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Construction at High Speed



The beginning of high speed traffic development in Uzbekistan started in 2004. Then the high-speed train «Registan», which travelled from Tashkent to Samarkand in a little more than 4 hours (today – in 3.5 hours), was put into operation. There were also other predecessors to the modern HSR – in 2007 the train «Shark»which get from Tashkent to Bukhara in 6.5 hours was presented. In the 2008 the train «Nasaf» began its operation from Tashkent to Karshi, its travel time was 5.5 hours. All above-mentioned trains already were major achievements for the republic. But today it is a question of absolutely other speeds – about the train «Afrosiyob».

The first such train named in honor of the ancient settlement, arrived to Tashkent in summer of 2011. And at the beginning of October the regular traffic on the Tashkent – Samarkand route was launched. The Uzbek railways reported that for these three months the train managed to transport 4,000 passengers. Last year numbers sharply increased. According to Uzzheldorpass JSC, «Afrosiyob» transported nearly 145,000 people in 2012. Why did the popularity of the train so increase?

It is obvious that the most important factor is time. Earlier passengers did this route (344 km) in 8 hours, in most cases they travelled by uncomfortable buses without an air conditioner. The rolling stock bought from the Talgo Company (for €38 million of its own means) is another matter. It is equipped with all necessary services: coach bistro, soft seats, and places for disabled people. Moreover, as the company reports, the crew and drivers got necessary training by the Spanish companies Talgo and Renfe, which guarantees better safety. The vendor worked over train construction. And the normal Talgo 250 model became as a result easier and cheaper to run.

The growth in statistics of passenger turnover was affected also by the fact that at the end of 2011 the second train arrived to Uzbekistan. And today one of them runs on weekends, and the second – every day. For citizens of Moscow and St Petersburg the train won’t seem anything unusual, as it is similar to “Sapsan”. But in Uzbekistan, where there was no normal high-speed traffic, both passengers and the government were happy with the arrival of the new train. 

Really, the HSR project turned out rather large scale for the republic and was executed in the shortest time. “During its implementation 600 km of tracks were modernised, 244 facilities, including 141 bridges were reconstructed, four new unique 420 metre long metal bridges were built”, a representative of Uzzheldorpass says. “Construction of a 700 km long electrified line is planned”.

Everything was constructed in only 5 months. The railroad spent about $170 million on infrastructure upgrades. Two new electrified lines were built: double-track Yangiyer – Dashtabad and single-track Dashtabad – Dzhizak. Their cost was $95 million. The overall cost of the project amounted to $225 million.



Not Fast Enough





However there were experts who criticised the project. In the construction phase, there was a public incident with a barbed wire which was set along a way with the purpose to ensure either safety of the population or safety of HSR. Having seen such barrier, the checking commission ordered to replace it immediately with normal grids. It took one month. But the unpleasant aftertaste remained.

Still experts say that high-speed train predecessors, usual freight trains and new trains use today the same tracks. Thus, the burden on rails increases, and the infrastructure becomes worn faster.

There are people who are not satisfied with the train. According to passengers, the high speed train is not as fast as they expected. In takes 2.5 hours to travel from one city to another, as the actual speed of the train is only 125 kph. It is no wonder, as the train operates on usual tracks; only one 35 kilometre long section and four new bridges were constructed specially for HSR. Nevertheless when it was passing tests in August, 2011, it got to the other city in only 90 minutes. But on normal infrastructure it can be unsafe.

There are a number of speed restrictions in the republic. The railway passes through high-rise levels and has a large number of curves; therefore it is impossible to travel there at a high speed. Thus, the speed in the Tashkent region must not exceed 190 kph, the maximum speed limit near Samarkand varies between 120 and 160 kph. In spite of the fact that additional tracks are to be constructed, it will not happen very soon, because of a difficult financial situation.

By the way, an alternative high-speed Chinese train “Registon” operates on the same line. Its comfort level doesn’t differ much from the Talgo model, and the travel time is only one hour more. The cost of tickets is less, however. And traveling by a shuttle bus will be even cheaper. But as the climate in Uzbekistan is hot, and buses are old, it would be difficult to make such trip.



It’s Just the Beginning



Skeptics say that the “«Afrosiyob»” train was invented for tourists who can’t do without the European level of comfort. However, the results of passenger traffic show this is not so.

And the government of Uzbekistan is making plans of further HSR development. 

Other three stages of the project are already known. The existing route is to expand due to the launch of high-speed traffic on the Tashkent – Bukhara line and on the Tashkent – Hodzhikent commuter line in 2016-2020.  

Line extension in the Tashkent – Karshi direction will begin in 2021. The last stage, which will be carried out by 2035, will include HSR development on the Tashkent – Navoi – Urgench and the Tashkent – Andizhan routes.

What trains will move on these routes? Probably, also Talgo models. The Spanish company has a representation office in the republic. And Pascual Torres, Head of the affiliate, noted that there was a demand for HSR transportation in Uzbekistan. According to him, cooperation with Uzbek Railways is interesting as the company has a long-term development program envisaging the purchase of rolling stock, and also infrastructure upgrades. Thus, experts at Talgo are ready to work on the development of new routes. “Two trains are only the beginning of our cooperation with Uzbek Railways “, Mr Torres said.

Well developed network of high-speed railways in Europe and Asia was constructed first of all for businessmen, people, for whom time means money. Who is the main audience of “«Afrosiyob»” is unknown. The cost of tickets for the train varies in the range of $30-50 (it is the cost of staying for a night in a local expensive hotel). Bus tickets usually cost $1–3 for 100 km. Therefore for ordinary people of Uzbekistan the new train is rather expensive. So, probably, the lion’s share of travelers were tourists last year. Nevertheless, it is obvious that HSR in Uzbekistan is a successful idea.

By Christina Alexandrova
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Construction at High Speed



The beginning of high speed traffic development in Uzbekistan started in 2004. Then the high-speed train «Registan», which travelled from Tashkent to Samarkand in a little more than 4 hours (today – in 3.5 hours), was put into operation. There were also other predecessors to the modern HSR – in 2007 the train «Shark»which get from Tashkent to Bukhara in 6.5 hours was presented. In the 2008 the train «Nasaf» began its operation from Tashkent to Karshi, its travel time was 5.5 hours. All above-mentioned trains already were major achievements for the republic. But today it is a question of absolutely other speeds – about the train «Afrosiyob».

The first such train named in honor of the ancient settlement, arrived to Tashkent in summer of 2011. And at the beginning of October the regular traffic on the Tashkent – Samarkand route was launched. The Uzbek railways reported that for these three months the train managed to transport 4,000 passengers. Last year numbers sharply increased. According to Uzzheldorpass JSC, «Afrosiyob» transported nearly 145,000 people in 2012. Why did the popularity of the train so increase?

It is obvious that the most important factor is time. Earlier passengers did this route (344 km) in 8 hours, in most cases they travelled by uncomfortable buses without an air conditioner. The rolling stock bought from the Talgo Company (for €38 million of its own means) is another matter. It is equipped with all necessary services: coach bistro, soft seats, and places for disabled people. Moreover, as the company reports, the crew and drivers got necessary training by the Spanish companies Talgo and Renfe, which guarantees better safety. The vendor worked over train construction. And the normal Talgo 250 model became as a result easier and cheaper to run.

The growth in statistics of passenger turnover was affected also by the fact that at the end of 2011 the second train arrived to Uzbekistan. And today one of them runs on weekends, and the second – every day. For citizens of Moscow and St Petersburg the train won’t seem anything unusual, as it is similar to “Sapsan”. But in Uzbekistan, where there was no normal high-speed traffic, both passengers and the government were happy with the arrival of the new train. 

Really, the HSR project turned out rather large scale for the republic and was executed in the shortest time. “During its implementation 600 km of tracks were modernised, 244 facilities, including 141 bridges were reconstructed, four new unique 420 metre long metal bridges were built”, a representative of Uzzheldorpass says. “Construction of a 700 km long electrified line is planned”.

Everything was constructed in only 5 months. The railroad spent about $170 million on infrastructure upgrades. Two new electrified lines were built: double-track Yangiyer – Dashtabad and single-track Dashtabad – Dzhizak. Their cost was $95 million. The overall cost of the project amounted to $225 million.



Not Fast Enough





However there were experts who criticised the project. In the construction phase, there was a public incident with a barbed wire which was set along a way with the purpose to ensure either safety of the population or safety of HSR. Having seen such barrier, the checking commission ordered to replace it immediately with normal grids. It took one month. But the unpleasant aftertaste remained.

Still experts say that high-speed train predecessors, usual freight trains and new trains use today the same tracks. Thus, the burden on rails increases, and the infrastructure becomes worn faster.

There are people who are not satisfied with the train. According to passengers, the high speed train is not as fast as they expected. In takes 2.5 hours to travel from one city to another, as the actual speed of the train is only 125 kph. It is no wonder, as the train operates on usual tracks; only one 35 kilometre long section and four new bridges were constructed specially for HSR. Nevertheless when it was passing tests in August, 2011, it got to the other city in only 90 minutes. But on normal infrastructure it can be unsafe.

There are a number of speed restrictions in the republic. The railway passes through high-rise levels and has a large number of curves; therefore it is impossible to travel there at a high speed. Thus, the speed in the Tashkent region must not exceed 190 kph, the maximum speed limit near Samarkand varies between 120 and 160 kph. In spite of the fact that additional tracks are to be constructed, it will not happen very soon, because of a difficult financial situation.

By the way, an alternative high-speed Chinese train “Registon” operates on the same line. Its comfort level doesn’t differ much from the Talgo model, and the travel time is only one hour more. The cost of tickets is less, however. And traveling by a shuttle bus will be even cheaper. But as the climate in Uzbekistan is hot, and buses are old, it would be difficult to make such trip.



It’s Just the Beginning



Skeptics say that the “«Afrosiyob»” train was invented for tourists who can’t do without the European level of comfort. However, the results of passenger traffic show this is not so.

And the government of Uzbekistan is making plans of further HSR development. 

Other three stages of the project are already known. The existing route is to expand due to the launch of high-speed traffic on the Tashkent – Bukhara line and on the Tashkent – Hodzhikent commuter line in 2016-2020.  

Line extension in the Tashkent – Karshi direction will begin in 2021. The last stage, which will be carried out by 2035, will include HSR development on the Tashkent – Navoi – Urgench and the Tashkent – Andizhan routes.

What trains will move on these routes? Probably, also Talgo models. The Spanish company has a representation office in the republic. And Pascual Torres, Head of the affiliate, noted that there was a demand for HSR transportation in Uzbekistan. According to him, cooperation with Uzbek Railways is interesting as the company has a long-term development program envisaging the purchase of rolling stock, and also infrastructure upgrades. Thus, experts at Talgo are ready to work on the development of new routes. “Two trains are only the beginning of our cooperation with Uzbek Railways “, Mr Torres said.

Well developed network of high-speed railways in Europe and Asia was constructed first of all for businessmen, people, for whom time means money. Who is the main audience of “«Afrosiyob»” is unknown. The cost of tickets for the train varies in the range of $30-50 (it is the cost of staying for a night in a local expensive hotel). Bus tickets usually cost $1–3 for 100 km. Therefore for ordinary people of Uzbekistan the new train is rather expensive. So, probably, the lion’s share of travelers were tourists last year. Nevertheless, it is obvious that HSR in Uzbekistan is a successful idea.

By Christina Alexandrova
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Construction at High Speed



The beginning of high speed traffic development in Uzbekistan started in 2004. Then the high-speed train «Registan», which travelled from Tashkent to Samarkand in a little more than 4 hours (today – in 3.5 hours), was put into operation. There were also other predecessors to the modern HSR – in 2007 the train «Shark»which get from Tashkent to Bukhara in 6.5 hours was presented. In the 2008 the train «Nasaf» began its operation from Tashkent to Karshi, its travel time was 5.5 hours. All above-mentioned trains already were major achievements for the republic. But today it is a question of absolutely other speeds – about the train «Afrosiyob».

The first such train named in honor of the ancient settlement, arrived to Tashkent in summer of 2011. And at the beginning of October the regular traffic on the Tashkent – Samarkand route was launched. The Uzbek railways reported that for these three months the train managed to transport 4,000 passengers. Last year numbers sharply increased. According to Uzzheldorpass JSC, «Afrosiyob» transported nearly 145,000 people in 2012. Why did the popularity of the train so increase?

It is obvious that the most important factor is time. Earlier passengers did this route (344 km) in 8 hours, in most cases they travelled by uncomfortable buses without an air conditioner. The rolling stock bought from the Talgo Company (for €38 million of its own means) is another matter. It is equipped with all necessary services: coach bistro, soft seats, and places for disabled people. Moreover, as the company reports, the crew and drivers got necessary training by the Spanish companies Talgo and Renfe, which guarantees better safety. The vendor worked over train construction. And the normal Talgo 250 model became as a result easier and cheaper to run.

The growth in statistics of passenger turnover was affected also by the fact that at the end of 2011 the second train arrived to Uzbekistan. And today one of them runs on weekends, and the second – every day. For citizens of Moscow and St Petersburg the train won’t seem anything unusual, as it is similar to “Sapsan”. But in Uzbekistan, where there was no normal high-speed traffic, both passengers and the government were happy with the arrival of the new train. 

Really, the HSR project turned out rather large scale for the republic and was executed in the shortest time. “During its implementation 600 km of tracks were modernised, 244 facilities, including 141 bridges were reconstructed, four new unique 420 metre long metal bridges were built”, a representative of Uzzheldorpass says. “Construction of a 700 km long electrified line is planned”.

Everything was constructed in only 5 months. The railroad spent about $170 million on infrastructure upgrades. Two new electrified lines were built: double-track Yangiyer – Dashtabad and single-track Dashtabad – Dzhizak. Their cost was $95 million. The overall cost of the project amounted to $225 million.



Not Fast Enough





However there were experts who criticised the project. In the construction phase, there was a public incident with a barbed wire which was set along a way with the purpose to ensure either safety of the population or safety of HSR. Having seen such barrier, the checking commission ordered to replace it immediately with normal grids. It took one month. But the unpleasant aftertaste remained.

Still experts say that high-speed train predecessors, usual freight trains and new trains use today the same tracks. Thus, the burden on rails increases, and the infrastructure becomes worn faster.

There are people who are not satisfied with the train. According to passengers, the high speed train is not as fast as they expected. In takes 2.5 hours to travel from one city to another, as the actual speed of the train is only 125 kph. It is no wonder, as the train operates on usual tracks; only one 35 kilometre long section and four new bridges were constructed specially for HSR. Nevertheless when it was passing tests in August, 2011, it got to the other city in only 90 minutes. But on normal infrastructure it can be unsafe.

There are a number of speed restrictions in the republic. The railway passes through high-rise levels and has a large number of curves; therefore it is impossible to travel there at a high speed. Thus, the speed in the Tashkent region must not exceed 190 kph, the maximum speed limit near Samarkand varies between 120 and 160 kph. In spite of the fact that additional tracks are to be constructed, it will not happen very soon, because of a difficult financial situation.

By the way, an alternative high-speed Chinese train “Registon” operates on the same line. Its comfort level doesn’t differ much from the Talgo model, and the travel time is only one hour more. The cost of tickets is less, however. And traveling by a shuttle bus will be even cheaper. But as the climate in Uzbekistan is hot, and buses are old, it would be difficult to make such trip.



It’s Just the Beginning



Skeptics say that the “«Afrosiyob»” train was invented for tourists who can’t do without the European level of comfort. However, the results of passenger traffic show this is not so.

And the government of Uzbekistan is making plans of further HSR development. 

Other three stages of the project are already known. The existing route is to expand due to the launch of high-speed traffic on the Tashkent – Bukhara line and on the Tashkent – Hodzhikent commuter line in 2016-2020.  

Line extension in the Tashkent – Karshi direction will begin in 2021. The last stage, which will be carried out by 2035, will include HSR development on the Tashkent – Navoi – Urgench and the Tashkent – Andizhan routes.

What trains will move on these routes? Probably, also Talgo models. The Spanish company has a representation office in the republic. And Pascual Torres, Head of the affiliate, noted that there was a demand for HSR transportation in Uzbekistan. According to him, cooperation with Uzbek Railways is interesting as the company has a long-term development program envisaging the purchase of rolling stock, and also infrastructure upgrades. Thus, experts at Talgo are ready to work on the development of new routes. “Two trains are only the beginning of our cooperation with Uzbek Railways “, Mr Torres said.

Well developed network of high-speed railways in Europe and Asia was constructed first of all for businessmen, people, for whom time means money. Who is the main audience of “«Afrosiyob»” is unknown. The cost of tickets for the train varies in the range of $30-50 (it is the cost of staying for a night in a local expensive hotel). Bus tickets usually cost $1–3 for 100 km. Therefore for ordinary people of Uzbekistan the new train is rather expensive. So, probably, the lion’s share of travelers were tourists last year. Nevertheless, it is obvious that HSR in Uzbekistan is a successful idea.

By Christina Alexandrova
    [~DETAIL_TEXT] => 
Construction at High Speed



The beginning of high speed traffic development in Uzbekistan started in 2004. Then the high-speed train «Registan», which travelled from Tashkent to Samarkand in a little more than 4 hours (today – in 3.5 hours), was put into operation. There were also other predecessors to the modern HSR – in 2007 the train «Shark»which get from Tashkent to Bukhara in 6.5 hours was presented. In the 2008 the train «Nasaf» began its operation from Tashkent to Karshi, its travel time was 5.5 hours. All above-mentioned trains already were major achievements for the republic. But today it is a question of absolutely other speeds – about the train «Afrosiyob».

The first such train named in honor of the ancient settlement, arrived to Tashkent in summer of 2011. And at the beginning of October the regular traffic on the Tashkent – Samarkand route was launched. The Uzbek railways reported that for these three months the train managed to transport 4,000 passengers. Last year numbers sharply increased. According to Uzzheldorpass JSC, «Afrosiyob» transported nearly 145,000 people in 2012. Why did the popularity of the train so increase?

It is obvious that the most important factor is time. Earlier passengers did this route (344 km) in 8 hours, in most cases they travelled by uncomfortable buses without an air conditioner. The rolling stock bought from the Talgo Company (for €38 million of its own means) is another matter. It is equipped with all necessary services: coach bistro, soft seats, and places for disabled people. Moreover, as the company reports, the crew and drivers got necessary training by the Spanish companies Talgo and Renfe, which guarantees better safety. The vendor worked over train construction. And the normal Talgo 250 model became as a result easier and cheaper to run.

The growth in statistics of passenger turnover was affected also by the fact that at the end of 2011 the second train arrived to Uzbekistan. And today one of them runs on weekends, and the second – every day. For citizens of Moscow and St Petersburg the train won’t seem anything unusual, as it is similar to “Sapsan”. But in Uzbekistan, where there was no normal high-speed traffic, both passengers and the government were happy with the arrival of the new train. 

Really, the HSR project turned out rather large scale for the republic and was executed in the shortest time. “During its implementation 600 km of tracks were modernised, 244 facilities, including 141 bridges were reconstructed, four new unique 420 metre long metal bridges were built”, a representative of Uzzheldorpass says. “Construction of a 700 km long electrified line is planned”.

Everything was constructed in only 5 months. The railroad spent about $170 million on infrastructure upgrades. Two new electrified lines were built: double-track Yangiyer – Dashtabad and single-track Dashtabad – Dzhizak. Their cost was $95 million. The overall cost of the project amounted to $225 million.



Not Fast Enough





However there were experts who criticised the project. In the construction phase, there was a public incident with a barbed wire which was set along a way with the purpose to ensure either safety of the population or safety of HSR. Having seen such barrier, the checking commission ordered to replace it immediately with normal grids. It took one month. But the unpleasant aftertaste remained.

Still experts say that high-speed train predecessors, usual freight trains and new trains use today the same tracks. Thus, the burden on rails increases, and the infrastructure becomes worn faster.

There are people who are not satisfied with the train. According to passengers, the high speed train is not as fast as they expected. In takes 2.5 hours to travel from one city to another, as the actual speed of the train is only 125 kph. It is no wonder, as the train operates on usual tracks; only one 35 kilometre long section and four new bridges were constructed specially for HSR. Nevertheless when it was passing tests in August, 2011, it got to the other city in only 90 minutes. But on normal infrastructure it can be unsafe.

There are a number of speed restrictions in the republic. The railway passes through high-rise levels and has a large number of curves; therefore it is impossible to travel there at a high speed. Thus, the speed in the Tashkent region must not exceed 190 kph, the maximum speed limit near Samarkand varies between 120 and 160 kph. In spite of the fact that additional tracks are to be constructed, it will not happen very soon, because of a difficult financial situation.

By the way, an alternative high-speed Chinese train “Registon” operates on the same line. Its comfort level doesn’t differ much from the Talgo model, and the travel time is only one hour more. The cost of tickets is less, however. And traveling by a shuttle bus will be even cheaper. But as the climate in Uzbekistan is hot, and buses are old, it would be difficult to make such trip.



It’s Just the Beginning



Skeptics say that the “«Afrosiyob»” train was invented for tourists who can’t do without the European level of comfort. However, the results of passenger traffic show this is not so.

And the government of Uzbekistan is making plans of further HSR development. 

Other three stages of the project are already known. The existing route is to expand due to the launch of high-speed traffic on the Tashkent – Bukhara line and on the Tashkent – Hodzhikent commuter line in 2016-2020.  

Line extension in the Tashkent – Karshi direction will begin in 2021. The last stage, which will be carried out by 2035, will include HSR development on the Tashkent – Navoi – Urgench and the Tashkent – Andizhan routes.

What trains will move on these routes? Probably, also Talgo models. The Spanish company has a representation office in the republic. And Pascual Torres, Head of the affiliate, noted that there was a demand for HSR transportation in Uzbekistan. According to him, cooperation with Uzbek Railways is interesting as the company has a long-term development program envisaging the purchase of rolling stock, and also infrastructure upgrades. Thus, experts at Talgo are ready to work on the development of new routes. “Two trains are only the beginning of our cooperation with Uzbek Railways “, Mr Torres said.

Well developed network of high-speed railways in Europe and Asia was constructed first of all for businessmen, people, for whom time means money. Who is the main audience of “«Afrosiyob»” is unknown. The cost of tickets for the train varies in the range of $30-50 (it is the cost of staying for a night in a local expensive hotel). Bus tickets usually cost $1–3 for 100 km. Therefore for ordinary people of Uzbekistan the new train is rather expensive. So, probably, the lion’s share of travelers were tourists last year. Nevertheless, it is obvious that HSR in Uzbekistan is a successful idea.

By Christina Alexandrova
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Winner Takes It All





At the beginning of last year all air carriers began to worry, because the passenger traffic between Moscow and Petersburg practically didn’t grow. Experts connected this tendency to the rapid development of high speed movement on this route. Russian Railways company was doing its best to increase the number of trains; they also tried to attract more clients by new services. However, air companies didn’t voice exact numbers on reduction. But RZD said that current resources of «Sapsans» were already depleted.

This factor in many respects also impacted totals of operation of carriers last year. Full year occupancy rates of «Sapsans» was 91.6%, but it didn’t prevent all airports in two cities from increasing all their indexes too. But companies still don’t want to give exact numbers, concerning the Moscow-Petersburg route.

According to Director of the High-Speed Train Department at Russian Railways Dmitry Pegov, it’s not right to say that «Sapsans» are taking passengers from airlines. “I would like to remind, that passenger traffic between the capital and St Petersburg can exceed 9 million passengers a year. Therefore, there is enough work for all carriers. Of course, some passengers chose to travel by «Sapsan» instead of planes. But we can’t say that passenger traffic at the airports fell. At least, it won’t happen until there is no separated rail line,” he said.

According to the High-Speed Train Department, about 3.1 million people were carried by «Sapsans» last year (it’s +9.7% to the results of 2011 and +38.7% more than in 2010). Such small growth is explained by the same factor – existing trains are completely filled, and new rolling stock hasn’t been delivered yet.

The Pulkovo airport in St Petersburg serviced more than 11 million people last year, which is 16% more than in 2011. The passenger traffic on internal flights grew by 11%. On the St Petersburg-Moscow route a small reduction, of about 2%, was recorded, but it didn’t affect the general indexes, and was connected, first of all, with the decision of air companies to offer direct flights, instead of connecting ones.

In Sheremetyevo, the year was completed with good results. The airport transported more than 26 million people last year (+16% to 2011). The increase by 18% was recorded on the internal flights, and St Petersburg became the most popular direction there.



Offering New Services



Last year the largest Russian air company Aeroflot transported its millionth passenger from St Petersburg to Moscow, having organized a welcome-ceremony and having awarded him with different certificates for company’s services. In many respects, the volume of passenger traffic of Aeroflot, according to its representatives, has grown due to the service “Business Travel Card” provided since 2011. And, of course, the loyalty program on accumulation of miles has a great impact too.

RZD also provided something similar last year, the Russian Railways Bonus program, but it didn’t concern high-speed trains. So what are the new services succeeded to provide almost 100% occupancy rate of «Sapsans» throughout all the 2012?

At the beginning of last year it was reported that Russian Railways had been going to increase the number of «Sapsans», increase the capacity of trains, and increase their comfort at the expense of arrangement of additional zones of the first class and a VIP-zone. The company was also going to provide internet connection for all passengers.

However park extension didn’t happen in 2012. According to the director of “Systems of Rail Transport” and “Mobility and Logistics” departments of Siemens Russia Dmitry Matsenov, the second consignment, consisted of eight trains, can be expected not earlier than at the end of 2013 or the beginning of 2014. He also said new trains would include the promised additional zones of the first class and VIP-zone. And there will be no other major differences.

As for Internet connection, passengers really could estimate this service last year. Together with the “Megafon” company RZD offered to choose from the services with different prices for high-speed connection. And for the travelers who selected the first class, the service became free. Thus, «Sapsans» got a serious advantage in comparison with flights. 

First Deputy Director of the High-Speed Train Department at Russian Railways Konstantin Vorontsov also says that introduction of the system of dynamic control by rates (when the cost of the ticket is created by means of two criteria: dates of sale of the travel document and percentage of occupied places in the train), and also advertizing and marketing actions helped to increase the volume of passenger traffic in high-speed trains. “Some types of rates were implemented,” K. Vorontsov said.  “For example: the rate “there and back” is cheaper than the usual one for 10%, the rate “Card” is cheaper than the usual one for 5%, rates: “60+” is cheaper for 20%, “16/25” is cheaper for 15%, “10/16” is cheaper for 20%, “Two capitals” is cheaper for 15%, “Restaurant” is cheaper for 5%”. So all passengers now have a good choice. 



No Surprises



Unlike «Sapsans», the results of which, as usual, exceeded all expectations, the «Allegro» trains (between St Petersburg and Helsinki) didn’t show really great results. According to the High-Speed Train Department at Russian Railways, the passenger traffic here grew also – more than 350 thousand passengers selected this way of traveling last year (+15.5% to 2011). But there were no surprises – according to the CEO of VR Group (Finnish Railways) Mikael Aro, they had been expecting such results.

But passengers weren’t offered anything new here. Opening of the promised Duty Free shop at the Finnish station was postponed until 2013 year, the Internet in trains was launched only on an experimental basis, the considerable reduction of prices of tickets , which many travelers had expected, didn’t occur. Besides, travelers understood that any visa privileges for the Russian citizens, who choose to travel by «Allegro», will be scrapped soon. And therefore they don’t want to overpay even for speed, because there are a lot of cheap alternatives to get to Finland.

Last year the occupancy rate of «Allegro», as well as earlier, was influenced by seasonal factors – during holidays this index could reach 100%, during not popular seasons – be less than 30%. 

It is impossible to speak about the competition only with air carriers here. Though Finnair airline finished last year with good operational results on the Helsinki – St Petersburg line, and in the 2013 they are going to increase number of these flights. However, the Rossiya airline last year temporarily stopped flights on this route. They didn’t voice the real reasons, but it is obvious that such a decision was made because air carriers are losing the competition to cars and buses, which still are favorites on this route.

According to data of the Border Service of Finland, last year more than 12 million people crossed the border by buses and cars (+13% to 2011). For New Year’s holidays alone there were 300 thousand travelers. That is a little less, than Allegro has transported for the whole year.

However last year the ferry operator St Peter Line, the ferries of which are travelling on routes St Petersburg – Helsinki and St Petersburg – Helsinki – Stockholm, got really incredible indexes, having transported more than 600 thousand passengers (+32% to 2011).

As for passengers from St Petersburg, it’s foolish to expect a great increase in their interest in «Allegro». Definitely the change of the system of rates, accepted at the end of last year, will not increase the statistics. Let’s remind that RZD and VR Group differentiated rates for this train, and now the ticket in holidays will be more expensive, than during the periods of low demand. As for «Sapsans», the same system works there too. However, on the St Petersburg-Moscow line, unlike the St Petersburg-Helsinki route, such cheap alternatives as shuttle buses don’t exist.

Carriers also understand it. And, according to Mr Aro, they connect all the expectations with HSR project to Moscow. RZD has already decided to fight for passengers from the capital, and is going to organize this year a transfer from the Moscovsky railway station, where Sapsan arrives, to Finlyandky railway station, where «Allegro» departs.

By Christina Alexandrova
    [~DETAIL_TEXT] => 
Winner Takes It All





At the beginning of last year all air carriers began to worry, because the passenger traffic between Moscow and Petersburg practically didn’t grow. Experts connected this tendency to the rapid development of high speed movement on this route. Russian Railways company was doing its best to increase the number of trains; they also tried to attract more clients by new services. However, air companies didn’t voice exact numbers on reduction. But RZD said that current resources of «Sapsans» were already depleted.

This factor in many respects also impacted totals of operation of carriers last year. Full year occupancy rates of «Sapsans» was 91.6%, but it didn’t prevent all airports in two cities from increasing all their indexes too. But companies still don’t want to give exact numbers, concerning the Moscow-Petersburg route.

According to Director of the High-Speed Train Department at Russian Railways Dmitry Pegov, it’s not right to say that «Sapsans» are taking passengers from airlines. “I would like to remind, that passenger traffic between the capital and St Petersburg can exceed 9 million passengers a year. Therefore, there is enough work for all carriers. Of course, some passengers chose to travel by «Sapsan» instead of planes. But we can’t say that passenger traffic at the airports fell. At least, it won’t happen until there is no separated rail line,” he said.

According to the High-Speed Train Department, about 3.1 million people were carried by «Sapsans» last year (it’s +9.7% to the results of 2011 and +38.7% more than in 2010). Such small growth is explained by the same factor – existing trains are completely filled, and new rolling stock hasn’t been delivered yet.

The Pulkovo airport in St Petersburg serviced more than 11 million people last year, which is 16% more than in 2011. The passenger traffic on internal flights grew by 11%. On the St Petersburg-Moscow route a small reduction, of about 2%, was recorded, but it didn’t affect the general indexes, and was connected, first of all, with the decision of air companies to offer direct flights, instead of connecting ones.

In Sheremetyevo, the year was completed with good results. The airport transported more than 26 million people last year (+16% to 2011). The increase by 18% was recorded on the internal flights, and St Petersburg became the most popular direction there.



Offering New Services



Last year the largest Russian air company Aeroflot transported its millionth passenger from St Petersburg to Moscow, having organized a welcome-ceremony and having awarded him with different certificates for company’s services. In many respects, the volume of passenger traffic of Aeroflot, according to its representatives, has grown due to the service “Business Travel Card” provided since 2011. And, of course, the loyalty program on accumulation of miles has a great impact too.

RZD also provided something similar last year, the Russian Railways Bonus program, but it didn’t concern high-speed trains. So what are the new services succeeded to provide almost 100% occupancy rate of «Sapsans» throughout all the 2012?

At the beginning of last year it was reported that Russian Railways had been going to increase the number of «Sapsans», increase the capacity of trains, and increase their comfort at the expense of arrangement of additional zones of the first class and a VIP-zone. The company was also going to provide internet connection for all passengers.

However park extension didn’t happen in 2012. According to the director of “Systems of Rail Transport” and “Mobility and Logistics” departments of Siemens Russia Dmitry Matsenov, the second consignment, consisted of eight trains, can be expected not earlier than at the end of 2013 or the beginning of 2014. He also said new trains would include the promised additional zones of the first class and VIP-zone. And there will be no other major differences.

As for Internet connection, passengers really could estimate this service last year. Together with the “Megafon” company RZD offered to choose from the services with different prices for high-speed connection. And for the travelers who selected the first class, the service became free. Thus, «Sapsans» got a serious advantage in comparison with flights. 

First Deputy Director of the High-Speed Train Department at Russian Railways Konstantin Vorontsov also says that introduction of the system of dynamic control by rates (when the cost of the ticket is created by means of two criteria: dates of sale of the travel document and percentage of occupied places in the train), and also advertizing and marketing actions helped to increase the volume of passenger traffic in high-speed trains. “Some types of rates were implemented,” K. Vorontsov said.  “For example: the rate “there and back” is cheaper than the usual one for 10%, the rate “Card” is cheaper than the usual one for 5%, rates: “60+” is cheaper for 20%, “16/25” is cheaper for 15%, “10/16” is cheaper for 20%, “Two capitals” is cheaper for 15%, “Restaurant” is cheaper for 5%”. So all passengers now have a good choice. 



No Surprises



Unlike «Sapsans», the results of which, as usual, exceeded all expectations, the «Allegro» trains (between St Petersburg and Helsinki) didn’t show really great results. According to the High-Speed Train Department at Russian Railways, the passenger traffic here grew also – more than 350 thousand passengers selected this way of traveling last year (+15.5% to 2011). But there were no surprises – according to the CEO of VR Group (Finnish Railways) Mikael Aro, they had been expecting such results.

