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1 (1) March - May 2005

1 (1) March - May 2005
COOPERATION GOES FIRST: According to the Strategic Programme of the company its mission envisages market demand on transportation satisfaction, operation efficiency increase as well as services improvement and deep integration into Euro-Asian transport system.

RUSSIA AND CHINA: TRANSPORT INTEGRATION: On cooperation perspectives of Russia and China, in particular, within freight railway transportation sector OAO RZD Senior Vice-President Khasyan Zyabirov speaks.

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Russia to Implement Common Transit Procedure

On May 1, 2004, the European Union approached to the Russian border as the Baltics joined the EU, including Lithuania. As a result Kaliningrad region turned into Russian enclave and the problem of cargo transportation to/from the region appeared. Automatic system "Kaliningrad transit" started operating in order to resolve the problem of Russia's transport system integration into Common Transit procedure.
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    [DETAIL_TEXT] => On February 18-19, 2005, in Svetlogorsk (Kaliningrad region) the transport ministers of Russia, Germany, Lithuania and Poland met. However, right before the negotiations Lietuvos Gelezinkeliai (Lithuanian railways) announced 15% tariff rise since March 15, 2005, for almost all cargo transported to/from Kaliningrad. Freight transportation tariffs increase was also affected by insurance price growth, despite EU obligation not to change transit terms for cargo passing Lithuania after the country's joining the Union. RF transport minister Igor Levitin offered the Lithuanian party to meet engagement and postpone new tariff implementation. Lithuania agreed to put off tariff rise.
Ministers' negotiations resulted in joint declaration, envisaging transport infrastructure development in southern part of the Baltic sea, including international transport corridors. Also, Russian-Lithuanian group for solutions of such problems as Lithuanian transit, reasonable rail tariff implementation and sea ports cargo supply was established. Thus, the ministers pointed out key problems on the way of Russian transport system integration into European one and started new stage of cooperation in the transport area in the Baltic region.

Background
In the summer of 2003 RF President Vladimir Putin, having visited the Kaliningrad region, charged the Government with instruction to activate negotiations with the EU on freight transit between the region and the rest of Russia.
RF State Customs Committee (predecessor of the Federal Customs Service) was instructed to start working in the subcommittee on customs RF - EU cooperation. After that the problem of Kaliningrad transit was discussed and key details of the "Kaliningrad transit scheme" were set by the heads of the RF State Customs Committee and the the Commission's Taxation and Customs Union Directorate-Generalas well as experts.
Thus, Russian customs having launched automatic system "Kaliningrad transit" and performed Common Transit transit procedure, de-facto started operating as a EU country customs, which is unexampled for a non-EU member. Also RF customs joined the European NCTS (New Computerized Transit System).
When the parties realized necessity to conclude written agreement, in Vilnius representatives of the RF State Customs Committee, the Commission of the European Communities and of Lithuania, Latvia, Estonia and Poland met. The so-called "Vilnius agreement" signed on December 17-18, 2003, became the base of the Kaliningrad transit system, particularly, Decree No370 of the RF State Customs Committee on customs control organizing and Decree No437 on IT as well as respective documents in Lithuania.
It's worth noting that today 90% of Russia-Kaliningrad cargo turnover is transported by railway, while Kaliningrad transit system is available only for road carriers yet. This is explained by customs expert position: railway performs smoothly so there is no necessity to implement Kaliningrad transit system for rail transport.





Lithuanian customs brokers take the market
Today a carrier is able to come to a Lithuanian customs border check-point, show cargo and transportation documents. However, he faces several difficulties. Particularly, documents should be translated into Lithuanian and a Russian carrier not speaking the language has to apply to a Lithuanian customs broker. A customs declaration translation costs some USD 40 per sheet. Moreover, a carrier looses time as registration is performed at the border crossing check-point.
A carrier could use a TIR procedure, however it is even less suitable and only 1% of road carriers does it. It is explained by the fact that for getting a TIR Carnet a carrier has to join the International road carriers association paying an entrance fee worth some USD 8 thousand and operate specially equipped vehicles.
The Kaliningrad transit procedure enables to set data into NCTS in the in-country customs not reaching a border. The system sets ID and an officer finds the information and prints it for a carrier to prove his legal stay in Lithuana. The system excludes even a Russian customs broker.
A crucial point also is that the system resolves the translation problem. Basing on the cargo data in the transport documents a Russian officer set a cargo code (4 symbols for a Harmonized system) and the programme translates information into Lithuanian. Thus, in Lithuania information is got in the state's language and a carrier is not involved in the translation procedure.

