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Vladimir Yakunin presents concept for strategic development of rail transport in CIS to 2020	
On October 18, Vladimir Yakunin, who in addition to being the President of RZD, is also the Chairman of the Council for Rail Transport of CIS States (CRT CIS), presented a concept for the strategic development of railway transport in the CIS member states until 2020 at a meeting of the council of CIS heads of government.
The purpose of the concept is to develop common approaches to the definition of strategic priorities for the development of railways in the CIS states and the formation of the market for transport services in the field of rail transport.
According to Mr Yakunin, implementation of the concept over the next 10 years will allow for the coordinated development of railway transport across the 1520mm broad gauge railway space and ensure a higher quality of services, further growth in the volume of passenger and freight traffic and increased revenues for transport companies.
This will in turn lead to increased profits, improved working conditions in the rail industry, increased safety and an improvement in the environmental performance of the railways.
This is the second such document. The first was produced 7 years ago and contained the main areas for cooperation, which were on the whole successfully implemented.

Sergey Ivanov Offers to Build a New Port in the North of Russia
Sergey Ivanov, Vice Prime Minister of the Russian Federation, considers that it is necessary to start construction of a new all-weather port in the Russian north.
“We need to develop the western part of the Murmansk Bay, to build a new port there. It is the only place in Russia, where an ocean non-freezing deep-sea port can be constructed,” said Mr Ivanov at the meeting of the Sea Board of the RF Government on September 20, 2011. In his opinion, the construction of the port should be started in the near future, and the project should be carried out on the principles of a public private partnership. 

RZD Plans to Increase Investment Programme 
“Russian Railways is looking at the possibility of increasing the company’s 2011 investment programme to RUR 413 billion, based on the results of the first nine months of this year. Initially, the company approved an investment budget of RUR 349 billion for the current year,” said Vladimir Yakunin, the President of Russian Railways, during a conference call on the company’s performance during the first nine months of this year.
According to Mr Yakunin, the 64-billion rouble increase in investment was made possible primarily by the range of measures the company implemented to reduce costs and increase efficiency at Russian Railways.
Additional funds of 20 RUR billion will be invested in implementing Olympic projects, RUR 15 billion in upgrading traction and railcar rolling stock, RUR 4 billion in implementing measures to protect rail infrastructure from acts of unlawful interference, more than RUR 4 billion in intermodal transport on the routes between Vladivostok – Kievichi and from Kazan railway station to Kazan International Airport , RUR 3.3 billion in rail passenger traffic on the Small Moscow Railway Ring and about RUR 6 billion in the acquisition and modernisation of track equipment and small machines and other miscellaneous equipment.
“We have already prepared the necessary documents so that the Board of Directors can consider these issues,” said Mr Yakunin.
During the first nine months of this year, the company’s investment budget amounted to a total of RUR 225.5 billion.

Russian Railways and British Government sign Memorandum of Understanding
On  September 12, 2011, during the visit of British Prime Minister David Cameron to Moscow, Russian Railways and the Government of the United Kingdom signed a Memorandum of Understanding.
The document was signed by Vladimir Yakunin, President of Russian Railways, and Lord Green, Britain’s Minister for Trade and Investment.
The signatories to the memorandum intend to cooperate on modernisation projects to turn Russian railway stations into transport hubs with advanced social and business functions.
Railway stations in St Petersburg, Tver and Rostov, as well as Yaroslavl – Main and Yaroslavl – Moscow, have been selected as pilot projects. Construction work is scheduled for completion in 2013-2015.
Cooperation is aimed at developing and strengthening the ties between Russian Railways and British companies and supporting and encouraging joint partnership programmes.
Priority areas for Russian-British cooperation include the joint preparation of construction documentation and the financing of railway station modernisation projects.
The parties will also exchange information with a view to attracting the latest British experience and encourage foreign investment in the Russian railway sector.

Kazakhstan Launches an Alternative to the North-South Corridor
The railway connecting Kazakhstan, Turkmenistan, and Iran is to be completed before the end of 2011. The route is Uzen’ (Kazakhstan) – Kyzylgaya – Bereket – Etrek (Turkmenia) – Gorgan (Iran). 
The project was developed as an alternative to the North-South corridor. The line via Kazakhstan and Turkmenistan is 600 kilometres shorter. The operator of the project is Kazakhstan Temir Zholy. The cost of the project is $417.7 million. The agreement between Kazakhstan, Turkmenistan, and Iran was signed in 2007, the construction started in 2009.  

RZD and Railways of the Slovak Republic Sign Memorandum of Cooperation
Vladimir Yakunin, President of Russian Railways, and Vladimir Luptak, CEO of Železnice Slovenskej Republiky (Railways of the Slovak Republic) signed a Memorandum of Cooperation in St Petersburg on October 14, 2011.
The two companies expressed their intention to cooperate on joint projects in the field of railway transportation in order to increase passenger and freight traffic using the Russian and Slovakian rail systems.
The Memorandum will facilitate the development and modernisation of transport infrastructure in the Slovak Republic, as well as mutual cooperation based on specific agreements, memoranda and specific projects to integrate the Russian and Slovak railway networks into pan-European and Eurasian transportation systems.
The companies also confirmed an agreement to continue their joint work within the framework of the project to extend a broad-gauge railway line to Bratislava and Vienna and to set up an international logistics centre.
In addition, the parties undertook to ensure the provision of efficient transport services on the basis of mutual benefits and the long-term interests of the Russian Federation and the Slovak Republic.

CIS Railway Administrations Approve Unified System for Managing And Using Freight Fleets
The 55th meeting of the Council for Rail Transport of CIS States, held on 29 October 2011 in the Armenian capital Yerevan, ended with representatives of railway administrations signing an agreement to set up a unified system for the management and use of freight wagons. Vladimir Yakunin, President of Russian Railways, signed the document on behalf of the company.
The process of reforming rail transportation and transitioning to a market economy has necessitated improvements to the system of international freight shipments.
At the moment, as part of the ongoing structural reforms in the industry, many railway administrations, including Russian Railways, are transferring their fleet of freight wagons to their subsidiaries.The Council for Rail Transport of CIS States therefore proposed setting up a unified system for the management and use of freight wagons to ensure the rational use of rolling stock belonging to different owners and to cut back on empty runs, etc. This should in turn reduce the costs of vehicle production and improve wagon performance.
Implementing the agreement will be closely linked with the preparation and adoption of specific changes and additions to existing regulations, as well as with adjustments to the software of the existing automated systems.

Number of Investors in the SEZ Grow More Than 20-Fold 
In 2006-2011, the number of companies investing in the special economic zones (SEZ) grew from 12 to 265. The news was announced by Igor Marychev, Head of the Port SEZ Development Sector at Special Economic Zones OJSC, at the IV international transport conference “St Petersburg – the Sea Capital of Russia. Transport and Transit Potential.”
In Russia, there are 24 special economic zones of tourist, industrial, port, and technical types. Participation in the programmes of such zones development allows investors to cut their expenses by 30%, and to receive other privileges and preferences. In the words of Mr Marychev, regional companies and exporters interested in construction of capacities for raw materials handling were the most active. “Large players chose a wait-and-see position,” he said.  

Agreements on the Taman Port Development Signed
In the framework of the international investment forum Sochi-2011, six investment agreements linked to the dry cargo section in the Taman sea port were concluded. Russian Transport Minister Igor Levitin and the Governor of the Krasnodar region Alexander Tkachyov signed six agreements on cooperation to develop infrastructure for cargo handling at the Taman sea port.
On the investors’ side, the agreements were signed by Alexander Iodchin, Executive Director of Global Ports Investments PLC (envisages the construction of a container terminal); Dmitry Strezhenov, CEO of EuroChem mineral and chemical company (a terminal for mineral fertilisers handling); Oleg Bukin, Director of UCL Holding B. V. (UCL Port B. V.) (terminals for coal, metal, and container handling); Sergey Levin, CEO of United Grain Company (a grain terminal); Eduard Potapov, CEO of Metalloinvest managing company (a terminal for iron-ore concentrate handling); and Vladimir Rashevsky, CEO of SUEK (a coal terminal).
The agreements were signed to attract investors to the project at the pre-design and design work stages, to define the freight base of the future dry cargo port section, and to organise interaction between the interested participants in the project.
The potential freight base of the dry cargo section of the Taman sea port may amount to approximately 79 million tons of cargo by the time the first stage of the terminal is put into operation (the figure was based on the integral estimation of data, including those on the mentioned producers and consignors).  
The project of development of the dry cargo section in the Taman sea port is being carried out in accordance with Decree №848 “On the Federal Target Programme “Transport System of Russia Development (2010-2015)” of the RF Government dated December 5, 2001. According to the Federal Target Programme, the total volume of financing is RUR 82,664.9 million. Of that, RUR 50,558.8 million will be from the federal budget, and RUR 32,106.1 million from non-budget sources.
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Vladimir Yakunin presents concept for strategic development of rail transport in CIS to 2020	
On October 18, Vladimir Yakunin, who in addition to being the President of RZD, is also the Chairman of the Council for Rail Transport of CIS States (CRT CIS), presented a concept for the strategic development of railway transport in the CIS member states until 2020 at a meeting of the council of CIS heads of government.
The purpose of the concept is to develop common approaches to the definition of strategic priorities for the development of railways in the CIS states and the formation of the market for transport services in the field of rail transport.
According to Mr Yakunin, implementation of the concept over the next 10 years will allow for the coordinated development of railway transport across the 1520mm broad gauge railway space and ensure a higher quality of services, further growth in the volume of passenger and freight traffic and increased revenues for transport companies.
This will in turn lead to increased profits, improved working conditions in the rail industry, increased safety and an improvement in the environmental performance of the railways.
This is the second such document. The first was produced 7 years ago and contained the main areas for cooperation, which were on the whole successfully implemented.

Sergey Ivanov Offers to Build a New Port in the North of Russia
Sergey Ivanov, Vice Prime Minister of the Russian Federation, considers that it is necessary to start construction of a new all-weather port in the Russian north.
“We need to develop the western part of the Murmansk Bay, to build a new port there. It is the only place in Russia, where an ocean non-freezing deep-sea port can be constructed,” said Mr Ivanov at the meeting of the Sea Board of the RF Government on September 20, 2011. In his opinion, the construction of the port should be started in the near future, and the project should be carried out on the principles of a public private partnership. 

RZD Plans to Increase Investment Programme 
“Russian Railways is looking at the possibility of increasing the company’s 2011 investment programme to RUR 413 billion, based on the results of the first nine months of this year. Initially, the company approved an investment budget of RUR 349 billion for the current year,” said Vladimir Yakunin, the President of Russian Railways, during a conference call on the company’s performance during the first nine months of this year.
According to Mr Yakunin, the 64-billion rouble increase in investment was made possible primarily by the range of measures the company implemented to reduce costs and increase efficiency at Russian Railways.
Additional funds of 20 RUR billion will be invested in implementing Olympic projects, RUR 15 billion in upgrading traction and railcar rolling stock, RUR 4 billion in implementing measures to protect rail infrastructure from acts of unlawful interference, more than RUR 4 billion in intermodal transport on the routes between Vladivostok – Kievichi and from Kazan railway station to Kazan International Airport , RUR 3.3 billion in rail passenger traffic on the Small Moscow Railway Ring and about RUR 6 billion in the acquisition and modernisation of track equipment and small machines and other miscellaneous equipment.
“We have already prepared the necessary documents so that the Board of Directors can consider these issues,” said Mr Yakunin.
During the first nine months of this year, the company’s investment budget amounted to a total of RUR 225.5 billion.

Russian Railways and British Government sign Memorandum of Understanding
On  September 12, 2011, during the visit of British Prime Minister David Cameron to Moscow, Russian Railways and the Government of the United Kingdom signed a Memorandum of Understanding.
The document was signed by Vladimir Yakunin, President of Russian Railways, and Lord Green, Britain’s Minister for Trade and Investment.
The signatories to the memorandum intend to cooperate on modernisation projects to turn Russian railway stations into transport hubs with advanced social and business functions.
Railway stations in St Petersburg, Tver and Rostov, as well as Yaroslavl – Main and Yaroslavl – Moscow, have been selected as pilot projects. Construction work is scheduled for completion in 2013-2015.
Cooperation is aimed at developing and strengthening the ties between Russian Railways and British companies and supporting and encouraging joint partnership programmes.
Priority areas for Russian-British cooperation include the joint preparation of construction documentation and the financing of railway station modernisation projects.
The parties will also exchange information with a view to attracting the latest British experience and encourage foreign investment in the Russian railway sector.

Kazakhstan Launches an Alternative to the North-South Corridor
The railway connecting Kazakhstan, Turkmenistan, and Iran is to be completed before the end of 2011. The route is Uzen’ (Kazakhstan) – Kyzylgaya – Bereket – Etrek (Turkmenia) – Gorgan (Iran). 
The project was developed as an alternative to the North-South corridor. The line via Kazakhstan and Turkmenistan is 600 kilometres shorter. The operator of the project is Kazakhstan Temir Zholy. The cost of the project is $417.7 million. The agreement between Kazakhstan, Turkmenistan, and Iran was signed in 2007, the construction started in 2009.  

RZD and Railways of the Slovak Republic Sign Memorandum of Cooperation
Vladimir Yakunin, President of Russian Railways, and Vladimir Luptak, CEO of Železnice Slovenskej Republiky (Railways of the Slovak Republic) signed a Memorandum of Cooperation in St Petersburg on October 14, 2011.
The two companies expressed their intention to cooperate on joint projects in the field of railway transportation in order to increase passenger and freight traffic using the Russian and Slovakian rail systems.
The Memorandum will facilitate the development and modernisation of transport infrastructure in the Slovak Republic, as well as mutual cooperation based on specific agreements, memoranda and specific projects to integrate the Russian and Slovak railway networks into pan-European and Eurasian transportation systems.
The companies also confirmed an agreement to continue their joint work within the framework of the project to extend a broad-gauge railway line to Bratislava and Vienna and to set up an international logistics centre.
In addition, the parties undertook to ensure the provision of efficient transport services on the basis of mutual benefits and the long-term interests of the Russian Federation and the Slovak Republic.

CIS Railway Administrations Approve Unified System for Managing And Using Freight Fleets
The 55th meeting of the Council for Rail Transport of CIS States, held on 29 October 2011 in the Armenian capital Yerevan, ended with representatives of railway administrations signing an agreement to set up a unified system for the management and use of freight wagons. Vladimir Yakunin, President of Russian Railways, signed the document on behalf of the company.
The process of reforming rail transportation and transitioning to a market economy has necessitated improvements to the system of international freight shipments.
At the moment, as part of the ongoing structural reforms in the industry, many railway administrations, including Russian Railways, are transferring their fleet of freight wagons to their subsidiaries.The Council for Rail Transport of CIS States therefore proposed setting up a unified system for the management and use of freight wagons to ensure the rational use of rolling stock belonging to different owners and to cut back on empty runs, etc. This should in turn reduce the costs of vehicle production and improve wagon performance.
Implementing the agreement will be closely linked with the preparation and adoption of specific changes and additions to existing regulations, as well as with adjustments to the software of the existing automated systems.

Number of Investors in the SEZ Grow More Than 20-Fold 
In 2006-2011, the number of companies investing in the special economic zones (SEZ) grew from 12 to 265. The news was announced by Igor Marychev, Head of the Port SEZ Development Sector at Special Economic Zones OJSC, at the IV international transport conference “St Petersburg – the Sea Capital of Russia. Transport and Transit Potential.”
In Russia, there are 24 special economic zones of tourist, industrial, port, and technical types. Participation in the programmes of such zones development allows investors to cut their expenses by 30%, and to receive other privileges and preferences. In the words of Mr Marychev, regional companies and exporters interested in construction of capacities for raw materials handling were the most active. “Large players chose a wait-and-see position,” he said.  

Agreements on the Taman Port Development Signed
In the framework of the international investment forum Sochi-2011, six investment agreements linked to the dry cargo section in the Taman sea port were concluded. Russian Transport Minister Igor Levitin and the Governor of the Krasnodar region Alexander Tkachyov signed six agreements on cooperation to develop infrastructure for cargo handling at the Taman sea port.
On the investors’ side, the agreements were signed by Alexander Iodchin, Executive Director of Global Ports Investments PLC (envisages the construction of a container terminal); Dmitry Strezhenov, CEO of EuroChem mineral and chemical company (a terminal for mineral fertilisers handling); Oleg Bukin, Director of UCL Holding B. V. (UCL Port B. V.) (terminals for coal, metal, and container handling); Sergey Levin, CEO of United Grain Company (a grain terminal); Eduard Potapov, CEO of Metalloinvest managing company (a terminal for iron-ore concentrate handling); and Vladimir Rashevsky, CEO of SUEK (a coal terminal).
The agreements were signed to attract investors to the project at the pre-design and design work stages, to define the freight base of the future dry cargo port section, and to organise interaction between the interested participants in the project.
The potential freight base of the dry cargo section of the Taman sea port may amount to approximately 79 million tons of cargo by the time the first stage of the terminal is put into operation (the figure was based on the integral estimation of data, including those on the mentioned producers and consignors).  
The project of development of the dry cargo section in the Taman sea port is being carried out in accordance with Decree №848 “On the Federal Target Programme “Transport System of Russia Development (2010-2015)” of the RF Government dated December 5, 2001. According to the Federal Target Programme, the total volume of financing is RUR 82,664.9 million. Of that, RUR 50,558.8 million will be from the federal budget, and RUR 32,106.1 million from non-budget sources.
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Vladimir Yakunin presents concept for strategic development of rail transport in CIS to 2020	
On October 18, Vladimir Yakunin, who in addition to being the President of RZD, is also the Chairman of the Council for Rail Transport of CIS States (CRT CIS), presented a concept for the strategic development of railway transport in the CIS member states until 2020 at a meeting of the council of CIS heads of government.
The purpose of the concept is to develop common approaches to the definition of strategic priorities for the development of railways in the CIS states and the formation of the market for transport services in the field of rail transport.
According to Mr Yakunin, implementation of the concept over the next 10 years will allow for the coordinated development of railway transport across the 1520mm broad gauge railway space and ensure a higher quality of services, further growth in the volume of passenger and freight traffic and increased revenues for transport companies.
This will in turn lead to increased profits, improved working conditions in the rail industry, increased safety and an improvement in the environmental performance of the railways.
This is the second such document. The first was produced 7 years ago and contained the main areas for cooperation, which were on the whole successfully implemented.