But passengers weren’t offered anything new here. Opening of the promised Duty Free shop at the Finnish station was postponed until 2013 year, the Internet in trains was launched only on an experimental basis, the considerable reduction of prices of tickets , which many travelers had expected, didn’t occur. Besides, travelers understood that any visa privileges for the Russian citizens, who choose to travel by «Allegro», will be scrapped soon. And therefore they don’t want to overpay even for speed, because there are a lot of cheap alternatives to get to Finland.

Last year the occupancy rate of «Allegro», as well as earlier, was influenced by seasonal factors – during holidays this index could reach 100%, during not popular seasons – be less than 30%. 

It is impossible to speak about the competition only with air carriers here. Though Finnair airline finished last year with good operational results on the Helsinki – St Petersburg line, and in the 2013 they are going to increase number of these flights. However, the Rossiya airline last year temporarily stopped flights on this route. They didn’t voice the real reasons, but it is obvious that such a decision was made because air carriers are losing the competition to cars and buses, which still are favorites on this route.

According to data of the Border Service of Finland, last year more than 12 million people crossed the border by buses and cars (+13% to 2011). For New Year’s holidays alone there were 300 thousand travelers. That is a little less, than Allegro has transported for the whole year.

However last year the ferry operator St Peter Line, the ferries of which are travelling on routes St Petersburg – Helsinki and St Petersburg – Helsinki – Stockholm, got really incredible indexes, having transported more than 600 thousand passengers (+32% to 2011).

As for passengers from St Petersburg, it’s foolish to expect a great increase in their interest in «Allegro». Definitely the change of the system of rates, accepted at the end of last year, will not increase the statistics. Let’s remind that RZD and VR Group differentiated rates for this train, and now the ticket in holidays will be more expensive, than during the periods of low demand. As for «Sapsans», the same system works there too. However, on the St Petersburg-Moscow line, unlike the St Petersburg-Helsinki route, such cheap alternatives as shuttle buses don’t exist.

Carriers also understand it. And, according to Mr Aro, they connect all the expectations with HSR project to Moscow. RZD has already decided to fight for passengers from the capital, and is going to organize this year a transfer from the Moscovsky railway station, where Sapsan arrives, to Finlyandky railway station, where «Allegro» departs.

By Christina Alexandrova
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Winner Takes It All





At the beginning of last year all air carriers began to worry, because the passenger traffic between Moscow and Petersburg practically didn’t grow. Experts connected this tendency to the rapid development of high speed movement on this route. Russian Railways company was doing its best to increase the number of trains; they also tried to attract more clients by new services. However, air companies didn’t voice exact numbers on reduction. But RZD said that current resources of «Sapsans» were already depleted.

This factor in many respects also impacted totals of operation of carriers last year. Full year occupancy rates of «Sapsans» was 91.6%, but it didn’t prevent all airports in two cities from increasing all their indexes too. But companies still don’t want to give exact numbers, concerning the Moscow-Petersburg route.

According to Director of the High-Speed Train Department at Russian Railways Dmitry Pegov, it’s not right to say that «Sapsans» are taking passengers from airlines. “I would like to remind, that passenger traffic between the capital and St Petersburg can exceed 9 million passengers a year. Therefore, there is enough work for all carriers. Of course, some passengers chose to travel by «Sapsan» instead of planes. But we can’t say that passenger traffic at the airports fell. At least, it won’t happen until there is no separated rail line,” he said.

According to the High-Speed Train Department, about 3.1 million people were carried by «Sapsans» last year (it’s +9.7% to the results of 2011 and +38.7% more than in 2010). Such small growth is explained by the same factor – existing trains are completely filled, and new rolling stock hasn’t been delivered yet.

The Pulkovo airport in St Petersburg serviced more than 11 million people last year, which is 16% more than in 2011. The passenger traffic on internal flights grew by 11%. On the St Petersburg-Moscow route a small reduction, of about 2%, was recorded, but it didn’t affect the general indexes, and was connected, first of all, with the decision of air companies to offer direct flights, instead of connecting ones.

In Sheremetyevo, the year was completed with good results. The airport transported more than 26 million people last year (+16% to 2011). The increase by 18% was recorded on the internal flights, and St Petersburg became the most popular direction there.



Offering New Services



Last year the largest Russian air company Aeroflot transported its millionth passenger from St Petersburg to Moscow, having organized a welcome-ceremony and having awarded him with different certificates for company’s services. In many respects, the volume of passenger traffic of Aeroflot, according to its representatives, has grown due to the service “Business Travel Card” provided since 2011. And, of course, the loyalty program on accumulation of miles has a great impact too.

RZD also provided something similar last year, the Russian Railways Bonus program, but it didn’t concern high-speed trains. So what are the new services succeeded to provide almost 100% occupancy rate of «Sapsans» throughout all the 2012?

At the beginning of last year it was reported that Russian Railways had been going to increase the number of «Sapsans», increase the capacity of trains, and increase their comfort at the expense of arrangement of additional zones of the first class and a VIP-zone. The company was also going to provide internet connection for all passengers.

However park extension didn’t happen in 2012. According to the director of “Systems of Rail Transport” and “Mobility and Logistics” departments of Siemens Russia Dmitry Matsenov, the second consignment, consisted of eight trains, can be expected not earlier than at the end of 2013 or the beginning of 2014. He also said new trains would include the promised additional zones of the first class and VIP-zone. And there will be no other major differences.

As for Internet connection, passengers really could estimate this service last year. Together with the “Megafon” company RZD offered to choose from the services with different prices for high-speed connection. And for the travelers who selected the first class, the service became free. Thus, «Sapsans» got a serious advantage in comparison with flights. 

First Deputy Director of the High-Speed Train Department at Russian Railways Konstantin Vorontsov also says that introduction of the system of dynamic control by rates (when the cost of the ticket is created by means of two criteria: dates of sale of the travel document and percentage of occupied places in the train), and also advertizing and marketing actions helped to increase the volume of passenger traffic in high-speed trains. “Some types of rates were implemented,” K. Vorontsov said.  “For example: the rate “there and back” is cheaper than the usual one for 10%, the rate “Card” is cheaper than the usual one for 5%, rates: “60+” is cheaper for 20%, “16/25” is cheaper for 15%, “10/16” is cheaper for 20%, “Two capitals” is cheaper for 15%, “Restaurant” is cheaper for 5%”. So all passengers now have a good choice. 



No Surprises



Unlike «Sapsans», the results of which, as usual, exceeded all expectations, the «Allegro» trains (between St Petersburg and Helsinki) didn’t show really great results. According to the High-Speed Train Department at Russian Railways, the passenger traffic here grew also – more than 350 thousand passengers selected this way of traveling last year (+15.5% to 2011). But there were no surprises – according to the CEO of VR Group (Finnish Railways) Mikael Aro, they had been expecting such results.

But passengers weren’t offered anything new here. Opening of the promised Duty Free shop at the Finnish station was postponed until 2013 year, the Internet in trains was launched only on an experimental basis, the considerable reduction of prices of tickets , which many travelers had expected, didn’t occur. Besides, travelers understood that any visa privileges for the Russian citizens, who choose to travel by «Allegro», will be scrapped soon. And therefore they don’t want to overpay even for speed, because there are a lot of cheap alternatives to get to Finland.

Last year the occupancy rate of «Allegro», as well as earlier, was influenced by seasonal factors – during holidays this index could reach 100%, during not popular seasons – be less than 30%. 

It is impossible to speak about the competition only with air carriers here. Though Finnair airline finished last year with good operational results on the Helsinki – St Petersburg line, and in the 2013 they are going to increase number of these flights. However, the Rossiya airline last year temporarily stopped flights on this route. They didn’t voice the real reasons, but it is obvious that such a decision was made because air carriers are losing the competition to cars and buses, which still are favorites on this route.

According to data of the Border Service of Finland, last year more than 12 million people crossed the border by buses and cars (+13% to 2011). For New Year’s holidays alone there were 300 thousand travelers. That is a little less, than Allegro has transported for the whole year.

However last year the ferry operator St Peter Line, the ferries of which are travelling on routes St Petersburg – Helsinki and St Petersburg – Helsinki – Stockholm, got really incredible indexes, having transported more than 600 thousand passengers (+32% to 2011).

As for passengers from St Petersburg, it’s foolish to expect a great increase in their interest in «Allegro». Definitely the change of the system of rates, accepted at the end of last year, will not increase the statistics. Let’s remind that RZD and VR Group differentiated rates for this train, and now the ticket in holidays will be more expensive, than during the periods of low demand. As for «Sapsans», the same system works there too. However, on the St Petersburg-Moscow line, unlike the St Petersburg-Helsinki route, such cheap alternatives as shuttle buses don’t exist.

Carriers also understand it. And, according to Mr Aro, they connect all the expectations with HSR project to Moscow. RZD has already decided to fight for passengers from the capital, and is going to organize this year a transfer from the Moscovsky railway station, where Sapsan arrives, to Finlyandky railway station, where «Allegro» departs.

By Christina Alexandrova
    [~DETAIL_TEXT] => 
Winner Takes It All





At the beginning of last year all air carriers began to worry, because the passenger traffic between Moscow and Petersburg practically didn’t grow. Experts connected this tendency to the rapid development of high speed movement on this route. Russian Railways company was doing its best to increase the number of trains; they also tried to attract more clients by new services. However, air companies didn’t voice exact numbers on reduction. But RZD said that current resources of «Sapsans» were already depleted.

This factor in many respects also impacted totals of operation of carriers last year. Full year occupancy rates of «Sapsans» was 91.6%, but it didn’t prevent all airports in two cities from increasing all their indexes too. But companies still don’t want to give exact numbers, concerning the Moscow-Petersburg route.

According to Director of the High-Speed Train Department at Russian Railways Dmitry Pegov, it’s not right to say that «Sapsans» are taking passengers from airlines. “I would like to remind, that passenger traffic between the capital and St Petersburg can exceed 9 million passengers a year. Therefore, there is enough work for all carriers. Of course, some passengers chose to travel by «Sapsan» instead of planes. But we can’t say that passenger traffic at the airports fell. At least, it won’t happen until there is no separated rail line,” he said.

According to the High-Speed Train Department, about 3.1 million people were carried by «Sapsans» last year (it’s +9.7% to the results of 2011 and +38.7% more than in 2010). Such small growth is explained by the same factor – existing trains are completely filled, and new rolling stock hasn’t been delivered yet.

The Pulkovo airport in St Petersburg serviced more than 11 million people last year, which is 16% more than in 2011. The passenger traffic on internal flights grew by 11%. On the St Petersburg-Moscow route a small reduction, of about 2%, was recorded, but it didn’t affect the general indexes, and was connected, first of all, with the decision of air companies to offer direct flights, instead of connecting ones.

In Sheremetyevo, the year was completed with good results. The airport transported more than 26 million people last year (+16% to 2011). The increase by 18% was recorded on the internal flights, and St Petersburg became the most popular direction there.



Offering New Services



Last year the largest Russian air company Aeroflot transported its millionth passenger from St Petersburg to Moscow, having organized a welcome-ceremony and having awarded him with different certificates for company’s services. In many respects, the volume of passenger traffic of Aeroflot, according to its representatives, has grown due to the service “Business Travel Card” provided since 2011. And, of course, the loyalty program on accumulation of miles has a great impact too.

RZD also provided something similar last year, the Russian Railways Bonus program, but it didn’t concern high-speed trains. So what are the new services succeeded to provide almost 100% occupancy rate of «Sapsans» throughout all the 2012?

At the beginning of last year it was reported that Russian Railways had been going to increase the number of «Sapsans», increase the capacity of trains, and increase their comfort at the expense of arrangement of additional zones of the first class and a VIP-zone. The company was also going to provide internet connection for all passengers.

However park extension didn’t happen in 2012. According to the director of “Systems of Rail Transport” and “Mobility and Logistics” departments of Siemens Russia Dmitry Matsenov, the second consignment, consisted of eight trains, can be expected not earlier than at the end of 2013 or the beginning of 2014. He also said new trains would include the promised additional zones of the first class and VIP-zone. And there will be no other major differences.

As for Internet connection, passengers really could estimate this service last year. Together with the “Megafon” company RZD offered to choose from the services with different prices for high-speed connection. And for the travelers who selected the first class, the service became free. Thus, «Sapsans» got a serious advantage in comparison with flights. 

First Deputy Director of the High-Speed Train Department at Russian Railways Konstantin Vorontsov also says that introduction of the system of dynamic control by rates (when the cost of the ticket is created by means of two criteria: dates of sale of the travel document and percentage of occupied places in the train), and also advertizing and marketing actions helped to increase the volume of passenger traffic in high-speed trains. “Some types of rates were implemented,” K. Vorontsov said.  “For example: the rate “there and back” is cheaper than the usual one for 10%, the rate “Card” is cheaper than the usual one for 5%, rates: “60+” is cheaper for 20%, “16/25” is cheaper for 15%, “10/16” is cheaper for 20%, “Two capitals” is cheaper for 15%, “Restaurant” is cheaper for 5%”. So all passengers now have a good choice. 



No Surprises



Unlike «Sapsans», the results of which, as usual, exceeded all expectations, the «Allegro» trains (between St Petersburg and Helsinki) didn’t show really great results. According to the High-Speed Train Department at Russian Railways, the passenger traffic here grew also – more than 350 thousand passengers selected this way of traveling last year (+15.5% to 2011). But there were no surprises – according to the CEO of VR Group (Finnish Railways) Mikael Aro, they had been expecting such results.

But passengers weren’t offered anything new here. Opening of the promised Duty Free shop at the Finnish station was postponed until 2013 year, the Internet in trains was launched only on an experimental basis, the considerable reduction of prices of tickets , which many travelers had expected, didn’t occur. Besides, travelers understood that any visa privileges for the Russian citizens, who choose to travel by «Allegro», will be scrapped soon. And therefore they don’t want to overpay even for speed, because there are a lot of cheap alternatives to get to Finland.

Last year the occupancy rate of «Allegro», as well as earlier, was influenced by seasonal factors – during holidays this index could reach 100%, during not popular seasons – be less than 30%. 

It is impossible to speak about the competition only with air carriers here. Though Finnair airline finished last year with good operational results on the Helsinki – St Petersburg line, and in the 2013 they are going to increase number of these flights. However, the Rossiya airline last year temporarily stopped flights on this route. They didn’t voice the real reasons, but it is obvious that such a decision was made because air carriers are losing the competition to cars and buses, which still are favorites on this route.

According to data of the Border Service of Finland, last year more than 12 million people crossed the border by buses and cars (+13% to 2011). For New Year’s holidays alone there were 300 thousand travelers. That is a little less, than Allegro has transported for the whole year.

However last year the ferry operator St Peter Line, the ferries of which are travelling on routes St Petersburg – Helsinki and St Petersburg – Helsinki – Stockholm, got really incredible indexes, having transported more than 600 thousand passengers (+32% to 2011).

As for passengers from St Petersburg, it’s foolish to expect a great increase in their interest in «Allegro». Definitely the change of the system of rates, accepted at the end of last year, will not increase the statistics. Let’s remind that RZD and VR Group differentiated rates for this train, and now the ticket in holidays will be more expensive, than during the periods of low demand. As for «Sapsans», the same system works there too. However, on the St Petersburg-Moscow line, unlike the St Petersburg-Helsinki route, such cheap alternatives as shuttle buses don’t exist.

Carriers also understand it. And, according to Mr Aro, they connect all the expectations with HSR project to Moscow. RZD has already decided to fight for passengers from the capital, and is going to organize this year a transfer from the Moscovsky railway station, where Sapsan arrives, to Finlyandky railway station, where «Allegro» departs.

By Christina Alexandrova
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Safety Is Top Priority



– Mr Myagotin, why was the CDPO created? What has been done already and what are the plans for the current year?



– The Directorate was created to provide safe traffic. I can give a shining example why passenger facilities are to be maintained in good order. Some vandals broke the guardrail at one of the railways. The damaged guardrail fell on the track, and a passenger train ran onto it. There must be persons responsible for prevention of similar situations.

Today, specialists from the Safe Traffic Department in regional directorates and the CDPO check whether requirements to safe traffic standards are fulfilled. 

We must also take care to enhance services provided to passengers and search for ways to increase efficiency in the railways’ property management in the suburbs. Of that, there are 656 suburban railway stations, 985 minor stations, and 275 passenger buildings, 230 turnstile halls, and approximately 14,700 platforms, the total area of which is 10.9 million square kilometers.

RUB 3.9 billion was allocated for the development, reconstruction, and repair of infrastructure facilities for commuter passenger transportation in 2012.

It is planned to develop digital technologies actively. The ASOKUPE system (automated system for the payment, control, and checking commuter passenger transportation) is to be installed at the ten busiest stations. Serious funds will be allocated for installation of the hardware and software facilities of the Centre of Suburban Facilities Management.  

To optimise expenditure, we are developing variants of the public-private partnership at the stations of the Moscow, Oktaybrskaya, Privolzhsk, and West-Siberian railways.

Taking into account how worn the passenger infrastructure is (approximately 75%), a programme for the capital repair in 2013 was developed. It covers 375 platforms, 28 railway stations, and 36 auxiliary buildings. The corporate purchase order has been signed. It is the minimum. If we get additional funding, the Directorate will carry out additional capital repair of facilities according to already prepared design specifications and estimates. 

For safe operation of the suburban sector, the annual expenditure on reconstruction of facilities should increase by RUB 4-6 billion in 2013-2015. Then, the rate of deterioration will reduce to 40% by 2016. The current pace of the infrastructure renewal is not enough to match the characteristics set by order №286 of the RF Transport Ministry dated December 21, 2010. For example, RUB 442.5 million is needed to equip the facilities with 1,770 shelters, and RUB 675 million – for ramps and stairlifts for physically challenged people. Unfortunately, some types of current expenditure were not taken into account when the budget of the CDPO was created.



Investment and Innovations



– The Directorate of Railway Stations has an ambitious programme for implementing innovative technologies. Does the CDPO have anything like it?



– Naturally, the Programme envisages, for example, the use of glass composite materials on platforms, where the passenger flow is more than 1,000 people a day. Unlike structures made of reinforced concrete, they do not need much expense on maintenance and capital repair during 50 years. Glass composite is corrosion-resistant; it does not suffer from humidity and temperature changes. It has a smaller weight, but it is more solid than reinforced concrete. There is no need to use special heavy machinery to assemble it, so there are no hindrances to train traffic.

Another innovation is assembly platforms, offered by RZDstroy. They were made at national enterprises using the best foreign technologies. This year, it is planned to reconstruct and build 76 railway stations and passenger platforms, including 12 platforms with the use of glass composite materials.



– You said, you plan to attract additional public investment. For that, you need to build efficient relations with regions. What measures have been taken?



– When upgrading the existing infrastructure and constructing new railway complexes at stations and stopping points, we strive at providing a balance of interests between the transporter and passengers. The former is interested in attracting additional passengers, and the latter – in available related services. 

For example, while people are waiting for a commuter train, sometimes they want to buy something or have a light meal. Such services are now irregular.

The quality of trade leaves much to be desired. Sketches of projects are being developed nowadays. Later, we will offer regional and city administrations to join efforts to carry them out.

The pilot project is being carried out in cooperation with the Moscow Railway. We have already received technical conditions for several stopping points. Investors confirmed their interest to these projects, and they are ready to start designing and constructing concourses at almost 30 stations.



Searching for Reliable Partners



– What measures have been taken to reduce expenses on maintaining infrastructure facilities and decreasing the cost of their repair?



– We have developed a plan, envisaging greater transparency of our actions and competition procedures. We analysed the usage of the space on platforms and small railway stations. The competition document has been prepared to define the market cost of 3,000 square metres. In the first half of 2013, the CDPO plans to hold open auctions to conclude rent contracts. 

The decline in the cost of the maintenance and repair of passenger infrastructure facilities is possible only if the technology of work changes. For example, we are striving at optimization of the material delivery schemes for capital repair. Asphalt coverings can be replaced by block pavement. It has a longer lifetime – up to several dozen years. When constructing new facilities, it is possible to use modular precast concrete retaining platforms. This platform needs neither asphalt nor any other covering.

Also, it is necessary to continue the further automation of systems. Today, we are using three models of modern turnstiles. Sometimes, there can be extraordinary breakdowns, which need to be repaired immediately. For on-line monitoring of the condition of turnstile lines, all the turnstiles are to be connected to the data communication network. The necessary software and turnstile multiplexers are needed for that.

Today, 12 regional railway directorates for passenger facilities have equipped approximately 2,900 turnstiles with the ASOKUPE systems. Most of them are on the Moscow (82 stopping points, 1,774 turnstiles) and the Oktaybsrskaya railway directorates for passenger facilities (21 stopping points and 488 turnstiles). The development of ASOKUPE allows organisation of a more efficient accounting of passengers, a better control of payments for travelling, and optimising passenger flows.



– What companies can be partners with the CDPO? What is required from them?



– First of all, we need reliable contractors. And we have them. Unfortunately, some of companies failed to cope with the required amount of work for the capital repair of platforms. We have plans to hold competition procedures by ourselves to reduce prices for construction works and increase control over the way the orders are being fulfilled. We need suppliers of high-quality materials and modern equipment, including safety systems (anti-terrorist security systems, fire-fighting systems, economic safety systems) and trouble-free operation of power supply network.

We have prepared competition documentation and we plan to conclude contracts with cleaning companies with the condition of their integration under the common control of the network operator.

A similar system is needed for other services (covering, garbage removal, etc.). Special attention should be paid to a high degree of labour saving, the share of the network of a railway serviced by one sub-contractor, opportunity to provide complex services.

We have ambitious plans, which must change a passenger’s vision of suburban infrastructure. For that, we have prepared standards for technical servicing, maintaining, and repairing passenger facilities, which are being examined and adjusted now. ®

Interviewed by Alexander Solntsev
    [~DETAIL_TEXT] => 
Safety Is Top Priority



– Mr Myagotin, why was the CDPO created? What has been done already and what are the plans for the current year?



– The Directorate was created to provide safe traffic. I can give a shining example why passenger facilities are to be maintained in good order. Some vandals broke the guardrail at one of the railways. The damaged guardrail fell on the track, and a passenger train ran onto it. There must be persons responsible for prevention of similar situations.

Today, specialists from the Safe Traffic Department in regional directorates and the CDPO check whether requirements to safe traffic standards are fulfilled. 

We must also take care to enhance services provided to passengers and search for ways to increase efficiency in the railways’ property management in the suburbs. Of that, there are 656 suburban railway stations, 985 minor stations, and 275 passenger buildings, 230 turnstile halls, and approximately 14,700 platforms, the total area of which is 10.9 million square kilometers.

RUB 3.9 billion was allocated for the development, reconstruction, and repair of infrastructure facilities for commuter passenger transportation in 2012.

It is planned to develop digital technologies actively. The ASOKUPE system (automated system for the payment, control, and checking commuter passenger transportation) is to be installed at the ten busiest stations. Serious funds will be allocated for installation of the hardware and software facilities of the Centre of Suburban Facilities Management.  

To optimise expenditure, we are developing variants of the public-private partnership at the stations of the Moscow, Oktaybrskaya, Privolzhsk, and West-Siberian railways.

Taking into account how worn the passenger infrastructure is (approximately 75%), a programme for the capital repair in 2013 was developed. It covers 375 platforms, 28 railway stations, and 36 auxiliary buildings. The corporate purchase order has been signed. It is the minimum. If we get additional funding, the Directorate will carry out additional capital repair of facilities according to already prepared design specifications and estimates. 

For safe operation of the suburban sector, the annual expenditure on reconstruction of facilities should increase by RUB 4-6 billion in 2013-2015. Then, the rate of deterioration will reduce to 40% by 2016. The current pace of the infrastructure renewal is not enough to match the characteristics set by order №286 of the RF Transport Ministry dated December 21, 2010. For example, RUB 442.5 million is needed to equip the facilities with 1,770 shelters, and RUB 675 million – for ramps and stairlifts for physically challenged people. Unfortunately, some types of current expenditure were not taken into account when the budget of the CDPO was created.



Investment and Innovations



– The Directorate of Railway Stations has an ambitious programme for implementing innovative technologies. Does the CDPO have anything like it?



– Naturally, the Programme envisages, for example, the use of glass composite materials on platforms, where the passenger flow is more than 1,000 people a day. Unlike structures made of reinforced concrete, they do not need much expense on maintenance and capital repair during 50 years. Glass composite is corrosion-resistant; it does not suffer from humidity and temperature changes. It has a smaller weight, but it is more solid than reinforced concrete. There is no need to use special heavy machinery to assemble it, so there are no hindrances to train traffic.

Another innovation is assembly platforms, offered by RZDstroy. They were made at national enterprises using the best foreign technologies. This year, it is planned to reconstruct and build 76 railway stations and passenger platforms, including 12 platforms with the use of glass composite materials.



– You said, you plan to attract additional public investment. For that, you need to build efficient relations with regions. What measures have been taken?



– When upgrading the existing infrastructure and constructing new railway complexes at stations and stopping points, we strive at providing a balance of interests between the transporter and passengers. The former is interested in attracting additional passengers, and the latter – in available related services. 

For example, while people are waiting for a commuter train, sometimes they want to buy something or have a light meal. Such services are now irregular.

The quality of trade leaves much to be desired. Sketches of projects are being developed nowadays. Later, we will offer regional and city administrations to join efforts to carry them out.

The pilot project is being carried out in cooperation with the Moscow Railway. We have already received technical conditions for several stopping points. Investors confirmed their interest to these projects, and they are ready to start designing and constructing concourses at almost 30 stations.



Searching for Reliable Partners



– What measures have been taken to reduce expenses on maintaining infrastructure facilities and decreasing the cost of their repair?



– We have developed a plan, envisaging greater transparency of our actions and competition procedures. We analysed the usage of the space on platforms and small railway stations. The competition document has been prepared to define the market cost of 3,000 square metres. In the first half of 2013, the CDPO plans to hold open auctions to conclude rent contracts. 

The decline in the cost of the maintenance and repair of passenger infrastructure facilities is possible only if the technology of work changes. For example, we are striving at optimization of the material delivery schemes for capital repair. Asphalt coverings can be replaced by block pavement. It has a longer lifetime – up to several dozen years. When constructing new facilities, it is possible to use modular precast concrete retaining platforms. This platform needs neither asphalt nor any other covering.

Also, it is necessary to continue the further automation of systems. Today, we are using three models of modern turnstiles. Sometimes, there can be extraordinary breakdowns, which need to be repaired immediately. For on-line monitoring of the condition of turnstile lines, all the turnstiles are to be connected to the data communication network. The necessary software and turnstile multiplexers are needed for that.

Today, 12 regional railway directorates for passenger facilities have equipped approximately 2,900 turnstiles with the ASOKUPE systems. Most of them are on the Moscow (82 stopping points, 1,774 turnstiles) and the Oktaybsrskaya railway directorates for passenger facilities (21 stopping points and 488 turnstiles). The development of ASOKUPE allows organisation of a more efficient accounting of passengers, a better control of payments for travelling, and optimising passenger flows.



– What companies can be partners with the CDPO? What is required from them?



– First of all, we need reliable contractors. And we have them. Unfortunately, some of companies failed to cope with the required amount of work for the capital repair of platforms. We have plans to hold competition procedures by ourselves to reduce prices for construction works and increase control over the way the orders are being fulfilled. We need suppliers of high-quality materials and modern equipment, including safety systems (anti-terrorist security systems, fire-fighting systems, economic safety systems) and trouble-free operation of power supply network.

We have prepared competition documentation and we plan to conclude contracts with cleaning companies with the condition of their integration under the common control of the network operator.

A similar system is needed for other services (covering, garbage removal, etc.). Special attention should be paid to a high degree of labour saving, the share of the network of a railway serviced by one sub-contractor, opportunity to provide complex services.

We have ambitious plans, which must change a passenger’s vision of suburban infrastructure. For that, we have prepared standards for technical servicing, maintaining, and repairing passenger facilities, which are being examined and adjusted now. ®

Interviewed by Alexander Solntsev
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Still, the Directorate has a lot of work to be done. 

And that’s what we are talking about with Boris Myagotin, Head of the CDPO.
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Still, the Directorate has a lot of work to be done. 

And that’s what we are talking about with Boris Myagotin, Head of the CDPO.
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Safety Is Top Priority



– Mr Myagotin, why was the CDPO created? What has been done already and what are the plans for the current year?



– The Directorate was created to provide safe traffic. I can give a shining example why passenger facilities are to be maintained in good order. Some vandals broke the guardrail at one of the railways. The damaged guardrail fell on the track, and a passenger train ran onto it. There must be persons responsible for prevention of similar situations.

Today, specialists from the Safe Traffic Department in regional directorates and the CDPO check whether requirements to safe traffic standards are fulfilled. 

We must also take care to enhance services provided to passengers and search for ways to increase efficiency in the railways’ property management in the suburbs. Of that, there are 656 suburban railway stations, 985 minor stations, and 275 passenger buildings, 230 turnstile halls, and approximately 14,700 platforms, the total area of which is 10.9 million square kilometers.

RUB 3.9 billion was allocated for the development, reconstruction, and repair of infrastructure facilities for commuter passenger transportation in 2012.

It is planned to develop digital technologies actively. The ASOKUPE system (automated system for the payment, control, and checking commuter passenger transportation) is to be installed at the ten busiest stations. Serious funds will be allocated for installation of the hardware and software facilities of the Centre of Suburban Facilities Management.  

To optimise expenditure, we are developing variants of the public-private partnership at the stations of the Moscow, Oktaybrskaya, Privolzhsk, and West-Siberian railways.

Taking into account how worn the passenger infrastructure is (approximately 75%), a programme for the capital repair in 2013 was developed. It covers 375 platforms, 28 railway stations, and 36 auxiliary buildings. The corporate purchase order has been signed. It is the minimum. If we get additional funding, the Directorate will carry out additional capital repair of facilities according to already prepared design specifications and estimates. 

For safe operation of the suburban sector, the annual expenditure on reconstruction of facilities should increase by RUB 4-6 billion in 2013-2015. Then, the rate of deterioration will reduce to 40% by 2016. The current pace of the infrastructure renewal is not enough to match the characteristics set by order №286 of the RF Transport Ministry dated December 21, 2010. For example, RUB 442.5 million is needed to equip the facilities with 1,770 shelters, and RUB 675 million – for ramps and stairlifts for physically challenged people. Unfortunately, some types of current expenditure were not taken into account when the budget of the CDPO was created.



Investment and Innovations



– The Directorate of Railway Stations has an ambitious programme for implementing innovative technologies. Does the CDPO have anything like it?



– Naturally, the Programme envisages, for example, the use of glass composite materials on platforms, where the passenger flow is more than 1,000 people a day. Unlike structures made of reinforced concrete, they do not need much expense on maintenance and capital repair during 50 years. Glass composite is corrosion-resistant; it does not suffer from humidity and temperature changes. It has a smaller weight, but it is more solid than reinforced concrete. There is no need to use special heavy machinery to assemble it, so there are no hindrances to train traffic.

Another innovation is assembly platforms, offered by RZDstroy. They were made at national enterprises using the best foreign technologies. This year, it is planned to reconstruct and build 76 railway stations and passenger platforms, including 12 platforms with the use of glass composite materials.



– You said, you plan to attract additional public investment. For that, you need to build efficient relations with regions. What measures have been taken?



– When upgrading the existing infrastructure and constructing new railway complexes at stations and stopping points, we strive at providing a balance of interests between the transporter and passengers. The former is interested in attracting additional passengers, and the latter – in available related services. 

For example, while people are waiting for a commuter train, sometimes they want to buy something or have a light meal. Such services are now irregular.

The quality of trade leaves much to be desired. Sketches of projects are being developed nowadays. Later, we will offer regional and city administrations to join efforts to carry them out.

The pilot project is being carried out in cooperation with the Moscow Railway. We have already received technical conditions for several stopping points. Investors confirmed their interest to these projects, and they are ready to start designing and constructing concourses at almost 30 stations.



Searching for Reliable Partners



– What measures have been taken to reduce expenses on maintaining infrastructure facilities and decreasing the cost of their repair?



– We have developed a plan, envisaging greater transparency of our actions and competition procedures. We analysed the usage of the space on platforms and small railway stations. The competition document has been prepared to define the market cost of 3,000 square metres. In the first half of 2013, the CDPO plans to hold open auctions to conclude rent contracts. 

The decline in the cost of the maintenance and repair of passenger infrastructure facilities is possible only if the technology of work changes. For example, we are striving at optimization of the material delivery schemes for capital repair. Asphalt coverings can be replaced by block pavement. It has a longer lifetime – up to several dozen years. When constructing new facilities, it is possible to use modular precast concrete retaining platforms. This platform needs neither asphalt nor any other covering.

Also, it is necessary to continue the further automation of systems. Today, we are using three models of modern turnstiles. Sometimes, there can be extraordinary breakdowns, which need to be repaired immediately. For on-line monitoring of the condition of turnstile lines, all the turnstiles are to be connected to the data communication network. The necessary software and turnstile multiplexers are needed for that.

Today, 12 regional railway directorates for passenger facilities have equipped approximately 2,900 turnstiles with the ASOKUPE systems. Most of them are on the Moscow (82 stopping points, 1,774 turnstiles) and the Oktaybsrskaya railway directorates for passenger facilities (21 stopping points and 488 turnstiles). The development of ASOKUPE allows organisation of a more efficient accounting of passengers, a better control of payments for travelling, and optimising passenger flows.



– What companies can be partners with the CDPO? What is required from them?



– First of all, we need reliable contractors. And we have them. Unfortunately, some of companies failed to cope with the required amount of work for the capital repair of platforms. We have plans to hold competition procedures by ourselves to reduce prices for construction works and increase control over the way the orders are being fulfilled. We need suppliers of high-quality materials and modern equipment, including safety systems (anti-terrorist security systems, fire-fighting systems, economic safety systems) and trouble-free operation of power supply network.