EU asks for guarantees
However, despite significant advantages of the Kaliningrad transit scheme today it is used by not over 5% of carriers. The situation is complicated as a carrier should have guarantees of Lithuania or any other EU-member. A Russian carrier can not get the guarantee without leaving the country. Moreover, Russian insurance legislation prohibits Russian organizations to issue insurances of foreign countries.
In order to resolve the problem on January 19, 2005, Lithuanian customs implemented an additional guarantee NCTS module. This means that information about guarantee issued in Lithuania is set right in Lithuanian customs body. The system gives an ID and PIN-code. Thus, a guarantee issued in Lithuania has not to be mailed.
However, cooperation of Lithuanian and Russian insurance companies and banks should be arranged in order to solve the problem. But the only case when these commercial companies cooperate is when they could realize profitability of that. In late October of 2004 the RF Federal Customs Service together with Lithuanian customs department held a meeting in Kaliningrad with banks and insurance companies of both countries. Another meeting of this sort was in December of 2004 in Vilnius, but only the most active and interested companies were represented.
It is expected that International road carriers association and their Lithuanian colleagues - association Linava and RESO-Garantiya, which has a subsidiary in Lithuania RESO-Europe, will be the pioneers using the Kaliningrad transit scheme. If evaluate interest of the companies shown in the area, we can forecast that in 2005 more carriers will use the scheme.

Common Transit Procedure?
The key objective is implementation the Common Transit procedure in Russia. In order to realize it the RF Federal Customs Service introduced its proposals to the Ministry of economic development and trade and the head of the latter Gherman Gref informed that issues are being worked out. Today a half of Russia's goods turnover is taken by Russia-EU trade. 30 countries are involved in the Common Transit procedure.
The convention "On Common Transit procedure" approved in 1987 is can't be joined without invitation. One of key terms is country's legislation harmonizing with the convention requirements. Apart from this, a country should also join the convention "On simplification of goods trade" (1987). Speaking about the latter, its the only subject is setting form of a unified administrative document (UAD) corresponding to Russian customs declaration. Thus, the Russia's first step on the way to EU transit procedure is decision to use UAD. By the way, initially Russian customs should start using UAD forms on January 1, 2006. However, the on-going administrative reform could postpone the date.
Experts believe that getting from decision to joining the Convention takes 2-3 years. As early as in 2004 a group of the European Unions Commission worked in the RF State Customs Service and analyzed and compared Russian and EU legislation and Customs IT system. The RF State Customs Service is waiting for a plan of measures on existing differences preventing from further development elimination, which is to be passed to the Ministry of economic development and trade.
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Ministers' negotiations resulted in joint declaration, envisaging transport infrastructure development in southern part of the Baltic sea, including international transport corridors. Also, Russian-Lithuanian group for solutions of such problems as Lithuanian transit, reasonable rail tariff implementation and sea ports cargo supply was established. Thus, the ministers pointed out key problems on the way of Russian transport system integration into European one and started new stage of cooperation in the transport area in the Baltic region.

Background
In the summer of 2003 RF President Vladimir Putin, having visited the Kaliningrad region, charged the Government with instruction to activate negotiations with the EU on freight transit between the region and the rest of Russia.
RF State Customs Committee (predecessor of the Federal Customs Service) was instructed to start working in the subcommittee on customs RF - EU cooperation. After that the problem of Kaliningrad transit was discussed and key details of the "Kaliningrad transit scheme" were set by the heads of the RF State Customs Committee and the the Commission's Taxation and Customs Union Directorate-Generalas well as experts.
Thus, Russian customs having launched automatic system "Kaliningrad transit" and performed Common Transit transit procedure, de-facto started operating as a EU country customs, which is unexampled for a non-EU member. Also RF customs joined the European NCTS (New Computerized Transit System).
When the parties realized necessity to conclude written agreement, in Vilnius representatives of the RF State Customs Committee, the Commission of the European Communities and of Lithuania, Latvia, Estonia and Poland met. The so-called "Vilnius agreement" signed on December 17-18, 2003, became the base of the Kaliningrad transit system, particularly, Decree No370 of the RF State Customs Committee on customs control organizing and Decree No437 on IT as well as respective documents in Lithuania.
It's worth noting that today 90% of Russia-Kaliningrad cargo turnover is transported by railway, while Kaliningrad transit system is available only for road carriers yet. This is explained by customs expert position: railway performs smoothly so there is no necessity to implement Kaliningrad transit system for rail transport.





