Audit of investment projects
Design documentation underwent a process and price audit at 30 railway infrastructure facilities in the reporting year.
The Company continued work initiated by the Russian Government in 2015 to conduct an independent process and price audit (PPA) of its investment projects.
The introduction of the PPA procedure was an important step towards improving the openness and transparency of the Company’s investment programmes that are funded in full or in part by federal budget funds and generate increased interest from the public.
Taking into account the decisions of the Russian Government as well as the procedure specified in the Corporate Standard ‘Mandatory Process and Price Audit of the Investment Projects of Russian Railways and Its Subsidiaries and Affiliates’, the biggest investment projects included in the Russian Railways Investment Programme underwent an audit during their pre-project stages:
- reconstruction and modernisation of the Baikal-Amur and Trans-Siberian Mainlines;
- development of railway infrastructure at approaches to ports in the Azov and Black Seas, including the bypass of the Krasnodar Railway Hub;
- development of railway infrastructure at approaches to ports in northwest Russia until 2020.
In accordance with the Corporate Standard, the results of the audit were published on the officialwebsite of Russian Railways and discussed with expert communities.
Overall, the experts noted that the projects have been sufficiently studied given the current implementation stage.
In December 2014, the Government Transportation Commission ordered audits of the design documentation for 72 railway infrastructure facilities in the Eastern operating domain with a final decision to be made on 12 of the facilities at meetings of the Interdepartmental Working Group on Railway Transportation Development Affairs.
Since the start of 2015, design documentation audits have already been conducted for 30 railway infrastructure facilities in the Eastern operating domain. Seven of the audit reports were sent to the Interdepartmental Group for consideration and two of them have already been reviewed by the Interdepartmental Group.
In 2016, design documentation audits are to be conducted at 38 facilities taking into account the expiration of deadlines for the preparation of design documentation by design institutes. In 2017, audits will be conducted at four facilities.
The Company also actively cooperates with the Russian Government, the Expert Council under the Russian Government, the Open Government and the Consumer Council on matters concerning the activities of Russian Railways as regards developing an optimal mechanism for managing the process and price audit procedure for projects. In particular, Russian Railways insists on the need to regulate independent process and price audit procedures at the level of federal legislation, which would make it possible to eliminate existing conflicts in the legislative provisions of the Russian Federation as well as determine the status of these procedures and the extent of liability.
In future years, the Company also plans to regularly carry out all the necessary comprehensive measures that aim to optimise the use of investment resources in order to improve its performance efficiency and execute the orders of the Russian Government.