We have prepared competition documentation and we plan to conclude contracts with cleaning companies with the condition of their integration under the common control of the network operator.

A similar system is needed for other services (covering, garbage removal, etc.). Special attention should be paid to a high degree of labour saving, the share of the network of a railway serviced by one sub-contractor, opportunity to provide complex services.

We have ambitious plans, which must change a passenger’s vision of suburban infrastructure. For that, we have prepared standards for technical servicing, maintaining, and repairing passenger facilities, which are being examined and adjusted now. ®

Interviewed by Alexander Solntsev
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Safety Is Top Priority



– Mr Myagotin, why was the CDPO created? What has been done already and what are the plans for the current year?



– The Directorate was created to provide safe traffic. I can give a shining example why passenger facilities are to be maintained in good order. Some vandals broke the guardrail at one of the railways. The damaged guardrail fell on the track, and a passenger train ran onto it. There must be persons responsible for prevention of similar situations.

Today, specialists from the Safe Traffic Department in regional directorates and the CDPO check whether requirements to safe traffic standards are fulfilled. 

We must also take care to enhance services provided to passengers and search for ways to increase efficiency in the railways’ property management in the suburbs. Of that, there are 656 suburban railway stations, 985 minor stations, and 275 passenger buildings, 230 turnstile halls, and approximately 14,700 platforms, the total area of which is 10.9 million square kilometers.

RUB 3.9 billion was allocated for the development, reconstruction, and repair of infrastructure facilities for commuter passenger transportation in 2012.

It is planned to develop digital technologies actively. The ASOKUPE system (automated system for the payment, control, and checking commuter passenger transportation) is to be installed at the ten busiest stations. Serious funds will be allocated for installation of the hardware and software facilities of the Centre of Suburban Facilities Management.  

To optimise expenditure, we are developing variants of the public-private partnership at the stations of the Moscow, Oktaybrskaya, Privolzhsk, and West-Siberian railways.

Taking into account how worn the passenger infrastructure is (approximately 75%), a programme for the capital repair in 2013 was developed. It covers 375 platforms, 28 railway stations, and 36 auxiliary buildings. The corporate purchase order has been signed. It is the minimum. If we get additional funding, the Directorate will carry out additional capital repair of facilities according to already prepared design specifications and estimates. 

For safe operation of the suburban sector, the annual expenditure on reconstruction of facilities should increase by RUB 4-6 billion in 2013-2015. Then, the rate of deterioration will reduce to 40% by 2016. The current pace of the infrastructure renewal is not enough to match the characteristics set by order №286 of the RF Transport Ministry dated December 21, 2010. For example, RUB 442.5 million is needed to equip the facilities with 1,770 shelters, and RUB 675 million – for ramps and stairlifts for physically challenged people. Unfortunately, some types of current expenditure were not taken into account when the budget of the CDPO was created.



Investment and Innovations



– The Directorate of Railway Stations has an ambitious programme for implementing innovative technologies. Does the CDPO have anything like it?



– Naturally, the Programme envisages, for example, the use of glass composite materials on platforms, where the passenger flow is more than 1,000 people a day. Unlike structures made of reinforced concrete, they do not need much expense on maintenance and capital repair during 50 years. Glass composite is corrosion-resistant; it does not suffer from humidity and temperature changes. It has a smaller weight, but it is more solid than reinforced concrete. There is no need to use special heavy machinery to assemble it, so there are no hindrances to train traffic.

Another innovation is assembly platforms, offered by RZDstroy. They were made at national enterprises using the best foreign technologies. This year, it is planned to reconstruct and build 76 railway stations and passenger platforms, including 12 platforms with the use of glass composite materials.



– You said, you plan to attract additional public investment. For that, you need to build efficient relations with regions. What measures have been taken?



– When upgrading the existing infrastructure and constructing new railway complexes at stations and stopping points, we strive at providing a balance of interests between the transporter and passengers. The former is interested in attracting additional passengers, and the latter – in available related services. 

For example, while people are waiting for a commuter train, sometimes they want to buy something or have a light meal. Such services are now irregular.

The quality of trade leaves much to be desired. Sketches of projects are being developed nowadays. Later, we will offer regional and city administrations to join efforts to carry them out.

The pilot project is being carried out in cooperation with the Moscow Railway. We have already received technical conditions for several stopping points. Investors confirmed their interest to these projects, and they are ready to start designing and constructing concourses at almost 30 stations.



Searching for Reliable Partners



– What measures have been taken to reduce expenses on maintaining infrastructure facilities and decreasing the cost of their repair?



– We have developed a plan, envisaging greater transparency of our actions and competition procedures. We analysed the usage of the space on platforms and small railway stations. The competition document has been prepared to define the market cost of 3,000 square metres. In the first half of 2013, the CDPO plans to hold open auctions to conclude rent contracts. 

The decline in the cost of the maintenance and repair of passenger infrastructure facilities is possible only if the technology of work changes. For example, we are striving at optimization of the material delivery schemes for capital repair. Asphalt coverings can be replaced by block pavement. It has a longer lifetime – up to several dozen years. When constructing new facilities, it is possible to use modular precast concrete retaining platforms. This platform needs neither asphalt nor any other covering.

Also, it is necessary to continue the further automation of systems. Today, we are using three models of modern turnstiles. Sometimes, there can be extraordinary breakdowns, which need to be repaired immediately. For on-line monitoring of the condition of turnstile lines, all the turnstiles are to be connected to the data communication network. The necessary software and turnstile multiplexers are needed for that.

Today, 12 regional railway directorates for passenger facilities have equipped approximately 2,900 turnstiles with the ASOKUPE systems. Most of them are on the Moscow (82 stopping points, 1,774 turnstiles) and the Oktaybsrskaya railway directorates for passenger facilities (21 stopping points and 488 turnstiles). The development of ASOKUPE allows organisation of a more efficient accounting of passengers, a better control of payments for travelling, and optimising passenger flows.



– What companies can be partners with the CDPO? What is required from them?



– First of all, we need reliable contractors. And we have them. Unfortunately, some of companies failed to cope with the required amount of work for the capital repair of platforms. We have plans to hold competition procedures by ourselves to reduce prices for construction works and increase control over the way the orders are being fulfilled. We need suppliers of high-quality materials and modern equipment, including safety systems (anti-terrorist security systems, fire-fighting systems, economic safety systems) and trouble-free operation of power supply network.

We have prepared competition documentation and we plan to conclude contracts with cleaning companies with the condition of their integration under the common control of the network operator.

A similar system is needed for other services (covering, garbage removal, etc.). Special attention should be paid to a high degree of labour saving, the share of the network of a railway serviced by one sub-contractor, opportunity to provide complex services.

We have ambitious plans, which must change a passenger’s vision of suburban infrastructure. For that, we have prepared standards for technical servicing, maintaining, and repairing passenger facilities, which are being examined and adjusted now. ®

Interviewed by Alexander Solntsev
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Still, the Directorate has a lot of work to be done. 

And that’s what we are talking about with Boris Myagotin, Head of the CDPO.
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Still, the Directorate has a lot of work to be done. 

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The Target Organisational Model



 Since 2003, i.e. from the start of the structural reform, multilevel, hierarchical, mainly territorial RZD-management structure has been formed to a vertically integrated functional system, which was organised according to the types of business. These were created to follow chains of command: management in distribution, forwarding, service and repair of tractive rolling stock, infrastructure and other branches. Its managers are vested with powers and responsibilities for the results of the current work and realisation of new development projects. Organisational conditions for enhancement of efficiency are also created: efficiency indexes, which are appropriate to the holding company’s development strategy, were developed for every direction, branch office and subsidiary, and their target figures for 2012-2015 were also set.

RZD includes almost 150 joint-stock companies. “Our production technologies and management process are interdependent and interrelated. We use common infrastructure, earn income from the same customers – shippers and passengers, and provide the reciprocal services. In this connection there is a necessity for prompt control and coordination of RZD’s daughter companies’ activity,” noted Vadim Morozov, the First Vice President of Russian Railways. As of today, more than 40 documents, which regulate this sector of corporate management, are accepted. According to the current system, vice presidents supervise subsidiaries. Therefore, they are now responsible for the results of the subsidiaries. Basing on the objectives and functions of railways and senior managers, the preferable forms of interaction between subsidiaries and railways and ways to legalise them are being developed. 

The development strategy can be worked out depending on the nature of interaction between the holding company and its subsidiaries. Such strategies can be implemented through the board of directors of daughter companies, direct and indirect agreements between RZD and its subsidiaries.

According to RZD managers, this target model is most pertinent and has a great potential.

However in the opinion of V. Morozov, it is required to work harder on formation of necessary management tools for all subdivisions of the holding company. Launching of every possible mechanism for efficiency and costs optimisation and income growth is also essential. 

In May 2012, it was decided to reorganise the sector of the corporate management and strategic development, and the financial and economic sector in order to complete the planned steps for making the management system and the company’s performance more efficient. 

The Department for the Management System Development, the Economic Department, and the Center for Business Projects Administration were created in the company’s headquarters.

In order to increase their efficiency, RZD subsidiaries developed such cost-saving measures as implementation of IT systems, labour productivity enhancement, reduction of direct and variable costs, and surplus capacities. With a view to solving this problem the organisational and scheduled basis was formed. RZD launched a permanent commission, the main goal of which is forming and updating the Plan of Additional Cost-Saving Measures in 2013-2015.

Besides in December 2012, the Consolidated Programme for the Holding Company’s Organisational Development till 2015 was adopted. 

It is coordinated with the approved programs and plans for costs decrease and receipts growth.

The consolidated programme will include the projects of two types. The first type is supporting activity with no immediate economic effect. It creates all the necessary conditions for the efficiency growth and exposure of improvement potential. The second concerns direct improvement of management quality.



The Infrastructure Sector Formation



One of the most important facts in the railway reform in 2012 was the start of economic activity of the Central Infrastructure Directorate (CID) – an affiliate of RZD. The decision about the creation of a special business unit engaged in the infrastructure management was made two years ago. The launch of the CID and its structures had been completed by October 1, 2012. 

Today, the Central Infrastructure Directorate is a powerful subdivision of RZD holding company. It is a vertically integrated affiliate that has 16 infrastructure directorates, 995 line enterprises with staff of more than 360,000 people. It is one third of the holding company’s staff and 97% of property of railways – tracks, bridges, overhead wire, automatic bloc signaling facilities, wagon depots, switch towers, heating points, etc.

At the territorial and central levels, the organisational structure of the directorate was formed so that it could diminish management risks. “At the same time we managed to find new approaches to form the structure as well as technologies for managing territorial infrastructure directorates,” noted CID Head Vladimir Suprun. “Each of them has its own center of infrastructure maintenance, which also acquired some activities of the business units. The conversion to the complex infrastructure management model depends on the activity of these centers. It is important to assure the common control mechanism for the infrastructure service and removal of incidents, which can be on the infrastructure objects.”

The information platforms for this activity are the management technologies used today by the Common Corporate Automated System for the Infrastructure Management. Currently it is integrated in the operational and maintenance phase of all infrastructure directions. The proper regulations were adopted to increase efficiency. They define the procedure of interaction at service provision or operations between different links of the central directorates – infrastructure, traffic control, traction, and service.

The infrastructure sector has three objectives for 2013. First of all, the further implementation of the complex infrastructure management model using infrastructure maintenance management centres and enhancement of technological processes. The second objective is the renewal of fixed assets to decrease the length of rail sections with overhead wire and signaling facilities, which are used for the above-standard time. The third one is provision of a high level of technical and technological readiness of the infrastructure objects. 



Regional Level



According to the programme and ideology of the railway transport reform, the role of railways and their senior managers has been changed. From October 1, 2012, the railways – affiliates of RZD – started operating as regional centers for corporate management. Thus, the overall management system – the corporate center (RСKU) was formed.

By becoming representatives of the RZD President, senior managers of RCKU are responsible for results and increase of the efficiency of the holding company. For that, they are entrusted with necessary powers and given necessary degree of responsibility for technological coordination and corporate management at the regional level. They should also efficiently interact with local authorities, society and business-partners. 

Taking into account the fact that the main function of RСKU in the new management system is technological and corporate coordination of RZD’s subdivisions, which work within the railway network, in the near future they will also be responsible for making and developing relations between local directorates, RZD’s subsidiaries, as well as optimising non-core assets.

The system and regular work of all the railway departments will become more important than co-ordination in the future. The target of this working process is increasing efficiency and formation of the through technological and management processes. It will contribute to a higher quality of management and better efficiency of regional directorates.

The holding company’s internal management system should correspond with the formed business model. On this basis, measures should be taken for further improvement of corporate management system and implementation of modern methods and technologies. The main tasks in the sphere of organisational development for 2013-2014 are as follows. Firstly, the functions of operational activity control will be transferred from RZD’s administrative personnel, so it will be reorganised into the company’s strategic management body – the Corporate Center, which provides interaction with other divisions, the balance of interests between the holding company’s partners, development and implementation of the common standards, policies, and rules, and synergy of joint activities. Secondly, there would be the reorganisation in the system for managing the main business units. Thirdly, a regular work will be carried out to increase efficiency, the quality of the management process and operations based on the project and portfolio management with the use of IT and automation facilities.

 

Path to Efficiency



The prospective management model foresees the formation of three business units – “Passenger Transportation”, “Infrastructure” and “The Transport and Logistics Unit” (with the simultaneous integration of GEFCO into the holding company).

The decision to establish the separate “Transport and Logistics” business unit was made to strengthen the holding positions on the market of high-yielding logistics services. It is imperative for strategic development.  The main approaches to management organisation in this sector will be formalised in a proper concept, which is developed now. 

Originally, the new management model was founded on the integration mechanisms, which should further contribute to synchronisation of operations, increase in the efficiency, and as a result it could assist with long-term business goals achievement. In 2012, the implementation of necessary instruments started. 

Particularly there was a new philosophy for the cooperation between business units, e.g. through planning, balanced index system, and services interchange. According to the services interchange model, all communications between the maintenance partners are based on the “customer-supplier” principle. This method assumes the availability of a system of mutual obligations and motivation. On the enlarged meeting of Russian Railways’ Board devoted to the company’s 2012 results, Alexey Illarionov, Vice President of the company, emphasised that all pilot projects for the interchange of services have already shown to be highly effective. On the basis of this experience, a complex Concept of Inner Service Circulation System was developed and will be carried out soon.

Therefore, most important changes in the management structure were completed in 2012. There were also created the new management mechanisms and conditions for their successful adoption and use. At the same time Senior Vice President of Russian Railways Valery Reshetnikov noted that currently the company has no impressive results proving the success of the reform. Operational results are worse than expected. The efficiency does not increase, it is even reduced considerably. The forecasts of most directorates are also negative. 

It should be noted, that the managers’ liability for achieved results is not realised in full. Therefore, subdivisions of the Corporate Center should delegate powers to directorates more actively, especially when considering funds allocation, economy or budgeting. So it will help to realise their potential for economic independence and motivation for the efficiency growing and optimisation of used assets and internal processes. All mentioned shortcomings are guidelines for the future work targeted at organisational development of the holding company. 

The management and development of the large RZD structure requires efficient and well coordinated work of all departments. Taking into account the modern requirements to the transport and logistics service, the company’s development strategy should be revised. It would be necessary to take into account all attained activity results, including those in the efficiency area. ®

By Elena Ushkova


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The Target Organisational Model



 Since 2003, i.e. from the start of the structural reform, multilevel, hierarchical, mainly territorial RZD-management structure has been formed to a vertically integrated functional system, which was organised according to the types of business. These were created to follow chains of command: management in distribution, forwarding, service and repair of tractive rolling stock, infrastructure and other branches. Its managers are vested with powers and responsibilities for the results of the current work and realisation of new development projects. Organisational conditions for enhancement of efficiency are also created: efficiency indexes, which are appropriate to the holding company’s development strategy, were developed for every direction, branch office and subsidiary, and their target figures for 2012-2015 were also set.

RZD includes almost 150 joint-stock companies. “Our production technologies and management process are interdependent and interrelated. We use common infrastructure, earn income from the same customers – shippers and passengers, and provide the reciprocal services. In this connection there is a necessity for prompt control and coordination of RZD’s daughter companies’ activity,” noted Vadim Morozov, the First Vice President of Russian Railways. As of today, more than 40 documents, which regulate this sector of corporate management, are accepted. According to the current system, vice presidents supervise subsidiaries. Therefore, they are now responsible for the results of the subsidiaries. Basing on the objectives and functions of railways and senior managers, the preferable forms of interaction between subsidiaries and railways and ways to legalise them are being developed. 

The development strategy can be worked out depending on the nature of interaction between the holding company and its subsidiaries. Such strategies can be implemented through the board of directors of daughter companies, direct and indirect agreements between RZD and its subsidiaries.

According to RZD managers, this target model is most pertinent and has a great potential.

However in the opinion of V. Morozov, it is required to work harder on formation of necessary management tools for all subdivisions of the holding company. Launching of every possible mechanism for efficiency and costs optimisation and income growth is also essential. 

In May 2012, it was decided to reorganise the sector of the corporate management and strategic development, and the financial and economic sector in order to complete the planned steps for making the management system and the company’s performance more efficient. 

The Department for the Management System Development, the Economic Department, and the Center for Business Projects Administration were created in the company’s headquarters.

In order to increase their efficiency, RZD subsidiaries developed such cost-saving measures as implementation of IT systems, labour productivity enhancement, reduction of direct and variable costs, and surplus capacities. With a view to solving this problem the organisational and scheduled basis was formed. RZD launched a permanent commission, the main goal of which is forming and updating the Plan of Additional Cost-Saving Measures in 2013-2015.

Besides in December 2012, the Consolidated Programme for the Holding Company’s Organisational Development till 2015 was adopted. 

It is coordinated with the approved programs and plans for costs decrease and receipts growth.

The consolidated programme will include the projects of two types. The first type is supporting activity with no immediate economic effect. It creates all the necessary conditions for the efficiency growth and exposure of improvement potential. The second concerns direct improvement of management quality.



The Infrastructure Sector Formation



One of the most important facts in the railway reform in 2012 was the start of economic activity of the Central Infrastructure Directorate (CID) – an affiliate of RZD. The decision about the creation of a special business unit engaged in the infrastructure management was made two years ago. The launch of the CID and its structures had been completed by October 1, 2012. 

Today, the Central Infrastructure Directorate is a powerful subdivision of RZD holding company. It is a vertically integrated affiliate that has 16 infrastructure directorates, 995 line enterprises with staff of more than 360,000 people. It is one third of the holding company’s staff and 97% of property of railways – tracks, bridges, overhead wire, automatic bloc signaling facilities, wagon depots, switch towers, heating points, etc.

At the territorial and central levels, the organisational structure of the directorate was formed so that it could diminish management risks. “At the same time we managed to find new approaches to form the structure as well as technologies for managing territorial infrastructure directorates,” noted CID Head Vladimir Suprun. “Each of them has its own center of infrastructure maintenance, which also acquired some activities of the business units. The conversion to the complex infrastructure management model depends on the activity of these centers. It is important to assure the common control mechanism for the infrastructure service and removal of incidents, which can be on the infrastructure objects.”

The information platforms for this activity are the management technologies used today by the Common Corporate Automated System for the Infrastructure Management. Currently it is integrated in the operational and maintenance phase of all infrastructure directions. The proper regulations were adopted to increase efficiency. They define the procedure of interaction at service provision or operations between different links of the central directorates – infrastructure, traffic control, traction, and service.

The infrastructure sector has three objectives for 2013. First of all, the further implementation of the complex infrastructure management model using infrastructure maintenance management centres and enhancement of technological processes. The second objective is the renewal of fixed assets to decrease the length of rail sections with overhead wire and signaling facilities, which are used for the above-standard time. The third one is provision of a high level of technical and technological readiness of the infrastructure objects. 



Regional Level



According to the programme and ideology of the railway transport reform, the role of railways and their senior managers has been changed. From October 1, 2012, the railways – affiliates of RZD – started operating as regional centers for corporate management. Thus, the overall management system – the corporate center (RСKU) was formed.

By becoming representatives of the RZD President, senior managers of RCKU are responsible for results and increase of the efficiency of the holding company. For that, they are entrusted with necessary powers and given necessary degree of responsibility for technological coordination and corporate management at the regional level. They should also efficiently interact with local authorities, society and business-partners. 

Taking into account the fact that the main function of RСKU in the new management system is technological and corporate coordination of RZD’s subdivisions, which work within the railway network, in the near future they will also be responsible for making and developing relations between local directorates, RZD’s subsidiaries, as well as optimising non-core assets.

The system and regular work of all the railway departments will become more important than co-ordination in the future. The target of this working process is increasing efficiency and formation of the through technological and management processes. It will contribute to a higher quality of management and better efficiency of regional directorates.

The holding company’s internal management system should correspond with the formed business model. On this basis, measures should be taken for further improvement of corporate management system and implementation of modern methods and technologies. The main tasks in the sphere of organisational development for 2013-2014 are as follows. Firstly, the functions of operational activity control will be transferred from RZD’s administrative personnel, so it will be reorganised into the company’s strategic management body – the Corporate Center, which provides interaction with other divisions, the balance of interests between the holding company’s partners, development and implementation of the common standards, policies, and rules, and synergy of joint activities. Secondly, there would be the reorganisation in the system for managing the main business units. Thirdly, a regular work will be carried out to increase efficiency, the quality of the management process and operations based on the project and portfolio management with the use of IT and automation facilities.

 

Path to Efficiency



The prospective management model foresees the formation of three business units – “Passenger Transportation”, “Infrastructure” and “The Transport and Logistics Unit” (with the simultaneous integration of GEFCO into the holding company).

The decision to establish the separate “Transport and Logistics” business unit was made to strengthen the holding positions on the market of high-yielding logistics services. It is imperative for strategic development.  The main approaches to management organisation in this sector will be formalised in a proper concept, which is developed now. 

Originally, the new management model was founded on the integration mechanisms, which should further contribute to synchronisation of operations, increase in the efficiency, and as a result it could assist with long-term business goals achievement. In 2012, the implementation of necessary instruments started. 

Particularly there was a new philosophy for the cooperation between business units, e.g. through planning, balanced index system, and services interchange. According to the services interchange model, all communications between the maintenance partners are based on the “customer-supplier” principle. This method assumes the availability of a system of mutual obligations and motivation. On the enlarged meeting of Russian Railways’ Board devoted to the company’s 2012 results, Alexey Illarionov, Vice President of the company, emphasised that all pilot projects for the interchange of services have already shown to be highly effective. On the basis of this experience, a complex Concept of Inner Service Circulation System was developed and will be carried out soon.

Therefore, most important changes in the management structure were completed in 2012. There were also created the new management mechanisms and conditions for their successful adoption and use. At the same time Senior Vice President of Russian Railways Valery Reshetnikov noted that currently the company has no impressive results proving the success of the reform. Operational results are worse than expected. The efficiency does not increase, it is even reduced considerably. The forecasts of most directorates are also negative. 

It should be noted, that the managers’ liability for achieved results is not realised in full. Therefore, subdivisions of the Corporate Center should delegate powers to directorates more actively, especially when considering funds allocation, economy or budgeting. So it will help to realise their potential for economic independence and motivation for the efficiency growing and optimisation of used assets and internal processes. All mentioned shortcomings are guidelines for the future work targeted at organisational development of the holding company. 

The management and development of the large RZD structure requires efficient and well coordinated work of all departments. Taking into account the modern requirements to the transport and logistics service, the company’s development strategy should be revised. It would be necessary to take into account all attained activity results, including those in the efficiency area. ®

By Elena Ushkova


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The Target Organisational Model



 Since 2003, i.e. from the start of the structural reform, multilevel, hierarchical, mainly territorial RZD-management structure has been formed to a vertically integrated functional system, which was organised according to the types of business. These were created to follow chains of command: management in distribution, forwarding, service and repair of tractive rolling stock, infrastructure and other branches. Its managers are vested with powers and responsibilities for the results of the current work and realisation of new development projects. Organisational conditions for enhancement of efficiency are also created: efficiency indexes, which are appropriate to the holding company’s development strategy, were developed for every direction, branch office and subsidiary, and their target figures for 2012-2015 were also set.

RZD includes almost 150 joint-stock companies. “Our production technologies and management process are interdependent and interrelated. We use common infrastructure, earn income from the same customers – shippers and passengers, and provide the reciprocal services. In this connection there is a necessity for prompt control and coordination of RZD’s daughter companies’ activity,” noted Vadim Morozov, the First Vice President of Russian Railways. As of today, more than 40 documents, which regulate this sector of corporate management, are accepted. According to the current system, vice presidents supervise subsidiaries. Therefore, they are now responsible for the results of the subsidiaries. Basing on the objectives and functions of railways and senior managers, the preferable forms of interaction between subsidiaries and railways and ways to legalise them are being developed. 

The development strategy can be worked out depending on the nature of interaction between the holding company and its subsidiaries. Such strategies can be implemented through the board of directors of daughter companies, direct and indirect agreements between RZD and its subsidiaries.

According to RZD managers, this target model is most pertinent and has a great potential.

However in the opinion of V. Morozov, it is required to work harder on formation of necessary management tools for all subdivisions of the holding company. Launching of every possible mechanism for efficiency and costs optimisation and income growth is also essential. 

In May 2012, it was decided to reorganise the sector of the corporate management and strategic development, and the financial and economic sector in order to complete the planned steps for making the management system and the company’s performance more efficient. 

The Department for the Management System Development, the Economic Department, and the Center for Business Projects Administration were created in the company’s headquarters.

In order to increase their efficiency, RZD subsidiaries developed such cost-saving measures as implementation of IT systems, labour productivity enhancement, reduction of direct and variable costs, and surplus capacities. With a view to solving this problem the organisational and scheduled basis was formed. RZD launched a permanent commission, the main goal of which is forming and updating the Plan of Additional Cost-Saving Measures in 2013-2015.

Besides in December 2012, the Consolidated Programme for the Holding Company’s Organisational Development till 2015 was adopted. 

It is coordinated with the approved programs and plans for costs decrease and receipts growth.

The consolidated programme will include the projects of two types. The first type is supporting activity with no immediate economic effect. It creates all the necessary conditions for the efficiency growth and exposure of improvement potential. The second concerns direct improvement of management quality.



The Infrastructure Sector Formation



One of the most important facts in the railway reform in 2012 was the start of economic activity of the Central Infrastructure Directorate (CID) – an affiliate of RZD. The decision about the creation of a special business unit engaged in the infrastructure management was made two years ago. The launch of the CID and its structures had been completed by October 1, 2012. 

Today, the Central Infrastructure Directorate is a powerful subdivision of RZD holding company. It is a vertically integrated affiliate that has 16 infrastructure directorates, 995 line enterprises with staff of more than 360,000 people. It is one third of the holding company’s staff and 97% of property of railways – tracks, bridges, overhead wire, automatic bloc signaling facilities, wagon depots, switch towers, heating points, etc.

At the territorial and central levels, the organisational structure of the directorate was formed so that it could diminish management risks. “At the same time we managed to find new approaches to form the structure as well as technologies for managing territorial infrastructure directorates,” noted CID Head Vladimir Suprun. “Each of them has its own center of infrastructure maintenance, which also acquired some activities of the business units. The conversion to the complex infrastructure management model depends on the activity of these centers. It is important to assure the common control mechanism for the infrastructure service and removal of incidents, which can be on the infrastructure objects.”

The information platforms for this activity are the management technologies used today by the Common Corporate Automated System for the Infrastructure Management. Currently it is integrated in the operational and maintenance phase of all infrastructure directions. The proper regulations were adopted to increase efficiency. They define the procedure of interaction at service provision or operations between different links of the central directorates – infrastructure, traffic control, traction, and service.

The infrastructure sector has three objectives for 2013. First of all, the further implementation of the complex infrastructure management model using infrastructure maintenance management centres and enhancement of technological processes. The second objective is the renewal of fixed assets to decrease the length of rail sections with overhead wire and signaling facilities, which are used for the above-standard time. The third one is provision of a high level of technical and technological readiness of the infrastructure objects. 



Regional Level



According to the programme and ideology of the railway transport reform, the role of railways and their senior managers has been changed. From October 1, 2012, the railways – affiliates of RZD – started operating as regional centers for corporate management. Thus, the overall management system – the corporate center (RСKU) was formed.

By becoming representatives of the RZD President, senior managers of RCKU are responsible for results and increase of the efficiency of the holding company. For that, they are entrusted with necessary powers and given necessary degree of responsibility for technological coordination and corporate management at the regional level. They should also efficiently interact with local authorities, society and business-partners. 

Taking into account the fact that the main function of RСKU in the new management system is technological and corporate coordination of RZD’s subdivisions, which work within the railway network, in the near future they will also be responsible for making and developing relations between local directorates, RZD’s subsidiaries, as well as optimising non-core assets.

The system and regular work of all the railway departments will become more important than co-ordination in the future. The target of this working process is increasing efficiency and formation of the through technological and management processes. It will contribute to a higher quality of management and better efficiency of regional directorates.

The holding company’s internal management system should correspond with the formed business model. On this basis, measures should be taken for further improvement of corporate management system and implementation of modern methods and technologies. The main tasks in the sphere of organisational development for 2013-2014 are as follows. Firstly, the functions of operational activity control will be transferred from RZD’s administrative personnel, so it will be reorganised into the company’s strategic management body – the Corporate Center, which provides interaction with other divisions, the balance of interests between the holding company’s partners, development and implementation of the common standards, policies, and rules, and synergy of joint activities. Secondly, there would be the reorganisation in the system for managing the main business units. Thirdly, a regular work will be carried out to increase efficiency, the quality of the management process and operations based on the project and portfolio management with the use of IT and automation facilities.

 

Path to Efficiency



The prospective management model foresees the formation of three business units – “Passenger Transportation”, “Infrastructure” and “The Transport and Logistics Unit” (with the simultaneous integration of GEFCO into the holding company).

The decision to establish the separate “Transport and Logistics” business unit was made to strengthen the holding positions on the market of high-yielding logistics services. It is imperative for strategic development.  The main approaches to management organisation in this sector will be formalised in a proper concept, which is developed now. 

Originally, the new management model was founded on the integration mechanisms, which should further contribute to synchronisation of operations, increase in the efficiency, and as a result it could assist with long-term business goals achievement. In 2012, the implementation of necessary instruments started. 

Particularly there was a new philosophy for the cooperation between business units, e.g. through planning, balanced index system, and services interchange. According to the services interchange model, all communications between the maintenance partners are based on the “customer-supplier” principle. This method assumes the availability of a system of mutual obligations and motivation. On the enlarged meeting of Russian Railways’ Board devoted to the company’s 2012 results, Alexey Illarionov, Vice President of the company, emphasised that all pilot projects for the interchange of services have already shown to be highly effective. On the basis of this experience, a complex Concept of Inner Service Circulation System was developed and will be carried out soon.

Therefore, most important changes in the management structure were completed in 2012. There were also created the new management mechanisms and conditions for their successful adoption and use. At the same time Senior Vice President of Russian Railways Valery Reshetnikov noted that currently the company has no impressive results proving the success of the reform. Operational results are worse than expected. The efficiency does not increase, it is even reduced considerably. The forecasts of most directorates are also negative. 

It should be noted, that the managers’ liability for achieved results is not realised in full. Therefore, subdivisions of the Corporate Center should delegate powers to directorates more actively, especially when considering funds allocation, economy or budgeting. So it will help to realise their potential for economic independence and motivation for the efficiency growing and optimisation of used assets and internal processes. All mentioned shortcomings are guidelines for the future work targeted at organisational development of the holding company. 

The management and development of the large RZD structure requires efficient and well coordinated work of all departments. Taking into account the modern requirements to the transport and logistics service, the company’s development strategy should be revised. It would be necessary to take into account all attained activity results, including those in the efficiency area. ®

By Elena Ushkova


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The Target Organisational Model



 Since 2003, i.e. from the start of the structural reform, multilevel, hierarchical, mainly territorial RZD-management structure has been formed to a vertically integrated functional system, which was organised according to the types of business. These were created to follow chains of command: management in distribution, forwarding, service and repair of tractive rolling stock, infrastructure and other branches. Its managers are vested with powers and responsibilities for the results of the current work and realisation of new development projects. Organisational conditions for enhancement of efficiency are also created: efficiency indexes, which are appropriate to the holding company’s development strategy, were developed for every direction, branch office and subsidiary, and their target figures for 2012-2015 were also set.

RZD includes almost 150 joint-stock companies. “Our production technologies and management process are interdependent and interrelated. We use common infrastructure, earn income from the same customers – shippers and passengers, and provide the reciprocal services. In this connection there is a necessity for prompt control and coordination of RZD’s daughter companies’ activity,” noted Vadim Morozov, the First Vice President of Russian Railways. As of today, more than 40 documents, which regulate this sector of corporate management, are accepted. According to the current system, vice presidents supervise subsidiaries. Therefore, they are now responsible for the results of the subsidiaries. Basing on the objectives and functions of railways and senior managers, the preferable forms of interaction between subsidiaries and railways and ways to legalise them are being developed. 

The development strategy can be worked out depending on the nature of interaction between the holding company and its subsidiaries. Such strategies can be implemented through the board of directors of daughter companies, direct and indirect agreements between RZD and its subsidiaries.

According to RZD managers, this target model is most pertinent and has a great potential.

However in the opinion of V. Morozov, it is required to work harder on formation of necessary management tools for all subdivisions of the holding company. Launching of every possible mechanism for efficiency and costs optimisation and income growth is also essential. 

In May 2012, it was decided to reorganise the sector of the corporate management and strategic development, and the financial and economic sector in order to complete the planned steps for making the management system and the company’s performance more efficient. 