Lithuanian customs brokers take the market
Today a carrier is able to come to a Lithuanian customs border check-point, show cargo and transportation documents. However, he faces several difficulties. Particularly, documents should be translated into Lithuanian and a Russian carrier not speaking the language has to apply to a Lithuanian customs broker. A customs declaration translation costs some USD 40 per sheet. Moreover, a carrier looses time as registration is performed at the border crossing check-point.
A carrier could use a TIR procedure, however it is even less suitable and only 1% of road carriers does it. It is explained by the fact that for getting a TIR Carnet a carrier has to join the International road carriers association paying an entrance fee worth some USD 8 thousand and operate specially equipped vehicles.
The Kaliningrad transit procedure enables to set data into NCTS in the in-country customs not reaching a border. The system sets ID and an officer finds the information and prints it for a carrier to prove his legal stay in Lithuana. The system excludes even a Russian customs broker.
A crucial point also is that the system resolves the translation problem. Basing on the cargo data in the transport documents a Russian officer set a cargo code (4 symbols for a Harmonized system) and the programme translates information into Lithuanian. Thus, in Lithuania information is got in the state's language and a carrier is not involved in the translation procedure.

EU asks for guarantees
However, despite significant advantages of the Kaliningrad transit scheme today it is used by not over 5% of carriers. The situation is complicated as a carrier should have guarantees of Lithuania or any other EU-member. A Russian carrier can not get the guarantee without leaving the country. Moreover, Russian insurance legislation prohibits Russian organizations to issue insurances of foreign countries.
In order to resolve the problem on January 19, 2005, Lithuanian customs implemented an additional guarantee NCTS module. This means that information about guarantee issued in Lithuania is set right in Lithuanian customs body. The system gives an ID and PIN-code. Thus, a guarantee issued in Lithuania has not to be mailed.
However, cooperation of Lithuanian and Russian insurance companies and banks should be arranged in order to solve the problem. But the only case when these commercial companies cooperate is when they could realize profitability of that. In late October of 2004 the RF Federal Customs Service together with Lithuanian customs department held a meeting in Kaliningrad with banks and insurance companies of both countries. Another meeting of this sort was in December of 2004 in Vilnius, but only the most active and interested companies were represented.
It is expected that International road carriers association and their Lithuanian colleagues - association Linava and RESO-Garantiya, which has a subsidiary in Lithuania RESO-Europe, will be the pioneers using the Kaliningrad transit scheme. If evaluate interest of the companies shown in the area, we can forecast that in 2005 more carriers will use the scheme.

Common Transit Procedure?
The key objective is implementation the Common Transit procedure in Russia. In order to realize it the RF Federal Customs Service introduced its proposals to the Ministry of economic development and trade and the head of the latter Gherman Gref informed that issues are being worked out. Today a half of Russia's goods turnover is taken by Russia-EU trade. 30 countries are involved in the Common Transit procedure.
The convention "On Common Transit procedure" approved in 1987 is can't be joined without invitation. One of key terms is country's legislation harmonizing with the convention requirements. Apart from this, a country should also join the convention "On simplification of goods trade" (1987). Speaking about the latter, its the only subject is setting form of a unified administrative document (UAD) corresponding to Russian customs declaration. Thus, the Russia's first step on the way to EU transit procedure is decision to use UAD. By the way, initially Russian customs should start using UAD forms on January 1, 2006. However, the on-going administrative reform could postpone the date.
Experts believe that getting from decision to joining the Convention takes 2-3 years. As early as in 2004 a group of the European Unions Commission worked in the RF State Customs Service and analyzed and compared Russian and EU legislation and Customs IT system. The RF State Customs Service is waiting for a plan of measures on existing differences preventing from further development elimination, which is to be passed to the Ministry of economic development and trade.
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    [DETAIL_TEXT] => On February 18-19, 2005, in Svetlogorsk (Kaliningrad region) the transport ministers of Russia, Germany, Lithuania and Poland met. However, right before the negotiations Lietuvos Gelezinkeliai (Lithuanian railways) announced 15% tariff rise since March 15, 2005, for almost all cargo transported to/from Kaliningrad. Freight transportation tariffs increase was also affected by insurance price growth, despite EU obligation not to change transit terms for cargo passing Lithuania after the country's joining the Union. RF transport minister Igor Levitin offered the Lithuanian party to meet engagement and postpone new tariff implementation. Lithuania agreed to put off tariff rise.
Ministers' negotiations resulted in joint declaration, envisaging transport infrastructure development in southern part of the Baltic sea, including international transport corridors. Also, Russian-Lithuanian group for solutions of such problems as Lithuanian transit, reasonable rail tariff implementation and sea ports cargo supply was established. Thus, the ministers pointed out key problems on the way of Russian transport system integration into European one and started new stage of cooperation in the transport area in the Baltic region.

