Evgeny Petrov: We welcome you at the next episode of our broadcasts dedicated to answering the questions that the management of Unitsky String Technologies Inc. has received throughout the year from people who follow our projects. My name is Evgeny Petrov. I am the Deputy General Director for Marketing of Unitsky String Technologies Inc. On the air today are Arsen Babayan, Director of Unitsky String Technologies LLC in Moscow, Oleg Zaretsky, Director of uScovery DMCC in Dubai and also employees of Unitsky String Technologies Inc. Maxim Gusev, Head of Project Management Division and Maxim Kubyshkin, Head of Design Engineering Department. I remind you that after our series of episodes, where we communicate in a narrow circle, it is planned to release a final address from the General Designer and General Director of Unitsky String Technologies Inc.,
which will present the results of 2023 year. Today we will talk about a topic that interests all those who follow the development of the project. It concerns the questions why not all information is broadcast, why not all the steps and contracts that we sign are reported to the general public as they are given very selectively. Why do we give information about one thing, but prefer to keep silent about another? And today I also suggest starting with you, Oleg. Oleg Zaretsky: There are legal issues. We sign a non-disclosure agreement with our potential clients at various stages. It can be signed at the feasibility study stage, for example.
Why does a potential buyer ask us not to disclose information? There may be many reasons for this. One of them is that the client does not want to disclose a potential project ahead of time. This is often related to financial issues: the division of cash flow, the struggle to split the budget. Everyone understands that early information about the project will lead to the activation of competitors who will start fighting for the budget and land. We must understand this perfectly well. Why can we hide information?
If the client asks us to keep quiet, we have no right to disclose the information. It's confidential. This is one thing. The second thing is often related to the fact that we do not consider it necessary to disclose information early. There may also be various reasons for this. Firstly, there are detractors. Secondly, there are competitors.
We are well aware that string transport technology has so many advantages that competitors may start creating obstacles. A friend of mine said: “I do not know how I can help you, but I can make a lot of harm to you”. Accordingly, there is a lot of information that can be posted through unscrupulous journalists. It can harm the project. Therefore, I strongly recommend keeping the project secret for as long as possible in order to prevent our competitors and detractors from attacking it in information, financial or any other way.
It is clear that the technology of string transport has so many advantages that it is impossible not to assume that we have a lot of detractors. I think these are two main reasons. By the way, there are many examples when early spread of information about the project by some people (often opponents) led to very serious problems.
I don't want to name the country, but there was a situation when people had very serious intentions. Then they received negative information about us and stopped negotiations. It's their choice. I think one of the reasons was that information was leaked. These are my thoughts. Maxim Gusev: Can I give you an example? In one of the previous episodes, we said that the number of applications increased after Indian Transport Minister Nitin Gadkari came to us and posted the news about it on his social networks such as Telegram and Instagram. People reacted to this. Not only string transport supporters watch our news.
How do you think, do our competitors watch our channels? For example, manufacturers of cable cars, monorails, or any other technologies? If information about our project is published somewhere, then the number of commercial offers from the company that conducts the tender will increase. Therefore, the question here is whether it is worth increasing transparency by talking about our projects, but at the same time participating in a much more difficult tender or transaction process. We prefer to keep it confidential. Evgeny Petrov: Thank you. Oleg Zaretsky touched upon an important topic.
You said that there’s competition for the budget and land. The conclusion suggests itself that very often our competitors are not only companies offering transport solutions, but also, for example, developers or companies that are engaged in landscaping, namely everyone who applies for an infrastructure project. It may not necessarily be a transport one. This money can be used for another infrastructure project.
Arsen, I know that you have repeatedly encountered such situations in your work. As someone with experience, please comment on this. Arsen Babayan: In my opinion, on the one hand, we need the projects to be open. On the other hand, it is difficult to disagree with colleagues who talk about the different risks, for example that competitors will react to the fact that a project is being prepared somewhere and will complicate our task. For sure, there are detractors who may try to spoil the situation. I think there is no right answer to this question. There is some point in time when it is necessary to start covering the project.
However, it is not worth doing it before this point for many reasons, in order for the project participants not to waste energy on any reactions, answers, and questions. The project should happen first. Sometimes you don't need to talk about the good things so that the energy doesn't go away. Oleg Zaretsky: I will add that there are scammers who are trying to use the idea of new technologies. Let's say there is a Railbus idea. It's bad, but it's advertised. think it's not quite right to give food to scammers by talking about where we have projects. They will go there and advertise their ideas, organize meetings.
Arsen Babayan: Oleg, imagine that you are selling not string technologies, but Siemens. Is it better to cover or not to cover the project? How would you answer this question? Oleg Zaretsky: I don't think Siemens is covering anything a lot. That's a good question. Arsen Babayan: I think they just don't think about it. Journalists are covering it, and they are just watching it.