The Department for the Management System Development, the Economic Department, and the Center for Business Projects Administration were created in the company’s headquarters.

In order to increase their efficiency, RZD subsidiaries developed such cost-saving measures as implementation of IT systems, labour productivity enhancement, reduction of direct and variable costs, and surplus capacities. With a view to solving this problem the organisational and scheduled basis was formed. RZD launched a permanent commission, the main goal of which is forming and updating the Plan of Additional Cost-Saving Measures in 2013-2015.

Besides in December 2012, the Consolidated Programme for the Holding Company’s Organisational Development till 2015 was adopted. 

It is coordinated with the approved programs and plans for costs decrease and receipts growth.

The consolidated programme will include the projects of two types. The first type is supporting activity with no immediate economic effect. It creates all the necessary conditions for the efficiency growth and exposure of improvement potential. The second concerns direct improvement of management quality.



The Infrastructure Sector Formation



One of the most important facts in the railway reform in 2012 was the start of economic activity of the Central Infrastructure Directorate (CID) – an affiliate of RZD. The decision about the creation of a special business unit engaged in the infrastructure management was made two years ago. The launch of the CID and its structures had been completed by October 1, 2012. 

Today, the Central Infrastructure Directorate is a powerful subdivision of RZD holding company. It is a vertically integrated affiliate that has 16 infrastructure directorates, 995 line enterprises with staff of more than 360,000 people. It is one third of the holding company’s staff and 97% of property of railways – tracks, bridges, overhead wire, automatic bloc signaling facilities, wagon depots, switch towers, heating points, etc.

At the territorial and central levels, the organisational structure of the directorate was formed so that it could diminish management risks. “At the same time we managed to find new approaches to form the structure as well as technologies for managing territorial infrastructure directorates,” noted CID Head Vladimir Suprun. “Each of them has its own center of infrastructure maintenance, which also acquired some activities of the business units. The conversion to the complex infrastructure management model depends on the activity of these centers. It is important to assure the common control mechanism for the infrastructure service and removal of incidents, which can be on the infrastructure objects.”

The information platforms for this activity are the management technologies used today by the Common Corporate Automated System for the Infrastructure Management. Currently it is integrated in the operational and maintenance phase of all infrastructure directions. The proper regulations were adopted to increase efficiency. They define the procedure of interaction at service provision or operations between different links of the central directorates – infrastructure, traffic control, traction, and service.

The infrastructure sector has three objectives for 2013. First of all, the further implementation of the complex infrastructure management model using infrastructure maintenance management centres and enhancement of technological processes. The second objective is the renewal of fixed assets to decrease the length of rail sections with overhead wire and signaling facilities, which are used for the above-standard time. The third one is provision of a high level of technical and technological readiness of the infrastructure objects. 



Regional Level



According to the programme and ideology of the railway transport reform, the role of railways and their senior managers has been changed. From October 1, 2012, the railways – affiliates of RZD – started operating as regional centers for corporate management. Thus, the overall management system – the corporate center (RСKU) was formed.

By becoming representatives of the RZD President, senior managers of RCKU are responsible for results and increase of the efficiency of the holding company. For that, they are entrusted with necessary powers and given necessary degree of responsibility for technological coordination and corporate management at the regional level. They should also efficiently interact with local authorities, society and business-partners. 

Taking into account the fact that the main function of RСKU in the new management system is technological and corporate coordination of RZD’s subdivisions, which work within the railway network, in the near future they will also be responsible for making and developing relations between local directorates, RZD’s subsidiaries, as well as optimising non-core assets.

The system and regular work of all the railway departments will become more important than co-ordination in the future. The target of this working process is increasing efficiency and formation of the through technological and management processes. It will contribute to a higher quality of management and better efficiency of regional directorates.

The holding company’s internal management system should correspond with the formed business model. On this basis, measures should be taken for further improvement of corporate management system and implementation of modern methods and technologies. The main tasks in the sphere of organisational development for 2013-2014 are as follows. Firstly, the functions of operational activity control will be transferred from RZD’s administrative personnel, so it will be reorganised into the company’s strategic management body – the Corporate Center, which provides interaction with other divisions, the balance of interests between the holding company’s partners, development and implementation of the common standards, policies, and rules, and synergy of joint activities. Secondly, there would be the reorganisation in the system for managing the main business units. Thirdly, a regular work will be carried out to increase efficiency, the quality of the management process and operations based on the project and portfolio management with the use of IT and automation facilities.

 

Path to Efficiency



The prospective management model foresees the formation of three business units – “Passenger Transportation”, “Infrastructure” and “The Transport and Logistics Unit” (with the simultaneous integration of GEFCO into the holding company).

The decision to establish the separate “Transport and Logistics” business unit was made to strengthen the holding positions on the market of high-yielding logistics services. It is imperative for strategic development.  The main approaches to management organisation in this sector will be formalised in a proper concept, which is developed now. 

Originally, the new management model was founded on the integration mechanisms, which should further contribute to synchronisation of operations, increase in the efficiency, and as a result it could assist with long-term business goals achievement. In 2012, the implementation of necessary instruments started. 

Particularly there was a new philosophy for the cooperation between business units, e.g. through planning, balanced index system, and services interchange. According to the services interchange model, all communications between the maintenance partners are based on the “customer-supplier” principle. This method assumes the availability of a system of mutual obligations and motivation. On the enlarged meeting of Russian Railways’ Board devoted to the company’s 2012 results, Alexey Illarionov, Vice President of the company, emphasised that all pilot projects for the interchange of services have already shown to be highly effective. On the basis of this experience, a complex Concept of Inner Service Circulation System was developed and will be carried out soon.

Therefore, most important changes in the management structure were completed in 2012. There were also created the new management mechanisms and conditions for their successful adoption and use. At the same time Senior Vice President of Russian Railways Valery Reshetnikov noted that currently the company has no impressive results proving the success of the reform. Operational results are worse than expected. The efficiency does not increase, it is even reduced considerably. The forecasts of most directorates are also negative. 

It should be noted, that the managers’ liability for achieved results is not realised in full. Therefore, subdivisions of the Corporate Center should delegate powers to directorates more actively, especially when considering funds allocation, economy or budgeting. So it will help to realise their potential for economic independence and motivation for the efficiency growing and optimisation of used assets and internal processes. All mentioned shortcomings are guidelines for the future work targeted at organisational development of the holding company. 

The management and development of the large RZD structure requires efficient and well coordinated work of all departments. Taking into account the modern requirements to the transport and logistics service, the company’s development strategy should be revised. It would be necessary to take into account all attained activity results, including those in the efficiency area. ®

By Elena Ushkova


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    [DETAIL_TEXT] => 
Alexander Misharin Appointed as CEO of Subsidiary of RZD

The former governor of the Sverdlovsk region, Alexander Misharin, has been appointed as CEO of Skorostnye Magistrali OJSC (High-Speed Mainlines), a subsidiary of RZD engaged in projects targeted at the development of high-speed railways.

Denis Muratov, who headed Skorostnye Magistrali starting from 2009, is now Deputy CEO.

Earlier Mr Misharin was appointed as the First Vice President of RZD in charge of the development of high-speed and very high speed traffic. Before that the company had only one First Vice President – Vadim Morozov.



RZD Completes Sale of 25% Stake in the Central Commuter Passenger Company

Russian Railways JSC has completed the sale of a 25% stake in the Central Commuter Passenger Company OJSC (CCPC). Now the company owns a 25% shareholding in the subsidiary.

In December 2012, Moscow Passenger Company LLC, which had already had a 25% stake plus one share in the Central Commuter Passenger Company, won an auction for the sale of 25% minus three shares in the CCPC. The cost of the purchase was RUB 780 million (approximately $26 million).

The deal was closed on January 31, 2013.

Another 25% plus one share in the CCPC belong to the Government of the Moscow Region.



Mechel Sells and Buys

In the middle of January 2013, Russian metals and mining group Mechel said it had paid for a 55% voting stake (73.33% shares) in the Vanino Commercial Sea Port, which were sold at an auction last December for RUB 15.5 billion. 

A week later, Mecheltrans sold a part of its earlier acquired controlling stake in the port to Russian and foreign investors, retaining some 1.5% of the enterprise’s common shares. “Investors are not interested in transshipping their products through the Vanino port, which will enable Mechel to use the port’s entire capacity for the company’s benefit”.

Meanwhile, on January 31, 2013 Russian billionaire Oleg Deripaska’s En+ Group has agreed to sell its entire 28.12% stake in the Vanino Commercial Sea Port to Mecheltrans for RUB 4.84 billion. In line with the transaction’s terms, the port’s shares became Mecheltrans’s property when the agreement was signed, while payment for the shares will be made within 145 days.



Freight Operators of Kazakhstan and Russia Signed a Memorandum of Cooperation

A Memorandum of Cooperation between Kaztemirtrans JSC and Federal Freight Company JSC was signed in Astana during the visit of leadership of Russian Federal Freight Company in the Republic of Kazakhstan on January 24, 2013.

The document was signed by President of Kaztemirtrans Kanat Almagambetov and CEO of Federal Freight Company Vitaly Evdokimenko.

According to the Memorandum, the parties reached an agreement on the effective use of freight rolling stock in Russia and Kazakhstan, mutual consultation on information exchange during the operation of freight cars, co-operation for the current repair in the two countries and other issues.



Freight One Carried 194.8 Million Tons of Cargo in 2012

Over 2012 the capacity of freight transportation on the RZD network in cars directly operated by Freight One JSC increased by 170%, year-on-year, totaling 194.8 million tons. 

The company’s turnover on the RZD network increased by 230% to 368.2 billion ton-kilometers.

The increase in volumes was due to Freight One shifting since February 2012 to direct operation of the gondola car fleet previously operated by Russian Railways JSC under Agent agreement, and also due to the expansion of the Company’s client portfolio.

Among the major freight transportation groups the volumes of coal amounted to 64.7 million tons, crude oil and petroleum products – 43.1 million tons, ore – 21.5 million tons, construction cargoes – 15.6 million tons, cement – 14.4 million tons, ferrous metals – 10.7 million tons.
    [~DETAIL_TEXT] => 
Alexander Misharin Appointed as CEO of Subsidiary of RZD

The former governor of the Sverdlovsk region, Alexander Misharin, has been appointed as CEO of Skorostnye Magistrali OJSC (High-Speed Mainlines), a subsidiary of RZD engaged in projects targeted at the development of high-speed railways.

Denis Muratov, who headed Skorostnye Magistrali starting from 2009, is now Deputy CEO.

Earlier Mr Misharin was appointed as the First Vice President of RZD in charge of the development of high-speed and very high speed traffic. Before that the company had only one First Vice President – Vadim Morozov.



RZD Completes Sale of 25% Stake in the Central Commuter Passenger Company

Russian Railways JSC has completed the sale of a 25% stake in the Central Commuter Passenger Company OJSC (CCPC). Now the company owns a 25% shareholding in the subsidiary.

In December 2012, Moscow Passenger Company LLC, which had already had a 25% stake plus one share in the Central Commuter Passenger Company, won an auction for the sale of 25% minus three shares in the CCPC. The cost of the purchase was RUB 780 million (approximately $26 million).

The deal was closed on January 31, 2013.

Another 25% plus one share in the CCPC belong to the Government of the Moscow Region.



Mechel Sells and Buys

In the middle of January 2013, Russian metals and mining group Mechel said it had paid for a 55% voting stake (73.33% shares) in the Vanino Commercial Sea Port, which were sold at an auction last December for RUB 15.5 billion. 

A week later, Mecheltrans sold a part of its earlier acquired controlling stake in the port to Russian and foreign investors, retaining some 1.5% of the enterprise’s common shares. “Investors are not interested in transshipping their products through the Vanino port, which will enable Mechel to use the port’s entire capacity for the company’s benefit”.

Meanwhile, on January 31, 2013 Russian billionaire Oleg Deripaska’s En+ Group has agreed to sell its entire 28.12% stake in the Vanino Commercial Sea Port to Mecheltrans for RUB 4.84 billion. In line with the transaction’s terms, the port’s shares became Mecheltrans’s property when the agreement was signed, while payment for the shares will be made within 145 days.



Freight Operators of Kazakhstan and Russia Signed a Memorandum of Cooperation

A Memorandum of Cooperation between Kaztemirtrans JSC and Federal Freight Company JSC was signed in Astana during the visit of leadership of Russian Federal Freight Company in the Republic of Kazakhstan on January 24, 2013.

The document was signed by President of Kaztemirtrans Kanat Almagambetov and CEO of Federal Freight Company Vitaly Evdokimenko.

According to the Memorandum, the parties reached an agreement on the effective use of freight rolling stock in Russia and Kazakhstan, mutual consultation on information exchange during the operation of freight cars, co-operation for the current repair in the two countries and other issues.



Freight One Carried 194.8 Million Tons of Cargo in 2012

Over 2012 the capacity of freight transportation on the RZD network in cars directly operated by Freight One JSC increased by 170%, year-on-year, totaling 194.8 million tons. 

The company’s turnover on the RZD network increased by 230% to 368.2 billion ton-kilometers.

The increase in volumes was due to Freight One shifting since February 2012 to direct operation of the gondola car fleet previously operated by Russian Railways JSC under Agent agreement, and also due to the expansion of the Company’s client portfolio.

Among the major freight transportation groups the volumes of coal amounted to 64.7 million tons, crude oil and petroleum products – 43.1 million tons, ore – 21.5 million tons, construction cargoes – 15.6 million tons, cement – 14.4 million tons, ferrous metals – 10.7 million tons.
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The former governor of the Sverdlovsk region, Alexander Misharin, has  been appointed as CEO of Skorostnye Magistrali OJSC (High-Speed  Mainlines), a subsidiary of RZD engaged in projects targeted at the  development of high-speed railways.
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    [DETAIL_TEXT] => 
Alexander Misharin Appointed as CEO of Subsidiary of RZD

The former governor of the Sverdlovsk region, Alexander Misharin, has been appointed as CEO of Skorostnye Magistrali OJSC (High-Speed Mainlines), a subsidiary of RZD engaged in projects targeted at the development of high-speed railways.

Denis Muratov, who headed Skorostnye Magistrali starting from 2009, is now Deputy CEO.

Earlier Mr Misharin was appointed as the First Vice President of RZD in charge of the development of high-speed and very high speed traffic. Before that the company had only one First Vice President – Vadim Morozov.



RZD Completes Sale of 25% Stake in the Central Commuter Passenger Company

Russian Railways JSC has completed the sale of a 25% stake in the Central Commuter Passenger Company OJSC (CCPC). Now the company owns a 25% shareholding in the subsidiary.

In December 2012, Moscow Passenger Company LLC, which had already had a 25% stake plus one share in the Central Commuter Passenger Company, won an auction for the sale of 25% minus three shares in the CCPC. The cost of the purchase was RUB 780 million (approximately $26 million).

The deal was closed on January 31, 2013.

Another 25% plus one share in the CCPC belong to the Government of the Moscow Region.



Mechel Sells and Buys

In the middle of January 2013, Russian metals and mining group Mechel said it had paid for a 55% voting stake (73.33% shares) in the Vanino Commercial Sea Port, which were sold at an auction last December for RUB 15.5 billion. 

A week later, Mecheltrans sold a part of its earlier acquired controlling stake in the port to Russian and foreign investors, retaining some 1.5% of the enterprise’s common shares. “Investors are not interested in transshipping their products through the Vanino port, which will enable Mechel to use the port’s entire capacity for the company’s benefit”.

Meanwhile, on January 31, 2013 Russian billionaire Oleg Deripaska’s En+ Group has agreed to sell its entire 28.12% stake in the Vanino Commercial Sea Port to Mecheltrans for RUB 4.84 billion. In line with the transaction’s terms, the port’s shares became Mecheltrans’s property when the agreement was signed, while payment for the shares will be made within 145 days.



Freight Operators of Kazakhstan and Russia Signed a Memorandum of Cooperation

A Memorandum of Cooperation between Kaztemirtrans JSC and Federal Freight Company JSC was signed in Astana during the visit of leadership of Russian Federal Freight Company in the Republic of Kazakhstan on January 24, 2013.

The document was signed by President of Kaztemirtrans Kanat Almagambetov and CEO of Federal Freight Company Vitaly Evdokimenko.

According to the Memorandum, the parties reached an agreement on the effective use of freight rolling stock in Russia and Kazakhstan, mutual consultation on information exchange during the operation of freight cars, co-operation for the current repair in the two countries and other issues.



Freight One Carried 194.8 Million Tons of Cargo in 2012

Over 2012 the capacity of freight transportation on the RZD network in cars directly operated by Freight One JSC increased by 170%, year-on-year, totaling 194.8 million tons. 

The company’s turnover on the RZD network increased by 230% to 368.2 billion ton-kilometers.

The increase in volumes was due to Freight One shifting since February 2012 to direct operation of the gondola car fleet previously operated by Russian Railways JSC under Agent agreement, and also due to the expansion of the Company’s client portfolio.

Among the major freight transportation groups the volumes of coal amounted to 64.7 million tons, crude oil and petroleum products – 43.1 million tons, ore – 21.5 million tons, construction cargoes – 15.6 million tons, cement – 14.4 million tons, ferrous metals – 10.7 million tons.
    [~DETAIL_TEXT] => 
Alexander Misharin Appointed as CEO of Subsidiary of RZD

The former governor of the Sverdlovsk region, Alexander Misharin, has been appointed as CEO of Skorostnye Magistrali OJSC (High-Speed Mainlines), a subsidiary of RZD engaged in projects targeted at the development of high-speed railways.

Denis Muratov, who headed Skorostnye Magistrali starting from 2009, is now Deputy CEO.

Earlier Mr Misharin was appointed as the First Vice President of RZD in charge of the development of high-speed and very high speed traffic. Before that the company had only one First Vice President – Vadim Morozov.



RZD Completes Sale of 25% Stake in the Central Commuter Passenger Company

Russian Railways JSC has completed the sale of a 25% stake in the Central Commuter Passenger Company OJSC (CCPC). Now the company owns a 25% shareholding in the subsidiary.

In December 2012, Moscow Passenger Company LLC, which had already had a 25% stake plus one share in the Central Commuter Passenger Company, won an auction for the sale of 25% minus three shares in the CCPC. The cost of the purchase was RUB 780 million (approximately $26 million).

The deal was closed on January 31, 2013.

Another 25% plus one share in the CCPC belong to the Government of the Moscow Region.



Mechel Sells and Buys

In the middle of January 2013, Russian metals and mining group Mechel said it had paid for a 55% voting stake (73.33% shares) in the Vanino Commercial Sea Port, which were sold at an auction last December for RUB 15.5 billion. 

A week later, Mecheltrans sold a part of its earlier acquired controlling stake in the port to Russian and foreign investors, retaining some 1.5% of the enterprise’s common shares. “Investors are not interested in transshipping their products through the Vanino port, which will enable Mechel to use the port’s entire capacity for the company’s benefit”.

Meanwhile, on January 31, 2013 Russian billionaire Oleg Deripaska’s En+ Group has agreed to sell its entire 28.12% stake in the Vanino Commercial Sea Port to Mecheltrans for RUB 4.84 billion. In line with the transaction’s terms, the port’s shares became Mecheltrans’s property when the agreement was signed, while payment for the shares will be made within 145 days.



Freight Operators of Kazakhstan and Russia Signed a Memorandum of Cooperation

A Memorandum of Cooperation between Kaztemirtrans JSC and Federal Freight Company JSC was signed in Astana during the visit of leadership of Russian Federal Freight Company in the Republic of Kazakhstan on January 24, 2013.

The document was signed by President of Kaztemirtrans Kanat Almagambetov and CEO of Federal Freight Company Vitaly Evdokimenko.

According to the Memorandum, the parties reached an agreement on the effective use of freight rolling stock in Russia and Kazakhstan, mutual consultation on information exchange during the operation of freight cars, co-operation for the current repair in the two countries and other issues.



Freight One Carried 194.8 Million Tons of Cargo in 2012

Over 2012 the capacity of freight transportation on the RZD network in cars directly operated by Freight One JSC increased by 170%, year-on-year, totaling 194.8 million tons. 

The company’s turnover on the RZD network increased by 230% to 368.2 billion ton-kilometers.

The increase in volumes was due to Freight One shifting since February 2012 to direct operation of the gondola car fleet previously operated by Russian Railways JSC under Agent agreement, and also due to the expansion of the Company’s client portfolio.

Among the major freight transportation groups the volumes of coal amounted to 64.7 million tons, crude oil and petroleum products – 43.1 million tons, ore – 21.5 million tons, construction cargoes – 15.6 million tons, cement – 14.4 million tons, ferrous metals – 10.7 million tons.
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New Solutions for Ambitious Plans





The dynamics of large container international transportation via the Trans-Siberian mainline have been positive lately. In 2011, the increase was 27%, and in 2012 – 15.4%. However, just 1% of the total container flow between Northern Europe and Asia is transported via Russia. According to experts, additional revenue of Russian transport companies can amount to approximately $2 billion per annum, if the annual transit cargo flow via the Transsib is 600,000-800,000 TEU.

Speaking at the XXI Plenary session of the international association Coordinating Council on Trans-Siberian Transportation (CCTT) in September 2012, Vladimir Yakunin, President of RZD named the development of export and import transportation and making use of the transit potential as two priorities for the development of the container business in Russia. They are targeted at increasing the competitiveness of the Trans-Siberian route at the international market of transport and logistics services till 2020. If these conditions are fulfilled, the level of containerisation of railway transportation in Russia may increase by between 30% and 70% by 2015. On the whole, the average annual growth for Russian railways can vary between 8% and 10%.

These plans are closely connected with the issues of modern development of infrastructure and the expansion of the carrying capacity of the Eastern area, particularly of the Trans-Siberian and Baikal-Amur mainlines. According to RZD, RUB 1.1 trillion of investment is needed. Of that, RUB 737 billion is needed to develop the BAM, and RUB 181 billion – for the eastern part of the Transsib. “We plan to increase transit transportation volume via the Trans-Siberian mainline due to the creation of competitive advantages to alternative routes, and first of all – the traditional sea route via the Suez Canal,” V. Yakunin said.

Meanwhile, to carry out such ambitious plans, new solutions are needed to enhance the work of all participants in the transport process and to increase their efficiency. It envisages a decrease in the time of cargo delivery via the Transsib, train customs clearance at border stations, simplification of transport and customs documents registration and making the procedure faster. One of such solutions, in the words of Elena Kunaeva, CEO of RZD’s Centre of Transport Services, is implementation of new information technology, allowing transferring to e-document circulation with railways from adjacent states, participating in transportation via the Transsib, and with controlling authorities of countries engaged in the transportation.

In the Concept of Trans-Siberian Transportation Development till 2020, the development of e-document circulation in part of transport documents registration for international transportation is considered a priority by RZD. This is needed for further enhancement of the technology and organisation of transportation of transit and foreign trade cargo via the Transsib and for provision of informational support to the transport process.



Electronic Train



In the framework of Electronic Train project, RZD is looking for ways to implement transport e-documents for the work with railways of Belarus and Kazakhstan.

Nowadays, a paper-free technology is used for registering transport documents on transportation inside Russia. According to RZD’s Centre of Transport Services, all 2997 stations in the Russian railway network, open for freight operations, are connected to the infrastructure of digital e-signature; over 2,900 external enterprises use their e-signature in the ETRAN system; the number of users of e-document circulation is more than 35,000; about 1.5 million primary documents are formalised with the use of an e-signature each month.

To test the scheme of e-documents application for international transportation, RZD concluded bilateral agreements with the railways of Finland and Latvia. On this basis, e-document exchange is carried out at transportation of empty private railcars (from Finland to Russia and back – starting from 2011, and from Latvia to Russia – starting from April 2012). In the near future, a similar scheme will be used for transportation between Russia and Lithuania. The next step of e-document circulation development will be the transfer to e-documents for empty and loaded private wagons between Russia and the railways of Belarus and Kazakhstan. RZD has made arrangements with the Belarusian Railway adjusting the way they interact. Draft documents regulating the technology and the order of interaction of the parties at e-documents exchange during transportation of empty and loaded wagons have been developed and are being discussed.

At first, transportation will be provided on the section adjusted for tests – the Kovdor station (RZD) – the Centrolit station (the Belarusian Railway). In accordance with the adjusted scheme, EDI system will be applied for the transfer of data from e-invoices between RZD and the Belarusian Railway. The EDI system will work in accordance with the international standard EDIFACT, and the transferred data will be electronically signed. Work is underway to transfer to an e-document circulation between RZD and Kazakhstan. According to the information of NC Kazakhstan Temir Zholy, implementation of the system of transport document electronisation has not been completed yet. Nevertheless, RZD and Kazakhstan Temir Zholy agreed on incremental transfer to paper-free technology.

E-document circulation will be put in operation at the initial stage to formalise transport documents on the pilot railway section, including transportation of empty private railcars from Kazakhstan to the RF using the same scheme of interaction as with Finland and Latvia. Later, the countries plan to transfer to completely electronic document circulation at transportation of empty private railcars as well as cargoes with a digital e-signature.



Common Consignment Note



Simplification of train customs clearance procedures at border stations and reduction of time needed for them through the enhancement of customs clearance procedure will help to speed up cargo transportation via the Transsib. The working group consisting of specialists from RZD and the RF Federal Customs Service approved a joint plan and documents regulating the order of interaction at e-data exchange between RZD and Russian customs bodies. Also, it defined the first places where the new scheme will be put in operation, and the list of clients participating in it, whose freight is exported or imported into the Customs Union.

Initially, the technology of e-document circulation with customs bodies upon cargo transportation out of the Customs Union will be tested at border stations Buslovskaya and Svetogorsk (for transportation to Finland), Posin (to Latvia), and Naushki (to China). During the test period, transportation will be provided by large consignors from the stations of the Oktaybrskaya, the Gorkovskaya, the Kuibyshev, and the East-Siberian railways. Pilot paper-free technology for goods incoming to the Customs Union will be applied in May 2013.

In the words of Mrs Kunaeva, these projects will create a favourable environment for extending the use of e-consignment notes into transportation via other states (apart from Russia, Belarus, and Kazakhstan), which are parts of Eurasian railway corridors and land bridges between rapidly developing economic districts of the Asian and Pacific Region, including China, and the EU. Also, it will contribute to application of e-documents in all phases of international transportation.

It is necessary to provide a faster unhindered movement of cargoes at border crossings, which currently create major delays. The main reasons for the barriers are drawbacks of formalisation of transport and accompanying documents. So, supported by the Organisation for Cooperation between Railways (OSJD), the International Union of Railways (UIC), and the International Rail Transport Committee (CIT), the working group for IT development at the CCTT actively cooperates with adjacent railways, forwarders, customs bodies, and other participants of transportation. All offered initiatives targeted at an enhancement of international cargo transportation by railway are tested.

For example, the CIM/SMGS common consignment note is the only successful international project for the unification of legal procedures at freight railway transportation providing unhampered transportation by railway, applying the western and the eastern transport legislation without additional formalities en route. The Ministry of Railways of China adjusted the use of the CIM/SMGS consignment note at the Erlyan, Alashankou, and Manchuria border crossings, thus expanding the geography of the CIT/OSJD project “Transport and Legal Interoperability of CIM/SMGS” and giving it a status of a transcontinental project. “The largest states with a significant potential of economic growth such as China, Mongolia, and Kazakhstan joining the CIM/SMGS project can contribute to a qualitative leap in the sphere of legal harmonisation of railway transportation in Eurasia,” noted Vladimir Yakunin.

In November 2012, a pilot container block train travelled using a common CIM/SMGS consignment note on the Chongqing (China) – Duisburg (Germany) route via Russia. The project was launched under the aegis of OSJD by the Belarusian Railway, NC KTZ (Kazakhstan), PKP Cargo (Poland), RZD, the Ministry of Railways of China, and DB Schenker Rail (Germany). The train carried 42 forty-foot containers loaded with products made by Acer and ASUS and consumer goods produced by other companies. It left Chongqing on October 31, and arrived to the destination point on November 16.

Before that, the Commission for Freight Transportation at the OSJD carried out ongoing work to analyse and assess the routes from China to Europe with the usage of the CIM/SMGS consignment note. Within the project framework, the parties demonstrated the opportunity to dispatch a block train as well as groups of wagons and containers using one consignment note, which simplifies border crossing procedures and, consequently, contributes to an increase in the speed of cargo transportation.

The demo trip of the container train will allow analysis of the use of the common CIM/SMGS consignment note, and reveal advantages of such documents at transcontinental transportation between China and Western Europe as an efficient instrument for border crossing simplification. Before using the common CIM/SMGS consignment note, over 20 trains travelled on the Chongqing – Duisburg route, and two separate consignment notes were used for them. In June 2012, RZD Logistics, Schenker China Ltd., Kaztransservice, Chongqing Transportation Holding (Group) Co., Ltd., and China Railway International Multimodal Transport Co., Ltd. officially registered a JV for containerised cargo transportation on the Chongqing – Duisburg route.

The further development of this and other projects of container trains using the advanced informational technologies, and simplification of customs procedures can help to increase the competitiveness of the Transsib. On the whole, 286,000 TEU was carried by container trains via the Trans-Siberian Mainline in 2012. This amount will increase in 2013, according to forecasts.

By Elena Ushkova
    [~DETAIL_TEXT] => 
New Solutions for Ambitious Plans





The dynamics of large container international transportation via the Trans-Siberian mainline have been positive lately. In 2011, the increase was 27%, and in 2012 – 15.4%. However, just 1% of the total container flow between Northern Europe and Asia is transported via Russia. According to experts, additional revenue of Russian transport companies can amount to approximately $2 billion per annum, if the annual transit cargo flow via the Transsib is 600,000-800,000 TEU.

Speaking at the XXI Plenary session of the international association Coordinating Council on Trans-Siberian Transportation (CCTT) in September 2012, Vladimir Yakunin, President of RZD named the development of export and import transportation and making use of the transit potential as two priorities for the development of the container business in Russia. They are targeted at increasing the competitiveness of the Trans-Siberian route at the international market of transport and logistics services till 2020. If these conditions are fulfilled, the level of containerisation of railway transportation in Russia may increase by between 30% and 70% by 2015. On the whole, the average annual growth for Russian railways can vary between 8% and 10%.

These plans are closely connected with the issues of modern development of infrastructure and the expansion of the carrying capacity of the Eastern area, particularly of the Trans-Siberian and Baikal-Amur mainlines. According to RZD, RUB 1.1 trillion of investment is needed. Of that, RUB 737 billion is needed to develop the BAM, and RUB 181 billion – for the eastern part of the Transsib. “We plan to increase transit transportation volume via the Trans-Siberian mainline due to the creation of competitive advantages to alternative routes, and first of all – the traditional sea route via the Suez Canal,” V. Yakunin said.

Meanwhile, to carry out such ambitious plans, new solutions are needed to enhance the work of all participants in the transport process and to increase their efficiency. It envisages a decrease in the time of cargo delivery via the Transsib, train customs clearance at border stations, simplification of transport and customs documents registration and making the procedure faster. One of such solutions, in the words of Elena Kunaeva, CEO of RZD’s Centre of Transport Services, is implementation of new information technology, allowing transferring to e-document circulation with railways from adjacent states, participating in transportation via the Transsib, and with controlling authorities of countries engaged in the transportation.

In the Concept of Trans-Siberian Transportation Development till 2020, the development of e-document circulation in part of transport documents registration for international transportation is considered a priority by RZD. This is needed for further enhancement of the technology and organisation of transportation of transit and foreign trade cargo via the Transsib and for provision of informational support to the transport process.



Electronic Train



In the framework of Electronic Train project, RZD is looking for ways to implement transport e-documents for the work with railways of Belarus and Kazakhstan.

Nowadays, a paper-free technology is used for registering transport documents on transportation inside Russia. According to RZD’s Centre of Transport Services, all 2997 stations in the Russian railway network, open for freight operations, are connected to the infrastructure of digital e-signature; over 2,900 external enterprises use their e-signature in the ETRAN system; the number of users of e-document circulation is more than 35,000; about 1.5 million primary documents are formalised with the use of an e-signature each month.

To test the scheme of e-documents application for international transportation, RZD concluded bilateral agreements with the railways of Finland and Latvia. On this basis, e-document exchange is carried out at transportation of empty private railcars (from Finland to Russia and back – starting from 2011, and from Latvia to Russia – starting from April 2012). In the near future, a similar scheme will be used for transportation between Russia and Lithuania. The next step of e-document circulation development will be the transfer to e-documents for empty and loaded private wagons between Russia and the railways of Belarus and Kazakhstan. RZD has made arrangements with the Belarusian Railway adjusting the way they interact. Draft documents regulating the technology and the order of interaction of the parties at e-documents exchange during transportation of empty and loaded wagons have been developed and are being discussed.

At first, transportation will be provided on the section adjusted for tests – the Kovdor station (RZD) – the Centrolit station (the Belarusian Railway). In accordance with the adjusted scheme, EDI system will be applied for the transfer of data from e-invoices between RZD and the Belarusian Railway. The EDI system will work in accordance with the international standard EDIFACT, and the transferred data will be electronically signed. Work is underway to transfer to an e-document circulation between RZD and Kazakhstan. According to the information of NC Kazakhstan Temir Zholy, implementation of the system of transport document electronisation has not been completed yet. Nevertheless, RZD and Kazakhstan Temir Zholy agreed on incremental transfer to paper-free technology.

E-document circulation will be put in operation at the initial stage to formalise transport documents on the pilot railway section, including transportation of empty private railcars from Kazakhstan to the RF using the same scheme of interaction as with Finland and Latvia. Later, the countries plan to transfer to completely electronic document circulation at transportation of empty private railcars as well as cargoes with a digital e-signature.



