Jul 2007

After re-establishing national independence in 1991 and the testing of its democratic resolve with the peaceful Orange Revolution on the winter streets of Kiev in December 2004, Ukraine and its new Government embarked on a course towards full market economy status, accession to the World Trade Organisation, and membership of the European Union. Part of this move was the urgent need to attract foreign investment to upgrade public infrastructure and redress decades of public project deferment and mismanagement.

Fig 1. Kiev's programme to excavate seven highway tunnel projects

As the national capital, Kiev was also looking to make a statement; to re-establish itself as a principal city on the trade routes of Europe and create an attractive centre from which to conduct business. To this end, Kiev State Administration officials began work on reforming local taxation and land ownership legislation and launched a concerted promotion and marketing effort to boost foreign investment and stimulate urban development.

Of the direct foreign investment into independent Ukraine to January 2005, Kiev and its 2.6 million population had received more than 32% or US$2.7 billion. Of this, 12% was invested in construction and real estate development and another 12.3% in transport and communication.

Under a new master plan to 2020, the State of Kiev Government, under Mayor Olexandr Omelchenco, approved 20 major projects that are described as very attractive opportunities for foreign investment. One of these is a series of seven major highway projects designed to improve transportation across the River Dnipro and provide a city bypass ring road for regional traffic. All include an element of bored tunnelling.

Although there is no experience of large-diameter highway tunnelling in Ukraine, promoters of the projects are aware of the recent large-diameter TBM highway tunnelling successes in Moscow and are confident the same can be achieved in Kiev.

Principal among supporters is Valeriy Borysov, First Vice-Mayor of the Kiev State Administration. During a meeting with TunnelTalk in April 2005, Borysov explained that, "it is the intention of the Administration to procure a large-diameter TBM and complete each highway tunnel project in succession over the next 10 to 15 years. This is the same model as used in Moscow. The City administration bought the tunnelling system and is making it available to different construction groups to complete the projects one after the other. As well as buying the TBM system, we must also establish the necessary design and construction capability in Kiev and gather support from experienced international entities to help us achieve our goal."

Among internationals supporting the city's aspirations in 2004 are Herrenknecht AG and Basler+Hofmann of Switzerland. Herrenknecht supplied the 14.2m-diameter slurry Mixshield TBM system to Moscow for the Lefortovo Tunnel and Olympia Highway projects, and is negotiating manufacture of the 14m+ diameter slurry TBM needed for Kiev. Basler+Hofmann is specialist subconsultant to the local projects' development design company Kyivproject for slurry TBM operation advice and precast concrete segmental lining design.

The way forward

The first project was to be one of three under-river crossings, but this was superseded by a 1.5km-bored tunnel addition to a new bridge project across the River Dnipro. The new route - the Podil bridge and tunnel project - is planned as 9km long and comprises six traffic lanes and provision to add a metro service line on the bridge at a later date.

From the bridge, the proposed bored tunnel is required to take traffic through the topographical rise of the Dnipro right bank on which the historic and commercial sectors of the city are established.

Fig 2. The 1.5km-long tunnel across the Dnipro to the city's commercial centre

"Early design plans had the bridge making landfall at river level and a serpentine surface alignment taking the road to the top of the hill," explained Volodymyr Vorobyov, Vice-Director of design company Kyivproject. "This gave way to a cut-and-cover extension of the bridge at a higher elevation landfall, which was subsequently upgraded to a bored tunnel. Our visit to the Lefortovo project during its construction gave us the confidence to consider the bored tunnel option. We do have metro tunnel and underground metro station construction experience in Kiev, but this will be the first major road tunnel for the city."

First Vice-Mayor Borysov added, "as the shortest and least technically demanding of the seven planned tunnels, this will be our learning curve. The next project will be the first river-crossing tunnel, which is significantly more demanding at 7km long and under a potential 45m head or up to 4.5 bar water pressure. It is principally for the under-river projects that the TBM will be designed. With a diameter of 14m or more, a slurry system is required."