Background
In the summer of 2003 RF President Vladimir Putin, having visited the Kaliningrad region, charged the Government with instruction to activate negotiations with the EU on freight transit between the region and the rest of Russia.
RF State Customs Committee (predecessor of the Federal Customs Service) was instructed to start working in the subcommittee on customs RF - EU cooperation. After that the problem of Kaliningrad transit was discussed and key details of the "Kaliningrad transit scheme" were set by the heads of the RF State Customs Committee and the the Commission's Taxation and Customs Union Directorate-Generalas well as experts.
Thus, Russian customs having launched automatic system "Kaliningrad transit" and performed Common Transit transit procedure, de-facto started operating as a EU country customs, which is unexampled for a non-EU member. Also RF customs joined the European NCTS (New Computerized Transit System).
When the parties realized necessity to conclude written agreement, in Vilnius representatives of the RF State Customs Committee, the Commission of the European Communities and of Lithuania, Latvia, Estonia and Poland met. The so-called "Vilnius agreement" signed on December 17-18, 2003, became the base of the Kaliningrad transit system, particularly, Decree No370 of the RF State Customs Committee on customs control organizing and Decree No437 on IT as well as respective documents in Lithuania.
It's worth noting that today 90% of Russia-Kaliningrad cargo turnover is transported by railway, while Kaliningrad transit system is available only for road carriers yet. This is explained by customs expert position: railway performs smoothly so there is no necessity to implement Kaliningrad transit system for rail transport.





Lithuanian customs brokers take the market
Today a carrier is able to come to a Lithuanian customs border check-point, show cargo and transportation documents. However, he faces several difficulties. Particularly, documents should be translated into Lithuanian and a Russian carrier not speaking the language has to apply to a Lithuanian customs broker. A customs declaration translation costs some USD 40 per sheet. Moreover, a carrier looses time as registration is performed at the border crossing check-point.
A carrier could use a TIR procedure, however it is even less suitable and only 1% of road carriers does it. It is explained by the fact that for getting a TIR Carnet a carrier has to join the International road carriers association paying an entrance fee worth some USD 8 thousand and operate specially equipped vehicles.
The Kaliningrad transit procedure enables to set data into NCTS in the in-country customs not reaching a border. The system sets ID and an officer finds the information and prints it for a carrier to prove his legal stay in Lithuana. The system excludes even a Russian customs broker.
A crucial point also is that the system resolves the translation problem. Basing on the cargo data in the transport documents a Russian officer set a cargo code (4 symbols for a Harmonized system) and the programme translates information into Lithuanian. Thus, in Lithuania information is got in the state's language and a carrier is not involved in the translation procedure.

EU asks for guarantees
However, despite significant advantages of the Kaliningrad transit scheme today it is used by not over 5% of carriers. The situation is complicated as a carrier should have guarantees of Lithuania or any other EU-member. A Russian carrier can not get the guarantee without leaving the country. Moreover, Russian insurance legislation prohibits Russian organizations to issue insurances of foreign countries.
In order to resolve the problem on January 19, 2005, Lithuanian customs implemented an additional guarantee NCTS module. This means that information about guarantee issued in Lithuania is set right in Lithuanian customs body. The system gives an ID and PIN-code. Thus, a guarantee issued in Lithuania has not to be mailed.
However, cooperation of Lithuanian and Russian insurance companies and banks should be arranged in order to solve the problem. But the only case when these commercial companies cooperate is when they could realize profitability of that. In late October of 2004 the RF Federal Customs Service together with Lithuanian customs department held a meeting in Kaliningrad with banks and insurance companies of both countries. Another meeting of this sort was in December of 2004 in Vilnius, but only the most active and interested companies were represented.
It is expected that International road carriers association and their Lithuanian colleagues - association Linava and RESO-Garantiya, which has a subsidiary in Lithuania RESO-Europe, will be the pioneers using the Kaliningrad transit scheme. If evaluate interest of the companies shown in the area, we can forecast that in 2005 more carriers will use the scheme.