Common Consignment Note



Simplification of train customs clearance procedures at border stations and reduction of time needed for them through the enhancement of customs clearance procedure will help to speed up cargo transportation via the Transsib. The working group consisting of specialists from RZD and the RF Federal Customs Service approved a joint plan and documents regulating the order of interaction at e-data exchange between RZD and Russian customs bodies. Also, it defined the first places where the new scheme will be put in operation, and the list of clients participating in it, whose freight is exported or imported into the Customs Union.

Initially, the technology of e-document circulation with customs bodies upon cargo transportation out of the Customs Union will be tested at border stations Buslovskaya and Svetogorsk (for transportation to Finland), Posin (to Latvia), and Naushki (to China). During the test period, transportation will be provided by large consignors from the stations of the Oktaybrskaya, the Gorkovskaya, the Kuibyshev, and the East-Siberian railways. Pilot paper-free technology for goods incoming to the Customs Union will be applied in May 2013.

In the words of Mrs Kunaeva, these projects will create a favourable environment for extending the use of e-consignment notes into transportation via other states (apart from Russia, Belarus, and Kazakhstan), which are parts of Eurasian railway corridors and land bridges between rapidly developing economic districts of the Asian and Pacific Region, including China, and the EU. Also, it will contribute to application of e-documents in all phases of international transportation.

It is necessary to provide a faster unhindered movement of cargoes at border crossings, which currently create major delays. The main reasons for the barriers are drawbacks of formalisation of transport and accompanying documents. So, supported by the Organisation for Cooperation between Railways (OSJD), the International Union of Railways (UIC), and the International Rail Transport Committee (CIT), the working group for IT development at the CCTT actively cooperates with adjacent railways, forwarders, customs bodies, and other participants of transportation. All offered initiatives targeted at an enhancement of international cargo transportation by railway are tested.

For example, the CIM/SMGS common consignment note is the only successful international project for the unification of legal procedures at freight railway transportation providing unhampered transportation by railway, applying the western and the eastern transport legislation without additional formalities en route. The Ministry of Railways of China adjusted the use of the CIM/SMGS consignment note at the Erlyan, Alashankou, and Manchuria border crossings, thus expanding the geography of the CIT/OSJD project “Transport and Legal Interoperability of CIM/SMGS” and giving it a status of a transcontinental project. “The largest states with a significant potential of economic growth such as China, Mongolia, and Kazakhstan joining the CIM/SMGS project can contribute to a qualitative leap in the sphere of legal harmonisation of railway transportation in Eurasia,” noted Vladimir Yakunin.

In November 2012, a pilot container block train travelled using a common CIM/SMGS consignment note on the Chongqing (China) – Duisburg (Germany) route via Russia. The project was launched under the aegis of OSJD by the Belarusian Railway, NC KTZ (Kazakhstan), PKP Cargo (Poland), RZD, the Ministry of Railways of China, and DB Schenker Rail (Germany). The train carried 42 forty-foot containers loaded with products made by Acer and ASUS and consumer goods produced by other companies. It left Chongqing on October 31, and arrived to the destination point on November 16.

Before that, the Commission for Freight Transportation at the OSJD carried out ongoing work to analyse and assess the routes from China to Europe with the usage of the CIM/SMGS consignment note. Within the project framework, the parties demonstrated the opportunity to dispatch a block train as well as groups of wagons and containers using one consignment note, which simplifies border crossing procedures and, consequently, contributes to an increase in the speed of cargo transportation.

The demo trip of the container train will allow analysis of the use of the common CIM/SMGS consignment note, and reveal advantages of such documents at transcontinental transportation between China and Western Europe as an efficient instrument for border crossing simplification. Before using the common CIM/SMGS consignment note, over 20 trains travelled on the Chongqing – Duisburg route, and two separate consignment notes were used for them. In June 2012, RZD Logistics, Schenker China Ltd., Kaztransservice, Chongqing Transportation Holding (Group) Co., Ltd., and China Railway International Multimodal Transport Co., Ltd. officially registered a JV for containerised cargo transportation on the Chongqing – Duisburg route.

The further development of this and other projects of container trains using the advanced informational technologies, and simplification of customs procedures can help to increase the competitiveness of the Transsib. On the whole, 286,000 TEU was carried by container trains via the Trans-Siberian Mainline in 2012. This amount will increase in 2013, according to forecasts.

By Elena Ushkova
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    [DETAIL_TEXT] => 
New Solutions for Ambitious Plans





The dynamics of large container international transportation via the Trans-Siberian mainline have been positive lately. In 2011, the increase was 27%, and in 2012 – 15.4%. However, just 1% of the total container flow between Northern Europe and Asia is transported via Russia. According to experts, additional revenue of Russian transport companies can amount to approximately $2 billion per annum, if the annual transit cargo flow via the Transsib is 600,000-800,000 TEU.

Speaking at the XXI Plenary session of the international association Coordinating Council on Trans-Siberian Transportation (CCTT) in September 2012, Vladimir Yakunin, President of RZD named the development of export and import transportation and making use of the transit potential as two priorities for the development of the container business in Russia. They are targeted at increasing the competitiveness of the Trans-Siberian route at the international market of transport and logistics services till 2020. If these conditions are fulfilled, the level of containerisation of railway transportation in Russia may increase by between 30% and 70% by 2015. On the whole, the average annual growth for Russian railways can vary between 8% and 10%.

These plans are closely connected with the issues of modern development of infrastructure and the expansion of the carrying capacity of the Eastern area, particularly of the Trans-Siberian and Baikal-Amur mainlines. According to RZD, RUB 1.1 trillion of investment is needed. Of that, RUB 737 billion is needed to develop the BAM, and RUB 181 billion – for the eastern part of the Transsib. “We plan to increase transit transportation volume via the Trans-Siberian mainline due to the creation of competitive advantages to alternative routes, and first of all – the traditional sea route via the Suez Canal,” V. Yakunin said.

Meanwhile, to carry out such ambitious plans, new solutions are needed to enhance the work of all participants in the transport process and to increase their efficiency. It envisages a decrease in the time of cargo delivery via the Transsib, train customs clearance at border stations, simplification of transport and customs documents registration and making the procedure faster. One of such solutions, in the words of Elena Kunaeva, CEO of RZD’s Centre of Transport Services, is implementation of new information technology, allowing transferring to e-document circulation with railways from adjacent states, participating in transportation via the Transsib, and with controlling authorities of countries engaged in the transportation.

In the Concept of Trans-Siberian Transportation Development till 2020, the development of e-document circulation in part of transport documents registration for international transportation is considered a priority by RZD. This is needed for further enhancement of the technology and organisation of transportation of transit and foreign trade cargo via the Transsib and for provision of informational support to the transport process.



Electronic Train



In the framework of Electronic Train project, RZD is looking for ways to implement transport e-documents for the work with railways of Belarus and Kazakhstan.

Nowadays, a paper-free technology is used for registering transport documents on transportation inside Russia. According to RZD’s Centre of Transport Services, all 2997 stations in the Russian railway network, open for freight operations, are connected to the infrastructure of digital e-signature; over 2,900 external enterprises use their e-signature in the ETRAN system; the number of users of e-document circulation is more than 35,000; about 1.5 million primary documents are formalised with the use of an e-signature each month.

To test the scheme of e-documents application for international transportation, RZD concluded bilateral agreements with the railways of Finland and Latvia. On this basis, e-document exchange is carried out at transportation of empty private railcars (from Finland to Russia and back – starting from 2011, and from Latvia to Russia – starting from April 2012). In the near future, a similar scheme will be used for transportation between Russia and Lithuania. The next step of e-document circulation development will be the transfer to e-documents for empty and loaded private wagons between Russia and the railways of Belarus and Kazakhstan. RZD has made arrangements with the Belarusian Railway adjusting the way they interact. Draft documents regulating the technology and the order of interaction of the parties at e-documents exchange during transportation of empty and loaded wagons have been developed and are being discussed.

At first, transportation will be provided on the section adjusted for tests – the Kovdor station (RZD) – the Centrolit station (the Belarusian Railway). In accordance with the adjusted scheme, EDI system will be applied for the transfer of data from e-invoices between RZD and the Belarusian Railway. The EDI system will work in accordance with the international standard EDIFACT, and the transferred data will be electronically signed. Work is underway to transfer to an e-document circulation between RZD and Kazakhstan. According to the information of NC Kazakhstan Temir Zholy, implementation of the system of transport document electronisation has not been completed yet. Nevertheless, RZD and Kazakhstan Temir Zholy agreed on incremental transfer to paper-free technology.

E-document circulation will be put in operation at the initial stage to formalise transport documents on the pilot railway section, including transportation of empty private railcars from Kazakhstan to the RF using the same scheme of interaction as with Finland and Latvia. Later, the countries plan to transfer to completely electronic document circulation at transportation of empty private railcars as well as cargoes with a digital e-signature.



Common Consignment Note



Simplification of train customs clearance procedures at border stations and reduction of time needed for them through the enhancement of customs clearance procedure will help to speed up cargo transportation via the Transsib. The working group consisting of specialists from RZD and the RF Federal Customs Service approved a joint plan and documents regulating the order of interaction at e-data exchange between RZD and Russian customs bodies. Also, it defined the first places where the new scheme will be put in operation, and the list of clients participating in it, whose freight is exported or imported into the Customs Union.

Initially, the technology of e-document circulation with customs bodies upon cargo transportation out of the Customs Union will be tested at border stations Buslovskaya and Svetogorsk (for transportation to Finland), Posin (to Latvia), and Naushki (to China). During the test period, transportation will be provided by large consignors from the stations of the Oktaybrskaya, the Gorkovskaya, the Kuibyshev, and the East-Siberian railways. Pilot paper-free technology for goods incoming to the Customs Union will be applied in May 2013.

In the words of Mrs Kunaeva, these projects will create a favourable environment for extending the use of e-consignment notes into transportation via other states (apart from Russia, Belarus, and Kazakhstan), which are parts of Eurasian railway corridors and land bridges between rapidly developing economic districts of the Asian and Pacific Region, including China, and the EU. Also, it will contribute to application of e-documents in all phases of international transportation.

It is necessary to provide a faster unhindered movement of cargoes at border crossings, which currently create major delays. The main reasons for the barriers are drawbacks of formalisation of transport and accompanying documents. So, supported by the Organisation for Cooperation between Railways (OSJD), the International Union of Railways (UIC), and the International Rail Transport Committee (CIT), the working group for IT development at the CCTT actively cooperates with adjacent railways, forwarders, customs bodies, and other participants of transportation. All offered initiatives targeted at an enhancement of international cargo transportation by railway are tested.

For example, the CIM/SMGS common consignment note is the only successful international project for the unification of legal procedures at freight railway transportation providing unhampered transportation by railway, applying the western and the eastern transport legislation without additional formalities en route. The Ministry of Railways of China adjusted the use of the CIM/SMGS consignment note at the Erlyan, Alashankou, and Manchuria border crossings, thus expanding the geography of the CIT/OSJD project “Transport and Legal Interoperability of CIM/SMGS” and giving it a status of a transcontinental project. “The largest states with a significant potential of economic growth such as China, Mongolia, and Kazakhstan joining the CIM/SMGS project can contribute to a qualitative leap in the sphere of legal harmonisation of railway transportation in Eurasia,” noted Vladimir Yakunin.

In November 2012, a pilot container block train travelled using a common CIM/SMGS consignment note on the Chongqing (China) – Duisburg (Germany) route via Russia. The project was launched under the aegis of OSJD by the Belarusian Railway, NC KTZ (Kazakhstan), PKP Cargo (Poland), RZD, the Ministry of Railways of China, and DB Schenker Rail (Germany). The train carried 42 forty-foot containers loaded with products made by Acer and ASUS and consumer goods produced by other companies. It left Chongqing on October 31, and arrived to the destination point on November 16.

Before that, the Commission for Freight Transportation at the OSJD carried out ongoing work to analyse and assess the routes from China to Europe with the usage of the CIM/SMGS consignment note. Within the project framework, the parties demonstrated the opportunity to dispatch a block train as well as groups of wagons and containers using one consignment note, which simplifies border crossing procedures and, consequently, contributes to an increase in the speed of cargo transportation.

The demo trip of the container train will allow analysis of the use of the common CIM/SMGS consignment note, and reveal advantages of such documents at transcontinental transportation between China and Western Europe as an efficient instrument for border crossing simplification. Before using the common CIM/SMGS consignment note, over 20 trains travelled on the Chongqing – Duisburg route, and two separate consignment notes were used for them. In June 2012, RZD Logistics, Schenker China Ltd., Kaztransservice, Chongqing Transportation Holding (Group) Co., Ltd., and China Railway International Multimodal Transport Co., Ltd. officially registered a JV for containerised cargo transportation on the Chongqing – Duisburg route.

The further development of this and other projects of container trains using the advanced informational technologies, and simplification of customs procedures can help to increase the competitiveness of the Transsib. On the whole, 286,000 TEU was carried by container trains via the Trans-Siberian Mainline in 2012. This amount will increase in 2013, according to forecasts.

By Elena Ushkova
    [~DETAIL_TEXT] => 
New Solutions for Ambitious Plans





The dynamics of large container international transportation via the Trans-Siberian mainline have been positive lately. In 2011, the increase was 27%, and in 2012 – 15.4%. However, just 1% of the total container flow between Northern Europe and Asia is transported via Russia. According to experts, additional revenue of Russian transport companies can amount to approximately $2 billion per annum, if the annual transit cargo flow via the Transsib is 600,000-800,000 TEU.

Speaking at the XXI Plenary session of the international association Coordinating Council on Trans-Siberian Transportation (CCTT) in September 2012, Vladimir Yakunin, President of RZD named the development of export and import transportation and making use of the transit potential as two priorities for the development of the container business in Russia. They are targeted at increasing the competitiveness of the Trans-Siberian route at the international market of transport and logistics services till 2020. If these conditions are fulfilled, the level of containerisation of railway transportation in Russia may increase by between 30% and 70% by 2015. On the whole, the average annual growth for Russian railways can vary between 8% and 10%.

These plans are closely connected with the issues of modern development of infrastructure and the expansion of the carrying capacity of the Eastern area, particularly of the Trans-Siberian and Baikal-Amur mainlines. According to RZD, RUB 1.1 trillion of investment is needed. Of that, RUB 737 billion is needed to develop the BAM, and RUB 181 billion – for the eastern part of the Transsib. “We plan to increase transit transportation volume via the Trans-Siberian mainline due to the creation of competitive advantages to alternative routes, and first of all – the traditional sea route via the Suez Canal,” V. Yakunin said.

Meanwhile, to carry out such ambitious plans, new solutions are needed to enhance the work of all participants in the transport process and to increase their efficiency. It envisages a decrease in the time of cargo delivery via the Transsib, train customs clearance at border stations, simplification of transport and customs documents registration and making the procedure faster. One of such solutions, in the words of Elena Kunaeva, CEO of RZD’s Centre of Transport Services, is implementation of new information technology, allowing transferring to e-document circulation with railways from adjacent states, participating in transportation via the Transsib, and with controlling authorities of countries engaged in the transportation.

In the Concept of Trans-Siberian Transportation Development till 2020, the development of e-document circulation in part of transport documents registration for international transportation is considered a priority by RZD. This is needed for further enhancement of the technology and organisation of transportation of transit and foreign trade cargo via the Transsib and for provision of informational support to the transport process.



Electronic Train



In the framework of Electronic Train project, RZD is looking for ways to implement transport e-documents for the work with railways of Belarus and Kazakhstan.

Nowadays, a paper-free technology is used for registering transport documents on transportation inside Russia. According to RZD’s Centre of Transport Services, all 2997 stations in the Russian railway network, open for freight operations, are connected to the infrastructure of digital e-signature; over 2,900 external enterprises use their e-signature in the ETRAN system; the number of users of e-document circulation is more than 35,000; about 1.5 million primary documents are formalised with the use of an e-signature each month.

To test the scheme of e-documents application for international transportation, RZD concluded bilateral agreements with the railways of Finland and Latvia. On this basis, e-document exchange is carried out at transportation of empty private railcars (from Finland to Russia and back – starting from 2011, and from Latvia to Russia – starting from April 2012). In the near future, a similar scheme will be used for transportation between Russia and Lithuania. The next step of e-document circulation development will be the transfer to e-documents for empty and loaded private wagons between Russia and the railways of Belarus and Kazakhstan. RZD has made arrangements with the Belarusian Railway adjusting the way they interact. Draft documents regulating the technology and the order of interaction of the parties at e-documents exchange during transportation of empty and loaded wagons have been developed and are being discussed.

At first, transportation will be provided on the section adjusted for tests – the Kovdor station (RZD) – the Centrolit station (the Belarusian Railway). In accordance with the adjusted scheme, EDI system will be applied for the transfer of data from e-invoices between RZD and the Belarusian Railway. The EDI system will work in accordance with the international standard EDIFACT, and the transferred data will be electronically signed. Work is underway to transfer to an e-document circulation between RZD and Kazakhstan. According to the information of NC Kazakhstan Temir Zholy, implementation of the system of transport document electronisation has not been completed yet. Nevertheless, RZD and Kazakhstan Temir Zholy agreed on incremental transfer to paper-free technology.

E-document circulation will be put in operation at the initial stage to formalise transport documents on the pilot railway section, including transportation of empty private railcars from Kazakhstan to the RF using the same scheme of interaction as with Finland and Latvia. Later, the countries plan to transfer to completely electronic document circulation at transportation of empty private railcars as well as cargoes with a digital e-signature.



Common Consignment Note



Simplification of train customs clearance procedures at border stations and reduction of time needed for them through the enhancement of customs clearance procedure will help to speed up cargo transportation via the Transsib. The working group consisting of specialists from RZD and the RF Federal Customs Service approved a joint plan and documents regulating the order of interaction at e-data exchange between RZD and Russian customs bodies. Also, it defined the first places where the new scheme will be put in operation, and the list of clients participating in it, whose freight is exported or imported into the Customs Union.

Initially, the technology of e-document circulation with customs bodies upon cargo transportation out of the Customs Union will be tested at border stations Buslovskaya and Svetogorsk (for transportation to Finland), Posin (to Latvia), and Naushki (to China). During the test period, transportation will be provided by large consignors from the stations of the Oktaybrskaya, the Gorkovskaya, the Kuibyshev, and the East-Siberian railways. Pilot paper-free technology for goods incoming to the Customs Union will be applied in May 2013.

In the words of Mrs Kunaeva, these projects will create a favourable environment for extending the use of e-consignment notes into transportation via other states (apart from Russia, Belarus, and Kazakhstan), which are parts of Eurasian railway corridors and land bridges between rapidly developing economic districts of the Asian and Pacific Region, including China, and the EU. Also, it will contribute to application of e-documents in all phases of international transportation.

It is necessary to provide a faster unhindered movement of cargoes at border crossings, which currently create major delays. The main reasons for the barriers are drawbacks of formalisation of transport and accompanying documents. So, supported by the Organisation for Cooperation between Railways (OSJD), the International Union of Railways (UIC), and the International Rail Transport Committee (CIT), the working group for IT development at the CCTT actively cooperates with adjacent railways, forwarders, customs bodies, and other participants of transportation. All offered initiatives targeted at an enhancement of international cargo transportation by railway are tested.

For example, the CIM/SMGS common consignment note is the only successful international project for the unification of legal procedures at freight railway transportation providing unhampered transportation by railway, applying the western and the eastern transport legislation without additional formalities en route. The Ministry of Railways of China adjusted the use of the CIM/SMGS consignment note at the Erlyan, Alashankou, and Manchuria border crossings, thus expanding the geography of the CIT/OSJD project “Transport and Legal Interoperability of CIM/SMGS” and giving it a status of a transcontinental project. “The largest states with a significant potential of economic growth such as China, Mongolia, and Kazakhstan joining the CIM/SMGS project can contribute to a qualitative leap in the sphere of legal harmonisation of railway transportation in Eurasia,” noted Vladimir Yakunin.

In November 2012, a pilot container block train travelled using a common CIM/SMGS consignment note on the Chongqing (China) – Duisburg (Germany) route via Russia. The project was launched under the aegis of OSJD by the Belarusian Railway, NC KTZ (Kazakhstan), PKP Cargo (Poland), RZD, the Ministry of Railways of China, and DB Schenker Rail (Germany). The train carried 42 forty-foot containers loaded with products made by Acer and ASUS and consumer goods produced by other companies. It left Chongqing on October 31, and arrived to the destination point on November 16.

Before that, the Commission for Freight Transportation at the OSJD carried out ongoing work to analyse and assess the routes from China to Europe with the usage of the CIM/SMGS consignment note. Within the project framework, the parties demonstrated the opportunity to dispatch a block train as well as groups of wagons and containers using one consignment note, which simplifies border crossing procedures and, consequently, contributes to an increase in the speed of cargo transportation.

The demo trip of the container train will allow analysis of the use of the common CIM/SMGS consignment note, and reveal advantages of such documents at transcontinental transportation between China and Western Europe as an efficient instrument for border crossing simplification. Before using the common CIM/SMGS consignment note, over 20 trains travelled on the Chongqing – Duisburg route, and two separate consignment notes were used for them. In June 2012, RZD Logistics, Schenker China Ltd., Kaztransservice, Chongqing Transportation Holding (Group) Co., Ltd., and China Railway International Multimodal Transport Co., Ltd. officially registered a JV for containerised cargo transportation on the Chongqing – Duisburg route.

The further development of this and other projects of container trains using the advanced informational technologies, and simplification of customs procedures can help to increase the competitiveness of the Transsib. On the whole, 286,000 TEU was carried by container trains via the Trans-Siberian Mainline in 2012. This amount will increase in 2013, according to forecasts.

By Elena Ushkova
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Pace Slows Down



In the first half of 2012, the throughput in Russian sea ports was growing by 5.1-5.4% every month. Later, growth slowed down to 4.7%. In autumn, it started to speed up again – to 5.7% in October and 5.9% in November. And in December there was a slowdown again. In the end, the result of 2012 was more moderate than forecast – +5.6% in comparison with 2011.

According to the Association of Russian Commercial Sea Ports, Russian stevedores succeeded last year due to an increase in the oil bulk throughput. In 2012, it grew by 4.3% to 313.8 million tons. The 8% growth in petrochemicals handling volume contributed to the total increase (to compare, there was just 1.3% increase in their throughout in the first half of 2012). Crude oil throughput was by 1.8% more than in 2011 (in January-June 2012, there was a 3.3% decline in its throughput year-on-year).

The rate of the increase in the throughput of dry cargoes was slowing down during the year. In the first six months, it rose by 14.9%, and at the end of 2012 it was 7.3%. One of the cargoes, the share of which was significant in this sector, was coal: 89.2 million tons of this freight was handled in 2012, 13.9% more than in the previous year. Grain, which used to make the largest part of dry cargo throughput for a long time, was the second (+23.3% year-on-year to 24 million tons).

There was a rise in the throughput of containerised freight (+8.3% to 42.7 million tons), ferrous metal (+4.8% to 25.6 million tons), cargo carried by ferries (+6.1% to 8.3 million tons), non-ferrous metal (+1.9% to 4.2 million tons). There was a decline in the handling volume of mineral fertilisers (-17% to 10.4 million tons), ore (-10.6% to 7.2 million tons), and refrigerated cargo (-14.1% to 3.9 million tons).

Metal scrap and timber, which had positive dynamics for the first nine months of 2012 (+8.5% and +1.7% respectively), lost their ground (-3.2% to 3.7 million tons and -3.9% to 5.9 million tons respectively). Experts say that it matches the trend of the decrease in the demand for products and raw materials in the global market.

It influenced the structure of cargo flows of Russian sea terminals. Last year, exports rose by 8.9% on 2011, which was less than in 9 months of 2012 (+9.2%) and than in the first half of the year (+10%). Igor Kraevsky, Senior Analyst at BCS financial group says that exports handling dynamics was the main reason for the slowdown in the increase in the throughput of Russian sea ports. Imports and coastal trade cargo, the amount of which increased, were not able to compensate for losses. Transit cargo throughput continued to reduce too.



The First and for a Long Time    



The leader among the basins was the Baltic basin according to the throughput in absolute terms and the growth rates (see infographics). The main reason was the launch of new terminals in the Ust-Luga port. Last year, stevedoring companies operating in the port handled over 46.8 million tons, twice as much as in 2011. “Such growth was caused by emerge of new cargoes and a regular increase in the throughput of operating terminals,” the press-service of Ust-Luga company said.

To remind, an oil terminal was put in operation in the port in March 2012 (the final point of the Baltic Pipeline System-2, BPS-2). It handled more than 14.3 million tons of crude oil. The throughput of Rosneftbunker terminal, which was put into operation in 2011, was 12.6 million tons of petrochemicals last year. The terminal of Rosterminalugol handled over 13.7 million tons of coal, 26.3% more than in the previous year.

The throughput of the Ust-Luga port is to reach approximately 180 million tons by 2018, therefore, the leader will hardly change  in the foreseeable future. The ports of the Azov and the Black Sea basin are the second according to the throughput. However, they are behind the leader and their colleagues from the Far East according to the growth rate. Moreover, in 2012 stevedores of the region had a slowdown in the throughput growth rate. In the first half of the year, it was +7.7%, and at the end of the year it fell to +1.5%. These dynamics are similar to those of the Novorossiysk port. Experts think that the slowdown in the throughput growth rate, and in the whole transport sector, was caused by instability in the global economy. In this case, unfavourable weather conditions and natural disasters contributed to it too. Because of the flood in the Krasnodar region in summer, there were restrictions on cargo transportation by railway to the Black Sea ports.       

Stevedores in the Far Eastern region practically caught up with the Azov and the Black Sea ports. Last year, their throughput grew by 6.9% year-on-year. Coal, which is cargo №1 here, contributed to the increase. Daltransugol handled 12 million tons of coal (+19.3%), and Vostochny Port handled 18 million tons of this freight (+9.3%). Meanwhile, the favourite cargo in the region can change in 2013. Therefore, the Kozmino special sea oil port (the final point of the East Siberia – the Pacific Ocean, the ESPO) plans to expand crude oil throughput to 21 million tons. It handled 16.3 million tons last year, 7.2% more than in 2011. 



Resume



Therefore, 2012 was quite successful for Russian stevedoring companies, if we do not take the December trends into account. The beginning of 2013 will show whether stevedores will continue to lose their positions or increase throughput. An alarming fact is that the growth rate of the largest sea ports of China slowed down in December. Thus, the container turnover of Shenzhen fell by 2%, and that of Hong Kong – by 11.3%. The possibility that the negative trend will spread over the container business and Russian ports is high enough.

By Olga Gorbunova
    [~DETAIL_TEXT] => 
Pace Slows Down



In the first half of 2012, the throughput in Russian sea ports was growing by 5.1-5.4% every month. Later, growth slowed down to 4.7%. In autumn, it started to speed up again – to 5.7% in October and 5.9% in November. And in December there was a slowdown again. In the end, the result of 2012 was more moderate than forecast – +5.6% in comparison with 2011.

According to the Association of Russian Commercial Sea Ports, Russian stevedores succeeded last year due to an increase in the oil bulk throughput. In 2012, it grew by 4.3% to 313.8 million tons. The 8% growth in petrochemicals handling volume contributed to the total increase (to compare, there was just 1.3% increase in their throughout in the first half of 2012). Crude oil throughput was by 1.8% more than in 2011 (in January-June 2012, there was a 3.3% decline in its throughput year-on-year).

The rate of the increase in the throughput of dry cargoes was slowing down during the year. In the first six months, it rose by 14.9%, and at the end of 2012 it was 7.3%. One of the cargoes, the share of which was significant in this sector, was coal: 89.2 million tons of this freight was handled in 2012, 13.9% more than in the previous year. Grain, which used to make the largest part of dry cargo throughput for a long time, was the second (+23.3% year-on-year to 24 million tons).

There was a rise in the throughput of containerised freight (+8.3% to 42.7 million tons), ferrous metal (+4.8% to 25.6 million tons), cargo carried by ferries (+6.1% to 8.3 million tons), non-ferrous metal (+1.9% to 4.2 million tons). There was a decline in the handling volume of mineral fertilisers (-17% to 10.4 million tons), ore (-10.6% to 7.2 million tons), and refrigerated cargo (-14.1% to 3.9 million tons).

Metal scrap and timber, which had positive dynamics for the first nine months of 2012 (+8.5% and +1.7% respectively), lost their ground (-3.2% to 3.7 million tons and -3.9% to 5.9 million tons respectively). Experts say that it matches the trend of the decrease in the demand for products and raw materials in the global market.

It influenced the structure of cargo flows of Russian sea terminals. Last year, exports rose by 8.9% on 2011, which was less than in 9 months of 2012 (+9.2%) and than in the first half of the year (+10%). Igor Kraevsky, Senior Analyst at BCS financial group says that exports handling dynamics was the main reason for the slowdown in the increase in the throughput of Russian sea ports. Imports and coastal trade cargo, the amount of which increased, were not able to compensate for losses. Transit cargo throughput continued to reduce too.



The First and for a Long Time    



The leader among the basins was the Baltic basin according to the throughput in absolute terms and the growth rates (see infographics). The main reason was the launch of new terminals in the Ust-Luga port. Last year, stevedoring companies operating in the port handled over 46.8 million tons, twice as much as in 2011. “Such growth was caused by emerge of new cargoes and a regular increase in the throughput of operating terminals,” the press-service of Ust-Luga company said.

To remind, an oil terminal was put in operation in the port in March 2012 (the final point of the Baltic Pipeline System-2, BPS-2). It handled more than 14.3 million tons of crude oil. The throughput of Rosneftbunker terminal, which was put into operation in 2011, was 12.6 million tons of petrochemicals last year. The terminal of Rosterminalugol handled over 13.7 million tons of coal, 26.3% more than in the previous year.

The throughput of the Ust-Luga port is to reach approximately 180 million tons by 2018, therefore, the leader will hardly change  in the foreseeable future. The ports of the Azov and the Black Sea basin are the second according to the throughput. However, they are behind the leader and their colleagues from the Far East according to the growth rate. Moreover, in 2012 stevedores of the region had a slowdown in the throughput growth rate. In the first half of the year, it was +7.7%, and at the end of the year it fell to +1.5%. These dynamics are similar to those of the Novorossiysk port. Experts think that the slowdown in the throughput growth rate, and in the whole transport sector, was caused by instability in the global economy. In this case, unfavourable weather conditions and natural disasters contributed to it too. Because of the flood in the Krasnodar region in summer, there were restrictions on cargo transportation by railway to the Black Sea ports.       

Stevedores in the Far Eastern region practically caught up with the Azov and the Black Sea ports. Last year, their throughput grew by 6.9% year-on-year. Coal, which is cargo №1 here, contributed to the increase. Daltransugol handled 12 million tons of coal (+19.3%), and Vostochny Port handled 18 million tons of this freight (+9.3%). Meanwhile, the favourite cargo in the region can change in 2013. Therefore, the Kozmino special sea oil port (the final point of the East Siberia – the Pacific Ocean, the ESPO) plans to expand crude oil throughput to 21 million tons. It handled 16.3 million tons last year, 7.2% more than in 2011. 



Resume



Therefore, 2012 was quite successful for Russian stevedoring companies, if we do not take the December trends into account. The beginning of 2013 will show whether stevedores will continue to lose their positions or increase throughput. An alarming fact is that the growth rate of the largest sea ports of China slowed down in December. Thus, the container turnover of Shenzhen fell by 2%, and that of Hong Kong – by 11.3%. The possibility that the negative trend will spread over the container business and Russian ports is high enough.

By Olga Gorbunova
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Pace Slows Down



In the first half of 2012, the throughput in Russian sea ports was growing by 5.1-5.4% every month. Later, growth slowed down to 4.7%. In autumn, it started to speed up again – to 5.7% in October and 5.9% in November. And in December there was a slowdown again. In the end, the result of 2012 was more moderate than forecast – +5.6% in comparison with 2011.

According to the Association of Russian Commercial Sea Ports, Russian stevedores succeeded last year due to an increase in the oil bulk throughput. In 2012, it grew by 4.3% to 313.8 million tons. The 8% growth in petrochemicals handling volume contributed to the total increase (to compare, there was just 1.3% increase in their throughout in the first half of 2012). Crude oil throughput was by 1.8% more than in 2011 (in January-June 2012, there was a 3.3% decline in its throughput year-on-year).

The rate of the increase in the throughput of dry cargoes was slowing down during the year. In the first six months, it rose by 14.9%, and at the end of 2012 it was 7.3%. One of the cargoes, the share of which was significant in this sector, was coal: 89.2 million tons of this freight was handled in 2012, 13.9% more than in the previous year. Grain, which used to make the largest part of dry cargo throughput for a long time, was the second (+23.3% year-on-year to 24 million tons).

There was a rise in the throughput of containerised freight (+8.3% to 42.7 million tons), ferrous metal (+4.8% to 25.6 million tons), cargo carried by ferries (+6.1% to 8.3 million tons), non-ferrous metal (+1.9% to 4.2 million tons). There was a decline in the handling volume of mineral fertilisers (-17% to 10.4 million tons), ore (-10.6% to 7.2 million tons), and refrigerated cargo (-14.1% to 3.9 million tons).

Metal scrap and timber, which had positive dynamics for the first nine months of 2012 (+8.5% and +1.7% respectively), lost their ground (-3.2% to 3.7 million tons and -3.9% to 5.9 million tons respectively). Experts say that it matches the trend of the decrease in the demand for products and raw materials in the global market.

It influenced the structure of cargo flows of Russian sea terminals. Last year, exports rose by 8.9% on 2011, which was less than in 9 months of 2012 (+9.2%) and than in the first half of the year (+10%). Igor Kraevsky, Senior Analyst at BCS financial group says that exports handling dynamics was the main reason for the slowdown in the increase in the throughput of Russian sea ports. Imports and coastal trade cargo, the amount of which increased, were not able to compensate for losses. Transit cargo throughput continued to reduce too.