Sergey Ivanov Offers to Build a New Port in the North of Russia
Sergey Ivanov, Vice Prime Minister of the Russian Federation, considers that it is necessary to start construction of a new all-weather port in the Russian north.
“We need to develop the western part of the Murmansk Bay, to build a new port there. It is the only place in Russia, where an ocean non-freezing deep-sea port can be constructed,” said Mr Ivanov at the meeting of the Sea Board of the RF Government on September 20, 2011. In his opinion, the construction of the port should be started in the near future, and the project should be carried out on the principles of a public private partnership. 

RZD Plans to Increase Investment Programme 
“Russian Railways is looking at the possibility of increasing the company’s 2011 investment programme to RUR 413 billion, based on the results of the first nine months of this year. Initially, the company approved an investment budget of RUR 349 billion for the current year,” said Vladimir Yakunin, the President of Russian Railways, during a conference call on the company’s performance during the first nine months of this year.
According to Mr Yakunin, the 64-billion rouble increase in investment was made possible primarily by the range of measures the company implemented to reduce costs and increase efficiency at Russian Railways.
Additional funds of 20 RUR billion will be invested in implementing Olympic projects, RUR 15 billion in upgrading traction and railcar rolling stock, RUR 4 billion in implementing measures to protect rail infrastructure from acts of unlawful interference, more than RUR 4 billion in intermodal transport on the routes between Vladivostok – Kievichi and from Kazan railway station to Kazan International Airport , RUR 3.3 billion in rail passenger traffic on the Small Moscow Railway Ring and about RUR 6 billion in the acquisition and modernisation of track equipment and small machines and other miscellaneous equipment.
“We have already prepared the necessary documents so that the Board of Directors can consider these issues,” said Mr Yakunin.
During the first nine months of this year, the company’s investment budget amounted to a total of RUR 225.5 billion.

Russian Railways and British Government sign Memorandum of Understanding
On  September 12, 2011, during the visit of British Prime Minister David Cameron to Moscow, Russian Railways and the Government of the United Kingdom signed a Memorandum of Understanding.
The document was signed by Vladimir Yakunin, President of Russian Railways, and Lord Green, Britain’s Minister for Trade and Investment.
The signatories to the memorandum intend to cooperate on modernisation projects to turn Russian railway stations into transport hubs with advanced social and business functions.
Railway stations in St Petersburg, Tver and Rostov, as well as Yaroslavl – Main and Yaroslavl – Moscow, have been selected as pilot projects. Construction work is scheduled for completion in 2013-2015.
Cooperation is aimed at developing and strengthening the ties between Russian Railways and British companies and supporting and encouraging joint partnership programmes.
Priority areas for Russian-British cooperation include the joint preparation of construction documentation and the financing of railway station modernisation projects.
The parties will also exchange information with a view to attracting the latest British experience and encourage foreign investment in the Russian railway sector.

Kazakhstan Launches an Alternative to the North-South Corridor
The railway connecting Kazakhstan, Turkmenistan, and Iran is to be completed before the end of 2011. The route is Uzen’ (Kazakhstan) – Kyzylgaya – Bereket – Etrek (Turkmenia) – Gorgan (Iran). 
The project was developed as an alternative to the North-South corridor. The line via Kazakhstan and Turkmenistan is 600 kilometres shorter. The operator of the project is Kazakhstan Temir Zholy. The cost of the project is $417.7 million. The agreement between Kazakhstan, Turkmenistan, and Iran was signed in 2007, the construction started in 2009.  

RZD and Railways of the Slovak Republic Sign Memorandum of Cooperation
Vladimir Yakunin, President of Russian Railways, and Vladimir Luptak, CEO of Železnice Slovenskej Republiky (Railways of the Slovak Republic) signed a Memorandum of Cooperation in St Petersburg on October 14, 2011.
The two companies expressed their intention to cooperate on joint projects in the field of railway transportation in order to increase passenger and freight traffic using the Russian and Slovakian rail systems.
The Memorandum will facilitate the development and modernisation of transport infrastructure in the Slovak Republic, as well as mutual cooperation based on specific agreements, memoranda and specific projects to integrate the Russian and Slovak railway networks into pan-European and Eurasian transportation systems.
The companies also confirmed an agreement to continue their joint work within the framework of the project to extend a broad-gauge railway line to Bratislava and Vienna and to set up an international logistics centre.
In addition, the parties undertook to ensure the provision of efficient transport services on the basis of mutual benefits and the long-term interests of the Russian Federation and the Slovak Republic.

CIS Railway Administrations Approve Unified System for Managing And Using Freight Fleets
The 55th meeting of the Council for Rail Transport of CIS States, held on 29 October 2011 in the Armenian capital Yerevan, ended with representatives of railway administrations signing an agreement to set up a unified system for the management and use of freight wagons. Vladimir Yakunin, President of Russian Railways, signed the document on behalf of the company.
The process of reforming rail transportation and transitioning to a market economy has necessitated improvements to the system of international freight shipments.
At the moment, as part of the ongoing structural reforms in the industry, many railway administrations, including Russian Railways, are transferring their fleet of freight wagons to their subsidiaries.The Council for Rail Transport of CIS States therefore proposed setting up a unified system for the management and use of freight wagons to ensure the rational use of rolling stock belonging to different owners and to cut back on empty runs, etc. This should in turn reduce the costs of vehicle production and improve wagon performance.
Implementing the agreement will be closely linked with the preparation and adoption of specific changes and additions to existing regulations, as well as with adjustments to the software of the existing automated systems.

Number of Investors in the SEZ Grow More Than 20-Fold 
In 2006-2011, the number of companies investing in the special economic zones (SEZ) grew from 12 to 265. The news was announced by Igor Marychev, Head of the Port SEZ Development Sector at Special Economic Zones OJSC, at the IV international transport conference “St Petersburg – the Sea Capital of Russia. Transport and Transit Potential.”
In Russia, there are 24 special economic zones of tourist, industrial, port, and technical types. Participation in the programmes of such zones development allows investors to cut their expenses by 30%, and to receive other privileges and preferences. In the words of Mr Marychev, regional companies and exporters interested in construction of capacities for raw materials handling were the most active. “Large players chose a wait-and-see position,” he said.  

Agreements on the Taman Port Development Signed
In the framework of the international investment forum Sochi-2011, six investment agreements linked to the dry cargo section in the Taman sea port were concluded. Russian Transport Minister Igor Levitin and the Governor of the Krasnodar region Alexander Tkachyov signed six agreements on cooperation to develop infrastructure for cargo handling at the Taman sea port.
On the investors’ side, the agreements were signed by Alexander Iodchin, Executive Director of Global Ports Investments PLC (envisages the construction of a container terminal); Dmitry Strezhenov, CEO of EuroChem mineral and chemical company (a terminal for mineral fertilisers handling); Oleg Bukin, Director of UCL Holding B. V. (UCL Port B. V.) (terminals for coal, metal, and container handling); Sergey Levin, CEO of United Grain Company (a grain terminal); Eduard Potapov, CEO of Metalloinvest managing company (a terminal for iron-ore concentrate handling); and Vladimir Rashevsky, CEO of SUEK (a coal terminal).
The agreements were signed to attract investors to the project at the pre-design and design work stages, to define the freight base of the future dry cargo port section, and to organise interaction between the interested participants in the project.
The potential freight base of the dry cargo section of the Taman sea port may amount to approximately 79 million tons of cargo by the time the first stage of the terminal is put into operation (the figure was based on the integral estimation of data, including those on the mentioned producers and consignors).  
The project of development of the dry cargo section in the Taman sea port is being carried out in accordance with Decree №848 “On the Federal Target Programme “Transport System of Russia Development (2010-2015)” of the RF Government dated December 5, 2001. According to the Federal Target Programme, the total volume of financing is RUR 82,664.9 million. Of that, RUR 50,558.8 million will be from the federal budget, and RUR 32,106.1 million from non-budget sources.
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Vladimir Yakunin presents concept for strategic development of rail transport in CIS to 2020	
On October 18, Vladimir Yakunin, who in addition to being the President of RZD, is also the Chairman of the Council for Rail Transport of CIS States (CRT CIS), presented a concept for the strategic development of railway transport in the CIS member states until 2020 at a meeting of the council of CIS heads of government.
The purpose of the concept is to develop common approaches to the definition of strategic priorities for the development of railways in the CIS states and the formation of the market for transport services in the field of rail transport.
According to Mr Yakunin, implementation of the concept over the next 10 years will allow for the coordinated development of railway transport across the 1520mm broad gauge railway space and ensure a higher quality of services, further growth in the volume of passenger and freight traffic and increased revenues for transport companies.
This will in turn lead to increased profits, improved working conditions in the rail industry, increased safety and an improvement in the environmental performance of the railways.
This is the second such document. The first was produced 7 years ago and contained the main areas for cooperation, which were on the whole successfully implemented.

Sergey Ivanov Offers to Build a New Port in the North of Russia
Sergey Ivanov, Vice Prime Minister of the Russian Federation, considers that it is necessary to start construction of a new all-weather port in the Russian north.
“We need to develop the western part of the Murmansk Bay, to build a new port there. It is the only place in Russia, where an ocean non-freezing deep-sea port can be constructed,” said Mr Ivanov at the meeting of the Sea Board of the RF Government on September 20, 2011. In his opinion, the construction of the port should be started in the near future, and the project should be carried out on the principles of a public private partnership. 

RZD Plans to Increase Investment Programme 
“Russian Railways is looking at the possibility of increasing the company’s 2011 investment programme to RUR 413 billion, based on the results of the first nine months of this year. Initially, the company approved an investment budget of RUR 349 billion for the current year,” said Vladimir Yakunin, the President of Russian Railways, during a conference call on the company’s performance during the first nine months of this year.
According to Mr Yakunin, the 64-billion rouble increase in investment was made possible primarily by the range of measures the company implemented to reduce costs and increase efficiency at Russian Railways.
Additional funds of 20 RUR billion will be invested in implementing Olympic projects, RUR 15 billion in upgrading traction and railcar rolling stock, RUR 4 billion in implementing measures to protect rail infrastructure from acts of unlawful interference, more than RUR 4 billion in intermodal transport on the routes between Vladivostok – Kievichi and from Kazan railway station to Kazan International Airport , RUR 3.3 billion in rail passenger traffic on the Small Moscow Railway Ring and about RUR 6 billion in the acquisition and modernisation of track equipment and small machines and other miscellaneous equipment.
“We have already prepared the necessary documents so that the Board of Directors can consider these issues,” said Mr Yakunin.
During the first nine months of this year, the company’s investment budget amounted to a total of RUR 225.5 billion.

Russian Railways and British Government sign Memorandum of Understanding
On  September 12, 2011, during the visit of British Prime Minister David Cameron to Moscow, Russian Railways and the Government of the United Kingdom signed a Memorandum of Understanding.
The document was signed by Vladimir Yakunin, President of Russian Railways, and Lord Green, Britain’s Minister for Trade and Investment.
The signatories to the memorandum intend to cooperate on modernisation projects to turn Russian railway stations into transport hubs with advanced social and business functions.
Railway stations in St Petersburg, Tver and Rostov, as well as Yaroslavl – Main and Yaroslavl – Moscow, have been selected as pilot projects. Construction work is scheduled for completion in 2013-2015.
Cooperation is aimed at developing and strengthening the ties between Russian Railways and British companies and supporting and encouraging joint partnership programmes.
Priority areas for Russian-British cooperation include the joint preparation of construction documentation and the financing of railway station modernisation projects.
The parties will also exchange information with a view to attracting the latest British experience and encourage foreign investment in the Russian railway sector.

Kazakhstan Launches an Alternative to the North-South Corridor
The railway connecting Kazakhstan, Turkmenistan, and Iran is to be completed before the end of 2011. The route is Uzen’ (Kazakhstan) – Kyzylgaya – Bereket – Etrek (Turkmenia) – Gorgan (Iran). 
The project was developed as an alternative to the North-South corridor. The line via Kazakhstan and Turkmenistan is 600 kilometres shorter. The operator of the project is Kazakhstan Temir Zholy. The cost of the project is $417.7 million. The agreement between Kazakhstan, Turkmenistan, and Iran was signed in 2007, the construction started in 2009.  

RZD and Railways of the Slovak Republic Sign Memorandum of Cooperation
Vladimir Yakunin, President of Russian Railways, and Vladimir Luptak, CEO of Železnice Slovenskej Republiky (Railways of the Slovak Republic) signed a Memorandum of Cooperation in St Petersburg on October 14, 2011.
The two companies expressed their intention to cooperate on joint projects in the field of railway transportation in order to increase passenger and freight traffic using the Russian and Slovakian rail systems.
The Memorandum will facilitate the development and modernisation of transport infrastructure in the Slovak Republic, as well as mutual cooperation based on specific agreements, memoranda and specific projects to integrate the Russian and Slovak railway networks into pan-European and Eurasian transportation systems.
The companies also confirmed an agreement to continue their joint work within the framework of the project to extend a broad-gauge railway line to Bratislava and Vienna and to set up an international logistics centre.
In addition, the parties undertook to ensure the provision of efficient transport services on the basis of mutual benefits and the long-term interests of the Russian Federation and the Slovak Republic.

CIS Railway Administrations Approve Unified System for Managing And Using Freight Fleets
The 55th meeting of the Council for Rail Transport of CIS States, held on 29 October 2011 in the Armenian capital Yerevan, ended with representatives of railway administrations signing an agreement to set up a unified system for the management and use of freight wagons. Vladimir Yakunin, President of Russian Railways, signed the document on behalf of the company.
The process of reforming rail transportation and transitioning to a market economy has necessitated improvements to the system of international freight shipments.
At the moment, as part of the ongoing structural reforms in the industry, many railway administrations, including Russian Railways, are transferring their fleet of freight wagons to their subsidiaries.The Council for Rail Transport of CIS States therefore proposed setting up a unified system for the management and use of freight wagons to ensure the rational use of rolling stock belonging to different owners and to cut back on empty runs, etc. This should in turn reduce the costs of vehicle production and improve wagon performance.
Implementing the agreement will be closely linked with the preparation and adoption of specific changes and additions to existing regulations, as well as with adjustments to the software of the existing automated systems.

Number of Investors in the SEZ Grow More Than 20-Fold 
In 2006-2011, the number of companies investing in the special economic zones (SEZ) grew from 12 to 265. The news was announced by Igor Marychev, Head of the Port SEZ Development Sector at Special Economic Zones OJSC, at the IV international transport conference “St Petersburg – the Sea Capital of Russia. Transport and Transit Potential.”
In Russia, there are 24 special economic zones of tourist, industrial, port, and technical types. Participation in the programmes of such zones development allows investors to cut their expenses by 30%, and to receive other privileges and preferences. In the words of Mr Marychev, regional companies and exporters interested in construction of capacities for raw materials handling were the most active. “Large players chose a wait-and-see position,” he said.  

Agreements on the Taman Port Development Signed
In the framework of the international investment forum Sochi-2011, six investment agreements linked to the dry cargo section in the Taman sea port were concluded. Russian Transport Minister Igor Levitin and the Governor of the Krasnodar region Alexander Tkachyov signed six agreements on cooperation to develop infrastructure for cargo handling at the Taman sea port.
On the investors’ side, the agreements were signed by Alexander Iodchin, Executive Director of Global Ports Investments PLC (envisages the construction of a container terminal); Dmitry Strezhenov, CEO of EuroChem mineral and chemical company (a terminal for mineral fertilisers handling); Oleg Bukin, Director of UCL Holding B. V. (UCL Port B. V.) (terminals for coal, metal, and container handling); Sergey Levin, CEO of United Grain Company (a grain terminal); Eduard Potapov, CEO of Metalloinvest managing company (a terminal for iron-ore concentrate handling); and Vladimir Rashevsky, CEO of SUEK (a coal terminal).
The agreements were signed to attract investors to the project at the pre-design and design work stages, to define the freight base of the future dry cargo port section, and to organise interaction between the interested participants in the project.
The potential freight base of the dry cargo section of the Taman sea port may amount to approximately 79 million tons of cargo by the time the first stage of the terminal is put into operation (the figure was based on the integral estimation of data, including those on the mentioned producers and consignors).  
The project of development of the dry cargo section in the Taman sea port is being carried out in accordance with Decree №848 “On the Federal Target Programme “Transport System of Russia Development (2010-2015)” of the RF Government dated December 5, 2001. According to the Federal Target Programme, the total volume of financing is RUR 82,664.9 million. Of that, RUR 50,558.8 million will be from the federal budget, and RUR 32,106.1 million from non-budget sources.
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RZD to boost investments
Joint Stock Company (JSC) UBR was established as a result of an agreement reached in 1949 between the USSR and the Mongolian governments. Each party to a contract holds an equal stake in the statutory capital. It goes without saying that the USSR at that time was helping Mongolia to develop its industrial production and infrastructure, mostly in non-ferrous metallurgy and railways. But for years between 1991 and 2000 cooperation was practically suspended - Russia curtailed its development project and almost left Mongolia. It helped China to successfully replace Russia in this partnership.
However, taking into account high investment to equip and maintain Mongolian railways, a joint venture (JV) to develop railway infrastructure was created in 2009. A limited liability company (LLC) “Infrastructure development” was co-founded by RZD (with a 50% share), state-owned Mongolian Railways (25%) and Erdenes MGL (25%). It was announced that charter capital of JV would be about USD 1.8 million.
According to the Decree, not long after it was signed by Dmitry Medvedev, RZD received 50% stake in UBR. In addition, it is expected that RZD will manage this equity stake for a period of 5 years. The main direction of the cooperation between two companies is improving the performance of UBR. Also RZD, in cooperation with companies concerned, is going to take part in projects on developing coal deposits in Mongolia, including building new lines to the mines.
Attraction of foreign investment became possible also due to the fact that the Mongolian government in 2007 passed a law that allowed mining companies to construct new routes to the opencast mines. The whole point is that this law eradicated the monopoly of railway and gave private companies the ability to develop their own infrastructure. Thus, in 2008 the building of a branch line to Tumurtey iron oil deposit, which is situated close to Russian border, was started.
Today the extent of Mongolian railroads is about 2.000 km. The general length of sections requiring the major repair is about 50%. It is obvious the UBR needs to be modernized. Therefore the questions of increasing the authorized capital were discussed during the meeting of shareholders in 2009, when the First Vice President of RZD Vadim Morozov was elected as the CEO of UBR.
“It is important to finish all the international procedures of the authorized capital increase by USD 250 million in time. Moreover, we have to take some serious and concrete steps to settle the problem of economically accepted domestic, export and transit fares,” said Vadim Morozov. 
According to Morozov, solution applied may lead to straightening out the financial situation in UBR, and provide its cost-effective work.

