Squire Patton Boggs Advises on New Tsifrovoye Primorye Smart Technology System

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Squire Patton Boggs has advised LLC Tsifrovoye Primorye, the concessionaire of a major new smart technology infrastructure system in Primorsky Krai, in Russia’s Far Eastern Federal District. On April 12, 2021, the government of Primorsky Krai, the administrations of the cities of Vladivostok, Artem, Nakhodka and Ussuriysk, and private investor LLC Tsifrovoye Primorye signed a concession agreement on the implementation of the project to create the information technology system Tsifrovoye Primorye in Primorsky Krai.

Alexander Dolgov, managing partner and head of the Infrastructure and PPP Practice of Squire Patton Boggs in Moscow, led the team advising the privately funded concessionaire LLC Tsifrovoye Primorye.

The project's investors are the Far Eastern High Technology Fund (FEHTF) and telecommunications service provider VessoLink Group. The total investment in the project will amount to more than five billion rubles, including bank financing, during the 12-year term of the concession agreement.

More than 30 key services will become available to residents of Primorsky Krai as part of the Tsifrovoye Primorye system, including:

  • A single card for residents of Primorsky Krai, which allows paying for transport and receiving discounts and social benefits
  • A single Tsifrovoye Primorye portal for both individuals and businesses – the portal will be analogous to Moscow's mos.ru
  • A student card (as well as bracelets and key fobs) for travel fares, as well as student benefits, food and entrance to educational institutions
  • “Smart” heated stations, “smart” traffic lights and pedestrian crossings, organized parking spaces, online services for public transport timetables, services related to traffic violations and measuring the dimensions and weight of heavy vehicles on public roads, school access and school videoconferencing services, special terminals for tourists and much more

Partner Alexander Dolgov commented: “This project is unique in terms of industry specifics. In fact, this is one of the first complex regional concession projects in relation to IT infrastructure facilities in Russia, where the features of the current version of the law on concession agreements were fully tested. In addition to successful preparation of the project, the work carried out has created not only the preconditions for successful replication of the practice of implementing projects in the IT sphere, but also made it possible to carry out effective work on the preparation of targeted amendments to applicable legislation, which we are currently working on together with colleagues from the Federation Council and a number of ministries.”

Konstantin Makarevich, director in the Infrastructure and PPP Practice at Squire Patton Boggs, added: “The implementation of high-tech PPP projects in socially significant areas is one of the drivers of the economic and social development of Russia’s Far East region. The use of PPP tools allows the implementation of large-scale and significant infrastructure projects in the shortest possible time and the raising of private investment.”

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