Greetings to all viewers who have joined our program. My name is Evgeny Petrov. I am the Deputy General Director for Marketing at Unitsky String Technologies Inc. Today we are on the line with Oleg Zaretsky, Director of uScovery DMCC and Arsen Babayan, Director of Unitsky String Technologies LLC in Moscow. These are the marketing offices that are engaged in selling the technology around the world.
We also have with us today employees of Unitsky String Technologies Inc. Maxim Gusev, Head of Project Management Division and Maxim Kubyshkin, Head of Design Engineering Department. In our series of five episodes we summarize the results of the year and answer the questions asked by those who have been following the development of the project throughout the year.
Today we are talking about the subject that is of most concern to all those who follow the project. We will talk about the current projects that are in process at Unitsky String Technologies Inc. and in the marketing offices. I would like to start broadly, with a discussion of projects around the world. So, I will ask Oleg Zaretsky to tell us about the projects that are in work today. What kind of projects are these? What kind of routes are they? What is their purpose? What stage are we at? And in general, tell us what you think is necessary. I know we are currently working on projects in India, Indonesia, Africa, Dominican Republic. Is this a complete list? If not, please add to it.
Oleg Zaretsky: Actually, we have a lot of projects in work. Evgeny Petrov: If we talk in general, and not only about those regions for which uScovery is responsible, then today we have about 100 projects in the works. Oleg Zaretsky: Yes, and negotiations are at various stages. But there are, of course, projects that, with a certain degree of certainty, can be said to have taken place. Here we mean projects where certain documents have been signed: some framework agreements or agreements on project designing.
Of course, first of all, we are very actively developing projects in India. From my point of view, India is a country where our projects will soon be launched and people will use our transportation system. At the same time, inquiries are now coming like an avalanche. Especially after the Indian Minister of Transport visited us and after our representative office in India started working very actively.
Evgeny Petrov: So, it's not just your point of view. It's a conclusion based on objective data. There are contracts, there are operational activities. Oleg Zaretsky: Of course. There is a huge need for our transport system in India, because India is a country with a billion and a half population, where a very huge number of people don't have access to private transport, and of course, where the purchasing capacity of the population is growing. People are willing to pay for tickets.
Both municipalities and government agencies are now very eager to develop the transportation component. And it is our string transport that is going to occupy this niche. We offer something that other transport systems cannot offer. And professionals not only in India but everywhere realize this.
Of course, there are still a few barriers to be broken through in terms of certification and authorization issues. As the saying goes, a journey of a thousand miles begins with a single step. We are walking on it. As for other projects, we are waiting for proposals in the Dominican Republic. There is a private company there with a very favorable commercial project. In fact, the documents have already been signed. We are waiting for direct work to begin. The RTA (Dubai's Roads and Transport Authority) is very interested in us. It is not a secret.
It has signed a memorandum of intent with us, and now we are actively advancing it to the next level. I cannot disclose all the nuances of working with the RTA. At InnoTrans 2022, there was a model of our uPod with our logo on it in the RTA booth. I think this also says something.
Evgeny Petrov: Not just in the booth, but in the center of the booth. Oleg Zaretsky: Yes, in the center. I can't reveal all the nuances and details. Nevertheless, the work is going on. There are difficulties, certain concerns and questions, which we are successfully overcoming.
As for Indonesia, it is a country where the string transport, I believe, is the only alternative. We are working with many cities, not only with Jakarta. And in some of these cities, I hold a conversation like this, "If you want to have public transport under the situation that we have studied, it will be string transport. If you fail with string transport, you're not going to have a public transportation system." This is a challenging country in terms of executing transport projects. Accordingly, all of the countries I have mentioned are regions where we are actually reaching the finish line, if not already there. There is a huge interest in us from Brazil, Mexico, and the United States of America, however surprising it may seem.
Evgeny Petrov: Oleg, I believe that viewers are interested in the following question. If we are at the finish line (and we are indeed there), can we expect to proceed directly to the construction sites in these regions next year? Oleg Zaretsky: Certainly, this is out of the question, but again, it depends more on Maxim Kubyshkin and Maxim Gusev. We will enter the construction sites when they finish project designing. Right after that, actually. Everything depends on them. If we are talking about deadlines, then, as always, the client needs it yesterday.
And we want to have some time in reserve. I think we have to find a compromise between the client's wishes and our capabilities. We have to adjust to the client's desires. We have to adjust to the client's desires.
I think they'll tell us if we'll be out on the construction sites next year. I hope so. At least in India. I mean, I estimate the number of projects in India alone is at least 200-250 lines waiting for our technology. And this is going to be an explosive spread of string transport technology. Evgeny Petrov: You said 'at least'. As far as I know, the high-ranking people with whom you and Anatoli Unitsky were in contact spoke about even more optimistic figures. The figure 500 was mentioned.