Facing the difficulties
So far, despite reaching numerous agreements, Russia and Mongolia seemed to have failed to agree on a concerted strategy to develop Mongolian railways. Factions lead Russia to refuse to invest USD 125 million this year. 
During the Moscow visit of Tsakhiagiin Elbegdorj, the President of Mongolia, it became obvious why Russia intended to give up investments. After the collapse of the USSR, parties agreed that in all joint ventures 49% of shares will be owned by Russia and 51% will belong to Mongolia. But UBR was divided in half.
For the last ten years Mongolia party is unsuccessfully trying to increase its share in company, referring to domestic laws. Moreover, Ulan-Bator wants to levy an income tax on company’s dividend.
It will be recalled that at the end of last year Mongolia’s Ministry of Finance claimed that the Russian party should contribute its half of the authorized capital to UBR. The other half should be deposited by Mongolia. Such steps are required because, despite the increase in cargo and passenger traffic, UBR can’t manage to make a technical reconstruction without any side help. More than 65% of rolling stock is expired; about 400 km of railroad have to be reconditioned.
But this autumn Russian Ministry of Finance announced amendments to federal budget. As it was said, government refused to invest capital spending sites. Thereby the modernization of UBR is postponed.

The battle of Tavan Tolgoi
This September Mongolia decided to suspend agreement on development of one of the largest untapped reserves of coal in the world Tavan Talgoi. The Mongolia National Safety Council claimed they wanted to revise participants’ stakes in this project. It is vital to note that RZD wanted to get access to Tavan Talgoi without any competition. But authorities of Mongolia offered the coal mine for sale. Therefore Russian company had to fight for it without special preferences.
Among 15 companies applying were steelmaker ArcelorMittal, Brazilian miner Vale, global diversified mining group Xtrata, consortium of Japanese Mitsui and Chinese Shenhua, American Peabody, Australian Fortescue Metals, Indian Mesco Teel and Chinese Erdos.
In July the government of Mongolia announced that an alliance headed by China Shenhua Energy would get a 40% stake in a project, Peabody Energy – 24% and a consortium headed by RZD – 36%. Apart from the Russian company, the other participants of consortium are Siberian Coal Energy Company, Korean Resourses Corporation, POSCO, KEPCO, LG, Daewoo and also Japanese Itochu, Sumitomo, Marubeni and Sojitz.
Tavan Tolgoi is an open pit coal mine in the district of Tsogttsetsii sum, south of Mongolia. It is claimed to be one of the largest reserves in the world, because it contains about 6.5 billion tonnes of coal (40% of it is coking coal with high calorific value). In comparison, reserves of the Russian largest coal deposit of Elginskoe, situated in Yakutia, are about 2 billion tonnes.
A coal Partial development of Tavan Tolgoi began in 1967. Mongolia divided it into two zones. One should be ruled by the group of international mining companies, other is being ruled by the state company Erdenes Tavan Tolgoi (50% belongs to the government, 50% is distributed among investors and citizens).
Under the terms of competition, the consortium headed by RZD also had to build 400 km of track from Tavan Tolgoi to Saishand, connecting it with the North-South Trans Mongolian rail line and Russia.
Except for building this route, Russia also offered to modernize the UBR rail line in that area, where it should be connected with new branch. Also the Russian-Korean-Japanese consortium role implies the use of far-eastern port powers.
Due to the large number of participants in projects, the danger that one company would make an effort to augment its stake at the expense of other participants arised. “I can’t imagine how swan, crab and pike are going to drive this cart,” said the President of RZD Vladimir Yakunin, quoting the Russian saying. He also claimed that inconsistency of the authorities of Mongolia leads to uncertainty for investors.
However, this October Mongolia decided to continue negotiating with prospective investors, including Japanese and Korean companies that didn’t succeed in the competition. But reaching the agreement will take some months. According to the Mongolian party, negotiations may be finished in June, when parliamentary elections will take place.
Anyway, UBR can’t get by without RZD’s help, because Mongolia uses 1520 mm gauge like in Russia (in neighboring China they are 1435 mm), therefore both countries can gain much from their cooperation.

A close liaison
Modern relations between the two countries may be followed by a number of conflicts, but in any case Russia and Mongolia are also tied by a common railway route from the border point of Erlian in China to the Transsiberian railway, the station of Naushki situated close to Russo-Mongolian border. The main benefit of this way is the possibility of fast cargoes delivery from Chinese producers to European consumers. It was declared this year by Vadim Morozov at the XVI International Transport & Logistics Exhibition and Conference “TransRussia”.
“There are obvious advantages here. Such as a short route, unitary gauge width, common technical standards and, in prospect, the single base of information and technology,” said Vadim Morozov.
Nowadays major trade routes connecting China, Russia and Europe run through the Ports of Vladivostok and Novorossiysk, Zabaykalsk, Kazakh-China border and others. But the advantageous location of Mongolia may help to save the time spent on transporting. The problem still is the low throughput of the UBR network. Also leading companies got used to rolled routes; therefore they are not going to come to Mongolia before the whole modernization of the country’s railway has taken place.
But specialized container trains “Mongolian Vector” and «Mongolian Vector – Zhui» running through Naushki to Europe are showing the viability of the project. It is obvious that this rate considerably cuts the expenditure on transportation. It takes 10-12 days to deliver cargoes from Ulan-Bator to Brest, which is three times quicker than shipping goods via ports. 
As for cargo owners, they are always looking to reduce the price of logistics. And Mongolia, with its low fares, may profit very soon.
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RZD to boost investments
Joint Stock Company (JSC) UBR was established as a result of an agreement reached in 1949 between the USSR and the Mongolian governments. Each party to a contract holds an equal stake in the statutory capital. It goes without saying that the USSR at that time was helping Mongolia to develop its industrial production and infrastructure, mostly in non-ferrous metallurgy and railways. But for years between 1991 and 2000 cooperation was practically suspended - Russia curtailed its development project and almost left Mongolia. It helped China to successfully replace Russia in this partnership.
However, taking into account high investment to equip and maintain Mongolian railways, a joint venture (JV) to develop railway infrastructure was created in 2009. A limited liability company (LLC) “Infrastructure development” was co-founded by RZD (with a 50% share), state-owned Mongolian Railways (25%) and Erdenes MGL (25%). It was announced that charter capital of JV would be about USD 1.8 million.
According to the Decree, not long after it was signed by Dmitry Medvedev, RZD received 50% stake in UBR. In addition, it is expected that RZD will manage this equity stake for a period of 5 years. The main direction of the cooperation between two companies is improving the performance of UBR. Also RZD, in cooperation with companies concerned, is going to take part in projects on developing coal deposits in Mongolia, including building new lines to the mines.
Attraction of foreign investment became possible also due to the fact that the Mongolian government in 2007 passed a law that allowed mining companies to construct new routes to the opencast mines. The whole point is that this law eradicated the monopoly of railway and gave private companies the ability to develop their own infrastructure. Thus, in 2008 the building of a branch line to Tumurtey iron oil deposit, which is situated close to Russian border, was started.
Today the extent of Mongolian railroads is about 2.000 km. The general length of sections requiring the major repair is about 50%. It is obvious the UBR needs to be modernized. Therefore the questions of increasing the authorized capital were discussed during the meeting of shareholders in 2009, when the First Vice President of RZD Vadim Morozov was elected as the CEO of UBR.
“It is important to finish all the international procedures of the authorized capital increase by USD 250 million in time. Moreover, we have to take some serious and concrete steps to settle the problem of economically accepted domestic, export and transit fares,” said Vadim Morozov. 
According to Morozov, solution applied may lead to straightening out the financial situation in UBR, and provide its cost-effective work.

Facing the difficulties
So far, despite reaching numerous agreements, Russia and Mongolia seemed to have failed to agree on a concerted strategy to develop Mongolian railways. Factions lead Russia to refuse to invest USD 125 million this year. 
During the Moscow visit of Tsakhiagiin Elbegdorj, the President of Mongolia, it became obvious why Russia intended to give up investments. After the collapse of the USSR, parties agreed that in all joint ventures 49% of shares will be owned by Russia and 51% will belong to Mongolia. But UBR was divided in half.
For the last ten years Mongolia party is unsuccessfully trying to increase its share in company, referring to domestic laws. Moreover, Ulan-Bator wants to levy an income tax on company’s dividend.
It will be recalled that at the end of last year Mongolia’s Ministry of Finance claimed that the Russian party should contribute its half of the authorized capital to UBR. The other half should be deposited by Mongolia. Such steps are required because, despite the increase in cargo and passenger traffic, UBR can’t manage to make a technical reconstruction without any side help. More than 65% of rolling stock is expired; about 400 km of railroad have to be reconditioned.
But this autumn Russian Ministry of Finance announced amendments to federal budget. As it was said, government refused to invest capital spending sites. Thereby the modernization of UBR is postponed.

The battle of Tavan Tolgoi
This September Mongolia decided to suspend agreement on development of one of the largest untapped reserves of coal in the world Tavan Talgoi. The Mongolia National Safety Council claimed they wanted to revise participants’ stakes in this project. It is vital to note that RZD wanted to get access to Tavan Talgoi without any competition. But authorities of Mongolia offered the coal mine for sale. Therefore Russian company had to fight for it without special preferences.
Among 15 companies applying were steelmaker ArcelorMittal, Brazilian miner Vale, global diversified mining group Xtrata, consortium of Japanese Mitsui and Chinese Shenhua, American Peabody, Australian Fortescue Metals, Indian Mesco Teel and Chinese Erdos.
In July the government of Mongolia announced that an alliance headed by China Shenhua Energy would get a 40% stake in a project, Peabody Energy – 24% and a consortium headed by RZD – 36%. Apart from the Russian company, the other participants of consortium are Siberian Coal Energy Company, Korean Resourses Corporation, POSCO, KEPCO, LG, Daewoo and also Japanese Itochu, Sumitomo, Marubeni and Sojitz.
Tavan Tolgoi is an open pit coal mine in the district of Tsogttsetsii sum, south of Mongolia. It is claimed to be one of the largest reserves in the world, because it contains about 6.5 billion tonnes of coal (40% of it is coking coal with high calorific value). In comparison, reserves of the Russian largest coal deposit of Elginskoe, situated in Yakutia, are about 2 billion tonnes.
A coal Partial development of Tavan Tolgoi began in 1967. Mongolia divided it into two zones. One should be ruled by the group of international mining companies, other is being ruled by the state company Erdenes Tavan Tolgoi (50% belongs to the government, 50% is distributed among investors and citizens).
Under the terms of competition, the consortium headed by RZD also had to build 400 km of track from Tavan Tolgoi to Saishand, connecting it with the North-South Trans Mongolian rail line and Russia.
Except for building this route, Russia also offered to modernize the UBR rail line in that area, where it should be connected with new branch. Also the Russian-Korean-Japanese consortium role implies the use of far-eastern port powers.
Due to the large number of participants in projects, the danger that one company would make an effort to augment its stake at the expense of other participants arised. “I can’t imagine how swan, crab and pike are going to drive this cart,” said the President of RZD Vladimir Yakunin, quoting the Russian saying. He also claimed that inconsistency of the authorities of Mongolia leads to uncertainty for investors.
However, this October Mongolia decided to continue negotiating with prospective investors, including Japanese and Korean companies that didn’t succeed in the competition. But reaching the agreement will take some months. According to the Mongolian party, negotiations may be finished in June, when parliamentary elections will take place.
Anyway, UBR can’t get by without RZD’s help, because Mongolia uses 1520 mm gauge like in Russia (in neighboring China they are 1435 mm), therefore both countries can gain much from their cooperation.

A close liaison
Modern relations between the two countries may be followed by a number of conflicts, but in any case Russia and Mongolia are also tied by a common railway route from the border point of Erlian in China to the Transsiberian railway, the station of Naushki situated close to Russo-Mongolian border. The main benefit of this way is the possibility of fast cargoes delivery from Chinese producers to European consumers. It was declared this year by Vadim Morozov at the XVI International Transport & Logistics Exhibition and Conference “TransRussia”.
“There are obvious advantages here. Such as a short route, unitary gauge width, common technical standards and, in prospect, the single base of information and technology,” said Vadim Morozov.
Nowadays major trade routes connecting China, Russia and Europe run through the Ports of Vladivostok and Novorossiysk, Zabaykalsk, Kazakh-China border and others. But the advantageous location of Mongolia may help to save the time spent on transporting. The problem still is the low throughput of the UBR network. Also leading companies got used to rolled routes; therefore they are not going to come to Mongolia before the whole modernization of the country’s railway has taken place.
But specialized container trains “Mongolian Vector” and «Mongolian Vector – Zhui» running through Naushki to Europe are showing the viability of the project. It is obvious that this rate considerably cuts the expenditure on transportation. It takes 10-12 days to deliver cargoes from Ulan-Bator to Brest, which is three times quicker than shipping goods via ports. 
As for cargo owners, they are always looking to reduce the price of logistics. And Mongolia, with its low fares, may profit very soon.
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            [SECTION_META_DESCRIPTION] => <img src="/ufiles/image/rus/inter/2011/4/4.jpg" border="1" alt=" " hspace="5" width="300" height="200" align="left" />It is an open secret that Mongolia puts the development and modernization of railway infrastructure at the top of its priority list, because this country is an important transport corridor connecting Russia and China. Today Ulan-Bator Railways (UBR) account for about 80% of national cargo flows, and about 100% of import and export flows. In 2009 half of the company’s stake was handed over by the administration of the Russian Federation to Russian Railways, which made it possible to set a bold new course for UBR.
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            [ELEMENT_META_DESCRIPTION] => <img src="/ufiles/image/rus/inter/2011/4/4.jpg" border="1" alt=" " hspace="5" width="300" height="200" align="left" />It is an open secret that Mongolia puts the development and modernization of railway infrastructure at the top of its priority list, because this country is an important transport corridor connecting Russia and China. Today Ulan-Bator Railways (UBR) account for about 80% of national cargo flows, and about 100% of import and export flows. In 2009 half of the company’s stake was handed over by the administration of the Russian Federation to Russian Railways, which made it possible to set a bold new course for UBR.
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RZD to boost investments
Joint Stock Company (JSC) UBR was established as a result of an agreement reached in 1949 between the USSR and the Mongolian governments. Each party to a contract holds an equal stake in the statutory capital. It goes without saying that the USSR at that time was helping Mongolia to develop its industrial production and infrastructure, mostly in non-ferrous metallurgy and railways. But for years between 1991 and 2000 cooperation was practically suspended - Russia curtailed its development project and almost left Mongolia. It helped China to successfully replace Russia in this partnership.
However, taking into account high investment to equip and maintain Mongolian railways, a joint venture (JV) to develop railway infrastructure was created in 2009. A limited liability company (LLC) “Infrastructure development” was co-founded by RZD (with a 50% share), state-owned Mongolian Railways (25%) and Erdenes MGL (25%). It was announced that charter capital of JV would be about USD 1.8 million.
According to the Decree, not long after it was signed by Dmitry Medvedev, RZD received 50% stake in UBR. In addition, it is expected that RZD will manage this equity stake for a period of 5 years. The main direction of the cooperation between two companies is improving the performance of UBR. Also RZD, in cooperation with companies concerned, is going to take part in projects on developing coal deposits in Mongolia, including building new lines to the mines.
Attraction of foreign investment became possible also due to the fact that the Mongolian government in 2007 passed a law that allowed mining companies to construct new routes to the opencast mines. The whole point is that this law eradicated the monopoly of railway and gave private companies the ability to develop their own infrastructure. Thus, in 2008 the building of a branch line to Tumurtey iron oil deposit, which is situated close to Russian border, was started.
Today the extent of Mongolian railroads is about 2.000 km. The general length of sections requiring the major repair is about 50%. It is obvious the UBR needs to be modernized. Therefore the questions of increasing the authorized capital were discussed during the meeting of shareholders in 2009, when the First Vice President of RZD Vadim Morozov was elected as the CEO of UBR.
“It is important to finish all the international procedures of the authorized capital increase by USD 250 million in time. Moreover, we have to take some serious and concrete steps to settle the problem of economically accepted domestic, export and transit fares,” said Vadim Morozov. 
According to Morozov, solution applied may lead to straightening out the financial situation in UBR, and provide its cost-effective work.