Borysov continued: "We hope to confirm an order for the TBM and tunnelling system by the end of 2005. At the same time, we will advance efforts to establish a consortium that will build the highway tunnels. The consortium will comprise financiers, construction companies, and suppliers and will include the Kiev-based civil construction company KPSB (KyivPidzemShlyakhBud) as a principal shareholder."

KPSB is a previously state-owned public works organisation that is now fully privatised. "At present, the company handles about 80% of Kiev's annual underground communications construction requirements and already is in negotiations with machine manufacturer Herrenknecht," said Dmitriy Andriyevskyi, president of KPSB.

General Director Anatoliy Halchuk described the company's tunnelling capabilities. "We own and operate eight open-faced tunnelling machines of Soviet design and of 2.15m to 3.2m in diameter," he said. "In 2003, we bought our first of two Herrenknecht AVN microtunnelling systems that install pipes of 1.2m and 2m i.d. respectively. We invested in the modern German technology because it eliminated the need for dewatering or ground freezing when tunnelling through water-bearing soils. It also reduces labour requirements and is two to three times faster than the Soviet systems at installing service pipelines. We selected Herrenknecht because the firm is a well­known brand name with an established reputation and it is working in Moscow."

Another Kiev-based Ukrainian joint-stock company, CAI, owns and is operating three Herrenknecht EPB machines to excavate 3m and 6m diameter utility tunnels beneath the city of Ashgabat in Turkmenistan.

"We were also keen to introduce new technologies and acquire advanced knowhow," said Halchuk. "We are the only company in Ukraine at present with a modern microtunnelling capability. For the present, we are working in Kiev, and although we have no direct competitors, we still tender against other construction companies for each new public works contract. Although the company has no previous experience of large-diameter, high-tech tunnelling, many of our senior staff worked previously on the city's metro tunnel excavations, and we intend to follow the Moscow model to engage specialist international advisors to train our personnel and facilitate modern TBM tunnelling technology transfer."

Costs and financing

Following preliminary discussions with Herrenknecht and Basler+Hofmann, advocates of the large-diameter bored highway tunnels are using an overall cost estimate of US$125,500/m of TBM tunnel to promote the projects, or US$84,000/m excluding the cost of procuring the tunnelling system. According to First Vice-Mayor Borysov, buying the complete tunnelling system from Herrenknecht would cost some US$70 million to $80 million. As an investment by the City administration, this cost would be amortised over construction of the seven tunnel projects during the coming 10 to 15 years.

Fig 3. The first two highway tunnel projects are single-bore, double-deck, six-lane, facilities

Borysov said that the first project, the Podil bridge and tunnel project, has an estimated total cost of about US$1.2 billion, with the 1.5km-long tunnel accounting for about US$240 million. The equipment represents 30% of the estimated cost of this first project.

"Construction of the bridge by the company Mostobud has already started," said Borysov, "and confirmation from the City government to advance the alternative bored-tunnel section of the project is expected shortly. To fund the project, we have borrowed some US$400 million to date and will borrow another US$250 million in 2005. Much of this money is raised in US dollars as Euro bonds and via a syndicate of Kreshchatik banks. Since reform away from the Soviet method of Government, the City has the right to raise and service debt for itself. The total debt permitted is controlled by the central Government's Minister of Finance but Kiev has a good credit rating. As owner of considerable tracts of public land and local government property, the City has an income revenue of about US$900 million/year, principally from municipal income, corporation taxes, land sales, rents, and lease agreements. Proposed procurement of the tunnelling system package from Herrenknecht is being negotiated as a lease to purchase agreement, with Herrenknecht investing in the projects by extending a line of government-guaranteed credit. Principal guarantor of the loans is the Kiev City Administration, and we will apply also for central Government guarantee support."