Oleg Zaretsky: I'm more reserved. Evgeny Petrov: You have halved it. Arsen, as the person in charge of the CIS area, tell us about what is currently in progress and what your immediate plans are. Arsen Babayan: Of course, I cannot make the same claims as Oleg that there are projects already waiting for design work to be completed so that they can proceed to construction. Unfortunately, we do not have such projects yet. But there are projects in a very high degree of readiness and in-depth study.
These are a number of projects in the capital regions, namely Moscow and St. Petersburg. And we have a number of projects in each of these regions. They have different focuses. These are projects that address the issues of transport accessibility for new neighborhoods. There are projects related to long-span crossings over water obstacles. There are promising directions, alternate routes of ordinary transportation highways. In these projects (maybe this is a Russian specificity), the authorities suggested that we find investors.
We have them too. Here it is always a matter of public-private partnership. And these projects are in the process of coming out, but they require certain costs on our part. They are related to the fact that concession relations need certain elaboration, conclusions, solving a number of land issues, and so on. We always say that with the first projects it is mandatory to develop technology localization projects. But I want to say that all this makes it harder to find projects and customers, because there are so many related tasks that are also challenging.
Nevertheless, there are projects that have every right and every chance to be launched next year. Again, I repeat, this is a whole range of projects in two metropolitan regions. There are also projects that we are actively studying. These include passenger transportation in the Siberian capital. This is the Novosibirsk region. This includes the center of culture and tourism – Yaroslavl, where we are also considering a number of projects. Rostourism (Russia’s Federal Tourism Agency) has a number of intriguing targeted projects that we are actively discussing. We are having dialogues with a number of large concession companies in Russia as potential investors who are interested in not in locations, but in the novelty and technology of our transportation.
Their interest is a little different. This is the case when we connect the final customer – the authorities – and the investor, who is interested in original, interesting and efficient projects. Because with concession stories, long payback periods are not so terrible.
They are focused on infrastructure projects with long payback periods. Evgeny Petrov: Last time we talked about the fact that our main task is to reconcile the interests of the state, which carries out transportation work (providing services to passengers, for example, if we are talking about passenger lines), and the interests of commercial structures. Am I right that in a number of metropolitan regions we have already passed the first most significant stage, when we receive confirmation of deep interest from government agencies, readiness to support, readiness to enter the string transport implementation project.
And we just need to move on to the second stage. Arsen Babayan: Yes, much of the time was spent convincing the authorities that string transport has a right to exist. That it has a whole range of advantages and that it can effectively solve acute transportation problems. But in this case, we are talking about megacities, about passenger problems. I would also like to add that we have a number of activities related to cargo transportation systems.
We are studying the possibility of organizing cross-border crossings for coal transportation to China with our uTrans cargo systems. There is such an urgent task in Russia – reorientation of transportation flows to the eastern markets. We are also strategically cooperating with MGRI (Russian State University for Geological Prospecting) – we are waiting for an expert opinion on the attractiveness of our intriguing uTrans product. This is transportation of bulk cargoes. The project differs in that it relies almost entirely on import-substituted technology. It solves unique transportation problems with long spans, which is very important in our Arctic territories, where it is difficult to use conventional means of transportation. And it is in demand, as Russia is largely a supplier of resources: ore, coal and other fossil energy resources.
Everyone notes that this technology is very intriguing for Russia. I think I will be able to show a definite breakthrough in terms of projects next year. Evgeny Petrov: That is, the task here is slightly different, and we talked about this last time, too. I understand that in the case of passenger transportation, we simply commit ourselves to designing the complex in line with certain requirements that exist in legislation. To put it into operation and to carry out the work in conformity with these requirements.
And while this, basically, is enough for passenger complexes, in terms of the business, there is a slightly different financing structure, but there are conditions for a successful case, a successful model. Arsen Babayan: I believe that not just priority, but special attention should be given to cargo transportation systems in Russia. Evgeny Petrov: Thank you, Arsen. But still, we are talking about the fact that there are a number of ingredients: firstly, to convince and interest officials, secondly, to confirm that we are in the proper legal framework, and thirdly, to organize funding.
If we are talking about the legal framework, then this, Maxim, is probably a question for you. How do we solve these problems in the Commonwealth of Independent States within Russia, and Arsen spoke about Kazakhstan, where there are projects now. And how these tasks are being solved, for example, by the same projects in India. Maxim, please comment. Maxim Gusev: Certification is both simple and complex. Yes, strangely enough.