Facing the difficulties
So far, despite reaching numerous agreements, Russia and Mongolia seemed to have failed to agree on a concerted strategy to develop Mongolian railways. Factions lead Russia to refuse to invest USD 125 million this year. 
During the Moscow visit of Tsakhiagiin Elbegdorj, the President of Mongolia, it became obvious why Russia intended to give up investments. After the collapse of the USSR, parties agreed that in all joint ventures 49% of shares will be owned by Russia and 51% will belong to Mongolia. But UBR was divided in half.
For the last ten years Mongolia party is unsuccessfully trying to increase its share in company, referring to domestic laws. Moreover, Ulan-Bator wants to levy an income tax on company’s dividend.
It will be recalled that at the end of last year Mongolia’s Ministry of Finance claimed that the Russian party should contribute its half of the authorized capital to UBR. The other half should be deposited by Mongolia. Such steps are required because, despite the increase in cargo and passenger traffic, UBR can’t manage to make a technical reconstruction without any side help. More than 65% of rolling stock is expired; about 400 km of railroad have to be reconditioned.
But this autumn Russian Ministry of Finance announced amendments to federal budget. As it was said, government refused to invest capital spending sites. Thereby the modernization of UBR is postponed.

The battle of Tavan Tolgoi
This September Mongolia decided to suspend agreement on development of one of the largest untapped reserves of coal in the world Tavan Talgoi. The Mongolia National Safety Council claimed they wanted to revise participants’ stakes in this project. It is vital to note that RZD wanted to get access to Tavan Talgoi without any competition. But authorities of Mongolia offered the coal mine for sale. Therefore Russian company had to fight for it without special preferences.
Among 15 companies applying were steelmaker ArcelorMittal, Brazilian miner Vale, global diversified mining group Xtrata, consortium of Japanese Mitsui and Chinese Shenhua, American Peabody, Australian Fortescue Metals, Indian Mesco Teel and Chinese Erdos.
In July the government of Mongolia announced that an alliance headed by China Shenhua Energy would get a 40% stake in a project, Peabody Energy – 24% and a consortium headed by RZD – 36%. Apart from the Russian company, the other participants of consortium are Siberian Coal Energy Company, Korean Resourses Corporation, POSCO, KEPCO, LG, Daewoo and also Japanese Itochu, Sumitomo, Marubeni and Sojitz.
Tavan Tolgoi is an open pit coal mine in the district of Tsogttsetsii sum, south of Mongolia. It is claimed to be one of the largest reserves in the world, because it contains about 6.5 billion tonnes of coal (40% of it is coking coal with high calorific value). In comparison, reserves of the Russian largest coal deposit of Elginskoe, situated in Yakutia, are about 2 billion tonnes.
A coal Partial development of Tavan Tolgoi began in 1967. Mongolia divided it into two zones. One should be ruled by the group of international mining companies, other is being ruled by the state company Erdenes Tavan Tolgoi (50% belongs to the government, 50% is distributed among investors and citizens).
Under the terms of competition, the consortium headed by RZD also had to build 400 km of track from Tavan Tolgoi to Saishand, connecting it with the North-South Trans Mongolian rail line and Russia.
Except for building this route, Russia also offered to modernize the UBR rail line in that area, where it should be connected with new branch. Also the Russian-Korean-Japanese consortium role implies the use of far-eastern port powers.
Due to the large number of participants in projects, the danger that one company would make an effort to augment its stake at the expense of other participants arised. “I can’t imagine how swan, crab and pike are going to drive this cart,” said the President of RZD Vladimir Yakunin, quoting the Russian saying. He also claimed that inconsistency of the authorities of Mongolia leads to uncertainty for investors.
However, this October Mongolia decided to continue negotiating with prospective investors, including Japanese and Korean companies that didn’t succeed in the competition. But reaching the agreement will take some months. According to the Mongolian party, negotiations may be finished in June, when parliamentary elections will take place.
Anyway, UBR can’t get by without RZD’s help, because Mongolia uses 1520 mm gauge like in Russia (in neighboring China they are 1435 mm), therefore both countries can gain much from their cooperation.

A close liaison
Modern relations between the two countries may be followed by a number of conflicts, but in any case Russia and Mongolia are also tied by a common railway route from the border point of Erlian in China to the Transsiberian railway, the station of Naushki situated close to Russo-Mongolian border. The main benefit of this way is the possibility of fast cargoes delivery from Chinese producers to European consumers. It was declared this year by Vadim Morozov at the XVI International Transport & Logistics Exhibition and Conference “TransRussia”.
“There are obvious advantages here. Such as a short route, unitary gauge width, common technical standards and, in prospect, the single base of information and technology,” said Vadim Morozov.
Nowadays major trade routes connecting China, Russia and Europe run through the Ports of Vladivostok and Novorossiysk, Zabaykalsk, Kazakh-China border and others. But the advantageous location of Mongolia may help to save the time spent on transporting. The problem still is the low throughput of the UBR network. Also leading companies got used to rolled routes; therefore they are not going to come to Mongolia before the whole modernization of the country’s railway has taken place.
But specialized container trains “Mongolian Vector” and «Mongolian Vector – Zhui» running through Naushki to Europe are showing the viability of the project. It is obvious that this rate considerably cuts the expenditure on transportation. It takes 10-12 days to deliver cargoes from Ulan-Bator to Brest, which is three times quicker than shipping goods via ports. 
As for cargo owners, they are always looking to reduce the price of logistics. And Mongolia, with its low fares, may profit very soon.
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RZD to boost investments
Joint Stock Company (JSC) UBR was established as a result of an agreement reached in 1949 between the USSR and the Mongolian governments. Each party to a contract holds an equal stake in the statutory capital. It goes without saying that the USSR at that time was helping Mongolia to develop its industrial production and infrastructure, mostly in non-ferrous metallurgy and railways. But for years between 1991 and 2000 cooperation was practically suspended - Russia curtailed its development project and almost left Mongolia. It helped China to successfully replace Russia in this partnership.
However, taking into account high investment to equip and maintain Mongolian railways, a joint venture (JV) to develop railway infrastructure was created in 2009. A limited liability company (LLC) “Infrastructure development” was co-founded by RZD (with a 50% share), state-owned Mongolian Railways (25%) and Erdenes MGL (25%). It was announced that charter capital of JV would be about USD 1.8 million.
According to the Decree, not long after it was signed by Dmitry Medvedev, RZD received 50% stake in UBR. In addition, it is expected that RZD will manage this equity stake for a period of 5 years. The main direction of the cooperation between two companies is improving the performance of UBR. Also RZD, in cooperation with companies concerned, is going to take part in projects on developing coal deposits in Mongolia, including building new lines to the mines.
Attraction of foreign investment became possible also due to the fact that the Mongolian government in 2007 passed a law that allowed mining companies to construct new routes to the opencast mines. The whole point is that this law eradicated the monopoly of railway and gave private companies the ability to develop their own infrastructure. Thus, in 2008 the building of a branch line to Tumurtey iron oil deposit, which is situated close to Russian border, was started.
Today the extent of Mongolian railroads is about 2.000 km. The general length of sections requiring the major repair is about 50%. It is obvious the UBR needs to be modernized. Therefore the questions of increasing the authorized capital were discussed during the meeting of shareholders in 2009, when the First Vice President of RZD Vadim Morozov was elected as the CEO of UBR.
“It is important to finish all the international procedures of the authorized capital increase by USD 250 million in time. Moreover, we have to take some serious and concrete steps to settle the problem of economically accepted domestic, export and transit fares,” said Vadim Morozov. 
According to Morozov, solution applied may lead to straightening out the financial situation in UBR, and provide its cost-effective work.

Facing the difficulties
So far, despite reaching numerous agreements, Russia and Mongolia seemed to have failed to agree on a concerted strategy to develop Mongolian railways. Factions lead Russia to refuse to invest USD 125 million this year. 
During the Moscow visit of Tsakhiagiin Elbegdorj, the President of Mongolia, it became obvious why Russia intended to give up investments. After the collapse of the USSR, parties agreed that in all joint ventures 49% of shares will be owned by Russia and 51% will belong to Mongolia. But UBR was divided in half.
For the last ten years Mongolia party is unsuccessfully trying to increase its share in company, referring to domestic laws. Moreover, Ulan-Bator wants to levy an income tax on company’s dividend.
It will be recalled that at the end of last year Mongolia’s Ministry of Finance claimed that the Russian party should contribute its half of the authorized capital to UBR. The other half should be deposited by Mongolia. Such steps are required because, despite the increase in cargo and passenger traffic, UBR can’t manage to make a technical reconstruction without any side help. More than 65% of rolling stock is expired; about 400 km of railroad have to be reconditioned.
But this autumn Russian Ministry of Finance announced amendments to federal budget. As it was said, government refused to invest capital spending sites. Thereby the modernization of UBR is postponed.

The battle of Tavan Tolgoi
This September Mongolia decided to suspend agreement on development of one of the largest untapped reserves of coal in the world Tavan Talgoi. The Mongolia National Safety Council claimed they wanted to revise participants’ stakes in this project. It is vital to note that RZD wanted to get access to Tavan Talgoi without any competition. But authorities of Mongolia offered the coal mine for sale. Therefore Russian company had to fight for it without special preferences.
Among 15 companies applying were steelmaker ArcelorMittal, Brazilian miner Vale, global diversified mining group Xtrata, consortium of Japanese Mitsui and Chinese Shenhua, American Peabody, Australian Fortescue Metals, Indian Mesco Teel and Chinese Erdos.
In July the government of Mongolia announced that an alliance headed by China Shenhua Energy would get a 40% stake in a project, Peabody Energy – 24% and a consortium headed by RZD – 36%. Apart from the Russian company, the other participants of consortium are Siberian Coal Energy Company, Korean Resourses Corporation, POSCO, KEPCO, LG, Daewoo and also Japanese Itochu, Sumitomo, Marubeni and Sojitz.
Tavan Tolgoi is an open pit coal mine in the district of Tsogttsetsii sum, south of Mongolia. It is claimed to be one of the largest reserves in the world, because it contains about 6.5 billion tonnes of coal (40% of it is coking coal with high calorific value). In comparison, reserves of the Russian largest coal deposit of Elginskoe, situated in Yakutia, are about 2 billion tonnes.
A coal Partial development of Tavan Tolgoi began in 1967. Mongolia divided it into two zones. One should be ruled by the group of international mining companies, other is being ruled by the state company Erdenes Tavan Tolgoi (50% belongs to the government, 50% is distributed among investors and citizens).
Under the terms of competition, the consortium headed by RZD also had to build 400 km of track from Tavan Tolgoi to Saishand, connecting it with the North-South Trans Mongolian rail line and Russia.
Except for building this route, Russia also offered to modernize the UBR rail line in that area, where it should be connected with new branch. Also the Russian-Korean-Japanese consortium role implies the use of far-eastern port powers.
Due to the large number of participants in projects, the danger that one company would make an effort to augment its stake at the expense of other participants arised. “I can’t imagine how swan, crab and pike are going to drive this cart,” said the President of RZD Vladimir Yakunin, quoting the Russian saying. He also claimed that inconsistency of the authorities of Mongolia leads to uncertainty for investors.
However, this October Mongolia decided to continue negotiating with prospective investors, including Japanese and Korean companies that didn’t succeed in the competition. But reaching the agreement will take some months. According to the Mongolian party, negotiations may be finished in June, when parliamentary elections will take place.
Anyway, UBR can’t get by without RZD’s help, because Mongolia uses 1520 mm gauge like in Russia (in neighboring China they are 1435 mm), therefore both countries can gain much from their cooperation.

A close liaison
Modern relations between the two countries may be followed by a number of conflicts, but in any case Russia and Mongolia are also tied by a common railway route from the border point of Erlian in China to the Transsiberian railway, the station of Naushki situated close to Russo-Mongolian border. The main benefit of this way is the possibility of fast cargoes delivery from Chinese producers to European consumers. It was declared this year by Vadim Morozov at the XVI International Transport & Logistics Exhibition and Conference “TransRussia”.
“There are obvious advantages here. Such as a short route, unitary gauge width, common technical standards and, in prospect, the single base of information and technology,” said Vadim Morozov.
Nowadays major trade routes connecting China, Russia and Europe run through the Ports of Vladivostok and Novorossiysk, Zabaykalsk, Kazakh-China border and others. But the advantageous location of Mongolia may help to save the time spent on transporting. The problem still is the low throughput of the UBR network. Also leading companies got used to rolled routes; therefore they are not going to come to Mongolia before the whole modernization of the country’s railway has taken place.
But specialized container trains “Mongolian Vector” and «Mongolian Vector – Zhui» running through Naushki to Europe are showing the viability of the project. It is obvious that this rate considerably cuts the expenditure on transportation. It takes 10-12 days to deliver cargoes from Ulan-Bator to Brest, which is three times quicker than shipping goods via ports. 
As for cargo owners, they are always looking to reduce the price of logistics. And Mongolia, with its low fares, may profit very soon.
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            [SECTION_META_DESCRIPTION] => <img src="/ufiles/image/rus/inter/2011/4/4.jpg" border="1" alt=" " hspace="5" width="300" height="200" align="left" />It is an open secret that Mongolia puts the development and modernization of railway infrastructure at the top of its priority list, because this country is an important transport corridor connecting Russia and China. Today Ulan-Bator Railways (UBR) account for about 80% of national cargo flows, and about 100% of import and export flows. In 2009 half of the company’s stake was handed over by the administration of the Russian Federation to Russian Railways, which made it possible to set a bold new course for UBR.
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A System Integrator in the 1520 AREA
– Mr Saltanov, what role do railways play in the foreign economic and foreign political relations of Russia?

– In the last two centuries, the mission of Russian Railways, which traditionally represent national interests on the international arena, was to create efficient and safe transport communication with European countries – Russia’s largest trade partners, and to participate actively in prospective international transport policy formation. Thus, the development of RZD’s international cooperation with foreign railway companies, international transport organisations, and multi-faceted structures of the Eurasian integration is not just an instrument for enlarging access to foreign markets, but a system element of the RF foreign political and foreign economic strategy as well. 

– What directions of RZD’s international activity are most urgent and important nowadays?

– The international activity of RZD is targeted at fulfillment of the strategic task of strengthening Russian Railways’ position on the world transport services market. Our company focuses on better usage of the competitive advantages of national railways, including Russia’s geopolitical position. From this standpoint, the cooperation with the CIS and Baltic railways in the framework of the CIS Railway Transport Council is most important. RZD acts as a “system integrator” of the railway administrations’ activities in the 1520 space, creating the world’s largest railway system.  
One of the most important issues the Council faces today is the increase in efficiency of interaction between railway administrations of the CIS, Georgia, Latvia, Lithuania, and Estonia amid the creation of the new model of freight transportation in the 1520 space and the growth of the number of rolling stock owners. In other words, it is the realisation of the Concept of the Single System to Manage and Use the Park of Cargo Railcars of Different Forms of Ownership. At the 55th meeting of the Council which was held in Yerevan at the end of October 2011, the Agreement on the Single System to Manage and Use the Cargo Railcar Park was signed.
Another milestone was the adoption of the Concept of Railway Transport Strategic Development in the CIS to 2020. The Concept aims at elaboration of coordinated approaches to defining the strategic priorities for the CIS railways development, and at forming a complex of measures to fulfill efficiently the need for international passenger and cargo transportation.
Understanding the importance of the integration into the Eurasian transport system to increase the company’s competitiveness and improve the country’s economy, we pay special attention to partnership with foreign railways, and first of all, those of the Customs Union member-states. The launch of the Customs Union (CU) as well as the creation of a Single Economic Space between Russia, Belarus, and Kazakhstan, the transfer of the customs control to the external border of the CU create new opportunities to speed up customs clearance procedures, and consequently, to attract transit cargo flows.  

– With which companies and international organisations does the company cooperate now?

– The enlargement of cooperation with the leading European transport machine-building companies to develop and create a new generation of rolling stock, to localise high-technology manufacturing in Russia, and to exchange experience and knowledge. Recently, the company concluded a lot of contracts and agreements with such companies as Siemens AG, Alstom, Talgo, Knorr Bremse, Finmeccanica etc. Joint ventures launched by RZD and its subsidiaries together with railways of Germany, Finland, and Slovakia play an important role in formation of through transport products on the Eurasian continent.
To enlarge access to the international cargo and passenger transportation and to make for the implementation of advanced technologies at Russian railway network, we think that cooperation with international transport organisations (the International Union of Railways (UIC), the OSJD, the CIS Railway Transport Council, the United Nations Economic Commission for Europe and ESCAP) and structures of the EU is very important for us. 

Connecting Parts of the World
– In the framework of its international activity, RZD carries out strategically important infrastructure projects abroad. Please tell us about them.

– There are projects on the reconstruction of the Khasan – Rajin railway section, large projects in Iran, and the development of Ulan-Bator Railway’s infrastructure. Nowadays, RZD actively cooperates with Serbia. We are going to participate in several projects on infrastructure construction and railway lines electrification on its territory. 
No doubt, the project of the 1520 mm-wide gauge railway from Kosice to Bratislava and Vienna and construction of the logistics infrastructure is urgent for integration of Russian railways into the European transport system. Most part of these projects is carried out to increase the transit potential of Russian railways and to integrate them into the Eurasian transport system. This will mirror the growth of the country’s international weight. 

