Sitronics wins bid to provide intelligent transport system for Moscow

RIA Novosti / Vadim Alekseev
transport solutions financed from the state budget
Sitronics has won the competition to develop and maintain an intelligent transport system (ITS) which should reduce major transport problems and traffic jams in Moscow.

­The project includes building branched fibre-optic telecommunications lines, Data Centers and situational dispatch centers, providing research information from bespoke software.

Irina Lanina, Vice President at Sitronics, confirmed the company, controlled by AFK Sistema and the Bank of Moscow, had won the competition.  It was initiated by the Moscow State government and overseen by Moscow Mayor, Sergey Sobyanin, who agreed to allocate a total of 20 billion roubles for the project, with 6.3 billion roubles planed for this year.

Sitronics will design the pioneer project using its own funds and the City of Moscow will pay off for the completed system when it has state approval.  The system is intended to resolve transport problems and aid management of Moscow transport, informing drivers of parking availability, timing of traffic lights and provide other advantages.

Uralsib analyst, Constantin Belov, says that in addition to the initial order Sitronics will strengthen its business by sustainable revenues from the ITS operations.

“Sitronics expected to report an average of $1.4 billion in profits in 2011. The Moscow state order can add 15% to company profits. It is very positive and promising for Sitronics’ business in Russia. The company will be receiving additional income from further system operations.”

Dmitry Adamidov, Deputy Head of the analytical department at InvestCafe, believes the state could have opted for a cheaper solution by handing the competition and contracts to companies experienced in providing traffic monitoring and management solutions.

“In spite of Sitronics reputed shareholders ensuring the company’s effective management, prudent business organization and financial stability, the company has a lack of experience in providing services for transport systems, and had been never involved in any of the projects of that kind. In that case, I expect Sitronics to attract professionals from outside who, obviously, will require more money than they could have in case of winning the state competition. Ultimately, the cost of the project could be 20-25% less if the state decided on experienced professionals, so the project would be worth 15-16 billion roubles instead of 20 billions.”