violated and it had been subjected to political persecution, in violation of Article 11 and Article 18 of the European Convention on Human Rights, as reported by Alexei Glukhov, a lawyer with the Agora International Human Rights Group who represents the OPR in Strasbourg.

The OPR emerged during the campaign for the rights of truckers that kicked off after the Plato road tolls payment system went online in November 2015. The OPR brought together independent truck owners and truck drivers. In June 2017, it announced it was planning to nominate its chair, Andrei Bazhutin, as a candidate for the Russian presidency. Shortly thereafter, the Justice Ministry launched an audit of the OPR, resulting in its being ruled a “foreign agent.” The ministry cited four donations from private individuals in Germany, totaling 3,620 euros, as evidence of “foreign financing.”

In a report on its oversight of the work of “foreign agent” NGOs in 2017, the Justice Ministry claimed the OPR had engaged in “political activity” by “organizing and holding events calling for the resignation of the Russian federal government.” In June of this year, the Krasnogvardeisky District Court in Petersburg fined the OPR 400,000 rubles [approx. $5,755] for failing to voluntarily [sic] register itself as a “foreign agent.”

The complaint says the OPR has been a nuisance to the Putin regime since the organization has led the campaign against the Plato road tolls payment system, which ultimately benefits businessmen closely allied with the Kremlin. The truckers are certain it was their grassroots activism that caused the authorities to persecute them. The fine leveled against the OPR not only was far in excess of the foreign donations it received but has also financially ruined the organization.

Glukhov points out the ECHR has received several dozen complaints from Russian NGOs labeled “foreign agents” by the Russian government, but the court has not yet ruled on Russia’s “foreign agent” law and its application in practice. However, the court has communicated the facts of the first large group of cases to the Russian authorities, while a second group of cases was nearing completion, meaning that a ruling on complaints filed by Russian “foreign agent” NGOs could be expected next year, argues Glukhov. The OPR’s complaint is part of a third wave of complaints filed in Strasbourg. As they await the court’s ruling, Russian NGOs continue to suffer from the harsh law.

Everyone has the right to complain to the EHCR, but the Russian Justice Ministry begins to work with a complaint [sic] only after the court has communicated its consent to hear the case, says Andrei Fyodorov, head of the office of Russia’s representative to the EHCR.

Lawyer Dmitry Agranovsky says the EHCR has rarely ruled that Article 18 of the European Convention has been violated. Recently, however, in response to a complaint filed by opposition politician Alexei Navalny, the court ruled Russia had violated Article 18. The ruling was a precedent of sorts. Agranovsky has the sense that, before the Navalny case, the court’s Grand Chamber had postponed other cases in which Article 18 had been invoked, but now it had worked out a common set of rules that could be applied in other cases as well. On the other hand, there was a risk Article 18 would be devalued, Agranovsky warns [sic].

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[Three] Years of Plato: How Russian Authorities Forced Truckers to Pay Road Tolls

[Three] years ago, on November 15, 2015, Russian authorities launched the Plato system (“Plato” is an acronym for “payment for a ton” in Russian) to collect tolls from owners of heavy-duty trucks traveling on federal highways. The authorities claimed their goal was to compensate for the damage the trucks caused to roads. It was decided the toll would be applied to owners of trucks weighing over twelve tons. Photo courtesy of Maxim Stulov/Vedomosti and RBC

fullscreen-12pm The right to develop and implement Plato was awarded to RT Invest Transport Systems without tendering. The company is owned on a parity basis by Igor Rotenberg and RT Invest, which is 25.01% owned by Rostec and 74.99% owned by Andrei Shipelov’s firm Tsaritsyn Capital LLC. The Russian government agreed to pay Plato’s developer and operator 10.6 billion rubles [approx. $153 million at current exchange rates] annually. Photo of Igor Rotenberg courtesy of Nikolai Galkin/TASS and RBC