– Experts recognise that the extension of the railway with a 1520 mm–wide gauge to the countries in Eastern and Central Europe is one of the most ambitious projects. What importance will it have for the social and economic development of Russia, the EU states, and the world economy?

–  The project of the 1520 mm railway line to Vienna construction is to become a breakthrough in the development of transport and foreign trade connections between Europe, the CIS, and China. Cargo flows of Austria, Slovakia, the Czech Republic, Hungary, Germany, Switzerland, Italy, Slovenia, Serbia, and Croatia incline towards the new railway line. Its construction will increase the attractiveness of logistics chains using railways. Due to the same width of the gauge, the cost of transportation, delivery time, and the share of the transport constituent in the final price of transported goods will reduce. 
In our estimation, the real time of cargo transportation from Europe to Asia or vice versa will be 13-14 days. Transit cargo transportation via the territory of Russia will last 7 days. Railways of Russia, Slovakia, Austria, and Ukraine launched a joint enterprise in 2009, in the framework of which the preparation of a tender on the project feasibility study is being carried out, the forecast of potential freight flows is being specified, and offers on financing terms are being formed.  
The policy of RZD is targeted at strengthening interaction with representatives of railway administrations and transport departments of other member states to form a positive approach to the project’s realisation, and to examine its legal and organisational and financial conditions.

– Vladimir Yakunin, President of RZD, has spoken often about the strategic importance of transit railway communication between China and the EU via the territory of Russia. Has this mutual interest been put into practice?

– RZD’s daughter companies actively cooperate with Chinese partners to organise transit railway transportation between China and the EU. A promising JV is RailContainer, launched by TransContainer and CRIMT (China Railway International Multimodal Transport). Lately, TransEurasiaLogistics (launched in 2008 by RZD in cooperation with DB Mobility Networks Logistics, TransContainer, Kombiverkehr, and Polzug) has succeeded in the sector of organising container transportation between China and Europe. 
In June 2011, regular container transportation between Chongqing and Duisburg was launched, and the JV participated in it. The forecasted annual cargo volume that inclines towards this railway line may exceed 23,000 FEU in 2012, and 31,000 FEU in 2015. In future, RZD plans to form a fundamental network of regular container lines covering all key points on the Russian railway network, and our joint ventures may play an important role in it. 
Another prospective activity is containerised cargo transportation from the north-eastern provinces of China (which do not have a direct access to the sea) via Russian Far Eastern ports with further delivery to the south of China, South Korea, and other countries. Here, the cooperation in the development of cargo transportation between Russia and China using the Khasan – Rajin railway line and the port of Rajin is prospective. The project is to be completed in 2012, then the commercial exploitation of the constructed objects will begin and transit transportation will be organised on the line.
The joining of Chinese Railways to the CIM/SMGS project seems to be prospective as well. Nowadays, it is one of the most successfully completed international projects of unification of legal procedures in the railway cargo transportation sector. If the Chinese party joins the project, it will be possible to transport goods from it to Western Europe and back without invoice relegalisation, and to realise the economic potential of western regions of China. This will make for the redirection of a significant part of cargo flows from the sea transport to railways. 

– What about the projects targeted at development of railway communication with the Baltic States?

– Taking into account the unique position of the Baltic region between the 1520 and 1435 spaces, the search of ways for cooperation and joint development of railway systems in all directions possible becomes especially important. A number of prospective projects in the railway transport sector are being developed nowadays. First of all is the launch of the “Riga Express” container train (Riga – Moscow – Riga). A pilot container train was dispatched from the Moscow – Tovarnaya railway station in September 2011. Cargo was carried on flat wagons owned by TransContainer. The train transported 48 FEU. In future, the train is to become regular. 
The second project is the launch of fast passenger communication between Moscow and Riga. Russian and Latvian specialists are examining this issue. The third project is the launch of the “Mercury” container train on the line Klaipeda – Kaliningrad – Moscow to redirect cargo from road transport to railways. It is supposed that a client will receive a pack of door-to-door services, including high–quality service, exact delivery time, and regular transportation. Cargo is also transported by “Baltika – Transit” container train from the Baltic states to the CIS via the territory of Russia. The operator of the project is FESCO Integrated Transport. 

The Future Is Being Born Today
– Could you tell us about the achievements of RZD in the sector of scientific and technical cooperation with foreign colleagues?

– Our company carries out a large programme of international scientific and technical cooperation with partners from Western and Eastern Europe, the USA, Canada, China, and the CIS. The measures envisaged by the programme are targeted at provision of technical regulation, standardisation and quality in the railway transport sector.
We closely cooperate with our foreign colleagues in the sector of development and implementation of new equipment and technologies. For example, in 2010-2011, the company signed several strategically important agreements and contracts aimed at integration into the Eurasian transport space and creation of a new generation of rolling stock. 
Among them there are the agreement on cooperation with Austrian Railways in the sector of logistics and intensification of transportation between Europe and Asia, transfer and development of technologies, and realisation of joint infrastructure projects; a contract between the Federal Passenger Company and Patentes Talgo S.L.(Spain) on supply of seven 20-wagon passenger trains, including those equipped with automatic gauge adjustment for use on both narrow and broad-gauge tracks. Also, an agreement was concluded with Patentes Talgo S.L. on scientific and technical cooperation in the sector of development, manufacture, exploitation, and maintenance of high-speed rolling stock.
A contract on supply of 1,200 railcars for “Lastochka” electric trains (Desiro Rus) was concluded with Siemens AG and Sinara group of companies. Its total cost is almost EUR 2 billion. Also, we concluded a contract on maintenance of 54 electric trains of this series (its cost is EUR 500 million). The contract on maintenance comes in force in 2013. Its time period is 40 years. 
Moreover, a protocol to the Agreement concluded in 1949 was signed. It envisaged that the authorised capital of the Ulan-Bator Railway would increase by $250 million to make the joint-stock company’s position financially stable and to make for its development. 
It is worth mentioning that RZD organises training of its employees abroad – in Germany, France, Spain and Finland – for them to study international experience and improve their professional skills.

– Has the specific character of cooperation in the framework of the UIC and other international organisations changed in the post–crisis period?

– The last seven years were one of the most dynamic periods in the history of interaction between RZD and multi–faceted structures. There were radical structural changes at Russian, European, and Asian railways, reformation of international transport organisations, the economic crisis in 2008-2009, and changes in the international market situation. Finally, one of the most serious structural changes in this period was the expansion of the European Union and European transport market to the countries of Central and Eastern Europe and the Baltic states.
RZD is practically the only company that, together with representatives of the governments, takes part in development of the system transport policy in the framework of the UN in the European region. Also, the company participates in the development of the system of agreements and conventions of the UN related to railway transport. Russian Transport Ministry empowered RZD to participate in the realisation of the UNECE’s global project of development of the Trans-European Railway (TER) network. As a result, the holding company can now influence the strategy of development of a railway of international importance in Europe. 
 The Organisation for Cooperation of Railways (OSJD) is principally important for RZD. Due to its active position, the company received the powers of a member of the OSJD General Directors Conference that allows it to participate in the work connected with the creation of the new normative base, and to develop norms and standards for infrastructure and rolling stock.
Thus, we can say that RZD holds the leading position in the activity of international organisations in terms of transport systems integration in Eurasia, harmonisation and actualisation of the railways’ legal base on an international scale. The position taken by RZD for its cooperation with international organisations is based on the following approach – a well-thought out joint work to integrate and consolidate efforts is necessary at all levels in crisis situations. 
by Dmitry Khantsevich
    [~DETAIL_TEXT] => 
A System Integrator in the 1520 AREA
– Mr Saltanov, what role do railways play in the foreign economic and foreign political relations of Russia?

– In the last two centuries, the mission of Russian Railways, which traditionally represent national interests on the international arena, was to create efficient and safe transport communication with European countries – Russia’s largest trade partners, and to participate actively in prospective international transport policy formation. Thus, the development of RZD’s international cooperation with foreign railway companies, international transport organisations, and multi-faceted structures of the Eurasian integration is not just an instrument for enlarging access to foreign markets, but a system element of the RF foreign political and foreign economic strategy as well. 

– What directions of RZD’s international activity are most urgent and important nowadays?

– The international activity of RZD is targeted at fulfillment of the strategic task of strengthening Russian Railways’ position on the world transport services market. Our company focuses on better usage of the competitive advantages of national railways, including Russia’s geopolitical position. From this standpoint, the cooperation with the CIS and Baltic railways in the framework of the CIS Railway Transport Council is most important. RZD acts as a “system integrator” of the railway administrations’ activities in the 1520 space, creating the world’s largest railway system.  
One of the most important issues the Council faces today is the increase in efficiency of interaction between railway administrations of the CIS, Georgia, Latvia, Lithuania, and Estonia amid the creation of the new model of freight transportation in the 1520 space and the growth of the number of rolling stock owners. In other words, it is the realisation of the Concept of the Single System to Manage and Use the Park of Cargo Railcars of Different Forms of Ownership. At the 55th meeting of the Council which was held in Yerevan at the end of October 2011, the Agreement on the Single System to Manage and Use the Cargo Railcar Park was signed.
Another milestone was the adoption of the Concept of Railway Transport Strategic Development in the CIS to 2020. The Concept aims at elaboration of coordinated approaches to defining the strategic priorities for the CIS railways development, and at forming a complex of measures to fulfill efficiently the need for international passenger and cargo transportation.
Understanding the importance of the integration into the Eurasian transport system to increase the company’s competitiveness and improve the country’s economy, we pay special attention to partnership with foreign railways, and first of all, those of the Customs Union member-states. The launch of the Customs Union (CU) as well as the creation of a Single Economic Space between Russia, Belarus, and Kazakhstan, the transfer of the customs control to the external border of the CU create new opportunities to speed up customs clearance procedures, and consequently, to attract transit cargo flows.  

– With which companies and international organisations does the company cooperate now?

– The enlargement of cooperation with the leading European transport machine-building companies to develop and create a new generation of rolling stock, to localise high-technology manufacturing in Russia, and to exchange experience and knowledge. Recently, the company concluded a lot of contracts and agreements with such companies as Siemens AG, Alstom, Talgo, Knorr Bremse, Finmeccanica etc. Joint ventures launched by RZD and its subsidiaries together with railways of Germany, Finland, and Slovakia play an important role in formation of through transport products on the Eurasian continent.
To enlarge access to the international cargo and passenger transportation and to make for the implementation of advanced technologies at Russian railway network, we think that cooperation with international transport organisations (the International Union of Railways (UIC), the OSJD, the CIS Railway Transport Council, the United Nations Economic Commission for Europe and ESCAP) and structures of the EU is very important for us. 

Connecting Parts of the World
– In the framework of its international activity, RZD carries out strategically important infrastructure projects abroad. Please tell us about them.

– There are projects on the reconstruction of the Khasan – Rajin railway section, large projects in Iran, and the development of Ulan-Bator Railway’s infrastructure. Nowadays, RZD actively cooperates with Serbia. We are going to participate in several projects on infrastructure construction and railway lines electrification on its territory. 
No doubt, the project of the 1520 mm-wide gauge railway from Kosice to Bratislava and Vienna and construction of the logistics infrastructure is urgent for integration of Russian railways into the European transport system. Most part of these projects is carried out to increase the transit potential of Russian railways and to integrate them into the Eurasian transport system. This will mirror the growth of the country’s international weight. 

– Experts recognise that the extension of the railway with a 1520 mm–wide gauge to the countries in Eastern and Central Europe is one of the most ambitious projects. What importance will it have for the social and economic development of Russia, the EU states, and the world economy?

–  The project of the 1520 mm railway line to Vienna construction is to become a breakthrough in the development of transport and foreign trade connections between Europe, the CIS, and China. Cargo flows of Austria, Slovakia, the Czech Republic, Hungary, Germany, Switzerland, Italy, Slovenia, Serbia, and Croatia incline towards the new railway line. Its construction will increase the attractiveness of logistics chains using railways. Due to the same width of the gauge, the cost of transportation, delivery time, and the share of the transport constituent in the final price of transported goods will reduce. 
In our estimation, the real time of cargo transportation from Europe to Asia or vice versa will be 13-14 days. Transit cargo transportation via the territory of Russia will last 7 days. Railways of Russia, Slovakia, Austria, and Ukraine launched a joint enterprise in 2009, in the framework of which the preparation of a tender on the project feasibility study is being carried out, the forecast of potential freight flows is being specified, and offers on financing terms are being formed.  
The policy of RZD is targeted at strengthening interaction with representatives of railway administrations and transport departments of other member states to form a positive approach to the project’s realisation, and to examine its legal and organisational and financial conditions.

– Vladimir Yakunin, President of RZD, has spoken often about the strategic importance of transit railway communication between China and the EU via the territory of Russia. Has this mutual interest been put into practice?

– RZD’s daughter companies actively cooperate with Chinese partners to organise transit railway transportation between China and the EU. A promising JV is RailContainer, launched by TransContainer and CRIMT (China Railway International Multimodal Transport). Lately, TransEurasiaLogistics (launched in 2008 by RZD in cooperation with DB Mobility Networks Logistics, TransContainer, Kombiverkehr, and Polzug) has succeeded in the sector of organising container transportation between China and Europe. 
In June 2011, regular container transportation between Chongqing and Duisburg was launched, and the JV participated in it. The forecasted annual cargo volume that inclines towards this railway line may exceed 23,000 FEU in 2012, and 31,000 FEU in 2015. In future, RZD plans to form a fundamental network of regular container lines covering all key points on the Russian railway network, and our joint ventures may play an important role in it. 
Another prospective activity is containerised cargo transportation from the north-eastern provinces of China (which do not have a direct access to the sea) via Russian Far Eastern ports with further delivery to the south of China, South Korea, and other countries. Here, the cooperation in the development of cargo transportation between Russia and China using the Khasan – Rajin railway line and the port of Rajin is prospective. The project is to be completed in 2012, then the commercial exploitation of the constructed objects will begin and transit transportation will be organised on the line.
The joining of Chinese Railways to the CIM/SMGS project seems to be prospective as well. Nowadays, it is one of the most successfully completed international projects of unification of legal procedures in the railway cargo transportation sector. If the Chinese party joins the project, it will be possible to transport goods from it to Western Europe and back without invoice relegalisation, and to realise the economic potential of western regions of China. This will make for the redirection of a significant part of cargo flows from the sea transport to railways. 

– What about the projects targeted at development of railway communication with the Baltic States?

– Taking into account the unique position of the Baltic region between the 1520 and 1435 spaces, the search of ways for cooperation and joint development of railway systems in all directions possible becomes especially important. A number of prospective projects in the railway transport sector are being developed nowadays. First of all is the launch of the “Riga Express” container train (Riga – Moscow – Riga). A pilot container train was dispatched from the Moscow – Tovarnaya railway station in September 2011. Cargo was carried on flat wagons owned by TransContainer. The train transported 48 FEU. In future, the train is to become regular. 
The second project is the launch of fast passenger communication between Moscow and Riga. Russian and Latvian specialists are examining this issue. The third project is the launch of the “Mercury” container train on the line Klaipeda – Kaliningrad – Moscow to redirect cargo from road transport to railways. It is supposed that a client will receive a pack of door-to-door services, including high–quality service, exact delivery time, and regular transportation. Cargo is also transported by “Baltika – Transit” container train from the Baltic states to the CIS via the territory of Russia. The operator of the project is FESCO Integrated Transport. 

The Future Is Being Born Today
– Could you tell us about the achievements of RZD in the sector of scientific and technical cooperation with foreign colleagues?

– Our company carries out a large programme of international scientific and technical cooperation with partners from Western and Eastern Europe, the USA, Canada, China, and the CIS. The measures envisaged by the programme are targeted at provision of technical regulation, standardisation and quality in the railway transport sector.
We closely cooperate with our foreign colleagues in the sector of development and implementation of new equipment and technologies. For example, in 2010-2011, the company signed several strategically important agreements and contracts aimed at integration into the Eurasian transport space and creation of a new generation of rolling stock. 
Among them there are the agreement on cooperation with Austrian Railways in the sector of logistics and intensification of transportation between Europe and Asia, transfer and development of technologies, and realisation of joint infrastructure projects; a contract between the Federal Passenger Company and Patentes Talgo S.L.(Spain) on supply of seven 20-wagon passenger trains, including those equipped with automatic gauge adjustment for use on both narrow and broad-gauge tracks. Also, an agreement was concluded with Patentes Talgo S.L. on scientific and technical cooperation in the sector of development, manufacture, exploitation, and maintenance of high-speed rolling stock.
A contract on supply of 1,200 railcars for “Lastochka” electric trains (Desiro Rus) was concluded with Siemens AG and Sinara group of companies. Its total cost is almost EUR 2 billion. Also, we concluded a contract on maintenance of 54 electric trains of this series (its cost is EUR 500 million). The contract on maintenance comes in force in 2013. Its time period is 40 years. 
Moreover, a protocol to the Agreement concluded in 1949 was signed. It envisaged that the authorised capital of the Ulan-Bator Railway would increase by $250 million to make the joint-stock company’s position financially stable and to make for its development. 
It is worth mentioning that RZD organises training of its employees abroad – in Germany, France, Spain and Finland – for them to study international experience and improve their professional skills.

– Has the specific character of cooperation in the framework of the UIC and other international organisations changed in the post–crisis period?