The First and for a Long Time    



The leader among the basins was the Baltic basin according to the throughput in absolute terms and the growth rates (see infographics). The main reason was the launch of new terminals in the Ust-Luga port. Last year, stevedoring companies operating in the port handled over 46.8 million tons, twice as much as in 2011. “Such growth was caused by emerge of new cargoes and a regular increase in the throughput of operating terminals,” the press-service of Ust-Luga company said.

To remind, an oil terminal was put in operation in the port in March 2012 (the final point of the Baltic Pipeline System-2, BPS-2). It handled more than 14.3 million tons of crude oil. The throughput of Rosneftbunker terminal, which was put into operation in 2011, was 12.6 million tons of petrochemicals last year. The terminal of Rosterminalugol handled over 13.7 million tons of coal, 26.3% more than in the previous year.

The throughput of the Ust-Luga port is to reach approximately 180 million tons by 2018, therefore, the leader will hardly change  in the foreseeable future. The ports of the Azov and the Black Sea basin are the second according to the throughput. However, they are behind the leader and their colleagues from the Far East according to the growth rate. Moreover, in 2012 stevedores of the region had a slowdown in the throughput growth rate. In the first half of the year, it was +7.7%, and at the end of the year it fell to +1.5%. These dynamics are similar to those of the Novorossiysk port. Experts think that the slowdown in the throughput growth rate, and in the whole transport sector, was caused by instability in the global economy. In this case, unfavourable weather conditions and natural disasters contributed to it too. Because of the flood in the Krasnodar region in summer, there were restrictions on cargo transportation by railway to the Black Sea ports.       

Stevedores in the Far Eastern region practically caught up with the Azov and the Black Sea ports. Last year, their throughput grew by 6.9% year-on-year. Coal, which is cargo №1 here, contributed to the increase. Daltransugol handled 12 million tons of coal (+19.3%), and Vostochny Port handled 18 million tons of this freight (+9.3%). Meanwhile, the favourite cargo in the region can change in 2013. Therefore, the Kozmino special sea oil port (the final point of the East Siberia – the Pacific Ocean, the ESPO) plans to expand crude oil throughput to 21 million tons. It handled 16.3 million tons last year, 7.2% more than in 2011. 



Resume



Therefore, 2012 was quite successful for Russian stevedoring companies, if we do not take the December trends into account. The beginning of 2013 will show whether stevedores will continue to lose their positions or increase throughput. An alarming fact is that the growth rate of the largest sea ports of China slowed down in December. Thus, the container turnover of Shenzhen fell by 2%, and that of Hong Kong – by 11.3%. The possibility that the negative trend will spread over the container business and Russian ports is high enough.

By Olga Gorbunova
    [~DETAIL_TEXT] => 
Pace Slows Down



In the first half of 2012, the throughput in Russian sea ports was growing by 5.1-5.4% every month. Later, growth slowed down to 4.7%. In autumn, it started to speed up again – to 5.7% in October and 5.9% in November. And in December there was a slowdown again. In the end, the result of 2012 was more moderate than forecast – +5.6% in comparison with 2011.

According to the Association of Russian Commercial Sea Ports, Russian stevedores succeeded last year due to an increase in the oil bulk throughput. In 2012, it grew by 4.3% to 313.8 million tons. The 8% growth in petrochemicals handling volume contributed to the total increase (to compare, there was just 1.3% increase in their throughout in the first half of 2012). Crude oil throughput was by 1.8% more than in 2011 (in January-June 2012, there was a 3.3% decline in its throughput year-on-year).

The rate of the increase in the throughput of dry cargoes was slowing down during the year. In the first six months, it rose by 14.9%, and at the end of 2012 it was 7.3%. One of the cargoes, the share of which was significant in this sector, was coal: 89.2 million tons of this freight was handled in 2012, 13.9% more than in the previous year. Grain, which used to make the largest part of dry cargo throughput for a long time, was the second (+23.3% year-on-year to 24 million tons).

There was a rise in the throughput of containerised freight (+8.3% to 42.7 million tons), ferrous metal (+4.8% to 25.6 million tons), cargo carried by ferries (+6.1% to 8.3 million tons), non-ferrous metal (+1.9% to 4.2 million tons). There was a decline in the handling volume of mineral fertilisers (-17% to 10.4 million tons), ore (-10.6% to 7.2 million tons), and refrigerated cargo (-14.1% to 3.9 million tons).

Metal scrap and timber, which had positive dynamics for the first nine months of 2012 (+8.5% and +1.7% respectively), lost their ground (-3.2% to 3.7 million tons and -3.9% to 5.9 million tons respectively). Experts say that it matches the trend of the decrease in the demand for products and raw materials in the global market.

It influenced the structure of cargo flows of Russian sea terminals. Last year, exports rose by 8.9% on 2011, which was less than in 9 months of 2012 (+9.2%) and than in the first half of the year (+10%). Igor Kraevsky, Senior Analyst at BCS financial group says that exports handling dynamics was the main reason for the slowdown in the increase in the throughput of Russian sea ports. Imports and coastal trade cargo, the amount of which increased, were not able to compensate for losses. Transit cargo throughput continued to reduce too.



The First and for a Long Time    



The leader among the basins was the Baltic basin according to the throughput in absolute terms and the growth rates (see infographics). The main reason was the launch of new terminals in the Ust-Luga port. Last year, stevedoring companies operating in the port handled over 46.8 million tons, twice as much as in 2011. “Such growth was caused by emerge of new cargoes and a regular increase in the throughput of operating terminals,” the press-service of Ust-Luga company said.

To remind, an oil terminal was put in operation in the port in March 2012 (the final point of the Baltic Pipeline System-2, BPS-2). It handled more than 14.3 million tons of crude oil. The throughput of Rosneftbunker terminal, which was put into operation in 2011, was 12.6 million tons of petrochemicals last year. The terminal of Rosterminalugol handled over 13.7 million tons of coal, 26.3% more than in the previous year.

The throughput of the Ust-Luga port is to reach approximately 180 million tons by 2018, therefore, the leader will hardly change  in the foreseeable future. The ports of the Azov and the Black Sea basin are the second according to the throughput. However, they are behind the leader and their colleagues from the Far East according to the growth rate. Moreover, in 2012 stevedores of the region had a slowdown in the throughput growth rate. In the first half of the year, it was +7.7%, and at the end of the year it fell to +1.5%. These dynamics are similar to those of the Novorossiysk port. Experts think that the slowdown in the throughput growth rate, and in the whole transport sector, was caused by instability in the global economy. In this case, unfavourable weather conditions and natural disasters contributed to it too. Because of the flood in the Krasnodar region in summer, there were restrictions on cargo transportation by railway to the Black Sea ports.       

Stevedores in the Far Eastern region practically caught up with the Azov and the Black Sea ports. Last year, their throughput grew by 6.9% year-on-year. Coal, which is cargo №1 here, contributed to the increase. Daltransugol handled 12 million tons of coal (+19.3%), and Vostochny Port handled 18 million tons of this freight (+9.3%). Meanwhile, the favourite cargo in the region can change in 2013. Therefore, the Kozmino special sea oil port (the final point of the East Siberia – the Pacific Ocean, the ESPO) plans to expand crude oil throughput to 21 million tons. It handled 16.3 million tons last year, 7.2% more than in 2011. 



Resume



Therefore, 2012 was quite successful for Russian stevedoring companies, if we do not take the December trends into account. The beginning of 2013 will show whether stevedores will continue to lose their positions or increase throughput. An alarming fact is that the growth rate of the largest sea ports of China slowed down in December. Thus, the container turnover of Shenzhen fell by 2%, and that of Hong Kong – by 11.3%. The possibility that the negative trend will spread over the container business and Russian ports is high enough.

By Olga Gorbunova
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Being Client-Friendly 



In 2012, RZD’s holding company provided a 6.4% increase in passenger transportation on the previous year – almost 1.06 billion passengers were carried by long-distance, commuter, and high-speed trains. Passenger turnover rose by 3.3% in comparison with 2011 to 144.4 billion passenger-kilometres. The passenger turnover of commuter trains increased by 7.6%. 942 million people used the services of commuter passenger companies. Trains of the Federal Passenger Company (a subsidiary of RZD) carried 116.5 million people. 

There was an upward trend in the high-speed traffic as well. In 2012, “Sapsan” trains carried over 3 million passengers, an 8.2% increase year-on-year, and their occupancy was practically full. Therefore, one more contract for the supply of eight “Sapsan” electric trains was concluded with Siemens. An important event in the sector of rolling stock renewal was the development of a two-system electric locomotive able to haul a passenger train at 200 kph. At the end of November the company received its first passenger electric locomotive from the EP20 series. No similar rolling stock had been produced in Russia and the Soviet Union before, so it was a triumph for the specialists of the company, producers, and the engineering centre.

Mikhail Akulov, Vice President of RZD emphasises, “Our main progress is connected with the enhancement of the quality of services provided to passengers and the client-friendliness of the passenger sector.” In 2012, passengers got an opportunity to get micro loans to purchase rail season tickets. The “RZD-bonus” loyalty programme is becoming more and more popular. The number of participants in it has already exceeded 100,000 people. It is a major step towards keeping existing passengers and attracting new ones to the railway transport. Another landmark was the transfer to a new technology of e-tickets sale with the opportunity to return them on RZD’s website using computer-aided procedures only. RZD implemented this service last November, and in its own way it is unique for Russia and for the whole world. The share of e-tickets in the total amount of sold tickets increased significantly. Today, it amounts to 13% (late in 2011 it was 8%). The E-ticket service was used by more than 16 million passengers last year. Of that, 38% use e-registration regularly. Over 5 million tickets were purchased through self-service terminals – these convenient and fast types of service are becoming more and more popular.

One more important aspect of the passenger business, connected with the company’s image, is the modernisation of railway station infrastructure. Reconstruction of Paveletsky, Savelovsky, and Rizhsky railway stations was completed in Moscow in 2012. The remaining five railway stations in the Russian capital are to be reconstructed in 2013. The very philosophy of using these transport nodes will change. Transport nodes in Moscow will turn into specific centres of socialisation, where a passenger can get all related services. 14 regional railway stations are being reconstructed too. Amid regular shortfalls in funding the passenger transportation sector and increasing competition, especially from road transport, these measures are being taken to prevent a sharp downturn in passenger numbers and provide an increase in the passenger flow in the sectors, where breakeven work is possible. Mikhail Akulov says, “The year of 2012 was when it became apparent the mechanism regulating passenger transportation was no longer working. On the whole, the system is characterised by contradictory state power bodies, chaotic division of the functions and responsibilities of the state and the transporter, insufficient compensation for lost revenue, which creates risks of non-controlled decline in the availability of transportation, transport mobility of people, and an increase in social tension.”



Suburban Problems     



These problems were especially acute in the suburban transportation sector. In 2011, a radically new system of commuter railway transport was created in Russia – now transportation services are being provided by suburban passenger companies, and regions of the Russian Federation act as the ordering party and tariff regulators. Privileged tariffs on infrastructure services are applied to commuter transportation. To remind, in 2011, 2012, and 2013, the RF Government commissioned to include into the federal budget RUB 25 billion to subsidise suburban passenger companies for the revenue they lose because of state-regulated tariffs. Meanwhile, the need for the subsidy to compensate for the lost revenue from infrastructure services exceeds RUB 32 billion. In the next few years, the subsidies from the federal budget will fall – to RUB 12.5 billion in 2014 and RUB 6.25 billion in 2015. 

“Only 19 regions in the RF took measures to provide breakeven transportation. I’d like to name the leaders among regions – the Sverdlovsk and the Irkutsk regions, which paid RUB 1 billion each during the year. At the same time, 10 regions compensate for less than 10% of the lost revenue, and four regions refused to compensate for it (the Vologda, the Kurgan, the Vladimir, and the Leningrad regions),” says Mikhail Akulov. In his words, in the current conditions, regions take unpopular decisions that can limit the availability of transport services for people. For example, the Kurgan and Chelyabinsk regions plan to reduce the order on train traffic by between 30% and 50% of the current schedule.  Draft budgets of the RF regions envisage RUB 7.4 billion of subsidies to compensate for the revenue lost because of the state tariff regulation. It is less than a half of the sum needed. According to specialists at RZD, the forecasted total losses from suburban passenger transportation can amount to RUB 18.5 billion in 2013.

However, regional authorities have grievances with railwaymen. The latter are accused of non-transparent financial activity. Andrey Turchak, Governor of the Pskov region emphasised that subsidies received from the federal centre had been given to the regional suburban company, but the latter had never shown the structure of its expenditure, and the lion’s share of funds paid to the railway was transferred to Moscow.

Whatever disputes the participants of the transport process have, it is obvious that a part of the tariff burden cannot be put onto consumers, i.e. ordinary people, because of the social importance of commuter transportation. Moreover, Gennady Verkhovykh, Head of the Passenger Traffic Department at RZD says that the relative affordability of commuter transportation has been improving lately. The pace of tariffs increase was less than the inflation and the average income of people. 

Whilst the increase in the tariff rate was about 3% in 2011, it was just 1.6% in 2012. In the opinion of Dmitry Rutenberg, Head of the Transport and Communication Control Department at the Federal Antimonopoly Service, measures must be taken. He says, “Today, 80% of the tariff on passenger transportation by a suburban train is RZD’s expenses, including those on the infrastructure, and the other 20% - expenses of suburban passenger companies. Taking this into account, tariffs on commuter transportation should be regulated at the federal level by transferring necessary powers from the RF regions to the Federal Antimonopoly Service, because the lion’s share of expenditure is infrastructure.” 



Bucking the Trend





In the opinion of Anatoly Zaitsev, Vice President of the International Academy of Transport, Professor at the St Petersburg State University of Railways, passenger transport by rail is being marginalised, mainly to the benefit of road transport, however the expert considers this to be a dead end as it contradicts current global trends in passenger transport.

The most popular of them sets the following requirements for passenger transportation by any transport mode as the most important: environmental friendliness, safety, and mobility for people. Obviously, railways meet these requirements according to many parameters. That’s why legislation in some countries, and even unions of states, envisages that this transport mode should dominate in the passenger transportation sector.  

As for Russia, some say quite seriously that buses should be used instead of commuter or long-distance trains, and the rails should be dismantled. Some representatives of the expert community share this viewpoint. One should understand, however, if this step is possible in theory, it will be impossible to restore dismantled railways in practice. 

A deep analysis of the reasons for which such a situation emerged can help to find a way out of it. In the opinion of Mr Zaitsev, a systemic mistake in the organisation of the current structure of the management of the suburban passenger transportation was that the regions got the right to organise such transportation. “An objective fact: from historical viewpoint, it is alien to regions. It has always been central bodies and federal structures that controlled commuter transportation. It is psychologically difficult for regions to take these powers. Moreover, there is not enough money in their budget,” he says. Another systemic mistake is unequal conditions for the major participants of the passenger transportation market. The railway loses the competition with road transport mainly because of the fact that road hauliers do not pay for the use of a federal or a regional motorway. And the cost of a ticket for a commuter train includes the cost of the infrastructure services. 

By Oksana Perepelitsa
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Being Client-Friendly 



In 2012, RZD’s holding company provided a 6.4% increase in passenger transportation on the previous year – almost 1.06 billion passengers were carried by long-distance, commuter, and high-speed trains. Passenger turnover rose by 3.3% in comparison with 2011 to 144.4 billion passenger-kilometres. The passenger turnover of commuter trains increased by 7.6%. 942 million people used the services of commuter passenger companies. Trains of the Federal Passenger Company (a subsidiary of RZD) carried 116.5 million people. 

There was an upward trend in the high-speed traffic as well. In 2012, “Sapsan” trains carried over 3 million passengers, an 8.2% increase year-on-year, and their occupancy was practically full. Therefore, one more contract for the supply of eight “Sapsan” electric trains was concluded with Siemens. An important event in the sector of rolling stock renewal was the development of a two-system electric locomotive able to haul a passenger train at 200 kph. At the end of November the company received its first passenger electric locomotive from the EP20 series. No similar rolling stock had been produced in Russia and the Soviet Union before, so it was a triumph for the specialists of the company, producers, and the engineering centre.

Mikhail Akulov, Vice President of RZD emphasises, “Our main progress is connected with the enhancement of the quality of services provided to passengers and the client-friendliness of the passenger sector.” In 2012, passengers got an opportunity to get micro loans to purchase rail season tickets. The “RZD-bonus” loyalty programme is becoming more and more popular. The number of participants in it has already exceeded 100,000 people. It is a major step towards keeping existing passengers and attracting new ones to the railway transport. Another landmark was the transfer to a new technology of e-tickets sale with the opportunity to return them on RZD’s website using computer-aided procedures only. RZD implemented this service last November, and in its own way it is unique for Russia and for the whole world. The share of e-tickets in the total amount of sold tickets increased significantly. Today, it amounts to 13% (late in 2011 it was 8%). The E-ticket service was used by more than 16 million passengers last year. Of that, 38% use e-registration regularly. Over 5 million tickets were purchased through self-service terminals – these convenient and fast types of service are becoming more and more popular.

One more important aspect of the passenger business, connected with the company’s image, is the modernisation of railway station infrastructure. Reconstruction of Paveletsky, Savelovsky, and Rizhsky railway stations was completed in Moscow in 2012. The remaining five railway stations in the Russian capital are to be reconstructed in 2013. The very philosophy of using these transport nodes will change. Transport nodes in Moscow will turn into specific centres of socialisation, where a passenger can get all related services. 14 regional railway stations are being reconstructed too. Amid regular shortfalls in funding the passenger transportation sector and increasing competition, especially from road transport, these measures are being taken to prevent a sharp downturn in passenger numbers and provide an increase in the passenger flow in the sectors, where breakeven work is possible. Mikhail Akulov says, “The year of 2012 was when it became apparent the mechanism regulating passenger transportation was no longer working. On the whole, the system is characterised by contradictory state power bodies, chaotic division of the functions and responsibilities of the state and the transporter, insufficient compensation for lost revenue, which creates risks of non-controlled decline in the availability of transportation, transport mobility of people, and an increase in social tension.”



Suburban Problems     



These problems were especially acute in the suburban transportation sector. In 2011, a radically new system of commuter railway transport was created in Russia – now transportation services are being provided by suburban passenger companies, and regions of the Russian Federation act as the ordering party and tariff regulators. Privileged tariffs on infrastructure services are applied to commuter transportation. To remind, in 2011, 2012, and 2013, the RF Government commissioned to include into the federal budget RUB 25 billion to subsidise suburban passenger companies for the revenue they lose because of state-regulated tariffs. Meanwhile, the need for the subsidy to compensate for the lost revenue from infrastructure services exceeds RUB 32 billion. In the next few years, the subsidies from the federal budget will fall – to RUB 12.5 billion in 2014 and RUB 6.25 billion in 2015. 

“Only 19 regions in the RF took measures to provide breakeven transportation. I’d like to name the leaders among regions – the Sverdlovsk and the Irkutsk regions, which paid RUB 1 billion each during the year. At the same time, 10 regions compensate for less than 10% of the lost revenue, and four regions refused to compensate for it (the Vologda, the Kurgan, the Vladimir, and the Leningrad regions),” says Mikhail Akulov. In his words, in the current conditions, regions take unpopular decisions that can limit the availability of transport services for people. For example, the Kurgan and Chelyabinsk regions plan to reduce the order on train traffic by between 30% and 50% of the current schedule.  Draft budgets of the RF regions envisage RUB 7.4 billion of subsidies to compensate for the revenue lost because of the state tariff regulation. It is less than a half of the sum needed. According to specialists at RZD, the forecasted total losses from suburban passenger transportation can amount to RUB 18.5 billion in 2013.

However, regional authorities have grievances with railwaymen. The latter are accused of non-transparent financial activity. Andrey Turchak, Governor of the Pskov region emphasised that subsidies received from the federal centre had been given to the regional suburban company, but the latter had never shown the structure of its expenditure, and the lion’s share of funds paid to the railway was transferred to Moscow.

Whatever disputes the participants of the transport process have, it is obvious that a part of the tariff burden cannot be put onto consumers, i.e. ordinary people, because of the social importance of commuter transportation. Moreover, Gennady Verkhovykh, Head of the Passenger Traffic Department at RZD says that the relative affordability of commuter transportation has been improving lately. The pace of tariffs increase was less than the inflation and the average income of people. 

Whilst the increase in the tariff rate was about 3% in 2011, it was just 1.6% in 2012. In the opinion of Dmitry Rutenberg, Head of the Transport and Communication Control Department at the Federal Antimonopoly Service, measures must be taken. He says, “Today, 80% of the tariff on passenger transportation by a suburban train is RZD’s expenses, including those on the infrastructure, and the other 20% - expenses of suburban passenger companies. Taking this into account, tariffs on commuter transportation should be regulated at the federal level by transferring necessary powers from the RF regions to the Federal Antimonopoly Service, because the lion’s share of expenditure is infrastructure.” 



Bucking the Trend





In the opinion of Anatoly Zaitsev, Vice President of the International Academy of Transport, Professor at the St Petersburg State University of Railways, passenger transport by rail is being marginalised, mainly to the benefit of road transport, however the expert considers this to be a dead end as it contradicts current global trends in passenger transport.

The most popular of them sets the following requirements for passenger transportation by any transport mode as the most important: environmental friendliness, safety, and mobility for people. Obviously, railways meet these requirements according to many parameters. That’s why legislation in some countries, and even unions of states, envisages that this transport mode should dominate in the passenger transportation sector.  

As for Russia, some say quite seriously that buses should be used instead of commuter or long-distance trains, and the rails should be dismantled. Some representatives of the expert community share this viewpoint. One should understand, however, if this step is possible in theory, it will be impossible to restore dismantled railways in practice. 

A deep analysis of the reasons for which such a situation emerged can help to find a way out of it. In the opinion of Mr Zaitsev, a systemic mistake in the organisation of the current structure of the management of the suburban passenger transportation was that the regions got the right to organise such transportation. “An objective fact: from historical viewpoint, it is alien to regions. It has always been central bodies and federal structures that controlled commuter transportation. It is psychologically difficult for regions to take these powers. Moreover, there is not enough money in their budget,” he says. Another systemic mistake is unequal conditions for the major participants of the passenger transportation market. The railway loses the competition with road transport mainly because of the fact that road hauliers do not pay for the use of a federal or a regional motorway. And the cost of a ticket for a commuter train includes the cost of the infrastructure services. 

By Oksana Perepelitsa
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Being Client-Friendly 



In 2012, RZD’s holding company provided a 6.4% increase in passenger transportation on the previous year – almost 1.06 billion passengers were carried by long-distance, commuter, and high-speed trains. Passenger turnover rose by 3.3% in comparison with 2011 to 144.4 billion passenger-kilometres. The passenger turnover of commuter trains increased by 7.6%. 942 million people used the services of commuter passenger companies. Trains of the Federal Passenger Company (a subsidiary of RZD) carried 116.5 million people. 

There was an upward trend in the high-speed traffic as well. In 2012, “Sapsan” trains carried over 3 million passengers, an 8.2% increase year-on-year, and their occupancy was practically full. Therefore, one more contract for the supply of eight “Sapsan” electric trains was concluded with Siemens. An important event in the sector of rolling stock renewal was the development of a two-system electric locomotive able to haul a passenger train at 200 kph. At the end of November the company received its first passenger electric locomotive from the EP20 series. No similar rolling stock had been produced in Russia and the Soviet Union before, so it was a triumph for the specialists of the company, producers, and the engineering centre.

Mikhail Akulov, Vice President of RZD emphasises, “Our main progress is connected with the enhancement of the quality of services provided to passengers and the client-friendliness of the passenger sector.” In 2012, passengers got an opportunity to get micro loans to purchase rail season tickets. The “RZD-bonus” loyalty programme is becoming more and more popular. The number of participants in it has already exceeded 100,000 people. It is a major step towards keeping existing passengers and attracting new ones to the railway transport. Another landmark was the transfer to a new technology of e-tickets sale with the opportunity to return them on RZD’s website using computer-aided procedures only. RZD implemented this service last November, and in its own way it is unique for Russia and for the whole world. The share of e-tickets in the total amount of sold tickets increased significantly. Today, it amounts to 13% (late in 2011 it was 8%). The E-ticket service was used by more than 16 million passengers last year. Of that, 38% use e-registration regularly. Over 5 million tickets were purchased through self-service terminals – these convenient and fast types of service are becoming more and more popular.

One more important aspect of the passenger business, connected with the company’s image, is the modernisation of railway station infrastructure. Reconstruction of Paveletsky, Savelovsky, and Rizhsky railway stations was completed in Moscow in 2012. The remaining five railway stations in the Russian capital are to be reconstructed in 2013. The very philosophy of using these transport nodes will change. Transport nodes in Moscow will turn into specific centres of socialisation, where a passenger can get all related services. 14 regional railway stations are being reconstructed too. Amid regular shortfalls in funding the passenger transportation sector and increasing competition, especially from road transport, these measures are being taken to prevent a sharp downturn in passenger numbers and provide an increase in the passenger flow in the sectors, where breakeven work is possible. Mikhail Akulov says, “The year of 2012 was when it became apparent the mechanism regulating passenger transportation was no longer working. On the whole, the system is characterised by contradictory state power bodies, chaotic division of the functions and responsibilities of the state and the transporter, insufficient compensation for lost revenue, which creates risks of non-controlled decline in the availability of transportation, transport mobility of people, and an increase in social tension.”



Suburban Problems     



These problems were especially acute in the suburban transportation sector. In 2011, a radically new system of commuter railway transport was created in Russia – now transportation services are being provided by suburban passenger companies, and regions of the Russian Federation act as the ordering party and tariff regulators. Privileged tariffs on infrastructure services are applied to commuter transportation. To remind, in 2011, 2012, and 2013, the RF Government commissioned to include into the federal budget RUB 25 billion to subsidise suburban passenger companies for the revenue they lose because of state-regulated tariffs. Meanwhile, the need for the subsidy to compensate for the lost revenue from infrastructure services exceeds RUB 32 billion. In the next few years, the subsidies from the federal budget will fall – to RUB 12.5 billion in 2014 and RUB 6.25 billion in 2015. 

“Only 19 regions in the RF took measures to provide breakeven transportation. I’d like to name the leaders among regions – the Sverdlovsk and the Irkutsk regions, which paid RUB 1 billion each during the year. At the same time, 10 regions compensate for less than 10% of the lost revenue, and four regions refused to compensate for it (the Vologda, the Kurgan, the Vladimir, and the Leningrad regions),” says Mikhail Akulov. In his words, in the current conditions, regions take unpopular decisions that can limit the availability of transport services for people. For example, the Kurgan and Chelyabinsk regions plan to reduce the order on train traffic by between 30% and 50% of the current schedule.  Draft budgets of the RF regions envisage RUB 7.4 billion of subsidies to compensate for the revenue lost because of the state tariff regulation. It is less than a half of the sum needed. According to specialists at RZD, the forecasted total losses from suburban passenger transportation can amount to RUB 18.5 billion in 2013.

However, regional authorities have grievances with railwaymen. The latter are accused of non-transparent financial activity. Andrey Turchak, Governor of the Pskov region emphasised that subsidies received from the federal centre had been given to the regional suburban company, but the latter had never shown the structure of its expenditure, and the lion’s share of funds paid to the railway was transferred to Moscow.

Whatever disputes the participants of the transport process have, it is obvious that a part of the tariff burden cannot be put onto consumers, i.e. ordinary people, because of the social importance of commuter transportation. Moreover, Gennady Verkhovykh, Head of the Passenger Traffic Department at RZD says that the relative affordability of commuter transportation has been improving lately. The pace of tariffs increase was less than the inflation and the average income of people. 

Whilst the increase in the tariff rate was about 3% in 2011, it was just 1.6% in 2012. In the opinion of Dmitry Rutenberg, Head of the Transport and Communication Control Department at the Federal Antimonopoly Service, measures must be taken. He says, “Today, 80% of the tariff on passenger transportation by a suburban train is RZD’s expenses, including those on the infrastructure, and the other 20% - expenses of suburban passenger companies. Taking this into account, tariffs on commuter transportation should be regulated at the federal level by transferring necessary powers from the RF regions to the Federal Antimonopoly Service, because the lion’s share of expenditure is infrastructure.” 



Bucking the Trend





In the opinion of Anatoly Zaitsev, Vice President of the International Academy of Transport, Professor at the St Petersburg State University of Railways, passenger transport by rail is being marginalised, mainly to the benefit of road transport, however the expert considers this to be a dead end as it contradicts current global trends in passenger transport.

The most popular of them sets the following requirements for passenger transportation by any transport mode as the most important: environmental friendliness, safety, and mobility for people. Obviously, railways meet these requirements according to many parameters. That’s why legislation in some countries, and even unions of states, envisages that this transport mode should dominate in the passenger transportation sector.  

As for Russia, some say quite seriously that buses should be used instead of commuter or long-distance trains, and the rails should be dismantled. Some representatives of the expert community share this viewpoint. One should understand, however, if this step is possible in theory, it will be impossible to restore dismantled railways in practice. 

A deep analysis of the reasons for which such a situation emerged can help to find a way out of it. In the opinion of Mr Zaitsev, a systemic mistake in the organisation of the current structure of the management of the suburban passenger transportation was that the regions got the right to organise such transportation. “An objective fact: from historical viewpoint, it is alien to regions. It has always been central bodies and federal structures that controlled commuter transportation. It is psychologically difficult for regions to take these powers. Moreover, there is not enough money in their budget,” he says. Another systemic mistake is unequal conditions for the major participants of the passenger transportation market. The railway loses the competition with road transport mainly because of the fact that road hauliers do not pay for the use of a federal or a regional motorway. And the cost of a ticket for a commuter train includes the cost of the infrastructure services. 

By Oksana Perepelitsa
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Being Client-Friendly 



In 2012, RZD’s holding company provided a 6.4% increase in passenger transportation on the previous year – almost 1.06 billion passengers were carried by long-distance, commuter, and high-speed trains. Passenger turnover rose by 3.3% in comparison with 2011 to 144.4 billion passenger-kilometres. The passenger turnover of commuter trains increased by 7.6%. 942 million people used the services of commuter passenger companies. Trains of the Federal Passenger Company (a subsidiary of RZD) carried 116.5 million people. 

There was an upward trend in the high-speed traffic as well. In 2012, “Sapsan” trains carried over 3 million passengers, an 8.2% increase year-on-year, and their occupancy was practically full. Therefore, one more contract for the supply of eight “Sapsan” electric trains was concluded with Siemens. An important event in the sector of rolling stock renewal was the development of a two-system electric locomotive able to haul a passenger train at 200 kph. At the end of November the company received its first passenger electric locomotive from the EP20 series. No similar rolling stock had been produced in Russia and the Soviet Union before, so it was a triumph for the specialists of the company, producers, and the engineering centre.

Mikhail Akulov, Vice President of RZD emphasises, “Our main progress is connected with the enhancement of the quality of services provided to passengers and the client-friendliness of the passenger sector.” In 2012, passengers got an opportunity to get micro loans to purchase rail season tickets. The “RZD-bonus” loyalty programme is becoming more and more popular. The number of participants in it has already exceeded 100,000 people. It is a major step towards keeping existing passengers and attracting new ones to the railway transport. Another landmark was the transfer to a new technology of e-tickets sale with the opportunity to return them on RZD’s website using computer-aided procedures only. RZD implemented this service last November, and in its own way it is unique for Russia and for the whole world. The share of e-tickets in the total amount of sold tickets increased significantly. Today, it amounts to 13% (late in 2011 it was 8%). The E-ticket service was used by more than 16 million passengers last year. Of that, 38% use e-registration regularly. Over 5 million tickets were purchased through self-service terminals – these convenient and fast types of service are becoming more and more popular.

One more important aspect of the passenger business, connected with the company’s image, is the modernisation of railway station infrastructure. Reconstruction of Paveletsky, Savelovsky, and Rizhsky railway stations was completed in Moscow in 2012. The remaining five railway stations in the Russian capital are to be reconstructed in 2013. The very philosophy of using these transport nodes will change. Transport nodes in Moscow will turn into specific centres of socialisation, where a passenger can get all related services. 14 regional railway stations are being reconstructed too. Amid regular shortfalls in funding the passenger transportation sector and increasing competition, especially from road transport, these measures are being taken to prevent a sharp downturn in passenger numbers and provide an increase in the passenger flow in the sectors, where breakeven work is possible. Mikhail Akulov says, “The year of 2012 was when it became apparent the mechanism regulating passenger transportation was no longer working. On the whole, the system is characterised by contradictory state power bodies, chaotic division of the functions and responsibilities of the state and the transporter, insufficient compensation for lost revenue, which creates risks of non-controlled decline in the availability of transportation, transport mobility of people, and an increase in social tension.”



Suburban Problems     



These problems were especially acute in the suburban transportation sector. In 2011, a radically new system of commuter railway transport was created in Russia – now transportation services are being provided by suburban passenger companies, and regions of the Russian Federation act as the ordering party and tariff regulators. Privileged tariffs on infrastructure services are applied to commuter transportation. To remind, in 2011, 2012, and 2013, the RF Government commissioned to include into the federal budget RUB 25 billion to subsidise suburban passenger companies for the revenue they lose because of state-regulated tariffs. Meanwhile, the need for the subsidy to compensate for the lost revenue from infrastructure services exceeds RUB 32 billion. In the next few years, the subsidies from the federal budget will fall – to RUB 12.5 billion in 2014 and RUB 6.25 billion in 2015. 