Although final approval of the tunnel is still awaited, its construction is essential. Project alignment and pre-development of the tunnel is approved, and the bridge, now in construction, rises over right bank buildings and developments to feed directly into the double-deck, six-lane, car-only tunnel. Heavy goods vehicles and trucks will be diverted onto surface routes, and the proposed later addition of metro services on the bridge will have lines veering off into future metro running tunnels.

As the leader of a working group advancing the highway tunnelling programme, Borysov said that the first 1.5km-long tunnel, lined with 700mm-thick precast segments, would take about eight months to excavate. "With confirmation of the TBM order by the end of 2005, it will take a year to manufacture and deliver the TBM and tunnelling system to complete excavation during 2007 and have the full bridge/tunnel project opened in late 2008/early 2009 after a year for finishing works."

For this first project, the TBM would have to operate in its pressurised slurry Mixshield mode. Maximum cover over the 1.5km-long tunnel is 70m, and the alignment passes beneath a high groundwater table perched on deeper clay layers. "The machine will operate principally through water-bearing sands and under a maximum of about 1.2 bar pressure," said Vice-Director Vorobyov of Kyivproject. "The technical feasibility of the project is well advanced and we are into the detailed design phase. Following that, we will prepare the construction contract documents. Along with TBM excavation, the contract will include excavation of emergency connection passages between the two road decks at 200m intervals and cut-and-cover portal works at both ends. The tunnel will ventilate naturally from the lower to the upper portal. Vent ducts, however, will be incorporated into the design of future projects to accommodate necessary forced ventilation systems."

Enabling process

Currently, Kiev is enjoying a great deal of international goodwill. Optimism among most of the city's citizens is high, and city officials are determined to reward them with services that they can all benefit from.

There remains, however, the potential for charges of corruption and fraud during the transition from former planned economies to free market-based commerce. Many who recently returned from studies overseas express unease about the amount of money being injected into the society and how it is being used. Sacking of the national government cabinet by President Yushchenko in September 2006, accusing members of having lost "team spirit," is another illustration of the transitional challenge. This transition will take time, and in the interim political developments must stand up to scrutiny.

Fig 4. The under-river section of a new ring road around Kiev would be designed as a twin-bore, six-lane facility

In Kiev, the Mayor is elected to a fixed term every four years, under the City's re­established democratic form of government, and the two First Vice-Mayors are appointed to unlimited terms by the Mayor from previous senior positions in commercial companies. Current Mayor Omelchenco is in his twelfth year of office having recently won re­election for a third consecutive term. First Vice-Mayor Borysov was appointed two-and-a-half years ago and is in charge of City finance with his counterpart in charge of the City's urban and industrial development.

Discussion about competitive tendering for contracts was limited. It was said that other TBM manufacturers had been interviewed for supply of the TBM package, but that the level of co-operation and association with Herrenknecht is well advanced and awaiting finalisation of national government credit guarantees before a contract is confirmed.

Regarding award of construction contracts, it was said that the projects will need international expertise and that talks were underway with companies from Russia, France, and Switzerland, and that a minimum two companies would have to tender for the initial Podil project. Transtroy of Russia, the joint stock company that completed the Lefortovo Tunnel in Moscow, was one potential bidder, but Borysov did say that a Ukrainian contractor will be involved. The consortium being developed around the KPSB organisation appears the frontrunner, although building KPSB into an organisation capable of managing a mega-TBM tunnelling project will take time and the expertise of individuals, if not the incorporation of joint venture or subcontracted partners.

While certain practices surrounding project development in former Soviet republics may appear questionable, the international community is supportive of the endeavours of these new republics towards sustained democracy and free enterprise. Growth of a private enterprise sector, completely separate from previous state ownership, needs more time to be fully realised and then enforced. Further legislative reform concerning taxation and land ownership is also in process. The risks on both sides are recognised, as are the consequences if these risks are not engaged. Order, supply, and operation of a mega-TBM and completion of the first highway tunnel project in Kiev will be a major confirmation that taking the risks was worth it. Despite foreseeable pitfalls that might well interrupt the ambitious and optimistic plan, it will be upon such primary successes that further national development will be achieved.