– The last seven years were one of the most dynamic periods in the history of interaction between RZD and multi–faceted structures. There were radical structural changes at Russian, European, and Asian railways, reformation of international transport organisations, the economic crisis in 2008-2009, and changes in the international market situation. Finally, one of the most serious structural changes in this period was the expansion of the European Union and European transport market to the countries of Central and Eastern Europe and the Baltic states.
RZD is practically the only company that, together with representatives of the governments, takes part in development of the system transport policy in the framework of the UN in the European region. Also, the company participates in the development of the system of agreements and conventions of the UN related to railway transport. Russian Transport Ministry empowered RZD to participate in the realisation of the UNECE’s global project of development of the Trans-European Railway (TER) network. As a result, the holding company can now influence the strategy of development of a railway of international importance in Europe. 
 The Organisation for Cooperation of Railways (OSJD) is principally important for RZD. Due to its active position, the company received the powers of a member of the OSJD General Directors Conference that allows it to participate in the work connected with the creation of the new normative base, and to develop norms and standards for infrastructure and rolling stock.
Thus, we can say that RZD holds the leading position in the activity of international organisations in terms of transport systems integration in Eurasia, harmonisation and actualisation of the railways’ legal base on an international scale. The position taken by RZD for its cooperation with international organisations is based on the following approach – a well-thought out joint work to integrate and consolidate efforts is necessary at all levels in crisis situations. 
by Dmitry Khantsevich
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A System Integrator in the 1520 AREA
– Mr Saltanov, what role do railways play in the foreign economic and foreign political relations of Russia?

– In the last two centuries, the mission of Russian Railways, which traditionally represent national interests on the international arena, was to create efficient and safe transport communication with European countries – Russia’s largest trade partners, and to participate actively in prospective international transport policy formation. Thus, the development of RZD’s international cooperation with foreign railway companies, international transport organisations, and multi-faceted structures of the Eurasian integration is not just an instrument for enlarging access to foreign markets, but a system element of the RF foreign political and foreign economic strategy as well. 

– What directions of RZD’s international activity are most urgent and important nowadays?

– The international activity of RZD is targeted at fulfillment of the strategic task of strengthening Russian Railways’ position on the world transport services market. Our company focuses on better usage of the competitive advantages of national railways, including Russia’s geopolitical position. From this standpoint, the cooperation with the CIS and Baltic railways in the framework of the CIS Railway Transport Council is most important. RZD acts as a “system integrator” of the railway administrations’ activities in the 1520 space, creating the world’s largest railway system.  
One of the most important issues the Council faces today is the increase in efficiency of interaction between railway administrations of the CIS, Georgia, Latvia, Lithuania, and Estonia amid the creation of the new model of freight transportation in the 1520 space and the growth of the number of rolling stock owners. In other words, it is the realisation of the Concept of the Single System to Manage and Use the Park of Cargo Railcars of Different Forms of Ownership. At the 55th meeting of the Council which was held in Yerevan at the end of October 2011, the Agreement on the Single System to Manage and Use the Cargo Railcar Park was signed.
Another milestone was the adoption of the Concept of Railway Transport Strategic Development in the CIS to 2020. The Concept aims at elaboration of coordinated approaches to defining the strategic priorities for the CIS railways development, and at forming a complex of measures to fulfill efficiently the need for international passenger and cargo transportation.
Understanding the importance of the integration into the Eurasian transport system to increase the company’s competitiveness and improve the country’s economy, we pay special attention to partnership with foreign railways, and first of all, those of the Customs Union member-states. The launch of the Customs Union (CU) as well as the creation of a Single Economic Space between Russia, Belarus, and Kazakhstan, the transfer of the customs control to the external border of the CU create new opportunities to speed up customs clearance procedures, and consequently, to attract transit cargo flows.  

– With which companies and international organisations does the company cooperate now?

– The enlargement of cooperation with the leading European transport machine-building companies to develop and create a new generation of rolling stock, to localise high-technology manufacturing in Russia, and to exchange experience and knowledge. Recently, the company concluded a lot of contracts and agreements with such companies as Siemens AG, Alstom, Talgo, Knorr Bremse, Finmeccanica etc. Joint ventures launched by RZD and its subsidiaries together with railways of Germany, Finland, and Slovakia play an important role in formation of through transport products on the Eurasian continent.
To enlarge access to the international cargo and passenger transportation and to make for the implementation of advanced technologies at Russian railway network, we think that cooperation with international transport organisations (the International Union of Railways (UIC), the OSJD, the CIS Railway Transport Council, the United Nations Economic Commission for Europe and ESCAP) and structures of the EU is very important for us. 

Connecting Parts of the World
– In the framework of its international activity, RZD carries out strategically important infrastructure projects abroad. Please tell us about them.

– There are projects on the reconstruction of the Khasan – Rajin railway section, large projects in Iran, and the development of Ulan-Bator Railway’s infrastructure. Nowadays, RZD actively cooperates with Serbia. We are going to participate in several projects on infrastructure construction and railway lines electrification on its territory. 
No doubt, the project of the 1520 mm-wide gauge railway from Kosice to Bratislava and Vienna and construction of the logistics infrastructure is urgent for integration of Russian railways into the European transport system. Most part of these projects is carried out to increase the transit potential of Russian railways and to integrate them into the Eurasian transport system. This will mirror the growth of the country’s international weight. 

– Experts recognise that the extension of the railway with a 1520 mm–wide gauge to the countries in Eastern and Central Europe is one of the most ambitious projects. What importance will it have for the social and economic development of Russia, the EU states, and the world economy?

–  The project of the 1520 mm railway line to Vienna construction is to become a breakthrough in the development of transport and foreign trade connections between Europe, the CIS, and China. Cargo flows of Austria, Slovakia, the Czech Republic, Hungary, Germany, Switzerland, Italy, Slovenia, Serbia, and Croatia incline towards the new railway line. Its construction will increase the attractiveness of logistics chains using railways. Due to the same width of the gauge, the cost of transportation, delivery time, and the share of the transport constituent in the final price of transported goods will reduce. 
In our estimation, the real time of cargo transportation from Europe to Asia or vice versa will be 13-14 days. Transit cargo transportation via the territory of Russia will last 7 days. Railways of Russia, Slovakia, Austria, and Ukraine launched a joint enterprise in 2009, in the framework of which the preparation of a tender on the project feasibility study is being carried out, the forecast of potential freight flows is being specified, and offers on financing terms are being formed.  
The policy of RZD is targeted at strengthening interaction with representatives of railway administrations and transport departments of other member states to form a positive approach to the project’s realisation, and to examine its legal and organisational and financial conditions.

– Vladimir Yakunin, President of RZD, has spoken often about the strategic importance of transit railway communication between China and the EU via the territory of Russia. Has this mutual interest been put into practice?

– RZD’s daughter companies actively cooperate with Chinese partners to organise transit railway transportation between China and the EU. A promising JV is RailContainer, launched by TransContainer and CRIMT (China Railway International Multimodal Transport). Lately, TransEurasiaLogistics (launched in 2008 by RZD in cooperation with DB Mobility Networks Logistics, TransContainer, Kombiverkehr, and Polzug) has succeeded in the sector of organising container transportation between China and Europe. 
In June 2011, regular container transportation between Chongqing and Duisburg was launched, and the JV participated in it. The forecasted annual cargo volume that inclines towards this railway line may exceed 23,000 FEU in 2012, and 31,000 FEU in 2015. In future, RZD plans to form a fundamental network of regular container lines covering all key points on the Russian railway network, and our joint ventures may play an important role in it. 
Another prospective activity is containerised cargo transportation from the north-eastern provinces of China (which do not have a direct access to the sea) via Russian Far Eastern ports with further delivery to the south of China, South Korea, and other countries. Here, the cooperation in the development of cargo transportation between Russia and China using the Khasan – Rajin railway line and the port of Rajin is prospective. The project is to be completed in 2012, then the commercial exploitation of the constructed objects will begin and transit transportation will be organised on the line.
The joining of Chinese Railways to the CIM/SMGS project seems to be prospective as well. Nowadays, it is one of the most successfully completed international projects of unification of legal procedures in the railway cargo transportation sector. If the Chinese party joins the project, it will be possible to transport goods from it to Western Europe and back without invoice relegalisation, and to realise the economic potential of western regions of China. This will make for the redirection of a significant part of cargo flows from the sea transport to railways. 

– What about the projects targeted at development of railway communication with the Baltic States?

– Taking into account the unique position of the Baltic region between the 1520 and 1435 spaces, the search of ways for cooperation and joint development of railway systems in all directions possible becomes especially important. A number of prospective projects in the railway transport sector are being developed nowadays. First of all is the launch of the “Riga Express” container train (Riga – Moscow – Riga). A pilot container train was dispatched from the Moscow – Tovarnaya railway station in September 2011. Cargo was carried on flat wagons owned by TransContainer. The train transported 48 FEU. In future, the train is to become regular. 
The second project is the launch of fast passenger communication between Moscow and Riga. Russian and Latvian specialists are examining this issue. The third project is the launch of the “Mercury” container train on the line Klaipeda – Kaliningrad – Moscow to redirect cargo from road transport to railways. It is supposed that a client will receive a pack of door-to-door services, including high–quality service, exact delivery time, and regular transportation. Cargo is also transported by “Baltika – Transit” container train from the Baltic states to the CIS via the territory of Russia. The operator of the project is FESCO Integrated Transport. 

The Future Is Being Born Today
– Could you tell us about the achievements of RZD in the sector of scientific and technical cooperation with foreign colleagues?

– Our company carries out a large programme of international scientific and technical cooperation with partners from Western and Eastern Europe, the USA, Canada, China, and the CIS. The measures envisaged by the programme are targeted at provision of technical regulation, standardisation and quality in the railway transport sector.
We closely cooperate with our foreign colleagues in the sector of development and implementation of new equipment and technologies. For example, in 2010-2011, the company signed several strategically important agreements and contracts aimed at integration into the Eurasian transport space and creation of a new generation of rolling stock. 
Among them there are the agreement on cooperation with Austrian Railways in the sector of logistics and intensification of transportation between Europe and Asia, transfer and development of technologies, and realisation of joint infrastructure projects; a contract between the Federal Passenger Company and Patentes Talgo S.L.(Spain) on supply of seven 20-wagon passenger trains, including those equipped with automatic gauge adjustment for use on both narrow and broad-gauge tracks. Also, an agreement was concluded with Patentes Talgo S.L. on scientific and technical cooperation in the sector of development, manufacture, exploitation, and maintenance of high-speed rolling stock.
A contract on supply of 1,200 railcars for “Lastochka” electric trains (Desiro Rus) was concluded with Siemens AG and Sinara group of companies. Its total cost is almost EUR 2 billion. Also, we concluded a contract on maintenance of 54 electric trains of this series (its cost is EUR 500 million). The contract on maintenance comes in force in 2013. Its time period is 40 years. 
Moreover, a protocol to the Agreement concluded in 1949 was signed. It envisaged that the authorised capital of the Ulan-Bator Railway would increase by $250 million to make the joint-stock company’s position financially stable and to make for its development. 
It is worth mentioning that RZD organises training of its employees abroad – in Germany, France, Spain and Finland – for them to study international experience and improve their professional skills.

– Has the specific character of cooperation in the framework of the UIC and other international organisations changed in the post–crisis period?

– The last seven years were one of the most dynamic periods in the history of interaction between RZD and multi–faceted structures. There were radical structural changes at Russian, European, and Asian railways, reformation of international transport organisations, the economic crisis in 2008-2009, and changes in the international market situation. Finally, one of the most serious structural changes in this period was the expansion of the European Union and European transport market to the countries of Central and Eastern Europe and the Baltic states.
RZD is practically the only company that, together with representatives of the governments, takes part in development of the system transport policy in the framework of the UN in the European region. Also, the company participates in the development of the system of agreements and conventions of the UN related to railway transport. Russian Transport Ministry empowered RZD to participate in the realisation of the UNECE’s global project of development of the Trans-European Railway (TER) network. As a result, the holding company can now influence the strategy of development of a railway of international importance in Europe. 
 The Organisation for Cooperation of Railways (OSJD) is principally important for RZD. Due to its active position, the company received the powers of a member of the OSJD General Directors Conference that allows it to participate in the work connected with the creation of the new normative base, and to develop norms and standards for infrastructure and rolling stock.
Thus, we can say that RZD holds the leading position in the activity of international organisations in terms of transport systems integration in Eurasia, harmonisation and actualisation of the railways’ legal base on an international scale. The position taken by RZD for its cooperation with international organisations is based on the following approach – a well-thought out joint work to integrate and consolidate efforts is necessary at all levels in crisis situations. 
by Dmitry Khantsevich
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A System Integrator in the 1520 AREA
– Mr Saltanov, what role do railways play in the foreign economic and foreign political relations of Russia?

– In the last two centuries, the mission of Russian Railways, which traditionally represent national interests on the international arena, was to create efficient and safe transport communication with European countries – Russia’s largest trade partners, and to participate actively in prospective international transport policy formation. Thus, the development of RZD’s international cooperation with foreign railway companies, international transport organisations, and multi-faceted structures of the Eurasian integration is not just an instrument for enlarging access to foreign markets, but a system element of the RF foreign political and foreign economic strategy as well. 

– What directions of RZD’s international activity are most urgent and important nowadays?

– The international activity of RZD is targeted at fulfillment of the strategic task of strengthening Russian Railways’ position on the world transport services market. Our company focuses on better usage of the competitive advantages of national railways, including Russia’s geopolitical position. From this standpoint, the cooperation with the CIS and Baltic railways in the framework of the CIS Railway Transport Council is most important. RZD acts as a “system integrator” of the railway administrations’ activities in the 1520 space, creating the world’s largest railway system.  
One of the most important issues the Council faces today is the increase in efficiency of interaction between railway administrations of the CIS, Georgia, Latvia, Lithuania, and Estonia amid the creation of the new model of freight transportation in the 1520 space and the growth of the number of rolling stock owners. In other words, it is the realisation of the Concept of the Single System to Manage and Use the Park of Cargo Railcars of Different Forms of Ownership. At the 55th meeting of the Council which was held in Yerevan at the end of October 2011, the Agreement on the Single System to Manage and Use the Cargo Railcar Park was signed.
Another milestone was the adoption of the Concept of Railway Transport Strategic Development in the CIS to 2020. The Concept aims at elaboration of coordinated approaches to defining the strategic priorities for the CIS railways development, and at forming a complex of measures to fulfill efficiently the need for international passenger and cargo transportation.
Understanding the importance of the integration into the Eurasian transport system to increase the company’s competitiveness and improve the country’s economy, we pay special attention to partnership with foreign railways, and first of all, those of the Customs Union member-states. The launch of the Customs Union (CU) as well as the creation of a Single Economic Space between Russia, Belarus, and Kazakhstan, the transfer of the customs control to the external border of the CU create new opportunities to speed up customs clearance procedures, and consequently, to attract transit cargo flows.  

– With which companies and international organisations does the company cooperate now?

– The enlargement of cooperation with the leading European transport machine-building companies to develop and create a new generation of rolling stock, to localise high-technology manufacturing in Russia, and to exchange experience and knowledge. Recently, the company concluded a lot of contracts and agreements with such companies as Siemens AG, Alstom, Talgo, Knorr Bremse, Finmeccanica etc. Joint ventures launched by RZD and its subsidiaries together with railways of Germany, Finland, and Slovakia play an important role in formation of through transport products on the Eurasian continent.
To enlarge access to the international cargo and passenger transportation and to make for the implementation of advanced technologies at Russian railway network, we think that cooperation with international transport organisations (the International Union of Railways (UIC), the OSJD, the CIS Railway Transport Council, the United Nations Economic Commission for Europe and ESCAP) and structures of the EU is very important for us. 

Connecting Parts of the World
– In the framework of its international activity, RZD carries out strategically important infrastructure projects abroad. Please tell us about them.

– There are projects on the reconstruction of the Khasan – Rajin railway section, large projects in Iran, and the development of Ulan-Bator Railway’s infrastructure. Nowadays, RZD actively cooperates with Serbia. We are going to participate in several projects on infrastructure construction and railway lines electrification on its territory. 
No doubt, the project of the 1520 mm-wide gauge railway from Kosice to Bratislava and Vienna and construction of the logistics infrastructure is urgent for integration of Russian railways into the European transport system. Most part of these projects is carried out to increase the transit potential of Russian railways and to integrate them into the Eurasian transport system. This will mirror the growth of the country’s international weight. 

– Experts recognise that the extension of the railway with a 1520 mm–wide gauge to the countries in Eastern and Central Europe is one of the most ambitious projects. What importance will it have for the social and economic development of Russia, the EU states, and the world economy?

–  The project of the 1520 mm railway line to Vienna construction is to become a breakthrough in the development of transport and foreign trade connections between Europe, the CIS, and China. Cargo flows of Austria, Slovakia, the Czech Republic, Hungary, Germany, Switzerland, Italy, Slovenia, Serbia, and Croatia incline towards the new railway line. Its construction will increase the attractiveness of logistics chains using railways. Due to the same width of the gauge, the cost of transportation, delivery time, and the share of the transport constituent in the final price of transported goods will reduce. 
In our estimation, the real time of cargo transportation from Europe to Asia or vice versa will be 13-14 days. Transit cargo transportation via the territory of Russia will last 7 days. Railways of Russia, Slovakia, Austria, and Ukraine launched a joint enterprise in 2009, in the framework of which the preparation of a tender on the project feasibility study is being carried out, the forecast of potential freight flows is being specified, and offers on financing terms are being formed.  
The policy of RZD is targeted at strengthening interaction with representatives of railway administrations and transport departments of other member states to form a positive approach to the project’s realisation, and to examine its legal and organisational and financial conditions.

– Vladimir Yakunin, President of RZD, has spoken often about the strategic importance of transit railway communication between China and the EU via the territory of Russia. Has this mutual interest been put into practice?