Oleg Zaretsky: I have to say that they are also struggling in the market, they have a lot of competition. There is Siemens, but there are also many other companies, for example, Alstom, Hitachi, Hyundai, which deal with transport issues, so the competition is very tough I don't think Siemens talks about their potential projects everywhere. I think Siemens focuses on PR only when there is a payment, or construction work has begun. Arsen Babayan: It has nothing to do with string technology. This is due to a trade secret. After the project has taken place and it will move forward, then I think we should welcome all kinds of publications on the subject.
Maxim Kubyshkin: Colleagues, I liked the Arsen's analogy about saving the energy of the team that is working on the project. Excessive coverage is harmful to the team. There were cases when too much was written about a potential project in the press.
Strangers found engineers and designers on social networks and started asking questions. They wrote something like “we know that you are working on such a project.” People are sometimes overly emotional, the team gets distracted by it. Therefore, I believe that deliberate insufficient coverage of the project is beneficial. When we enter the construction and implementation stages of the project, then I think it is worth covering it in the press.
While the project has not reached the implementation stage, it does not bring any bonuses from the point of view of the well-coordinated team work. Evgeny Petrov: Thank you, colleagues. We mentioned Siemens, but this is a conventional example. We say that there are many other companies that are engaged in large infrastructure projects.
At a certain point, such projects cannot do without publicity and public discussion, because it affects the interests of the public. If the transport line has to pass the house where you live, it is presented to the city and regional councils. I wanted to point out that we’re asked why we don’t show the contracts we sign.
I can say that we tried to purposefully search for contracts of our competitors, for example, Siemens or Doppelmayr. We found several contracts from a decade ago that just happened to hit the Internet. Oleg Zaretsky: A contract is part of intellectual property. We have contract packages.
We put a lot of effort into designing and reconciling them, so the last thing I want is for someone to copy them and start working on them. Evgeny Petrov: That’s what I’m saying. Even if the project is made public, the details of the technology are not revealed. But selling such a complex infrastructure project is also a technology. Technology remains a trade secret and is confined to non-disclosure agreements. In addition, we should keep in mind the external factors that may have a negative impact on the project, if we talk about it.
However, we talk about some projects. Let’s discuss these projects and tell our viewers why we talk about some projects and steps. Oleg, can you start again? Oleg Zaretsky: We signed a memorandum in Indonesia with Innovative Transport Systems (ITS) on them being our partners in this country.
So, it wasn’t a contract on some particular project. It was a memorandum that there was a government organization set up at the Ministry of Transport to identify transport systems potentially innovative for implementation in Indonesia. Evgeny Petrov: Excuse me, Mr. Oleg. Am I to understand that in this case, as in others, when we do go public with our projects, our partners needed this publicity to get some kind of support? Oleg Zaretsky: By the way, yes. PR and presentation to the press were the initiative of ITS. A similar event took place when we signed a similar memorandum in Dubai. ITS was interested in cooperating with us. And on that basis, we get the lead from ITS on some projects.
We work very closely with them. With the help of ITS, a meeting was arranged with the Governor of Jakarta, but again this does not mean that there was any specific project. It was the ITS initiative, and we supported it. Indonesia is a potential market for us. There is no secret. But when it comes to specific projects in India, the Dominican Republic or elsewhere, I prefer not to disclose details. Evgeny Petrov: And in Indonesia, when we talk about specific projects, we prefer not to disclose details.
Oleg Zaretsky: Yes, we don’t disclose details. Evgeny Petrov: The same situation happened in El Salvador, when the authorities initiated some projects and, by the way, UST Inc. paid a certain amount for the work done as part of the preliminary feasibility study. Local authorities were interested in making the information public, and we met them halfway. Oleg Zaretsky: Yes. If we don’t see any pitfalls or anything, why not.
Although in some cases we do not recommend the client to make the information public. But again, I’m telling you, there can’t be some immutable rule here. Of course, we assess everything by the situation and try to do what’s best. Because we all have the same goal – getting the targeted project and its construction.
Evgeny Petrov: I think everyone agrees that each of our projects is unique and individual. Clearly individual. And, of course, where we can, we talk, and somewhere we prefer to remain silent for the time being. With access to the construction site it will become impossible to hide information at a certain stage, and it will be impossible to do without public discussion. Let’s talk about the challenges. Because we have so far focused on the victories and achievements that we have, and yet there is a number of significant challenges on places. For example, I know that a number of projects that we even signed contracts for have been suspended at some point.
Here I can recall a project on the territory of Ukraine, where we have already started to carry out a feasibility study. But at some point we had to stop all the work. It wasn’t about publicity or non-publicity. A force majeure happened. And there may be other circumstances. People often talk about it now.