Opposition politician Alexei Navalny and Anti-Corruption Foundation (FBK) lawyer Ivan Zhdanov asked that the courts declare the government’s agreement with RT Invest Transport Systems null and void. Their lawsuit was rejected first by the Moscow Court of Arbitration, and later by the Russian Constitutional Court. Photo of Alexei Navalny courtesy of Yevgeny Razumny/Vedomosti and RBC

fullscreen-12do Truckers in forty Russian regions protested against Plato in November 2016. They demanded Plato be turned off, a three-year moratorium imposed on its use, and the system be tested for at least a year. Photo by Yevgeny Yegorov/Vedomosti and RBC

fullscreen-12su When Plato was launched in November 2015, truck drivers paid 1.53 rubles a kilometer. Four months later, the authorities planned to double the toll, but after negotiations with truckers they made concessions, reducing the toll increase to 25%. Since April 15, 2017, the authorities have charged trucks 1.91 rubles a kilometer. Photo courtesy of Sergei Nikolayev/Vedomosti and RBC

fullscreen-12d8 However, even the discounted [sic] toll increase did not sit well with all truckers [sic]. On March 27, 2016, the OPR went on what it called an indefinite nationwide strike. Truckers protested the toll increases and demanded fairness and transparency at weight stations. Photo by Yevgeny Razumny/Vedomosti and RBC. [The slogans read, “Down with Plato!!! It’s Rotenberg’s Feeding Trough” and “We’re Against Toll Roads.”]

fullscreen-12jx In October 2017, the government approved a bill increasing fines for nonpayment of Plato tolls from 5,000 rubles to 20,000 rubles. If passed, the law would make it possible to charge drivers for violations that occurred six months earlier. The new rules were set to take effect in 2018. Photo of Dmitry Medvedev courtesy of Dmitry Astakhov/TASS and RBC

fullscreen-1ghb Plato’s database has registered 921,000 vehicles weighing over twelve tons. According to the Russian Transport Ministry, during its first two years of operation, Plato raised 37 billion rubles for the Federal Roads Fund. In the autumn of 2017, the government selected three projects that would be financed by the monies raised by Plato: a fourth bridge in Novosibirsk and bypasses around the cities of Chusovoy (Perm Territory) and Khabarovsky. Photo courtesy of Georgy Shpikalov/PhotoXPress and RBC

Vehicles that transport people are exempt from Plato tolls, as are emergency vehicles, including vehicles used by firefighters, police, ambulance services, emergency services, and the military traffic police. Vehicles used to transport military equipment are also exempt from the toll. Photo courtesy of Gleb Garanich/Reuters and RBC

Russian Trucking News

“Delivery for a favorite client.” A short-haul freight truck in downtown Petersburg, August 8, 2018. Photo by the Russian Reader

Officials Want to Equip New Trucks with Special Sensors as of 2024
Carriers Are Worried Tightening Monitoring Weight and Size of Trucks Will Increase Load on Business
Elizaveta Bazanova and Vladimir Shtanov
Vedomosti
December 24, 2018

Officials have concocted a new way to monitor business. They want to equip trucks with axial-load sensors in order to combat trucks hauling loads in excess of legal weights. Legislation requiring such loads be transported by trucks weighing over 3.5 tons will be drafted by 2024. The plan is contained in the outline of the Russian government’s national Safe and High-Quality Highways project, two federal officials told Vedomosti. A spokesperson for Deputy Prime Minister Maxim Akimov said the project’s outline would be approved by the cabinet on Monday.

The Industry and Trade Ministry and the Transportation Ministry would have until 2022 to draft amendments to the technical regulations of the Eurasian Customs Union (EACU), forbidding the import to Russia of trucks not equipped with the sensors. The amendments should also be inserted into Russian technical regulations before 2024, according to the national highway project’s outline. (Vedomosti has seen part of this document.) As of 2024, all new trucks will have to be equipped by manufacturers with the sensors, explained Akimov’s spokesperson. Owners of old trucks will not be forced to install them. They will have the option of installing them, says a source who has learned about the plans from a federal official.