“Only 19 regions in the RF took measures to provide breakeven transportation. I’d like to name the leaders among regions – the Sverdlovsk and the Irkutsk regions, which paid RUB 1 billion each during the year. At the same time, 10 regions compensate for less than 10% of the lost revenue, and four regions refused to compensate for it (the Vologda, the Kurgan, the Vladimir, and the Leningrad regions),” says Mikhail Akulov. In his words, in the current conditions, regions take unpopular decisions that can limit the availability of transport services for people. For example, the Kurgan and Chelyabinsk regions plan to reduce the order on train traffic by between 30% and 50% of the current schedule.  Draft budgets of the RF regions envisage RUB 7.4 billion of subsidies to compensate for the revenue lost because of the state tariff regulation. It is less than a half of the sum needed. According to specialists at RZD, the forecasted total losses from suburban passenger transportation can amount to RUB 18.5 billion in 2013.

However, regional authorities have grievances with railwaymen. The latter are accused of non-transparent financial activity. Andrey Turchak, Governor of the Pskov region emphasised that subsidies received from the federal centre had been given to the regional suburban company, but the latter had never shown the structure of its expenditure, and the lion’s share of funds paid to the railway was transferred to Moscow.

Whatever disputes the participants of the transport process have, it is obvious that a part of the tariff burden cannot be put onto consumers, i.e. ordinary people, because of the social importance of commuter transportation. Moreover, Gennady Verkhovykh, Head of the Passenger Traffic Department at RZD says that the relative affordability of commuter transportation has been improving lately. The pace of tariffs increase was less than the inflation and the average income of people. 

Whilst the increase in the tariff rate was about 3% in 2011, it was just 1.6% in 2012. In the opinion of Dmitry Rutenberg, Head of the Transport and Communication Control Department at the Federal Antimonopoly Service, measures must be taken. He says, “Today, 80% of the tariff on passenger transportation by a suburban train is RZD’s expenses, including those on the infrastructure, and the other 20% - expenses of suburban passenger companies. Taking this into account, tariffs on commuter transportation should be regulated at the federal level by transferring necessary powers from the RF regions to the Federal Antimonopoly Service, because the lion’s share of expenditure is infrastructure.” 



Bucking the Trend





In the opinion of Anatoly Zaitsev, Vice President of the International Academy of Transport, Professor at the St Petersburg State University of Railways, passenger transport by rail is being marginalised, mainly to the benefit of road transport, however the expert considers this to be a dead end as it contradicts current global trends in passenger transport.

The most popular of them sets the following requirements for passenger transportation by any transport mode as the most important: environmental friendliness, safety, and mobility for people. Obviously, railways meet these requirements according to many parameters. That’s why legislation in some countries, and even unions of states, envisages that this transport mode should dominate in the passenger transportation sector.  

As for Russia, some say quite seriously that buses should be used instead of commuter or long-distance trains, and the rails should be dismantled. Some representatives of the expert community share this viewpoint. One should understand, however, if this step is possible in theory, it will be impossible to restore dismantled railways in practice. 

A deep analysis of the reasons for which such a situation emerged can help to find a way out of it. In the opinion of Mr Zaitsev, a systemic mistake in the organisation of the current structure of the management of the suburban passenger transportation was that the regions got the right to organise such transportation. “An objective fact: from historical viewpoint, it is alien to regions. It has always been central bodies and federal structures that controlled commuter transportation. It is psychologically difficult for regions to take these powers. Moreover, there is not enough money in their budget,” he says. Another systemic mistake is unequal conditions for the major participants of the passenger transportation market. The railway loses the competition with road transport mainly because of the fact that road hauliers do not pay for the use of a federal or a regional motorway. And the cost of a ticket for a commuter train includes the cost of the infrastructure services. 

By Oksana Perepelitsa
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Driver of Growth Is Demand for Raw Materials



The main problems in recent years were a shortage of railcars and a rapid increase in rates on rolling stock supply services. Operators treated clients differently: applications by some companies were partly fulfilled (in some cases, clients received just 3-5% of the rolling stock they needed), whilst others got more wagons than required. Due to measures taken in 2012, the situation changed dramatically. Experts note that the problem of the search for rolling stock is no longer acute, because the demand is practically completely fulfilled. Statistics prove it. Fulfillment of applications in percentage terms in 2012 was as follows: 111.7% for grain railcars, 95.9% for flat wagons, 92.2% for tank wagons, 90.5% for gondola cars, and 87.9% for boxcars.

As for the cost of transportation, last year’s results also seem quite positive. In 2011, the average rate on rolling stock supply services grew by 40% (from RUB 1,300 a day to RUB 1,900 a day), and in 2012 this figure fell to RUB 1,100 a day. Moreover, at the end of the year the rate of RUB 500-700 a day was not a rare thing.

Market players say that the very specifics of relations between clients and providers of services have changed. If 2011 can be named “a year of operators”, the position of cargo owners became stronger last year. It is too early to say that the buyer’s market has been formed, but the trend is rather obvious. Without going into details about reasons for this inversion, there were three main factors: the RPR fleet, enhancement of the regulations on railcar movement on the network, and some trade markets cooling down. Unification of tariffs on empty mileage added to the list in early November. 



Inertial Motion?



1,271.9 million tons were loaded on Russian Railways’ network last year. It is 2.4% or 30.3 million tons more than in 2011. It is less than forecast (the loading volume was supposed to grow by 3-4% in 2012), still it is a good result matching the slowing down growth rate of Russian economy. 

According to RZD, last year the loading volume of 8 cargoes out of 43 exceeded the relevant pre-crisis figures of 2008. The increase in the loading of construction materials (+22.6 million tons), coal (+11.4 million tons), and oil bulk (+8.2 million tons) was the largest. Meanwhile, there was a decline in the amount of metal cargoes (ore, ferrous metal scrap, ferrous metal – by 3.2 million tons in total) and timber (-4.4 million tons) and chemical freight (fertilizers, chemicals, and soda – by 2.2 million tons in total).  

Interesting as this is, it was actually low-yielding cargoes that contributed to the increase in the loading volume most of all (+4.8% or 32.5 million tons). Transportation of medium-yielding cargoes reduced by 5.6% or more than 8 million tons. An increase in high-yielding freight transportation became possible due to oil bulk. If we do not take oil bulk into account, the loading volume of cargoes of the third tariff class (high-yielding freight) fell by approximately 2 million tons.

The share of cargoes of the first tariff class (low-yielding) in the total loading volume increased by 0.9% as compared with 2011, whilst the shares of freight of the second and the third tariff classes fell by 0.3% and 0.6% respectively. This is an alarming trend because the tariff model is based on cross-subsiding principle. One can say that transportation of freight of the first tariff class is subsidised from transportation of third-class cargoes. Consequently, an imbalance of cargoes of these classes in the total loading volume can cause a serious imbalance in the economy of railway transport. Taking into account that when the ESPO-2 oil pipeline is put in operation, up to 10 million tons of oil can be redirected to pipelines, this problem can become crucial.

 There is another alarming aspect. Regardless of the specifics of local changes in the dynamics of loading some cargoes because of the market situation, one more unpleasant trend can be observed: the loading volume of cargoes dispatched in small lots decreases most of all. 

The share of block trains on the network is less than 30%, therefore, up to 70% of cargo carried today is potentially in the high-risk locations. The search for mutually acceptable solutions, providing an efficient transportation of wagonloads, should become one more urgent objective of the sector. Otherwise, the outflow of freight to other transport modes can become enormous.

There are alarming trends in transportation of construction materials and cement. On the whole, the situation in the country is also unclear. Consignors say that the system of public funding was surprising last spring, and the increase in transportation in 2012 was caused by some inertial factors. Some specialists think that the 2012 downgoing trend in the construction material sector can continue this year. Experts note that amid the decline in demand, prices for non-ore materials reduced. Many consumers and traders used this period to form commodity stock and wait for a recovery of the market.   

One can say that a significant part of transportation for the purposes of the current year has been fulfilled already. If no dramatic changes happen, the sector will face a serious decline in supplies even after the beginning of seasonal works. There is a similar trend for cement (see infographics), just take into account that it is not reasonable to accumulate large stock of the freight for winter, purchase dynamics reacts to changes in real consumption very fast. Competition with road transport is strong in this sector and there is a demand for transportation by railway due to cargoes for construction of large facilities. Therefore, the ambiguity with the distribution of public funds creates the basis for pessimistic forecasts about the need for hoppers. 

If difficulties in the construction market are caused by internal factors mainly, the situation with other cargoes, forming the   lion’s share of the loading volume, is more complicated. For example, the situation with coal transportation, which makes more than a quarter of the total freight carried on RZD’s network, is ambiguous. Until recently, the market situation was favourable for Russian miners. The Fukushima nuclear accident in 2011, and the common correction of the power policy in the world that followed it and gave a new impulse to the development of the coal power industry, floods in Australia, which submerged coal mines there, and a rapid growth in the Chinese economy were the main drivers of growth of the demand for Russian coal (today, approximately 60% of coal extracted in the country is exported). This contributed to an increase in the transportation volume of coal in the last three years. Experts say that the success of Russian coalmen in the latest decades is explained by the favourable situation in the global market, where the developing companies found their place easily. I.e. they grew together with the market, not as a result of competition. Moreover, the growth was stimulated by low prices for export coal transportation in the early 2000-s. The saturation point, however, seems to have been reached. Analysts forecast a 1.2% decline in the coal volume purchased by the EU states in 2013 to 171 million tons. Opinions about another large importer – China – vary, but most experts believe that even keeping the same purchase volume will be a success. In the optimistic outlook, the volume of global coal export can continue to increase (the forecast for 2013 is +4%). In this case, however, one should take into account that the figure grew by almost 11% in 2012, and the coal loading volume on RZD’s network rose by just 3.9%. The logistics of supplies focuses on transportation to Europe and China, therefore, cooling down at Russia’s basic and nearest sales markets will be more notable than an increase in the consumption in countries of the Asian and Pacific Region.  

A fly in the ointment is the outlook for the competitiveness of Russian coal companies in price terms. According to the optimistic forecast made by analysts from Barclays bank, in 2013 the average price for coal will be $95 for a ton ($103.15 in 2012). As a reminder, when coal prices fell to $110 for a ton, representatives of the coal sector asked the RF Government to reduce railway tariffs, otherwise, the profitability of their business could reach a critical level.

Due to the market warming up during the recent years, coal export business is attractive not for Russian companies only. According to experts, such states as Mongolia, Indonesia, and even Madagascar can join the club of coal countries. Traditional suppliers are not going to reduce extraction volume. Moreover, a number of American coal companies announced plans to start coal supplies to Europe. The competition will be strong.

Perhaps, one should not start jumping to conclusions about a future stagnation in the coal sector. In January, coal loading volumes on RZD’s network increased by 0.9% year-on-year to 26.8 million tons. Nevertheless, coalmen will have to work hard to achieve an increase in supplies.

The situation in the sector of ore mining and smelting cargo transportation is even more ambiguous. Its notorious volatility is increasing, often even beyond sensible explanations. On the one hand, despite serious fluctuations, the common trend of post-recession development proves that there is an increase in prices as well as in consumption. On the other hand, it becomes obvious that a recipe for success of companies in the sector is not just the ability to optimise production processes, but the skill to match changes in the market situation.  

Anyway, all leading foreign and national analysts think that China will play the main role in the sector (and it is no wonder – its share in iron and steel smelting and consumption of relevant raw materials exceeds two-thirds).  

For example, let’s analyse iron ore supplies. In 2013, prices for it are likely to grow, because analysts expect that China will import record volume of this raw material. According to experts polled by Bloomberg, this year China can purchase 778 million tons of iron ore from other countries, 6.9% more than in 2012. Thus, the country’s share in the total global supplies will be about 65%.

Last year’s situation was rather illustrative, when in September the cost of iron ore fell to its minimum in three-year period, because official and semi-official reports from China created a feeling that “the yellow dragon” got tired, and its metallurgical sector has serious problems. Then the country declared about the start of developing a number of infrastructure projects, and prices for iron ore increased by 56%. When the market was low, China purchased about 65 million tons of raw materials (an absolute record for 20 months). Then, during the fourth quarter of 2012, there was a downward price trend. It won’t be surprising if prices go upwards in spring. 

Leading iron ore corporations plan to expand their production volume. An Australian company Fortescue Metals Group (FMG) decided to postpone the development of the Kings field during the decrease in the market, now says it will return to this question. Putting Kings in operation will allow FMG to expand the production volume of iron ore raw materials from 84 million tons in 2012 to approximately 155 million tons. Rio Tinto, the largest producer of iron ore raw materials in Australia, has confirmed its intention to expand its capacities. The company is going to produce 353 million tons per annum by 2015 (for the sake of comparison, it produced 250 million tons in 2012). A significant increase in raw material production volume is forecast in Brazil (in 2013, supplies from this country can grow by 20%). Therefore, it is possible that the global iron ore market is on the verge of a long period of oversupply and, consequently, low prices. In January, the loading volume of iron and manganese ore on the railway network reduced by 3.8% to 8.5 million tons, which matches analysts’ forecasts.



Be Prepared!



However strange as it is, experts’ opinions about prospects for railway transportation match this motto. The situation can change unpredictably. Local fluctuations overlay with other, more extended processes. In such conditions, mobile players, who are able to sell when profitable and to deliver when necessary, win.

One can’t say that the time of long-term contracts and stable supplies has passed, but the share of the spot sector will increase. For railways, it means new challenges, and a necessity to form new mechanisms for interaction with clients. Moreover, the issue of competition with other transport modes becomes more and more urgent. Today, the issue of redirection of cargoes, for example grain or cement, to other transport modes becomes especially important. Out of 60 million tons of cement produced in 2012, about 35 million tons were transported by railways. Consequently, actual approaches to the interaction with clients are needed to use opportunities of domestic transportation more efficiently amid the difficult situation with exports. 

 

Within the Framework of Globalisation



Analysing the structure of loading according to directions, we can see that last year exports grew faster than the domestic transportation volume (+3.4% and +2.1% respectively). Despite the activation of exporters, the share of domestic transportation was 67%, 0.2% less than in 2011.

There was an increase in exports of coal (+11.3%), oil bulk (+3%), iron ore (+2.2%), and grain (+31.9%). The amount of exports transported eastwards rose significantly – by 7% (first of all, due to coal). Imports grew by 4.3% year-on-year. According to the growth rate, the leader among them was construction materials (+35.2%) from Ukraine and the Republic of Belarus.   

Transit transportation increased by 10.4% in 2012. The largest part of it was oil bulk (43%), grain and cereals (15%), and coal (7%). The lion’s share of transit was transported via border crossings of Russia (90%). 10% was carried via Russian ports.

Changes in the ratio of external and internal transportation reflect processes of Russia’s integration in the global economy. After Russia joined the WTO, this trend will become stronger. One should understand that opportunities for the railway sector development are counterbalanced by risks. Therefore, preferences from customs barriers removal in the metallurgical sector are “compensated” by cooling world market down, suppliers of iron ore and mineral fertilizers talk more and more often about strengthening the focus on domestic demand. Anyway, the global economy’s impact on transportation via RZD’s network will only increase.

Most analysts think that the pessimistic scenario of economic development will come to life in the mid-term. The Ministry of Economic Development decreased the outlook for the annual growth of the GDP and industrial production volume. Taking into account the experts’ estimation of the situation at commodity and raw material markets, the loading volume in 2013 is supposed to reach 1,280.3 million tons (+0.7% year-on-year). The increase will be achieved due to construction materials, coal, and the recovery of chemicals transportation.

RZD’s network operates in conditions, when main manufactures are integrated in the global trade and have to compete for contracts. Therefore, an urgent objective is to harmonise RZD’s operating activity, targeted at optimisation and making its own processes more efficient, with the marketing policies of its clients, and to create no additional risks for all participants of the transport market. The best variant will be its adaptation to new conditions. Only in this case, the negative trends, which appeared lately, will be reversed. 

By Dmitry Khantsevich 
    [~DETAIL_TEXT] => 
Driver of Growth Is Demand for Raw Materials



The main problems in recent years were a shortage of railcars and a rapid increase in rates on rolling stock supply services. Operators treated clients differently: applications by some companies were partly fulfilled (in some cases, clients received just 3-5% of the rolling stock they needed), whilst others got more wagons than required. Due to measures taken in 2012, the situation changed dramatically. Experts note that the problem of the search for rolling stock is no longer acute, because the demand is practically completely fulfilled. Statistics prove it. Fulfillment of applications in percentage terms in 2012 was as follows: 111.7% for grain railcars, 95.9% for flat wagons, 92.2% for tank wagons, 90.5% for gondola cars, and 87.9% for boxcars.

As for the cost of transportation, last year’s results also seem quite positive. In 2011, the average rate on rolling stock supply services grew by 40% (from RUB 1,300 a day to RUB 1,900 a day), and in 2012 this figure fell to RUB 1,100 a day. Moreover, at the end of the year the rate of RUB 500-700 a day was not a rare thing.

Market players say that the very specifics of relations between clients and providers of services have changed. If 2011 can be named “a year of operators”, the position of cargo owners became stronger last year. It is too early to say that the buyer’s market has been formed, but the trend is rather obvious. Without going into details about reasons for this inversion, there were three main factors: the RPR fleet, enhancement of the regulations on railcar movement on the network, and some trade markets cooling down. Unification of tariffs on empty mileage added to the list in early November. 



Inertial Motion?



1,271.9 million tons were loaded on Russian Railways’ network last year. It is 2.4% or 30.3 million tons more than in 2011. It is less than forecast (the loading volume was supposed to grow by 3-4% in 2012), still it is a good result matching the slowing down growth rate of Russian economy. 

According to RZD, last year the loading volume of 8 cargoes out of 43 exceeded the relevant pre-crisis figures of 2008. The increase in the loading of construction materials (+22.6 million tons), coal (+11.4 million tons), and oil bulk (+8.2 million tons) was the largest. Meanwhile, there was a decline in the amount of metal cargoes (ore, ferrous metal scrap, ferrous metal – by 3.2 million tons in total) and timber (-4.4 million tons) and chemical freight (fertilizers, chemicals, and soda – by 2.2 million tons in total).  

Interesting as this is, it was actually low-yielding cargoes that contributed to the increase in the loading volume most of all (+4.8% or 32.5 million tons). Transportation of medium-yielding cargoes reduced by 5.6% or more than 8 million tons. An increase in high-yielding freight transportation became possible due to oil bulk. If we do not take oil bulk into account, the loading volume of cargoes of the third tariff class (high-yielding freight) fell by approximately 2 million tons.

The share of cargoes of the first tariff class (low-yielding) in the total loading volume increased by 0.9% as compared with 2011, whilst the shares of freight of the second and the third tariff classes fell by 0.3% and 0.6% respectively. This is an alarming trend because the tariff model is based on cross-subsiding principle. One can say that transportation of freight of the first tariff class is subsidised from transportation of third-class cargoes. Consequently, an imbalance of cargoes of these classes in the total loading volume can cause a serious imbalance in the economy of railway transport. Taking into account that when the ESPO-2 oil pipeline is put in operation, up to 10 million tons of oil can be redirected to pipelines, this problem can become crucial.

 There is another alarming aspect. Regardless of the specifics of local changes in the dynamics of loading some cargoes because of the market situation, one more unpleasant trend can be observed: the loading volume of cargoes dispatched in small lots decreases most of all. 

The share of block trains on the network is less than 30%, therefore, up to 70% of cargo carried today is potentially in the high-risk locations. The search for mutually acceptable solutions, providing an efficient transportation of wagonloads, should become one more urgent objective of the sector. Otherwise, the outflow of freight to other transport modes can become enormous.

There are alarming trends in transportation of construction materials and cement. On the whole, the situation in the country is also unclear. Consignors say that the system of public funding was surprising last spring, and the increase in transportation in 2012 was caused by some inertial factors. Some specialists think that the 2012 downgoing trend in the construction material sector can continue this year. Experts note that amid the decline in demand, prices for non-ore materials reduced. Many consumers and traders used this period to form commodity stock and wait for a recovery of the market.   

One can say that a significant part of transportation for the purposes of the current year has been fulfilled already. If no dramatic changes happen, the sector will face a serious decline in supplies even after the beginning of seasonal works. There is a similar trend for cement (see infographics), just take into account that it is not reasonable to accumulate large stock of the freight for winter, purchase dynamics reacts to changes in real consumption very fast. Competition with road transport is strong in this sector and there is a demand for transportation by railway due to cargoes for construction of large facilities. Therefore, the ambiguity with the distribution of public funds creates the basis for pessimistic forecasts about the need for hoppers. 

If difficulties in the construction market are caused by internal factors mainly, the situation with other cargoes, forming the   lion’s share of the loading volume, is more complicated. For example, the situation with coal transportation, which makes more than a quarter of the total freight carried on RZD’s network, is ambiguous. Until recently, the market situation was favourable for Russian miners. The Fukushima nuclear accident in 2011, and the common correction of the power policy in the world that followed it and gave a new impulse to the development of the coal power industry, floods in Australia, which submerged coal mines there, and a rapid growth in the Chinese economy were the main drivers of growth of the demand for Russian coal (today, approximately 60% of coal extracted in the country is exported). This contributed to an increase in the transportation volume of coal in the last three years. Experts say that the success of Russian coalmen in the latest decades is explained by the favourable situation in the global market, where the developing companies found their place easily. I.e. they grew together with the market, not as a result of competition. Moreover, the growth was stimulated by low prices for export coal transportation in the early 2000-s. The saturation point, however, seems to have been reached. Analysts forecast a 1.2% decline in the coal volume purchased by the EU states in 2013 to 171 million tons. Opinions about another large importer – China – vary, but most experts believe that even keeping the same purchase volume will be a success. In the optimistic outlook, the volume of global coal export can continue to increase (the forecast for 2013 is +4%). In this case, however, one should take into account that the figure grew by almost 11% in 2012, and the coal loading volume on RZD’s network rose by just 3.9%. The logistics of supplies focuses on transportation to Europe and China, therefore, cooling down at Russia’s basic and nearest sales markets will be more notable than an increase in the consumption in countries of the Asian and Pacific Region.  

A fly in the ointment is the outlook for the competitiveness of Russian coal companies in price terms. According to the optimistic forecast made by analysts from Barclays bank, in 2013 the average price for coal will be $95 for a ton ($103.15 in 2012). As a reminder, when coal prices fell to $110 for a ton, representatives of the coal sector asked the RF Government to reduce railway tariffs, otherwise, the profitability of their business could reach a critical level.

Due to the market warming up during the recent years, coal export business is attractive not for Russian companies only. According to experts, such states as Mongolia, Indonesia, and even Madagascar can join the club of coal countries. Traditional suppliers are not going to reduce extraction volume. Moreover, a number of American coal companies announced plans to start coal supplies to Europe. The competition will be strong.

Perhaps, one should not start jumping to conclusions about a future stagnation in the coal sector. In January, coal loading volumes on RZD’s network increased by 0.9% year-on-year to 26.8 million tons. Nevertheless, coalmen will have to work hard to achieve an increase in supplies.

The situation in the sector of ore mining and smelting cargo transportation is even more ambiguous. Its notorious volatility is increasing, often even beyond sensible explanations. On the one hand, despite serious fluctuations, the common trend of post-recession development proves that there is an increase in prices as well as in consumption. On the other hand, it becomes obvious that a recipe for success of companies in the sector is not just the ability to optimise production processes, but the skill to match changes in the market situation.  

Anyway, all leading foreign and national analysts think that China will play the main role in the sector (and it is no wonder – its share in iron and steel smelting and consumption of relevant raw materials exceeds two-thirds).  

For example, let’s analyse iron ore supplies. In 2013, prices for it are likely to grow, because analysts expect that China will import record volume of this raw material. According to experts polled by Bloomberg, this year China can purchase 778 million tons of iron ore from other countries, 6.9% more than in 2012. Thus, the country’s share in the total global supplies will be about 65%.

Last year’s situation was rather illustrative, when in September the cost of iron ore fell to its minimum in three-year period, because official and semi-official reports from China created a feeling that “the yellow dragon” got tired, and its metallurgical sector has serious problems. Then the country declared about the start of developing a number of infrastructure projects, and prices for iron ore increased by 56%. When the market was low, China purchased about 65 million tons of raw materials (an absolute record for 20 months). Then, during the fourth quarter of 2012, there was a downward price trend. It won’t be surprising if prices go upwards in spring. 

Leading iron ore corporations plan to expand their production volume. An Australian company Fortescue Metals Group (FMG) decided to postpone the development of the Kings field during the decrease in the market, now says it will return to this question. Putting Kings in operation will allow FMG to expand the production volume of iron ore raw materials from 84 million tons in 2012 to approximately 155 million tons. Rio Tinto, the largest producer of iron ore raw materials in Australia, has confirmed its intention to expand its capacities. The company is going to produce 353 million tons per annum by 2015 (for the sake of comparison, it produced 250 million tons in 2012). A significant increase in raw material production volume is forecast in Brazil (in 2013, supplies from this country can grow by 20%). Therefore, it is possible that the global iron ore market is on the verge of a long period of oversupply and, consequently, low prices. In January, the loading volume of iron and manganese ore on the railway network reduced by 3.8% to 8.5 million tons, which matches analysts’ forecasts.



Be Prepared!



However strange as it is, experts’ opinions about prospects for railway transportation match this motto. The situation can change unpredictably. Local fluctuations overlay with other, more extended processes. In such conditions, mobile players, who are able to sell when profitable and to deliver when necessary, win.

One can’t say that the time of long-term contracts and stable supplies has passed, but the share of the spot sector will increase. For railways, it means new challenges, and a necessity to form new mechanisms for interaction with clients. Moreover, the issue of competition with other transport modes becomes more and more urgent. Today, the issue of redirection of cargoes, for example grain or cement, to other transport modes becomes especially important. Out of 60 million tons of cement produced in 2012, about 35 million tons were transported by railways. Consequently, actual approaches to the interaction with clients are needed to use opportunities of domestic transportation more efficiently amid the difficult situation with exports. 

 

Within the Framework of Globalisation



Analysing the structure of loading according to directions, we can see that last year exports grew faster than the domestic transportation volume (+3.4% and +2.1% respectively). Despite the activation of exporters, the share of domestic transportation was 67%, 0.2% less than in 2011.

There was an increase in exports of coal (+11.3%), oil bulk (+3%), iron ore (+2.2%), and grain (+31.9%). The amount of exports transported eastwards rose significantly – by 7% (first of all, due to coal). Imports grew by 4.3% year-on-year. According to the growth rate, the leader among them was construction materials (+35.2%) from Ukraine and the Republic of Belarus.   

Transit transportation increased by 10.4% in 2012. The largest part of it was oil bulk (43%), grain and cereals (15%), and coal (7%). The lion’s share of transit was transported via border crossings of Russia (90%). 10% was carried via Russian ports.

Changes in the ratio of external and internal transportation reflect processes of Russia’s integration in the global economy. After Russia joined the WTO, this trend will become stronger. One should understand that opportunities for the railway sector development are counterbalanced by risks. Therefore, preferences from customs barriers removal in the metallurgical sector are “compensated” by cooling world market down, suppliers of iron ore and mineral fertilizers talk more and more often about strengthening the focus on domestic demand. Anyway, the global economy’s impact on transportation via RZD’s network will only increase.

Most analysts think that the pessimistic scenario of economic development will come to life in the mid-term. The Ministry of Economic Development decreased the outlook for the annual growth of the GDP and industrial production volume. Taking into account the experts’ estimation of the situation at commodity and raw material markets, the loading volume in 2013 is supposed to reach 1,280.3 million tons (+0.7% year-on-year). The increase will be achieved due to construction materials, coal, and the recovery of chemicals transportation.

RZD’s network operates in conditions, when main manufactures are integrated in the global trade and have to compete for contracts. Therefore, an urgent objective is to harmonise RZD’s operating activity, targeted at optimisation and making its own processes more efficient, with the marketing policies of its clients, and to create no additional risks for all participants of the transport market. The best variant will be its adaptation to new conditions. Only in this case, the negative trends, which appeared lately, will be reversed. 

By Dmitry Khantsevich 
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Driver of Growth Is Demand for Raw Materials



The main problems in recent years were a shortage of railcars and a rapid increase in rates on rolling stock supply services. Operators treated clients differently: applications by some companies were partly fulfilled (in some cases, clients received just 3-5% of the rolling stock they needed), whilst others got more wagons than required. Due to measures taken in 2012, the situation changed dramatically. Experts note that the problem of the search for rolling stock is no longer acute, because the demand is practically completely fulfilled. Statistics prove it. Fulfillment of applications in percentage terms in 2012 was as follows: 111.7% for grain railcars, 95.9% for flat wagons, 92.2% for tank wagons, 90.5% for gondola cars, and 87.9% for boxcars.

As for the cost of transportation, last year’s results also seem quite positive. In 2011, the average rate on rolling stock supply services grew by 40% (from RUB 1,300 a day to RUB 1,900 a day), and in 2012 this figure fell to RUB 1,100 a day. Moreover, at the end of the year the rate of RUB 500-700 a day was not a rare thing.

Market players say that the very specifics of relations between clients and providers of services have changed. If 2011 can be named “a year of operators”, the position of cargo owners became stronger last year. It is too early to say that the buyer’s market has been formed, but the trend is rather obvious. Without going into details about reasons for this inversion, there were three main factors: the RPR fleet, enhancement of the regulations on railcar movement on the network, and some trade markets cooling down. Unification of tariffs on empty mileage added to the list in early November. 



Inertial Motion?



1,271.9 million tons were loaded on Russian Railways’ network last year. It is 2.4% or 30.3 million tons more than in 2011. It is less than forecast (the loading volume was supposed to grow by 3-4% in 2012), still it is a good result matching the slowing down growth rate of Russian economy. 

According to RZD, last year the loading volume of 8 cargoes out of 43 exceeded the relevant pre-crisis figures of 2008. The increase in the loading of construction materials (+22.6 million tons), coal (+11.4 million tons), and oil bulk (+8.2 million tons) was the largest. Meanwhile, there was a decline in the amount of metal cargoes (ore, ferrous metal scrap, ferrous metal – by 3.2 million tons in total) and timber (-4.4 million tons) and chemical freight (fertilizers, chemicals, and soda – by 2.2 million tons in total).  

Interesting as this is, it was actually low-yielding cargoes that contributed to the increase in the loading volume most of all (+4.8% or 32.5 million tons). Transportation of medium-yielding cargoes reduced by 5.6% or more than 8 million tons. An increase in high-yielding freight transportation became possible due to oil bulk. If we do not take oil bulk into account, the loading volume of cargoes of the third tariff class (high-yielding freight) fell by approximately 2 million tons.

The share of cargoes of the first tariff class (low-yielding) in the total loading volume increased by 0.9% as compared with 2011, whilst the shares of freight of the second and the third tariff classes fell by 0.3% and 0.6% respectively. This is an alarming trend because the tariff model is based on cross-subsiding principle. One can say that transportation of freight of the first tariff class is subsidised from transportation of third-class cargoes. Consequently, an imbalance of cargoes of these classes in the total loading volume can cause a serious imbalance in the economy of railway transport. Taking into account that when the ESPO-2 oil pipeline is put in operation, up to 10 million tons of oil can be redirected to pipelines, this problem can become crucial.

 There is another alarming aspect. Regardless of the specifics of local changes in the dynamics of loading some cargoes because of the market situation, one more unpleasant trend can be observed: the loading volume of cargoes dispatched in small lots decreases most of all. 

The share of block trains on the network is less than 30%, therefore, up to 70% of cargo carried today is potentially in the high-risk locations. The search for mutually acceptable solutions, providing an efficient transportation of wagonloads, should become one more urgent objective of the sector. Otherwise, the outflow of freight to other transport modes can become enormous.

There are alarming trends in transportation of construction materials and cement. On the whole, the situation in the country is also unclear. Consignors say that the system of public funding was surprising last spring, and the increase in transportation in 2012 was caused by some inertial factors. Some specialists think that the 2012 downgoing trend in the construction material sector can continue this year. Experts note that amid the decline in demand, prices for non-ore materials reduced. Many consumers and traders used this period to form commodity stock and wait for a recovery of the market.   

One can say that a significant part of transportation for the purposes of the current year has been fulfilled already. If no dramatic changes happen, the sector will face a serious decline in supplies even after the beginning of seasonal works. There is a similar trend for cement (see infographics), just take into account that it is not reasonable to accumulate large stock of the freight for winter, purchase dynamics reacts to changes in real consumption very fast. Competition with road transport is strong in this sector and there is a demand for transportation by railway due to cargoes for construction of large facilities. Therefore, the ambiguity with the distribution of public funds creates the basis for pessimistic forecasts about the need for hoppers. 

If difficulties in the construction market are caused by internal factors mainly, the situation with other cargoes, forming the   lion’s share of the loading volume, is more complicated. For example, the situation with coal transportation, which makes more than a quarter of the total freight carried on RZD’s network, is ambiguous. Until recently, the market situation was favourable for Russian miners. The Fukushima nuclear accident in 2011, and the common correction of the power policy in the world that followed it and gave a new impulse to the development of the coal power industry, floods in Australia, which submerged coal mines there, and a rapid growth in the Chinese economy were the main drivers of growth of the demand for Russian coal (today, approximately 60% of coal extracted in the country is exported). This contributed to an increase in the transportation volume of coal in the last three years. Experts say that the success of Russian coalmen in the latest decades is explained by the favourable situation in the global market, where the developing companies found their place easily. I.e. they grew together with the market, not as a result of competition. Moreover, the growth was stimulated by low prices for export coal transportation in the early 2000-s. The saturation point, however, seems to have been reached. Analysts forecast a 1.2% decline in the coal volume purchased by the EU states in 2013 to 171 million tons. Opinions about another large importer – China – vary, but most experts believe that even keeping the same purchase volume will be a success. In the optimistic outlook, the volume of global coal export can continue to increase (the forecast for 2013 is +4%). In this case, however, one should take into account that the figure grew by almost 11% in 2012, and the coal loading volume on RZD’s network rose by just 3.9%. The logistics of supplies focuses on transportation to Europe and China, therefore, cooling down at Russia’s basic and nearest sales markets will be more notable than an increase in the consumption in countries of the Asian and Pacific Region.  