Oleg Zaretsky: We should be well aware that there is another problem – Russia and Belarus are under sanctions, so it is difficult to talk about commercial projects in Europe. While there is great interest from Europe and America, we have to focus on Asia and Africa. Because for Europeans, there are certain political risks if the technology is supplied from Belarus. In this regard, we have to be careful – all developing countries in Africa and Asia are under enormous pressure to stop all cooperation with Belarus and Russia. Yes, we have a company in the Emirates. We say we have technology from the Emirates. But we have to be careful. Evgeny Petrov: Initially it seems that this has nothing to do with openness/privacy of information. Although, in fact, it does.
So, the more we talk, the more attention we get. Oleg Zaretsky: Of course, there is pressure. But I will not name countries or individuals. When communicating with people at a sufficiently high level, there is such a message that there is pressure on all fronts to limit or even stop any cooperation of African and Asian countries with Russia and Belarus. Maxim Kubyshkin: Evgeny, I can remember a situation from my practice, however I also won’t name the country. This is about how the disclosure of project information can be used in a bad way.
When we talk about countries where there’s democracy, where there are elections, we have to understand that our projects are the infrastructure ones, that is, they solve some very painful transport problems, which were fought over by the previous heads of regions. And, of course, it is very advantageous for the head of some region to say in public in their country that now they are signing a contract with such a company and will solve the transport problem. And after the election is over, either the candidate is defeated and our projects are forgotten, or the promise remains a promise. This is an example of how we are being used in their campaigns. That’s the downside of the business we’re in. Infrastructure projects are always very vital for the region and the population.
Evgeny Petrov: Thank you, Mr. Maxim. You have drawn attention to a really important point. And here I will add that our technologies, our solutions can be used as an element of election campaign by some officials. And where there is competition, any politicians naturally fall into the hands of their competitors. And unfortunately, we often see when there’s an attack on a politician, the projects that this politician promotes are also at risk.
And here, when we give information to the public space, we risk getting involved with one or another person in the electoral game. And if this person is under attack, we and our reputation are under attack accordingly. And today it is an important indicator. Mr. Arsen, do you have anything to add? Arsen Babayan: Firstly, I’d like to develop the topic of sanctions pressure, which was mentioned by Mr. Oleg.
I talk about the fact that the Russian or Belarusian footprint significantly hinders the company’s promotion in the market. It’s maybe not about the Asian countries, where there are simply difficulties with calculations and other things. But European and American markets are closed to us today. From the point of view of our internal situation, Mr. Evgeny, our project has reached a certain stage and passed the point of no return in one of the southern regions (we will not reveal the name). And this project has not been abandoned, it has been put on hold for some time until the geopolitical situation and priorities change and the project is allowed to live.
These are force majeure factors, they are certainly present in our work. What I would like to draw attention to is the risks. There are risks associated with publication, risks associated with personalities.
The point is, the project has to go through a number of important people who have to approve it to get it to the point where the decision is made. It means that on this path you can meet people who once read something, not fully understood everything, and formed a biased opinion due to unfair publications. Accordingly, the project is delayed, requires some explanations, answers to the questions. And the work on the project is slowed down or stopped altogether. The customer refuses to continue. They just say no.
Maxim Gusev: I can give you more than one or two examples where we knew exactly that the return on investment, operating expenses, capital expenditure, project cost, passenger traffic and in general almost all the conditions, all the parameters were really better compared to those of the competitors. In percent the numbers were considerably higher. But we never won these tenders – there were other interests that had a great influence. That’s why I’m totally agree with Arsen – it’s not always the high performance of the product that matters. Evgeny Petrov: Thank you, Mr. Maxim. As we see, there is a number of factors that speaks against us covering the information. So, let me summarize.
By giving information to the public space, we are initiating a debate about innovation, and they have never been accepted positively. There are all sorts of social phenomena like, say, the one abbreviated as NIMBY, which literally means Not In My Back Yard. I mean, you can build anywhere, but if the road goes by my house, I disagree. And if such concerns are voiced, then in response you need to make some material saying that everything will be fine.
And after the positive publication is done, there will come a negative one as a response. And this can affect the decision-making of some local officials. And if we don’t put the information in the public domain, we simply leave the opinion of officials or other decision makers to be affected. On the other hand, information in the public field does not give any results.
Because our clients get most of their information not from the media, but from their advisors, and we work with them. I hope now our viewers understand a little more why we only talk about something pointwise, selectively and very carefully. This is primarily in the interest of business, technology and investors. We thank the audience for your attention, and our colleagues – for participating in the discussion.
Next time we will talk about our assets, competencies, and preparation of material base for the implementation of commercial projects. We hope you will join us, and after that, at the end of this year, before the holidays, there will be an address of the General Designer and General Director of UST Inc. summarizing the results of the year. Thank you for your attention. See you again.
2023-12-26