It is simple from the perspective that if we divide our complex into elements, then, in principle, the requirements for them are clear. If we are talking about building structures, they are unique to their respective countries. For example, India has its own, Belarus has its own, the Russian Federation has its own, and so on. If we are talking about track structures, vehicles, control systems, it is a bit more complicated, but it is roughly the same.
If the control system is safe, and you have proved it by risk assessment or any other actions, then, basically, it is possible to pass certification. But it is still difficult, because each party requires that this stage is passed specifically for its entire project. But certification without a project is quite a challenge.
Because you’re going to the state certification bodies and saying that you don't have a project yet, but you would like to certify something there, because in the future, when you have a project, it will save time for me and for you. In general, this even sounds a little extravagant, let's put it that way. Evgeny Petrov: But we don't do that, I must say. When clients come to us and ask where are our certificates, well, it's just a misunderstanding of the product specifics. Maxim Gusev: It’s important to understand that we treat each client individually. Remember, I was talking about passenger traffic, route features and everything else.
It happens that 150 meters is an optimal figure for a span, however sometimes it can be 300 or even 500 meters, and sometimes even more. The anchor support can also be 8 meters, while sometimes the figure is 35 meters. And you need to understand that what we have developed, for example, to prove the safety of one project, may not be suitable for another one. We are just trying to show the inside of the process as much as possible now. We do this throughout the company’s life. We try to do so-called “homework” for those solutions that clients often request from both Oleg and Arsen. We do it to stack volumes of evidence of safety as soon as we have a project or contract. Because, guys, this is not one or 10 pages, these are calculations.
There are certain standards, there are certain requirements for this. Everything is taken into account and is submitted to the relevant authorities. And then the standard process takes place, namely questions and answers, like “We do not just think so, we have evidence.” This is how this process looks now. Maxim Kubyshkin: I back up Maxim here. Evgeny Petrov: Sorry, Maxim, I just wanted to ask you to speak out and clarify things regarding the fact that there are really different jurisdictions, different laws, different countries, different norms. We have already partially talked about the mentality.
There are regions where we have already solved a number of such fundamental issues, including certification, and somewhere the task is to scale, while somewhere it is bringing the moment when we form a package of projects. As for the execution of design itself, the regulatory field is clear. But Oleg noted that everything depends on how quickly we execute design.
Therefore, Maxim, please comment on how quickly we do that. Tell what stages are there, so that our viewers get a little deeper into the specifics of this activity and understand the time horizon, or even standard time, maybe. Maxim Kubyshkin: If we talk about designing abroad, we generally adjust to the regulatory framework that exists in a particular country. Of course, it takes time. But we have already gained experience in this respect.
Our solutions are harmonized with global standards. Basically, we rely on European standards, on Eurocodes, as far as infrastructure solutions and building structures are concerned. Therefore, in recent years, we have not encountered any problems that put the implementation of the entire project in question.
As a rule, when we talk about designing abroad, we mean cooperation with local consultants who review our solutions, and, if necessary, adapt them to local legislation. I would say that today this is routine work. There can no longer be something unique here. Of course, we adapt to the client's requirements and to the local market. For example, if the production of metal structures is more developed somewhere, we focus on them when producing the overpass or some components and parts of our complex. If the production of reinforced concrete structures is developed, we take this into account in the component base of our transport and infrastructure complexes.
Also, when we talk about design, we conceptualize a project image for the client and define its functionality. Maxim has already touched on this topic. From the very beginning, about 50 engineers have been working on the project. These are logisticians, master plan specialists, designers, and architects.
This stage determines the image of our facility, I would say. And further on, depending on the signed contract, there will be either a detailed design or so-called one-stage design. That is, we prepare design documents at once in the volume sufficient for implementation, or we still divide it into some particular sub-stages: feasibility study, some approved part of the project, which passes all the approvals in the necessary authorities, and so on. It is up to the client to decide on these issues. In fact, there are plenty of design options. I would also like to point out that a lot depends on the client's interest.
That is, if the client's eyes light up and they realize that project implementation is not only our responsibility as a technology company, but a common cause. Only when they realize the complexity of our work as technology suppliers and project developers, we get results. That is why the facilities we have at the design stage are the ones where the client shows maximum interest.
Evgeny Petrov: Well, and, as far as I understand, we have all the business processes fine-tuned in general. We understand how to design and what stages and phases it takes. Overall, we have about 100 projects in progress today, of which about a dozen are in the hot phase.
There's every reason to look forward to going out to construction sites next year, and it's going to be a really important milestone for UST Inc. In many ways, this would not have been possible without the work we have done. In the next episodes, we will talk more about this, as well as about the peculiarities of negotiating in the regions, about closed and open information, and about what we have and where we are going. I thank you, colleagues, for joining this discussion today. See you next time.
2023-12-18