City Hall Project Beset With Problems

MTThe Edelweiss Tower on Kutuzovsky Prospekt, a New Moscow Ring project.
New Moscow Ring, an ambitious plan to surround the city with hundreds of skyscrapers, was hailed as one of City Hall's grandest construction projects when it was unveiled in 1999. Ten years later, however, the project has barely gotten off the ground, an example of the often-haphazard process of planning and building high-rises in Moscow.

Conceived as the 21st century's answer to the Stalin era's famous "Seven Sisters," New Moscow Ring envisioned 200 skyscrapers in 60 different sites on the peripheries of the city. But the project has been slow to attract investors, and developers have complained that it is beset with problems, from poor visibility studies to a lack of expertise and a complete absence of clear-cut guidelines.

"The project does not appear to have been thoroughly thought out," said Yury Sinyayev, the marketing director of the KONTI Group, the main developer of New Moscow Ring. "The biggest threat has been a lack of proper documentation of the city's underground communication network."

Sinyayev said that when KONTI began digging the foundation pit for the Continental, one of the New Moscow Ring projects, in 2004, they came across high-voltage cables that were not documented in the feasibility study.

Moving the cables cost KONTI $5 million, immediately spiking up the project's cost, Sinyayev said.

KONTI Group has so far only fully completed the 44-floor, 440-apartment Edelweiss Tower located on Davydovskaya Ulitsa, one of the seven high-rises it initially planned to build.

The Continental is due to be completed in 2009, Sinyayev said.

Dmitry Lutsenko, a director at Mirax Group, which is building the Well House, one of the planned high-rises on Leninsky Prospekt, said only a few companies could build and operate high-rise buildings in Moscow.

"Very few architectural firms in Moscow today can handle the New Moscow Ring projects," Lutsenko said.

"I believe that soon the project will lose its attraction for developers because it is too complicated and requires heavy capital outlay," he said.

New Ring of Moscow, a company set up by City Hall to provide financing, construction and maintenance of the high-rise buildings, insisted that the project is on track.

"Many large developers have tendered to take part in the auctions, and many have shown huge interest in this project because it makes economic sense for them," said the official, who requested anonymity, citing the company's policy.

"As of today, investors have bought 10 construction platforms while others are submitting tenders," he said.

Some industry players, however, argued against the very idea of constructing skyscrapers in Moscow, which they say is ill-suited to high-rises because of the geological makeup of the ground the city is built on.

Dmitry Taganov, head of Inkom real estate company's analytical center, said Moscow's peculiar subsoil presents daunting challenges to high-rise builders, adding to construction overhead in both money and time.

"Unlike New York City, which sits securely on a basaltic slab, the top layer of Moscow's land mass is a mix of soft ice-borne sediments, sands and marine clay," Taganov said. "Getting to a solid layer needed for high-rise construction sometimes requires burrowing 50 meters deep. That racks up construction cost by 30 to 40 percent."

On top of this, the city's infrastructure, especially Soviet-era communication lines, are too old and worn out, while about 50 percent of the city's water and drainage pipes require immediate replacement, Taganov said.

"Perhaps the most serious danger in Moscow is the complete absence of geological monitoring services to gauge the temperature of groundwater," he said.

Groundwater can heat up to excessive temperatures, leading to topsoil caving in -- a danger in skyscraper construction, Taganov said.

"Many of the accident-prone parts of the city are not monitored at all, and the city still lacks modern automatic monitoring systems that could supply high-rise builders with accurate data."

KONTI Group's Sinyayev said a lack of uniform guidelines and norms of high-rise construction have forced developers to resort to a trial-and-error system, and many try to work out separate parameters for individual projects.

The new skyscrapers, he said, have also been known to put a heavy burden on local infrastructure in the form of clogged access roads and inadequate parking spaces in the vicinities where they are located.

More dire are the problems with equipment, such as special cranes for high-rise construction.

Sinayev said that in most cases, building equipment is put to the test for the first time right on the construction site -- a risky venture.

Yet another problem is a lack of education. While skyscraper building requires highly specialized knowledge, the country lacks a local pool of experts that can be relied upon to build high-rises.

"Even today, Russia has no higher institution of learning where architects could learn the craft of building skyscrapers," Inkom Group's Taganov said.

Sinyayev said that when New Moscow Ring was conceived, it lacked a program for the training and coordination of high-profile specialists, which he said has led to reliance on foreign experts.

"Young people in Russia are generally reluctant to go into the field because of poor pay and long working hours," he said.

Analysts said the current financial crisis, which has put severe pressure on the real estate sector, will further cloud New Moscow Ring's future prospects, possibly forcing many of the project's planned buildings to be mothballed until better times.

"The current credit crunch would certainly be an impediment to the New Moscow Ring because this is a capital-intensive project," Konti's Sinayev said.

"Many investors are already opting out after barely completing the feasibility studies stage."