– RZD’s daughter companies actively cooperate with Chinese partners to organise transit railway transportation between China and the EU. A promising JV is RailContainer, launched by TransContainer and CRIMT (China Railway International Multimodal Transport). Lately, TransEurasiaLogistics (launched in 2008 by RZD in cooperation with DB Mobility Networks Logistics, TransContainer, Kombiverkehr, and Polzug) has succeeded in the sector of organising container transportation between China and Europe. 
In June 2011, regular container transportation between Chongqing and Duisburg was launched, and the JV participated in it. The forecasted annual cargo volume that inclines towards this railway line may exceed 23,000 FEU in 2012, and 31,000 FEU in 2015. In future, RZD plans to form a fundamental network of regular container lines covering all key points on the Russian railway network, and our joint ventures may play an important role in it. 
Another prospective activity is containerised cargo transportation from the north-eastern provinces of China (which do not have a direct access to the sea) via Russian Far Eastern ports with further delivery to the south of China, South Korea, and other countries. Here, the cooperation in the development of cargo transportation between Russia and China using the Khasan – Rajin railway line and the port of Rajin is prospective. The project is to be completed in 2012, then the commercial exploitation of the constructed objects will begin and transit transportation will be organised on the line.
The joining of Chinese Railways to the CIM/SMGS project seems to be prospective as well. Nowadays, it is one of the most successfully completed international projects of unification of legal procedures in the railway cargo transportation sector. If the Chinese party joins the project, it will be possible to transport goods from it to Western Europe and back without invoice relegalisation, and to realise the economic potential of western regions of China. This will make for the redirection of a significant part of cargo flows from the sea transport to railways. 

– What about the projects targeted at development of railway communication with the Baltic States?

– Taking into account the unique position of the Baltic region between the 1520 and 1435 spaces, the search of ways for cooperation and joint development of railway systems in all directions possible becomes especially important. A number of prospective projects in the railway transport sector are being developed nowadays. First of all is the launch of the “Riga Express” container train (Riga – Moscow – Riga). A pilot container train was dispatched from the Moscow – Tovarnaya railway station in September 2011. Cargo was carried on flat wagons owned by TransContainer. The train transported 48 FEU. In future, the train is to become regular. 
The second project is the launch of fast passenger communication between Moscow and Riga. Russian and Latvian specialists are examining this issue. The third project is the launch of the “Mercury” container train on the line Klaipeda – Kaliningrad – Moscow to redirect cargo from road transport to railways. It is supposed that a client will receive a pack of door-to-door services, including high–quality service, exact delivery time, and regular transportation. Cargo is also transported by “Baltika – Transit” container train from the Baltic states to the CIS via the territory of Russia. The operator of the project is FESCO Integrated Transport. 

The Future Is Being Born Today
– Could you tell us about the achievements of RZD in the sector of scientific and technical cooperation with foreign colleagues?

– Our company carries out a large programme of international scientific and technical cooperation with partners from Western and Eastern Europe, the USA, Canada, China, and the CIS. The measures envisaged by the programme are targeted at provision of technical regulation, standardisation and quality in the railway transport sector.
We closely cooperate with our foreign colleagues in the sector of development and implementation of new equipment and technologies. For example, in 2010-2011, the company signed several strategically important agreements and contracts aimed at integration into the Eurasian transport space and creation of a new generation of rolling stock. 
Among them there are the agreement on cooperation with Austrian Railways in the sector of logistics and intensification of transportation between Europe and Asia, transfer and development of technologies, and realisation of joint infrastructure projects; a contract between the Federal Passenger Company and Patentes Talgo S.L.(Spain) on supply of seven 20-wagon passenger trains, including those equipped with automatic gauge adjustment for use on both narrow and broad-gauge tracks. Also, an agreement was concluded with Patentes Talgo S.L. on scientific and technical cooperation in the sector of development, manufacture, exploitation, and maintenance of high-speed rolling stock.
A contract on supply of 1,200 railcars for “Lastochka” electric trains (Desiro Rus) was concluded with Siemens AG and Sinara group of companies. Its total cost is almost EUR 2 billion. Also, we concluded a contract on maintenance of 54 electric trains of this series (its cost is EUR 500 million). The contract on maintenance comes in force in 2013. Its time period is 40 years. 
Moreover, a protocol to the Agreement concluded in 1949 was signed. It envisaged that the authorised capital of the Ulan-Bator Railway would increase by $250 million to make the joint-stock company’s position financially stable and to make for its development. 
It is worth mentioning that RZD organises training of its employees abroad – in Germany, France, Spain and Finland – for them to study international experience and improve their professional skills.

– Has the specific character of cooperation in the framework of the UIC and other international organisations changed in the post–crisis period?

– The last seven years were one of the most dynamic periods in the history of interaction between RZD and multi–faceted structures. There were radical structural changes at Russian, European, and Asian railways, reformation of international transport organisations, the economic crisis in 2008-2009, and changes in the international market situation. Finally, one of the most serious structural changes in this period was the expansion of the European Union and European transport market to the countries of Central and Eastern Europe and the Baltic states.
RZD is practically the only company that, together with representatives of the governments, takes part in development of the system transport policy in the framework of the UN in the European region. Also, the company participates in the development of the system of agreements and conventions of the UN related to railway transport. Russian Transport Ministry empowered RZD to participate in the realisation of the UNECE’s global project of development of the Trans-European Railway (TER) network. As a result, the holding company can now influence the strategy of development of a railway of international importance in Europe. 
 The Organisation for Cooperation of Railways (OSJD) is principally important for RZD. Due to its active position, the company received the powers of a member of the OSJD General Directors Conference that allows it to participate in the work connected with the creation of the new normative base, and to develop norms and standards for infrastructure and rolling stock.
Thus, we can say that RZD holds the leading position in the activity of international organisations in terms of transport systems integration in Eurasia, harmonisation and actualisation of the railways’ legal base on an international scale. The position taken by RZD for its cooperation with international organisations is based on the following approach – a well-thought out joint work to integrate and consolidate efforts is necessary at all levels in crisis situations. 
by Dmitry Khantsevich
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Enlarging the 1520 AREA
In Russia the rail gauge of 1520mm (5 ft) was used for the first time in the 19th century during the construction of railway connecting the two major cities of Moscow and St. Petersburg. As distinct from the standard 1435 mm (4 ft 8.5 in) Western European gauge, it provides the transportation of cargoes with greater weight.
There exists an opinion that when choosing the rail gauge in Russia, the military aspect was taken into account. The aim of establishing such a rail size was to prevent enemies from making regular military supplies in case of war. It gave an advantage over German armies during the World War II, forcing them each time to change the width of the tracks for their rolling stocks.
However 1435 mm rail gauge is the most widespread size standard in the world. It is used in the North America, China and in many European countries, except CIS and Baltic countries, Finland, Ireland, Spain and Portugal.
Passage through the section where one gauge meets another is a headache for all the transporting companies. The break of gauge not only takes a lot of time, but also adds additional costs to traffic in general. The changing of bogies usually takes about an hour.
Such efforts spent on replacing of wheels and sometimes transferring cargoes to road transport on the borders make the railway from China to Europe lose its popularity. All additional technical operations make companies turn to other ways of transportation. The creation of broad gauge railway will set out the conditions for non-stop cargoes circulation in Europe, and will help to increase the turnover by 60%.
Nowadays the key area of RZD’s international work is the establishment of the close partnership with countries that use the common broad rail gauge.
The development of 1520mm railroad line to Bratislava and Vienna began in 2007. Two years later at a Partnership meeting in Sochi a memorandum on creating the joint venture Breitspur Planungsgesellschaft mbH was signed between Russia, Ukraine, Slovakia and Austria. “We are considering this project as a center of gravity for other businesses, all together we will form powerful logistics and transport system”, said the president of RZD Vladimir Yakunin.
Before signing the document Michael Kostiuk, Chief Executive Officer of the State Administration of Ukranian Railways, said that he had noticed a great interest in such project and it was important to pass from words to deeds. He also claimed that the joint venture implied equal stakes in its statutory fund. The joint venture itself has to develop the project and to find investors. According to Kostiuk’s prediction, turnover capacity should increase to 30-40 million tons a year.

End to end
The new broad gauge railway should run from Russia to Austria through the Ukraine and Slovakia. There has been a lot of debate about this. Broad gauge railways already exist in Ukraine and Slovakia; therefore experts were thinking about how to build it in Austria. In consequence of panel discussions two projects were submitted. The building of new third rail, parallel to the existing line, was suggested. Such a system is successfully used in Australia, where different lines between states were turned into dual gauge, or three rails line. But in Europe it is not so possible.
Numerous problems with railway points and wires may appear in future, so experts had to reject this idea. The other way is quite expensive, because it is connected with building a whole new line. But finally, preference was given to this method. 
Custom research on construction plan was made later by international consulting company Berger Strategy Consultants. According to experts, the extension of 1520 mm track from Kosice in East Slovakia to Vienna is technically and legally feasible. This project will create favorable conditions for an uninterrupted and effective railway connection between Russia, China, Asia-Pacific region in general and Central Europe. Moreover, it will offer a new competitive and environmentally safe transportation service.
The new project will mobilize from 16 to 24 million tons of additional cargoes by 2050; delivery terms will reduce to 15 days. In addition to this, fuel prices will decrease and the working capital saved will be between USD 100 and USD 1000 for one container.
The volume of turnover on the line between Koshitse-Bratislava will make up 23.7 million tons, and 18.5 million tons between Bratislava-Vienna. The raw materials (iron, ferrous metals, etc.) will be transported to Europe, and containers will be coming back.
The builders estimate the cost of creating the new line at EUR 6.3 billion. In addition to it EUR 240 million should be invest in organizing new terminals and EUR 130 million in purchasing the new vehicles. Such capital expenses can be compared with the other European infrastructure projects. 
All main works are going to take place in Slovakia. The broad-gauge line to Slovakia was built in 1960s to transport iron and coal from the USSR to Kosice. The broad gauge line has been extended to the city of Kosice, East Slovakia. Later, in 2000, the steelworks near Kosice was sold to the US Steel Corporation. But still all raw materials are being transported there through the broad gauge railway. Under the project feasibility study presented last year by Roland Berger Strategy Consultants, 505 km of line should be built from Kosice to Bratislava and 50 km to Vienna, including 8 km of tunnels and 10 km of bridges. 
According to Vladimir Yakunin, RZD is going to extend all their existing transport corridors soon. “In particular, we want to extend the broad gauge railway to Vienna. This project is being developed. However, we are experiencing some difficulties. But it is quite natural, because we are talking about different transport system standards, and about different traditions”, said the president of the RZD at the International Railway forum this year.
The company is going to conduct the design work in 2011-2013. The construction is scheduled for 2013-2015. Train services should begin in 2016. At the same time the RZD is going to build an innovative logistics centre and some terminals. In addition the development of passenger traffic is also included in company’s arrangements.

Subjected to criticism
The benefits are obvious. Firstly, Vienna itself is a huge logistics centre, due to the Danube, second-longest river in Europe, and arterial highways connecting Austria with other Central European countries. Secondly, using the Trans-Siberian Railway, the Far East can be connected with Europe through Russia, the Ukraine and Slovakia. In addition, Kazakhstan and CIS countries of Central Asia may also get involved in this way of cargo transportation.
A broad gauge rail line to Vienna and Bratislava is expected to create new jobs and provide lot of economic benefits to four countries that will establish strong ties between the EU and Russia, and also between the EU and Asia.
Of course, Europe supports the project, because it depends on Russian raw materials. 
China also has no choice. Traffic from the East to the West constantly grows, and China hasn’t created a method to bypass Russia on its way. Therefore this idea is commercially viable, and the charges will be divided between all member countries.
It is an open secret that the USA is against this project, because they are afraid that instead of oil and gas transportation, Russia may carry tanks and armored vehicles to Europe.
However the USA will not influence the plans. Political agreement signed in 2009 confirmed the plans of cooperation between Russia and Slovakia. According to Vladimir Yakunin, the new line would help to develop the International Corridor V from Koper, Slovenia, and Trieste, Italy, to Russia, Slovakia, Ukraine and Austria.
“Slovakia is opened and comfortable door to Europe”, said the President of Russia Dmitry Medvedev during his visit to Slovakia in 2010. However, last year Slovakia also had a doubt. After the summer elections the Prime Minister Robert Fico, who had supported the project, resigned. New government had the other point of view. They were afraid that all major cargo transfer stations will become unclaimed, because all traffic will go through Vienna. Opponents also claimed that the workload of Slovakia’s railway is not full – only 20%. Therefore it is important to develop the national routes, but not the new Russian one. 
Long-distance truck drivers are also against building the new line. They transport cargoes both to Europe and Asia, and broad gauge railway may leave them without work. But according to RZD, the broad gauge railway will be built anyway, with or without Slovakia’s participation. 
Anyway the project has many supporters. Czech Republic, Hungary, Germany, Switzerland, Italy, Slovenia, Serbia and Croatia have already shown great interest. The project is included in Russia’s federal plan on developing external economic ties by 2020.
“It is the most convenient, the most fresh decision, which answers not only the purposes of the Council for railway transport, but the purposes of our international partners”, said Vladimir Yakunin.
By Christina Alexandrova
    [~DETAIL_TEXT] => 
Enlarging the 1520 AREA
In Russia the rail gauge of 1520mm (5 ft) was used for the first time in the 19th century during the construction of railway connecting the two major cities of Moscow and St. Petersburg. As distinct from the standard 1435 mm (4 ft 8.5 in) Western European gauge, it provides the transportation of cargoes with greater weight.
There exists an opinion that when choosing the rail gauge in Russia, the military aspect was taken into account. The aim of establishing such a rail size was to prevent enemies from making regular military supplies in case of war. It gave an advantage over German armies during the World War II, forcing them each time to change the width of the tracks for their rolling stocks.
However 1435 mm rail gauge is the most widespread size standard in the world. It is used in the North America, China and in many European countries, except CIS and Baltic countries, Finland, Ireland, Spain and Portugal.
Passage through the section where one gauge meets another is a headache for all the transporting companies. The break of gauge not only takes a lot of time, but also adds additional costs to traffic in general. The changing of bogies usually takes about an hour.
Such efforts spent on replacing of wheels and sometimes transferring cargoes to road transport on the borders make the railway from China to Europe lose its popularity. All additional technical operations make companies turn to other ways of transportation. The creation of broad gauge railway will set out the conditions for non-stop cargoes circulation in Europe, and will help to increase the turnover by 60%.
Nowadays the key area of RZD’s international work is the establishment of the close partnership with countries that use the common broad rail gauge.
The development of 1520mm railroad line to Bratislava and Vienna began in 2007. Two years later at a Partnership meeting in Sochi a memorandum on creating the joint venture Breitspur Planungsgesellschaft mbH was signed between Russia, Ukraine, Slovakia and Austria. “We are considering this project as a center of gravity for other businesses, all together we will form powerful logistics and transport system”, said the president of RZD Vladimir Yakunin.
Before signing the document Michael Kostiuk, Chief Executive Officer of the State Administration of Ukranian Railways, said that he had noticed a great interest in such project and it was important to pass from words to deeds. He also claimed that the joint venture implied equal stakes in its statutory fund. The joint venture itself has to develop the project and to find investors. According to Kostiuk’s prediction, turnover capacity should increase to 30-40 million tons a year.

End to end
The new broad gauge railway should run from Russia to Austria through the Ukraine and Slovakia. There has been a lot of debate about this. Broad gauge railways already exist in Ukraine and Slovakia; therefore experts were thinking about how to build it in Austria. In consequence of panel discussions two projects were submitted. The building of new third rail, parallel to the existing line, was suggested. Such a system is successfully used in Australia, where different lines between states were turned into dual gauge, or three rails line. But in Europe it is not so possible.
Numerous problems with railway points and wires may appear in future, so experts had to reject this idea. The other way is quite expensive, because it is connected with building a whole new line. But finally, preference was given to this method. 
Custom research on construction plan was made later by international consulting company Berger Strategy Consultants. According to experts, the extension of 1520 mm track from Kosice in East Slovakia to Vienna is technically and legally feasible. This project will create favorable conditions for an uninterrupted and effective railway connection between Russia, China, Asia-Pacific region in general and Central Europe. Moreover, it will offer a new competitive and environmentally safe transportation service.
The new project will mobilize from 16 to 24 million tons of additional cargoes by 2050; delivery terms will reduce to 15 days. In addition to this, fuel prices will decrease and the working capital saved will be between USD 100 and USD 1000 for one container.
The volume of turnover on the line between Koshitse-Bratislava will make up 23.7 million tons, and 18.5 million tons between Bratislava-Vienna. The raw materials (iron, ferrous metals, etc.) will be transported to Europe, and containers will be coming back.
The builders estimate the cost of creating the new line at EUR 6.3 billion. In addition to it EUR 240 million should be invest in organizing new terminals and EUR 130 million in purchasing the new vehicles. Such capital expenses can be compared with the other European infrastructure projects. 
All main works are going to take place in Slovakia. The broad-gauge line to Slovakia was built in 1960s to transport iron and coal from the USSR to Kosice. The broad gauge line has been extended to the city of Kosice, East Slovakia. Later, in 2000, the steelworks near Kosice was sold to the US Steel Corporation. But still all raw materials are being transported there through the broad gauge railway. Under the project feasibility study presented last year by Roland Berger Strategy Consultants, 505 km of line should be built from Kosice to Bratislava and 50 km to Vienna, including 8 km of tunnels and 10 km of bridges. 
According to Vladimir Yakunin, RZD is going to extend all their existing transport corridors soon. “In particular, we want to extend the broad gauge railway to Vienna. This project is being developed. However, we are experiencing some difficulties. But it is quite natural, because we are talking about different transport system standards, and about different traditions”, said the president of the RZD at the International Railway forum this year.
The company is going to conduct the design work in 2011-2013. The construction is scheduled for 2013-2015. Train services should begin in 2016. At the same time the RZD is going to build an innovative logistics centre and some terminals. In addition the development of passenger traffic is also included in company’s arrangements.