Common Transit Procedure?
The key objective is implementation the Common Transit procedure in Russia. In order to realize it the RF Federal Customs Service introduced its proposals to the Ministry of economic development and trade and the head of the latter Gherman Gref informed that issues are being worked out. Today a half of Russia's goods turnover is taken by Russia-EU trade. 30 countries are involved in the Common Transit procedure.
The convention "On Common Transit procedure" approved in 1987 is can't be joined without invitation. One of key terms is country's legislation harmonizing with the convention requirements. Apart from this, a country should also join the convention "On simplification of goods trade" (1987). Speaking about the latter, its the only subject is setting form of a unified administrative document (UAD) corresponding to Russian customs declaration. Thus, the Russia's first step on the way to EU transit procedure is decision to use UAD. By the way, initially Russian customs should start using UAD forms on January 1, 2006. However, the on-going administrative reform could postpone the date.
Experts believe that getting from decision to joining the Convention takes 2-3 years. As early as in 2004 a group of the European Unions Commission worked in the RF State Customs Service and analyzed and compared Russian and EU legislation and Customs IT system. The RF State Customs Service is waiting for a plan of measures on existing differences preventing from further development elimination, which is to be passed to the Ministry of economic development and trade.
[~DETAIL_TEXT] => On February 18-19, 2005, in Svetlogorsk (Kaliningrad region) the transport ministers of Russia, Germany, Lithuania and Poland met. However, right before the negotiations Lietuvos Gelezinkeliai (Lithuanian railways) announced 15% tariff rise since March 15, 2005, for almost all cargo transported to/from Kaliningrad. Freight transportation tariffs increase was also affected by insurance price growth, despite EU obligation not to change transit terms for cargo passing Lithuania after the country's joining the Union. RF transport minister Igor Levitin offered the Lithuanian party to meet engagement and postpone new tariff implementation. Lithuania agreed to put off tariff rise.
Ministers' negotiations resulted in joint declaration, envisaging transport infrastructure development in southern part of the Baltic sea, including international transport corridors. Also, Russian-Lithuanian group for solutions of such problems as Lithuanian transit, reasonable rail tariff implementation and sea ports cargo supply was established. Thus, the ministers pointed out key problems on the way of Russian transport system integration into European one and started new stage of cooperation in the transport area in the Baltic region.

Background
In the summer of 2003 RF President Vladimir Putin, having visited the Kaliningrad region, charged the Government with instruction to activate negotiations with the EU on freight transit between the region and the rest of Russia.
RF State Customs Committee (predecessor of the Federal Customs Service) was instructed to start working in the subcommittee on customs RF - EU cooperation. After that the problem of Kaliningrad transit was discussed and key details of the "Kaliningrad transit scheme" were set by the heads of the RF State Customs Committee and the the Commission's Taxation and Customs Union Directorate-Generalas well as experts.
Thus, Russian customs having launched automatic system "Kaliningrad transit" and performed Common Transit transit procedure, de-facto started operating as a EU country customs, which is unexampled for a non-EU member. Also RF customs joined the European NCTS (New Computerized Transit System).
When the parties realized necessity to conclude written agreement, in Vilnius representatives of the RF State Customs Committee, the Commission of the European Communities and of Lithuania, Latvia, Estonia and Poland met. The so-called "Vilnius agreement" signed on December 17-18, 2003, became the base of the Kaliningrad transit system, particularly, Decree No370 of the RF State Customs Committee on customs control organizing and Decree No437 on IT as well as respective documents in Lithuania.
It's worth noting that today 90% of Russia-Kaliningrad cargo turnover is transported by railway, while Kaliningrad transit system is available only for road carriers yet. This is explained by customs expert position: railway performs smoothly so there is no necessity to implement Kaliningrad transit system for rail transport.





Lithuanian customs brokers take the market
Today a carrier is able to come to a Lithuanian customs border check-point, show cargo and transportation documents. However, he faces several difficulties. Particularly, documents should be translated into Lithuanian and a Russian carrier not speaking the language has to apply to a Lithuanian customs broker. A customs declaration translation costs some USD 40 per sheet. Moreover, a carrier looses time as registration is performed at the border crossing check-point.
A carrier could use a TIR procedure, however it is even less suitable and only 1% of road carriers does it. It is explained by the fact that for getting a TIR Carnet a carrier has to join the International road carriers association paying an entrance fee worth some USD 8 thousand and operate specially equipped vehicles.
The Kaliningrad transit procedure enables to set data into NCTS in the in-country customs not reaching a border. The system sets ID and an officer finds the information and prints it for a carrier to prove his legal stay in Lithuana. The system excludes even a Russian customs broker.
A crucial point also is that the system resolves the translation problem. Basing on the cargo data in the transport documents a Russian officer set a cargo code (4 symbols for a Harmonized system) and the programme translates information into Lithuanian. Thus, in Lithuania information is got in the state's language and a carrier is not involved in the translation procedure.

