The Russian Federation Ministry of Regional Development claims in court that Alfa-Bank and Transstroy Engineering Corporation should pay $19m and $9m, respectively, for delay with the commissioning of the dam that protects Saint Petersburg from floods, Kommersant reports.


According to the newspaper, Transstroy Engineering Corporation (a member of Oleg Deripaska’s Transstroy) and Rosstroy signed a 4.7-billion-ruble agreement regarding the construction of the dam’s second portion in October 2005. After Rosstroy went into liquidation in May 2008, the Russian Federation Ministry of Regional Development assumed its responsibilities. In the meantime, Alfa-Bank offered Transstroy Engineering Corporation a $19m bank guarantee in November 2007. The guarantee was supposed to have been transferred to the Ministry in case the contractor failed to meet its obligations.


The Ministry of Regional Development now says that, according to the contract, Transstroy Engineering Corporation was to have completed C-2 section of the dam and the drawbridge before March 18, 2008.


‘Our contractor was unable to fill in all the as-built documentation, which was why the dam couldn’t be commissioned before the deadline,’ says Alexei Vasilyev, who runs the Investment Construction Projects Fund (the dam project’s fiscal agent).