A fly in the ointment is the outlook for the competitiveness of Russian coal companies in price terms. According to the optimistic forecast made by analysts from Barclays bank, in 2013 the average price for coal will be $95 for a ton ($103.15 in 2012). As a reminder, when coal prices fell to $110 for a ton, representatives of the coal sector asked the RF Government to reduce railway tariffs, otherwise, the profitability of their business could reach a critical level.

Due to the market warming up during the recent years, coal export business is attractive not for Russian companies only. According to experts, such states as Mongolia, Indonesia, and even Madagascar can join the club of coal countries. Traditional suppliers are not going to reduce extraction volume. Moreover, a number of American coal companies announced plans to start coal supplies to Europe. The competition will be strong.

Perhaps, one should not start jumping to conclusions about a future stagnation in the coal sector. In January, coal loading volumes on RZD’s network increased by 0.9% year-on-year to 26.8 million tons. Nevertheless, coalmen will have to work hard to achieve an increase in supplies.

The situation in the sector of ore mining and smelting cargo transportation is even more ambiguous. Its notorious volatility is increasing, often even beyond sensible explanations. On the one hand, despite serious fluctuations, the common trend of post-recession development proves that there is an increase in prices as well as in consumption. On the other hand, it becomes obvious that a recipe for success of companies in the sector is not just the ability to optimise production processes, but the skill to match changes in the market situation.  

Anyway, all leading foreign and national analysts think that China will play the main role in the sector (and it is no wonder – its share in iron and steel smelting and consumption of relevant raw materials exceeds two-thirds).  

For example, let’s analyse iron ore supplies. In 2013, prices for it are likely to grow, because analysts expect that China will import record volume of this raw material. According to experts polled by Bloomberg, this year China can purchase 778 million tons of iron ore from other countries, 6.9% more than in 2012. Thus, the country’s share in the total global supplies will be about 65%.

Last year’s situation was rather illustrative, when in September the cost of iron ore fell to its minimum in three-year period, because official and semi-official reports from China created a feeling that “the yellow dragon” got tired, and its metallurgical sector has serious problems. Then the country declared about the start of developing a number of infrastructure projects, and prices for iron ore increased by 56%. When the market was low, China purchased about 65 million tons of raw materials (an absolute record for 20 months). Then, during the fourth quarter of 2012, there was a downward price trend. It won’t be surprising if prices go upwards in spring. 

Leading iron ore corporations plan to expand their production volume. An Australian company Fortescue Metals Group (FMG) decided to postpone the development of the Kings field during the decrease in the market, now says it will return to this question. Putting Kings in operation will allow FMG to expand the production volume of iron ore raw materials from 84 million tons in 2012 to approximately 155 million tons. Rio Tinto, the largest producer of iron ore raw materials in Australia, has confirmed its intention to expand its capacities. The company is going to produce 353 million tons per annum by 2015 (for the sake of comparison, it produced 250 million tons in 2012). A significant increase in raw material production volume is forecast in Brazil (in 2013, supplies from this country can grow by 20%). Therefore, it is possible that the global iron ore market is on the verge of a long period of oversupply and, consequently, low prices. In January, the loading volume of iron and manganese ore on the railway network reduced by 3.8% to 8.5 million tons, which matches analysts’ forecasts.



Be Prepared!



However strange as it is, experts’ opinions about prospects for railway transportation match this motto. The situation can change unpredictably. Local fluctuations overlay with other, more extended processes. In such conditions, mobile players, who are able to sell when profitable and to deliver when necessary, win.

One can’t say that the time of long-term contracts and stable supplies has passed, but the share of the spot sector will increase. For railways, it means new challenges, and a necessity to form new mechanisms for interaction with clients. Moreover, the issue of competition with other transport modes becomes more and more urgent. Today, the issue of redirection of cargoes, for example grain or cement, to other transport modes becomes especially important. Out of 60 million tons of cement produced in 2012, about 35 million tons were transported by railways. Consequently, actual approaches to the interaction with clients are needed to use opportunities of domestic transportation more efficiently amid the difficult situation with exports. 

 

Within the Framework of Globalisation



Analysing the structure of loading according to directions, we can see that last year exports grew faster than the domestic transportation volume (+3.4% and +2.1% respectively). Despite the activation of exporters, the share of domestic transportation was 67%, 0.2% less than in 2011.

There was an increase in exports of coal (+11.3%), oil bulk (+3%), iron ore (+2.2%), and grain (+31.9%). The amount of exports transported eastwards rose significantly – by 7% (first of all, due to coal). Imports grew by 4.3% year-on-year. According to the growth rate, the leader among them was construction materials (+35.2%) from Ukraine and the Republic of Belarus.   

Transit transportation increased by 10.4% in 2012. The largest part of it was oil bulk (43%), grain and cereals (15%), and coal (7%). The lion’s share of transit was transported via border crossings of Russia (90%). 10% was carried via Russian ports.

Changes in the ratio of external and internal transportation reflect processes of Russia’s integration in the global economy. After Russia joined the WTO, this trend will become stronger. One should understand that opportunities for the railway sector development are counterbalanced by risks. Therefore, preferences from customs barriers removal in the metallurgical sector are “compensated” by cooling world market down, suppliers of iron ore and mineral fertilizers talk more and more often about strengthening the focus on domestic demand. Anyway, the global economy’s impact on transportation via RZD’s network will only increase.

Most analysts think that the pessimistic scenario of economic development will come to life in the mid-term. The Ministry of Economic Development decreased the outlook for the annual growth of the GDP and industrial production volume. Taking into account the experts’ estimation of the situation at commodity and raw material markets, the loading volume in 2013 is supposed to reach 1,280.3 million tons (+0.7% year-on-year). The increase will be achieved due to construction materials, coal, and the recovery of chemicals transportation.

RZD’s network operates in conditions, when main manufactures are integrated in the global trade and have to compete for contracts. Therefore, an urgent objective is to harmonise RZD’s operating activity, targeted at optimisation and making its own processes more efficient, with the marketing policies of its clients, and to create no additional risks for all participants of the transport market. The best variant will be its adaptation to new conditions. Only in this case, the negative trends, which appeared lately, will be reversed. 

By Dmitry Khantsevich 
    [~DETAIL_TEXT] => 
Driver of Growth Is Demand for Raw Materials



The main problems in recent years were a shortage of railcars and a rapid increase in rates on rolling stock supply services. Operators treated clients differently: applications by some companies were partly fulfilled (in some cases, clients received just 3-5% of the rolling stock they needed), whilst others got more wagons than required. Due to measures taken in 2012, the situation changed dramatically. Experts note that the problem of the search for rolling stock is no longer acute, because the demand is practically completely fulfilled. Statistics prove it. Fulfillment of applications in percentage terms in 2012 was as follows: 111.7% for grain railcars, 95.9% for flat wagons, 92.2% for tank wagons, 90.5% for gondola cars, and 87.9% for boxcars.

As for the cost of transportation, last year’s results also seem quite positive. In 2011, the average rate on rolling stock supply services grew by 40% (from RUB 1,300 a day to RUB 1,900 a day), and in 2012 this figure fell to RUB 1,100 a day. Moreover, at the end of the year the rate of RUB 500-700 a day was not a rare thing.

Market players say that the very specifics of relations between clients and providers of services have changed. If 2011 can be named “a year of operators”, the position of cargo owners became stronger last year. It is too early to say that the buyer’s market has been formed, but the trend is rather obvious. Without going into details about reasons for this inversion, there were three main factors: the RPR fleet, enhancement of the regulations on railcar movement on the network, and some trade markets cooling down. Unification of tariffs on empty mileage added to the list in early November. 



Inertial Motion?



1,271.9 million tons were loaded on Russian Railways’ network last year. It is 2.4% or 30.3 million tons more than in 2011. It is less than forecast (the loading volume was supposed to grow by 3-4% in 2012), still it is a good result matching the slowing down growth rate of Russian economy. 

According to RZD, last year the loading volume of 8 cargoes out of 43 exceeded the relevant pre-crisis figures of 2008. The increase in the loading of construction materials (+22.6 million tons), coal (+11.4 million tons), and oil bulk (+8.2 million tons) was the largest. Meanwhile, there was a decline in the amount of metal cargoes (ore, ferrous metal scrap, ferrous metal – by 3.2 million tons in total) and timber (-4.4 million tons) and chemical freight (fertilizers, chemicals, and soda – by 2.2 million tons in total).  

Interesting as this is, it was actually low-yielding cargoes that contributed to the increase in the loading volume most of all (+4.8% or 32.5 million tons). Transportation of medium-yielding cargoes reduced by 5.6% or more than 8 million tons. An increase in high-yielding freight transportation became possible due to oil bulk. If we do not take oil bulk into account, the loading volume of cargoes of the third tariff class (high-yielding freight) fell by approximately 2 million tons.

The share of cargoes of the first tariff class (low-yielding) in the total loading volume increased by 0.9% as compared with 2011, whilst the shares of freight of the second and the third tariff classes fell by 0.3% and 0.6% respectively. This is an alarming trend because the tariff model is based on cross-subsiding principle. One can say that transportation of freight of the first tariff class is subsidised from transportation of third-class cargoes. Consequently, an imbalance of cargoes of these classes in the total loading volume can cause a serious imbalance in the economy of railway transport. Taking into account that when the ESPO-2 oil pipeline is put in operation, up to 10 million tons of oil can be redirected to pipelines, this problem can become crucial.

 There is another alarming aspect. Regardless of the specifics of local changes in the dynamics of loading some cargoes because of the market situation, one more unpleasant trend can be observed: the loading volume of cargoes dispatched in small lots decreases most of all. 

The share of block trains on the network is less than 30%, therefore, up to 70% of cargo carried today is potentially in the high-risk locations. The search for mutually acceptable solutions, providing an efficient transportation of wagonloads, should become one more urgent objective of the sector. Otherwise, the outflow of freight to other transport modes can become enormous.

There are alarming trends in transportation of construction materials and cement. On the whole, the situation in the country is also unclear. Consignors say that the system of public funding was surprising last spring, and the increase in transportation in 2012 was caused by some inertial factors. Some specialists think that the 2012 downgoing trend in the construction material sector can continue this year. Experts note that amid the decline in demand, prices for non-ore materials reduced. Many consumers and traders used this period to form commodity stock and wait for a recovery of the market.   

One can say that a significant part of transportation for the purposes of the current year has been fulfilled already. If no dramatic changes happen, the sector will face a serious decline in supplies even after the beginning of seasonal works. There is a similar trend for cement (see infographics), just take into account that it is not reasonable to accumulate large stock of the freight for winter, purchase dynamics reacts to changes in real consumption very fast. Competition with road transport is strong in this sector and there is a demand for transportation by railway due to cargoes for construction of large facilities. Therefore, the ambiguity with the distribution of public funds creates the basis for pessimistic forecasts about the need for hoppers. 

If difficulties in the construction market are caused by internal factors mainly, the situation with other cargoes, forming the   lion’s share of the loading volume, is more complicated. For example, the situation with coal transportation, which makes more than a quarter of the total freight carried on RZD’s network, is ambiguous. Until recently, the market situation was favourable for Russian miners. The Fukushima nuclear accident in 2011, and the common correction of the power policy in the world that followed it and gave a new impulse to the development of the coal power industry, floods in Australia, which submerged coal mines there, and a rapid growth in the Chinese economy were the main drivers of growth of the demand for Russian coal (today, approximately 60% of coal extracted in the country is exported). This contributed to an increase in the transportation volume of coal in the last three years. Experts say that the success of Russian coalmen in the latest decades is explained by the favourable situation in the global market, where the developing companies found their place easily. I.e. they grew together with the market, not as a result of competition. Moreover, the growth was stimulated by low prices for export coal transportation in the early 2000-s. The saturation point, however, seems to have been reached. Analysts forecast a 1.2% decline in the coal volume purchased by the EU states in 2013 to 171 million tons. Opinions about another large importer – China – vary, but most experts believe that even keeping the same purchase volume will be a success. In the optimistic outlook, the volume of global coal export can continue to increase (the forecast for 2013 is +4%). In this case, however, one should take into account that the figure grew by almost 11% in 2012, and the coal loading volume on RZD’s network rose by just 3.9%. The logistics of supplies focuses on transportation to Europe and China, therefore, cooling down at Russia’s basic and nearest sales markets will be more notable than an increase in the consumption in countries of the Asian and Pacific Region.  

A fly in the ointment is the outlook for the competitiveness of Russian coal companies in price terms. According to the optimistic forecast made by analysts from Barclays bank, in 2013 the average price for coal will be $95 for a ton ($103.15 in 2012). As a reminder, when coal prices fell to $110 for a ton, representatives of the coal sector asked the RF Government to reduce railway tariffs, otherwise, the profitability of their business could reach a critical level.

Due to the market warming up during the recent years, coal export business is attractive not for Russian companies only. According to experts, such states as Mongolia, Indonesia, and even Madagascar can join the club of coal countries. Traditional suppliers are not going to reduce extraction volume. Moreover, a number of American coal companies announced plans to start coal supplies to Europe. The competition will be strong.

Perhaps, one should not start jumping to conclusions about a future stagnation in the coal sector. In January, coal loading volumes on RZD’s network increased by 0.9% year-on-year to 26.8 million tons. Nevertheless, coalmen will have to work hard to achieve an increase in supplies.

The situation in the sector of ore mining and smelting cargo transportation is even more ambiguous. Its notorious volatility is increasing, often even beyond sensible explanations. On the one hand, despite serious fluctuations, the common trend of post-recession development proves that there is an increase in prices as well as in consumption. On the other hand, it becomes obvious that a recipe for success of companies in the sector is not just the ability to optimise production processes, but the skill to match changes in the market situation.  

Anyway, all leading foreign and national analysts think that China will play the main role in the sector (and it is no wonder – its share in iron and steel smelting and consumption of relevant raw materials exceeds two-thirds).  

For example, let’s analyse iron ore supplies. In 2013, prices for it are likely to grow, because analysts expect that China will import record volume of this raw material. According to experts polled by Bloomberg, this year China can purchase 778 million tons of iron ore from other countries, 6.9% more than in 2012. Thus, the country’s share in the total global supplies will be about 65%.

Last year’s situation was rather illustrative, when in September the cost of iron ore fell to its minimum in three-year period, because official and semi-official reports from China created a feeling that “the yellow dragon” got tired, and its metallurgical sector has serious problems. Then the country declared about the start of developing a number of infrastructure projects, and prices for iron ore increased by 56%. When the market was low, China purchased about 65 million tons of raw materials (an absolute record for 20 months). Then, during the fourth quarter of 2012, there was a downward price trend. It won’t be surprising if prices go upwards in spring. 

Leading iron ore corporations plan to expand their production volume. An Australian company Fortescue Metals Group (FMG) decided to postpone the development of the Kings field during the decrease in the market, now says it will return to this question. Putting Kings in operation will allow FMG to expand the production volume of iron ore raw materials from 84 million tons in 2012 to approximately 155 million tons. Rio Tinto, the largest producer of iron ore raw materials in Australia, has confirmed its intention to expand its capacities. The company is going to produce 353 million tons per annum by 2015 (for the sake of comparison, it produced 250 million tons in 2012). A significant increase in raw material production volume is forecast in Brazil (in 2013, supplies from this country can grow by 20%). Therefore, it is possible that the global iron ore market is on the verge of a long period of oversupply and, consequently, low prices. In January, the loading volume of iron and manganese ore on the railway network reduced by 3.8% to 8.5 million tons, which matches analysts’ forecasts.



Be Prepared!



However strange as it is, experts’ opinions about prospects for railway transportation match this motto. The situation can change unpredictably. Local fluctuations overlay with other, more extended processes. In such conditions, mobile players, who are able to sell when profitable and to deliver when necessary, win.

One can’t say that the time of long-term contracts and stable supplies has passed, but the share of the spot sector will increase. For railways, it means new challenges, and a necessity to form new mechanisms for interaction with clients. Moreover, the issue of competition with other transport modes becomes more and more urgent. Today, the issue of redirection of cargoes, for example grain or cement, to other transport modes becomes especially important. Out of 60 million tons of cement produced in 2012, about 35 million tons were transported by railways. Consequently, actual approaches to the interaction with clients are needed to use opportunities of domestic transportation more efficiently amid the difficult situation with exports. 

 

Within the Framework of Globalisation



Analysing the structure of loading according to directions, we can see that last year exports grew faster than the domestic transportation volume (+3.4% and +2.1% respectively). Despite the activation of exporters, the share of domestic transportation was 67%, 0.2% less than in 2011.

There was an increase in exports of coal (+11.3%), oil bulk (+3%), iron ore (+2.2%), and grain (+31.9%). The amount of exports transported eastwards rose significantly – by 7% (first of all, due to coal). Imports grew by 4.3% year-on-year. According to the growth rate, the leader among them was construction materials (+35.2%) from Ukraine and the Republic of Belarus.   

Transit transportation increased by 10.4% in 2012. The largest part of it was oil bulk (43%), grain and cereals (15%), and coal (7%). The lion’s share of transit was transported via border crossings of Russia (90%). 10% was carried via Russian ports.

Changes in the ratio of external and internal transportation reflect processes of Russia’s integration in the global economy. After Russia joined the WTO, this trend will become stronger. One should understand that opportunities for the railway sector development are counterbalanced by risks. Therefore, preferences from customs barriers removal in the metallurgical sector are “compensated” by cooling world market down, suppliers of iron ore and mineral fertilizers talk more and more often about strengthening the focus on domestic demand. Anyway, the global economy’s impact on transportation via RZD’s network will only increase.

Most analysts think that the pessimistic scenario of economic development will come to life in the mid-term. The Ministry of Economic Development decreased the outlook for the annual growth of the GDP and industrial production volume. Taking into account the experts’ estimation of the situation at commodity and raw material markets, the loading volume in 2013 is supposed to reach 1,280.3 million tons (+0.7% year-on-year). The increase will be achieved due to construction materials, coal, and the recovery of chemicals transportation.

RZD’s network operates in conditions, when main manufactures are integrated in the global trade and have to compete for contracts. Therefore, an urgent objective is to harmonise RZD’s operating activity, targeted at optimisation and making its own processes more efficient, with the marketing policies of its clients, and to create no additional risks for all participants of the transport market. The best variant will be its adaptation to new conditions. Only in this case, the negative trends, which appeared lately, will be reversed. 

By Dmitry Khantsevich 
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Cargo Transportation in Armenia Increased by 4% in 2012

In 2012, cargo transportation in Armenia grew 4% in comparison with 2011 to 10.109 million tons, the country’s National Statistics Service says.

Cargo turnover increased by 16.3% to 4.166 billion tonne-kilometres. Cargo transportation by railway grew by 5.8% to 3.460 million tons. Cargo transportation by road haulages fell by 1.9% to 4.848 million tons, and by air transport rose by 23% to 12,300 tons. 1.789 million tons of natural gas was carried by pipelines, a 19.5% increase as compared to 2011. 

Passenger transportation in 2012 reduced by 0.5% to 248.483 million people, passenger turnover – by 4.4% to 3.471 billion passenger-kilometers. 

The number of passengers carried by railways fell by 6% to 551,400 people, passenger transportation by road transport increased by 0.3% to 225.561 million people, that by airlines – by 5.3% to 1.763 million people. 20.607 million people used electric transport, 9.2% less than in the previous year.





Kazakhstan Needs a Network of Transport Centers

It is necessary to map out a complex plan on the creation of a network of transport and logistics centers in and outside the country, thinks Prime Minister of Kazakhstan Serik Akhmetov. 

“Kazakhstan is a landlocked country. And this type of service infrastructure is of critical importance, it needs to be developed,” Mr Akhmetov stressed.

In his words, development of transport and logistics centers, such as “Khorgos–Dostyk” western gate and “Dostyk–Aktau sea port” eastern gate also demands attention.  



Ukrzaliznytsia Sees 2.5% Decline in Freight Transportation in 2012

In 2012 Ukrainian Railways carried 457.5 million tons of freight, which is 2.5% less year-over-year.

Coal was the main type of cargo carried by railways in 2012. Over the year 122.4 million tons of coal was carried.

Iron and black iron ores also dominated the list of freight (86.7 million tons), as well as ferrous metals (34 million tons), oil and oil products (27.4 million tons), and grain and grain products (23.6 million tons).

According to results of 2012, imports and exports saw a 9.5% and a 7.3% growth compared to 2011 – to 35 million tons and 140.9 million tons respectively.

The domestic transportation volume was 239.5 million tons of cargo, and transit transportation volume - 41.9 million tons.



RPR Park Operated by RZD Will Continue Its Work till December 31, 2013

The period of operation of the Rented Private Railcar fleet (RPR) by Russian Railways will be extended till December 31, 2013, according to the Governmental Decree published on the website of the RF Transport Ministry.

The RPR fleet now consists mainly of railcars owned by the Federal Cargo Company (FCC, earlier its name was the Second Cargo Company or Freight Two). To attract other companies to the project, the Ministry will change the share of the FCC in the RPR fleet.  



Lastochka Departs on First Journey with Passengers

On January 23, 2013, the «Lastochka» («Swallow») electric train departed from the Moscow railway station in St Petersburg on its first passenger-carrying journey.

“The «Lastochka» electric train is an innovative project in the field of passenger transport. It is designed to operate in Russia’s climate and meet our technology standards and special requirements regarding safety and environmental protection. It meets the needs of the most discerning passenger,” said Valentin Gapanovich, Senior Vice President at Russian Railways in his speech during the ceremony marking the start of commercial operations for the «Lastochka». He also reiterated that in order to further develop the manufacturing of modern high-speed motor-train units in Russia, work was continuing on setting up a joint venture in Russia to produce the «Lastochka».

According to Victor Stepov, Head of Oktaybrskaya Railway, the «Lastochka» is oriented towards the regions. Passengers from St. Petersburg, Leningrad and Novgorod regions will be the first to appreciate the comfort offered by the new train.

The first «Lastochka» service operates on two routes: between St Petersburg – Chudovo – Novgorod-on-Volkhov and St Petersburg – Chudovo – Bologoye. Later this year, «Lastochka» services are scheduled to begin from Kazan and Sochi.


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Cargo Transportation in Armenia Increased by 4% in 2012

In 2012, cargo transportation in Armenia grew 4% in comparison with 2011 to 10.109 million tons, the country’s National Statistics Service says.

Cargo turnover increased by 16.3% to 4.166 billion tonne-kilometres. Cargo transportation by railway grew by 5.8% to 3.460 million tons. Cargo transportation by road haulages fell by 1.9% to 4.848 million tons, and by air transport rose by 23% to 12,300 tons. 1.789 million tons of natural gas was carried by pipelines, a 19.5% increase as compared to 2011. 

Passenger transportation in 2012 reduced by 0.5% to 248.483 million people, passenger turnover – by 4.4% to 3.471 billion passenger-kilometers. 

The number of passengers carried by railways fell by 6% to 551,400 people, passenger transportation by road transport increased by 0.3% to 225.561 million people, that by airlines – by 5.3% to 1.763 million people. 20.607 million people used electric transport, 9.2% less than in the previous year.





Kazakhstan Needs a Network of Transport Centers

It is necessary to map out a complex plan on the creation of a network of transport and logistics centers in and outside the country, thinks Prime Minister of Kazakhstan Serik Akhmetov. 

“Kazakhstan is a landlocked country. And this type of service infrastructure is of critical importance, it needs to be developed,” Mr Akhmetov stressed.

In his words, development of transport and logistics centers, such as “Khorgos–Dostyk” western gate and “Dostyk–Aktau sea port” eastern gate also demands attention.  



Ukrzaliznytsia Sees 2.5% Decline in Freight Transportation in 2012

In 2012 Ukrainian Railways carried 457.5 million tons of freight, which is 2.5% less year-over-year.

Coal was the main type of cargo carried by railways in 2012. Over the year 122.4 million tons of coal was carried.

Iron and black iron ores also dominated the list of freight (86.7 million tons), as well as ferrous metals (34 million tons), oil and oil products (27.4 million tons), and grain and grain products (23.6 million tons).

According to results of 2012, imports and exports saw a 9.5% and a 7.3% growth compared to 2011 – to 35 million tons and 140.9 million tons respectively.

The domestic transportation volume was 239.5 million tons of cargo, and transit transportation volume - 41.9 million tons.



RPR Park Operated by RZD Will Continue Its Work till December 31, 2013

The period of operation of the Rented Private Railcar fleet (RPR) by Russian Railways will be extended till December 31, 2013, according to the Governmental Decree published on the website of the RF Transport Ministry.

The RPR fleet now consists mainly of railcars owned by the Federal Cargo Company (FCC, earlier its name was the Second Cargo Company or Freight Two). To attract other companies to the project, the Ministry will change the share of the FCC in the RPR fleet.  



Lastochka Departs on First Journey with Passengers

On January 23, 2013, the «Lastochka» («Swallow») electric train departed from the Moscow railway station in St Petersburg on its first passenger-carrying journey.

“The «Lastochka» electric train is an innovative project in the field of passenger transport. It is designed to operate in Russia’s climate and meet our technology standards and special requirements regarding safety and environmental protection. It meets the needs of the most discerning passenger,” said Valentin Gapanovich, Senior Vice President at Russian Railways in his speech during the ceremony marking the start of commercial operations for the «Lastochka». He also reiterated that in order to further develop the manufacturing of modern high-speed motor-train units in Russia, work was continuing on setting up a joint venture in Russia to produce the «Lastochka».

According to Victor Stepov, Head of Oktaybrskaya Railway, the «Lastochka» is oriented towards the regions. Passengers from St. Petersburg, Leningrad and Novgorod regions will be the first to appreciate the comfort offered by the new train.

The first «Lastochka» service operates on two routes: between St Petersburg – Chudovo – Novgorod-on-Volkhov and St Petersburg – Chudovo – Bologoye. Later this year, «Lastochka» services are scheduled to begin from Kazan and Sochi.


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Cargo Transportation in Armenia Increased by 4% in 2012

In 2012, cargo transportation in Armenia grew 4% in comparison with 2011 to 10.109 million tons, the country’s National Statistics Service says.

Cargo turnover increased by 16.3% to 4.166 billion tonne-kilometres. Cargo transportation by railway grew by 5.8% to 3.460 million tons. Cargo transportation by road haulages fell by 1.9% to 4.848 million tons, and by air transport rose by 23% to 12,300 tons. 1.789 million tons of natural gas was carried by pipelines, a 19.5% increase as compared to 2011. 

Passenger transportation in 2012 reduced by 0.5% to 248.483 million people, passenger turnover – by 4.4% to 3.471 billion passenger-kilometers. 

The number of passengers carried by railways fell by 6% to 551,400 people, passenger transportation by road transport increased by 0.3% to 225.561 million people, that by airlines – by 5.3% to 1.763 million people. 20.607 million people used electric transport, 9.2% less than in the previous year.





Kazakhstan Needs a Network of Transport Centers

It is necessary to map out a complex plan on the creation of a network of transport and logistics centers in and outside the country, thinks Prime Minister of Kazakhstan Serik Akhmetov. 

“Kazakhstan is a landlocked country. And this type of service infrastructure is of critical importance, it needs to be developed,” Mr Akhmetov stressed.

In his words, development of transport and logistics centers, such as “Khorgos–Dostyk” western gate and “Dostyk–Aktau sea port” eastern gate also demands attention.  



Ukrzaliznytsia Sees 2.5% Decline in Freight Transportation in 2012

In 2012 Ukrainian Railways carried 457.5 million tons of freight, which is 2.5% less year-over-year.

Coal was the main type of cargo carried by railways in 2012. Over the year 122.4 million tons of coal was carried.

Iron and black iron ores also dominated the list of freight (86.7 million tons), as well as ferrous metals (34 million tons), oil and oil products (27.4 million tons), and grain and grain products (23.6 million tons).

According to results of 2012, imports and exports saw a 9.5% and a 7.3% growth compared to 2011 – to 35 million tons and 140.9 million tons respectively.

The domestic transportation volume was 239.5 million tons of cargo, and transit transportation volume - 41.9 million tons.



RPR Park Operated by RZD Will Continue Its Work till December 31, 2013

The period of operation of the Rented Private Railcar fleet (RPR) by Russian Railways will be extended till December 31, 2013, according to the Governmental Decree published on the website of the RF Transport Ministry.

The RPR fleet now consists mainly of railcars owned by the Federal Cargo Company (FCC, earlier its name was the Second Cargo Company or Freight Two). To attract other companies to the project, the Ministry will change the share of the FCC in the RPR fleet.  



Lastochka Departs on First Journey with Passengers

On January 23, 2013, the «Lastochka» («Swallow») electric train departed from the Moscow railway station in St Petersburg on its first passenger-carrying journey.

“The «Lastochka» electric train is an innovative project in the field of passenger transport. It is designed to operate in Russia’s climate and meet our technology standards and special requirements regarding safety and environmental protection. It meets the needs of the most discerning passenger,” said Valentin Gapanovich, Senior Vice President at Russian Railways in his speech during the ceremony marking the start of commercial operations for the «Lastochka». He also reiterated that in order to further develop the manufacturing of modern high-speed motor-train units in Russia, work was continuing on setting up a joint venture in Russia to produce the «Lastochka».

According to Victor Stepov, Head of Oktaybrskaya Railway, the «Lastochka» is oriented towards the regions. Passengers from St. Petersburg, Leningrad and Novgorod regions will be the first to appreciate the comfort offered by the new train.

The first «Lastochka» service operates on two routes: between St Petersburg – Chudovo – Novgorod-on-Volkhov and St Petersburg – Chudovo – Bologoye. Later this year, «Lastochka» services are scheduled to begin from Kazan and Sochi.


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Cargo Transportation in Armenia Increased by 4% in 2012

In 2012, cargo transportation in Armenia grew 4% in comparison with 2011 to 10.109 million tons, the country’s National Statistics Service says.

Cargo turnover increased by 16.3% to 4.166 billion tonne-kilometres. Cargo transportation by railway grew by 5.8% to 3.460 million tons. Cargo transportation by road haulages fell by 1.9% to 4.848 million tons, and by air transport rose by 23% to 12,300 tons. 1.789 million tons of natural gas was carried by pipelines, a 19.5% increase as compared to 2011. 

Passenger transportation in 2012 reduced by 0.5% to 248.483 million people, passenger turnover – by 4.4% to 3.471 billion passenger-kilometers. 

The number of passengers carried by railways fell by 6% to 551,400 people, passenger transportation by road transport increased by 0.3% to 225.561 million people, that by airlines – by 5.3% to 1.763 million people. 20.607 million people used electric transport, 9.2% less than in the previous year.





Kazakhstan Needs a Network of Transport Centers

It is necessary to map out a complex plan on the creation of a network of transport and logistics centers in and outside the country, thinks Prime Minister of Kazakhstan Serik Akhmetov. 

“Kazakhstan is a landlocked country. And this type of service infrastructure is of critical importance, it needs to be developed,” Mr Akhmetov stressed.

In his words, development of transport and logistics centers, such as “Khorgos–Dostyk” western gate and “Dostyk–Aktau sea port” eastern gate also demands attention.  



Ukrzaliznytsia Sees 2.5% Decline in Freight Transportation in 2012

In 2012 Ukrainian Railways carried 457.5 million tons of freight, which is 2.5% less year-over-year.

Coal was the main type of cargo carried by railways in 2012. Over the year 122.4 million tons of coal was carried.

Iron and black iron ores also dominated the list of freight (86.7 million tons), as well as ferrous metals (34 million tons), oil and oil products (27.4 million tons), and grain and grain products (23.6 million tons).

According to results of 2012, imports and exports saw a 9.5% and a 7.3% growth compared to 2011 – to 35 million tons and 140.9 million tons respectively.

The domestic transportation volume was 239.5 million tons of cargo, and transit transportation volume - 41.9 million tons.



RPR Park Operated by RZD Will Continue Its Work till December 31, 2013

The period of operation of the Rented Private Railcar fleet (RPR) by Russian Railways will be extended till December 31, 2013, according to the Governmental Decree published on the website of the RF Transport Ministry.

The RPR fleet now consists mainly of railcars owned by the Federal Cargo Company (FCC, earlier its name was the Second Cargo Company or Freight Two). To attract other companies to the project, the Ministry will change the share of the FCC in the RPR fleet.  



Lastochka Departs on First Journey with Passengers

On January 23, 2013, the «Lastochka» («Swallow») electric train departed from the Moscow railway station in St Petersburg on its first passenger-carrying journey.

“The «Lastochka» electric train is an innovative project in the field of passenger transport. It is designed to operate in Russia’s climate and meet our technology standards and special requirements regarding safety and environmental protection. It meets the needs of the most discerning passenger,” said Valentin Gapanovich, Senior Vice President at Russian Railways in his speech during the ceremony marking the start of commercial operations for the «Lastochka». He also reiterated that in order to further develop the manufacturing of modern high-speed motor-train units in Russia, work was continuing on setting up a joint venture in Russia to produce the «Lastochka».

According to Victor Stepov, Head of Oktaybrskaya Railway, the «Lastochka» is oriented towards the regions. Passengers from St. Petersburg, Leningrad and Novgorod regions will be the first to appreciate the comfort offered by the new train.

The first «Lastochka» service operates on two routes: between St Petersburg – Chudovo – Novgorod-on-Volkhov and St Petersburg – Chudovo – Bologoye. Later this year, «Lastochka» services are scheduled to begin from Kazan and Sochi.


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