Regulations on equipping all Russian trucks weighing more than 3.5 tons with axial-load sensors have not yet been drafted, according to spokespeople at the Transport Ministry and Rosavtodor (Russian Federal Road Agency).

Russian authorities set about establishing weight-and-size monitoring system for freight trucks in 2016. Their goal is to maintain the quality of roads and reduce the number of accidents. Automatic scales that measure the axial load of trucks have been installed on highways in test regions. If a truck is overweight, the carrier must pay a fine of up to 450,000 rubles [approx. 5,800 euros]. A total of twenty-seven checkpoints in eighteen Russian regions have been set up on federal highways. By 2024, the number of checkpoints should rise to 387, covering federal and regional highways in seventy-five regions.

The pilot program in Vologda Region has shown the average overload is thirty percent, the Transport Ministry reported. During their first year of operation, the checkpoints reduced the number of violators from forty percent to four percent. On the federal level, the weight-and-size monitoring system will be a public-private partnership. RT Invest Transport Systems, owned by Igor Rotenberg, son of Arkady Rotenberg, and RT Invest, jointly owned by Rostec and Andrei Shipelov, has shown interest in acquiring an operating license. In June 2018, the company proposed a public-private partnership with the government.

The regions will establish their own public-private partnerships. Truck owners will be able to purchase the sensors from any manufacturer. No directives will be issued on this score, a federal official assured us.

3.74 million trucks were registered in Russia as of July 1, reports Autostat. Under the European classification, trucks weighing between 3.5 tons to 12 tons are categorized as N2. Such trucks are manufactured by KAMAZ, Iveco, Mercedes-Benz, and Renault (Midlum), among other companies. They are usually employed for short hauls, for example, from a distribution center to retail outlets, a logistics manager from a company in the consumer sector told us.

Currently, truck owners rarely install the sensors, said Boris Rybak, director general of Infomost, because equipping a truck costs owners between several tens of thousands to several hundreds of thousands of rubles. Trucks manufactured in the west that carry goods in Russia usually have the sensors pre-installed.

Alexander Lashkevich, director for relations with industrial and infrastructure organizations at the Business Lines Group, said they did not install additional sensors, since they are a standard feature on most imported vehicles, but this applies to trucks with a capacity of more than 12 tons. The new K5 line of trucks from KAMAZ features axial-load sensors as a standard feature, said a company spokesperson. Lashkevich said Business Lines used special calculators that facilitate loading semitrailers so as to avoid overloading.

Introducing weight and size monitoring will help maintain roads, but it is not clear why small-tonnage vehicles need to be equipped with axial-load sensors. Problems with overloaded axles happen to heavy haul vehicles. Ultimately, the load on the shipping business will grow, while the expediency of the planned measures is difficult to assess, warned Lashkevich.

The sensors are not needed on low-tonnage trucks. Problems with excess weight “occur extremely rarely due to the specifics of moving people’s things to new residences,” explained Arkady Usachov, director general of Gentle Move, a moving company.

The damage to roads caused by trucks weighing under 12 tons is considerably less, said Rybak, but equipping even light trucks with the sensors is a worldwide trend: you can load even a 3.5 ton truck with up to ten tons of freight. Such systems are in operation on roads in many countries, agreed Mikhail Blinkin, director of the Institute of Transport Economics and Transport Policy Studies at the Higher School of Economics.

The cost of buying and operating trucks could increase, warned Usachov.

“Freight haulage should be getting cheaper, but this approach will only make it more expensive,” argued Alexander Prokofiev, head of operations at the Moving Center. “Plato, ERA-GLONASS, and other systems will not provide real security, and they will not improve road quality. The amount of freight hauled on the roads will not decrease. Roads have to be built well from the get-go.”

Translated by the Russian Reader