Subjected to criticism
The benefits are obvious. Firstly, Vienna itself is a huge logistics centre, due to the Danube, second-longest river in Europe, and arterial highways connecting Austria with other Central European countries. Secondly, using the Trans-Siberian Railway, the Far East can be connected with Europe through Russia, the Ukraine and Slovakia. In addition, Kazakhstan and CIS countries of Central Asia may also get involved in this way of cargo transportation.
A broad gauge rail line to Vienna and Bratislava is expected to create new jobs and provide lot of economic benefits to four countries that will establish strong ties between the EU and Russia, and also between the EU and Asia.
Of course, Europe supports the project, because it depends on Russian raw materials. 
China also has no choice. Traffic from the East to the West constantly grows, and China hasn’t created a method to bypass Russia on its way. Therefore this idea is commercially viable, and the charges will be divided between all member countries.
It is an open secret that the USA is against this project, because they are afraid that instead of oil and gas transportation, Russia may carry tanks and armored vehicles to Europe.
However the USA will not influence the plans. Political agreement signed in 2009 confirmed the plans of cooperation between Russia and Slovakia. According to Vladimir Yakunin, the new line would help to develop the International Corridor V from Koper, Slovenia, and Trieste, Italy, to Russia, Slovakia, Ukraine and Austria.
“Slovakia is opened and comfortable door to Europe”, said the President of Russia Dmitry Medvedev during his visit to Slovakia in 2010. However, last year Slovakia also had a doubt. After the summer elections the Prime Minister Robert Fico, who had supported the project, resigned. New government had the other point of view. They were afraid that all major cargo transfer stations will become unclaimed, because all traffic will go through Vienna. Opponents also claimed that the workload of Slovakia’s railway is not full – only 20%. Therefore it is important to develop the national routes, but not the new Russian one. 
Long-distance truck drivers are also against building the new line. They transport cargoes both to Europe and Asia, and broad gauge railway may leave them without work. But according to RZD, the broad gauge railway will be built anyway, with or without Slovakia’s participation. 
Anyway the project has many supporters. Czech Republic, Hungary, Germany, Switzerland, Italy, Slovenia, Serbia and Croatia have already shown great interest. The project is included in Russia’s federal plan on developing external economic ties by 2020.
“It is the most convenient, the most fresh decision, which answers not only the purposes of the Council for railway transport, but the purposes of our international partners”, said Vladimir Yakunin.
By Christina Alexandrova
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            [SECTION_META_DESCRIPTION] => <img src="/ufiles/image/rus/inter/2011/4/2.jpg" border="1" alt=" " hspace="5" width="300" height="228" align="left" />The project of building a broad gauge railway from Russia to Europe seems to be entering the final phase. At the end of October the President of Russian Railways Vladimir Yakunin and the CEO of the Austrian Federal Railways Christian Kern signed the agreement on working out an investment feasibility study for the project in 2011. This agreement implies also the developing of a business model and marketing strategy for the new line and terminals. According to the projections, it may take about 10 years to build the new route.
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Enlarging the 1520 AREA
In Russia the rail gauge of 1520mm (5 ft) was used for the first time in the 19th century during the construction of railway connecting the two major cities of Moscow and St. Petersburg. As distinct from the standard 1435 mm (4 ft 8.5 in) Western European gauge, it provides the transportation of cargoes with greater weight.
There exists an opinion that when choosing the rail gauge in Russia, the military aspect was taken into account. The aim of establishing such a rail size was to prevent enemies from making regular military supplies in case of war. It gave an advantage over German armies during the World War II, forcing them each time to change the width of the tracks for their rolling stocks.
However 1435 mm rail gauge is the most widespread size standard in the world. It is used in the North America, China and in many European countries, except CIS and Baltic countries, Finland, Ireland, Spain and Portugal.
Passage through the section where one gauge meets another is a headache for all the transporting companies. The break of gauge not only takes a lot of time, but also adds additional costs to traffic in general. The changing of bogies usually takes about an hour.
Such efforts spent on replacing of wheels and sometimes transferring cargoes to road transport on the borders make the railway from China to Europe lose its popularity. All additional technical operations make companies turn to other ways of transportation. The creation of broad gauge railway will set out the conditions for non-stop cargoes circulation in Europe, and will help to increase the turnover by 60%.
Nowadays the key area of RZD’s international work is the establishment of the close partnership with countries that use the common broad rail gauge.
The development of 1520mm railroad line to Bratislava and Vienna began in 2007. Two years later at a Partnership meeting in Sochi a memorandum on creating the joint venture Breitspur Planungsgesellschaft mbH was signed between Russia, Ukraine, Slovakia and Austria. “We are considering this project as a center of gravity for other businesses, all together we will form powerful logistics and transport system”, said the president of RZD Vladimir Yakunin.
Before signing the document Michael Kostiuk, Chief Executive Officer of the State Administration of Ukranian Railways, said that he had noticed a great interest in such project and it was important to pass from words to deeds. He also claimed that the joint venture implied equal stakes in its statutory fund. The joint venture itself has to develop the project and to find investors. According to Kostiuk’s prediction, turnover capacity should increase to 30-40 million tons a year.

End to end
The new broad gauge railway should run from Russia to Austria through the Ukraine and Slovakia. There has been a lot of debate about this. Broad gauge railways already exist in Ukraine and Slovakia; therefore experts were thinking about how to build it in Austria. In consequence of panel discussions two projects were submitted. The building of new third rail, parallel to the existing line, was suggested. Such a system is successfully used in Australia, where different lines between states were turned into dual gauge, or three rails line. But in Europe it is not so possible.
Numerous problems with railway points and wires may appear in future, so experts had to reject this idea. The other way is quite expensive, because it is connected with building a whole new line. But finally, preference was given to this method. 
Custom research on construction plan was made later by international consulting company Berger Strategy Consultants. According to experts, the extension of 1520 mm track from Kosice in East Slovakia to Vienna is technically and legally feasible. This project will create favorable conditions for an uninterrupted and effective railway connection between Russia, China, Asia-Pacific region in general and Central Europe. Moreover, it will offer a new competitive and environmentally safe transportation service.
The new project will mobilize from 16 to 24 million tons of additional cargoes by 2050; delivery terms will reduce to 15 days. In addition to this, fuel prices will decrease and the working capital saved will be between USD 100 and USD 1000 for one container.
The volume of turnover on the line between Koshitse-Bratislava will make up 23.7 million tons, and 18.5 million tons between Bratislava-Vienna. The raw materials (iron, ferrous metals, etc.) will be transported to Europe, and containers will be coming back.
The builders estimate the cost of creating the new line at EUR 6.3 billion. In addition to it EUR 240 million should be invest in organizing new terminals and EUR 130 million in purchasing the new vehicles. Such capital expenses can be compared with the other European infrastructure projects. 
All main works are going to take place in Slovakia. The broad-gauge line to Slovakia was built in 1960s to transport iron and coal from the USSR to Kosice. The broad gauge line has been extended to the city of Kosice, East Slovakia. Later, in 2000, the steelworks near Kosice was sold to the US Steel Corporation. But still all raw materials are being transported there through the broad gauge railway. Under the project feasibility study presented last year by Roland Berger Strategy Consultants, 505 km of line should be built from Kosice to Bratislava and 50 km to Vienna, including 8 km of tunnels and 10 km of bridges. 
According to Vladimir Yakunin, RZD is going to extend all their existing transport corridors soon. “In particular, we want to extend the broad gauge railway to Vienna. This project is being developed. However, we are experiencing some difficulties. But it is quite natural, because we are talking about different transport system standards, and about different traditions”, said the president of the RZD at the International Railway forum this year.
The company is going to conduct the design work in 2011-2013. The construction is scheduled for 2013-2015. Train services should begin in 2016. At the same time the RZD is going to build an innovative logistics centre and some terminals. In addition the development of passenger traffic is also included in company’s arrangements.

Subjected to criticism
The benefits are obvious. Firstly, Vienna itself is a huge logistics centre, due to the Danube, second-longest river in Europe, and arterial highways connecting Austria with other Central European countries. Secondly, using the Trans-Siberian Railway, the Far East can be connected with Europe through Russia, the Ukraine and Slovakia. In addition, Kazakhstan and CIS countries of Central Asia may also get involved in this way of cargo transportation.
A broad gauge rail line to Vienna and Bratislava is expected to create new jobs and provide lot of economic benefits to four countries that will establish strong ties between the EU and Russia, and also between the EU and Asia.
Of course, Europe supports the project, because it depends on Russian raw materials. 
China also has no choice. Traffic from the East to the West constantly grows, and China hasn’t created a method to bypass Russia on its way. Therefore this idea is commercially viable, and the charges will be divided between all member countries.
It is an open secret that the USA is against this project, because they are afraid that instead of oil and gas transportation, Russia may carry tanks and armored vehicles to Europe.
However the USA will not influence the plans. Political agreement signed in 2009 confirmed the plans of cooperation between Russia and Slovakia. According to Vladimir Yakunin, the new line would help to develop the International Corridor V from Koper, Slovenia, and Trieste, Italy, to Russia, Slovakia, Ukraine and Austria.
“Slovakia is opened and comfortable door to Europe”, said the President of Russia Dmitry Medvedev during his visit to Slovakia in 2010. However, last year Slovakia also had a doubt. After the summer elections the Prime Minister Robert Fico, who had supported the project, resigned. New government had the other point of view. They were afraid that all major cargo transfer stations will become unclaimed, because all traffic will go through Vienna. Opponents also claimed that the workload of Slovakia’s railway is not full – only 20%. Therefore it is important to develop the national routes, but not the new Russian one. 
Long-distance truck drivers are also against building the new line. They transport cargoes both to Europe and Asia, and broad gauge railway may leave them without work. But according to RZD, the broad gauge railway will be built anyway, with or without Slovakia’s participation. 
Anyway the project has many supporters. Czech Republic, Hungary, Germany, Switzerland, Italy, Slovenia, Serbia and Croatia have already shown great interest. The project is included in Russia’s federal plan on developing external economic ties by 2020.
“It is the most convenient, the most fresh decision, which answers not only the purposes of the Council for railway transport, but the purposes of our international partners”, said Vladimir Yakunin.
By Christina Alexandrova
    [~DETAIL_TEXT] => 
Enlarging the 1520 AREA
In Russia the rail gauge of 1520mm (5 ft) was used for the first time in the 19th century during the construction of railway connecting the two major cities of Moscow and St. Petersburg. As distinct from the standard 1435 mm (4 ft 8.5 in) Western European gauge, it provides the transportation of cargoes with greater weight.
There exists an opinion that when choosing the rail gauge in Russia, the military aspect was taken into account. The aim of establishing such a rail size was to prevent enemies from making regular military supplies in case of war. It gave an advantage over German armies during the World War II, forcing them each time to change the width of the tracks for their rolling stocks.
However 1435 mm rail gauge is the most widespread size standard in the world. It is used in the North America, China and in many European countries, except CIS and Baltic countries, Finland, Ireland, Spain and Portugal.
Passage through the section where one gauge meets another is a headache for all the transporting companies. The break of gauge not only takes a lot of time, but also adds additional costs to traffic in general. The changing of bogies usually takes about an hour.
Such efforts spent on replacing of wheels and sometimes transferring cargoes to road transport on the borders make the railway from China to Europe lose its popularity. All additional technical operations make companies turn to other ways of transportation. The creation of broad gauge railway will set out the conditions for non-stop cargoes circulation in Europe, and will help to increase the turnover by 60%.
Nowadays the key area of RZD’s international work is the establishment of the close partnership with countries that use the common broad rail gauge.
The development of 1520mm railroad line to Bratislava and Vienna began in 2007. Two years later at a Partnership meeting in Sochi a memorandum on creating the joint venture Breitspur Planungsgesellschaft mbH was signed between Russia, Ukraine, Slovakia and Austria. “We are considering this project as a center of gravity for other businesses, all together we will form powerful logistics and transport system”, said the president of RZD Vladimir Yakunin.
Before signing the document Michael Kostiuk, Chief Executive Officer of the State Administration of Ukranian Railways, said that he had noticed a great interest in such project and it was important to pass from words to deeds. He also claimed that the joint venture implied equal stakes in its statutory fund. The joint venture itself has to develop the project and to find investors. According to Kostiuk’s prediction, turnover capacity should increase to 30-40 million tons a year.

End to end
The new broad gauge railway should run from Russia to Austria through the Ukraine and Slovakia. There has been a lot of debate about this. Broad gauge railways already exist in Ukraine and Slovakia; therefore experts were thinking about how to build it in Austria. In consequence of panel discussions two projects were submitted. The building of new third rail, parallel to the existing line, was suggested. Such a system is successfully used in Australia, where different lines between states were turned into dual gauge, or three rails line. But in Europe it is not so possible.
Numerous problems with railway points and wires may appear in future, so experts had to reject this idea. The other way is quite expensive, because it is connected with building a whole new line. But finally, preference was given to this method. 
Custom research on construction plan was made later by international consulting company Berger Strategy Consultants. According to experts, the extension of 1520 mm track from Kosice in East Slovakia to Vienna is technically and legally feasible. This project will create favorable conditions for an uninterrupted and effective railway connection between Russia, China, Asia-Pacific region in general and Central Europe. Moreover, it will offer a new competitive and environmentally safe transportation service.
The new project will mobilize from 16 to 24 million tons of additional cargoes by 2050; delivery terms will reduce to 15 days. In addition to this, fuel prices will decrease and the working capital saved will be between USD 100 and USD 1000 for one container.
The volume of turnover on the line between Koshitse-Bratislava will make up 23.7 million tons, and 18.5 million tons between Bratislava-Vienna. The raw materials (iron, ferrous metals, etc.) will be transported to Europe, and containers will be coming back.
The builders estimate the cost of creating the new line at EUR 6.3 billion. In addition to it EUR 240 million should be invest in organizing new terminals and EUR 130 million in purchasing the new vehicles. Such capital expenses can be compared with the other European infrastructure projects. 
All main works are going to take place in Slovakia. The broad-gauge line to Slovakia was built in 1960s to transport iron and coal from the USSR to Kosice. The broad gauge line has been extended to the city of Kosice, East Slovakia. Later, in 2000, the steelworks near Kosice was sold to the US Steel Corporation. But still all raw materials are being transported there through the broad gauge railway. Under the project feasibility study presented last year by Roland Berger Strategy Consultants, 505 km of line should be built from Kosice to Bratislava and 50 km to Vienna, including 8 km of tunnels and 10 km of bridges. 
According to Vladimir Yakunin, RZD is going to extend all their existing transport corridors soon. “In particular, we want to extend the broad gauge railway to Vienna. This project is being developed. However, we are experiencing some difficulties. But it is quite natural, because we are talking about different transport system standards, and about different traditions”, said the president of the RZD at the International Railway forum this year.
The company is going to conduct the design work in 2011-2013. The construction is scheduled for 2013-2015. Train services should begin in 2016. At the same time the RZD is going to build an innovative logistics centre and some terminals. In addition the development of passenger traffic is also included in company’s arrangements.

Subjected to criticism
The benefits are obvious. Firstly, Vienna itself is a huge logistics centre, due to the Danube, second-longest river in Europe, and arterial highways connecting Austria with other Central European countries. Secondly, using the Trans-Siberian Railway, the Far East can be connected with Europe through Russia, the Ukraine and Slovakia. In addition, Kazakhstan and CIS countries of Central Asia may also get involved in this way of cargo transportation.
A broad gauge rail line to Vienna and Bratislava is expected to create new jobs and provide lot of economic benefits to four countries that will establish strong ties between the EU and Russia, and also between the EU and Asia.
Of course, Europe supports the project, because it depends on Russian raw materials. 
China also has no choice. Traffic from the East to the West constantly grows, and China hasn’t created a method to bypass Russia on its way. Therefore this idea is commercially viable, and the charges will be divided between all member countries.
It is an open secret that the USA is against this project, because they are afraid that instead of oil and gas transportation, Russia may carry tanks and armored vehicles to Europe.
However the USA will not influence the plans. Political agreement signed in 2009 confirmed the plans of cooperation between Russia and Slovakia. According to Vladimir Yakunin, the new line would help to develop the International Corridor V from Koper, Slovenia, and Trieste, Italy, to Russia, Slovakia, Ukraine and Austria.
“Slovakia is opened and comfortable door to Europe”, said the President of Russia Dmitry Medvedev during his visit to Slovakia in 2010. However, last year Slovakia also had a doubt. After the summer elections the Prime Minister Robert Fico, who had supported the project, resigned. New government had the other point of view. They were afraid that all major cargo transfer stations will become unclaimed, because all traffic will go through Vienna. Opponents also claimed that the workload of Slovakia’s railway is not full – only 20%. Therefore it is important to develop the national routes, but not the new Russian one. 
Long-distance truck drivers are also against building the new line. They transport cargoes both to Europe and Asia, and broad gauge railway may leave them without work. But according to RZD, the broad gauge railway will be built anyway, with or without Slovakia’s participation. 
Anyway the project has many supporters. Czech Republic, Hungary, Germany, Switzerland, Italy, Slovenia, Serbia and Croatia have already shown great interest. The project is included in Russia’s federal plan on developing external economic ties by 2020.
“It is the most convenient, the most fresh decision, which answers not only the purposes of the Council for railway transport, but the purposes of our international partners”, said Vladimir Yakunin.
By Christina Alexandrova
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