EU asks for guarantees
However, despite significant advantages of the Kaliningrad transit scheme today it is used by not over 5% of carriers. The situation is complicated as a carrier should have guarantees of Lithuania or any other EU-member. A Russian carrier can not get the guarantee without leaving the country. Moreover, Russian insurance legislation prohibits Russian organizations to issue insurances of foreign countries.
In order to resolve the problem on January 19, 2005, Lithuanian customs implemented an additional guarantee NCTS module. This means that information about guarantee issued in Lithuania is set right in Lithuanian customs body. The system gives an ID and PIN-code. Thus, a guarantee issued in Lithuania has not to be mailed.
However, cooperation of Lithuanian and Russian insurance companies and banks should be arranged in order to solve the problem. But the only case when these commercial companies cooperate is when they could realize profitability of that. In late October of 2004 the RF Federal Customs Service together with Lithuanian customs department held a meeting in Kaliningrad with banks and insurance companies of both countries. Another meeting of this sort was in December of 2004 in Vilnius, but only the most active and interested companies were represented.
It is expected that International road carriers association and their Lithuanian colleagues - association Linava and RESO-Garantiya, which has a subsidiary in Lithuania RESO-Europe, will be the pioneers using the Kaliningrad transit scheme. If evaluate interest of the companies shown in the area, we can forecast that in 2005 more carriers will use the scheme.

Common Transit Procedure?
The key objective is implementation the Common Transit procedure in Russia. In order to realize it the RF Federal Customs Service introduced its proposals to the Ministry of economic development and trade and the head of the latter Gherman Gref informed that issues are being worked out. Today a half of Russia's goods turnover is taken by Russia-EU trade. 30 countries are involved in the Common Transit procedure.
The convention "On Common Transit procedure" approved in 1987 is can't be joined without invitation. One of key terms is country's legislation harmonizing with the convention requirements. Apart from this, a country should also join the convention "On simplification of goods trade" (1987). Speaking about the latter, its the only subject is setting form of a unified administrative document (UAD) corresponding to Russian customs declaration. Thus, the Russia's first step on the way to EU transit procedure is decision to use UAD. By the way, initially Russian customs should start using UAD forms on January 1, 2006. However, the on-going administrative reform could postpone the date.
Experts believe that getting from decision to joining the Convention takes 2-3 years. As early as in 2004 a group of the European Unions Commission worked in the RF State Customs Service and analyzed and compared Russian and EU legislation and Customs IT system. The RF State Customs Service is waiting for a plan of measures on existing differences preventing from further development elimination, which is to be passed to the Ministry of economic development and trade.
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РЖД-Партнер

Security Services of Russian Railways: Yesterday, Today and Tomorrow

Boris Borodin, General Director of the "Vedomstvennaya Okhrana MPS of Russia"
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    [DETAIL_TEXT] => The Federal State Enterprise "Vedomstvennaya Okhrana MPS of Russia" rendering services on the railway cargo guarding and ensuring fire safety of the railway objects throughout Russian territory is currently the largest company in this industry.

History of the security service: XIX-XXI centuries
...The guarding of cargo on the Russian state railways was carried out according to the Russian Railways Common Statute of 1879 and was entrusted to the conductor teams, watchmen, repairmen, roadmasters, station-masters, railway gendarmerie, as well as, upon the station-masters order, to other "agents".
The economic and political crisis caused by the protracted World War I resulted in failures of the well-tuned railway security system. In 1916 the state of martial law was declared on the Russian railway. Maintenance of ":the outer order, respectability and the public safety" came to be provided by the units of the railway security endowed with the same rights and duties, as the railway police.
The 1917 revolution and civil war resulted in the wrecking of the railway, the security system in particular, which caused numerous thefts in the transportation process. Terrorist and diversionary acts, largely such as arson of railway objects - bridges, warehouses, storehouses, loaded carriages, grew common. Therefore after the victory of the Soviet regime the restoration of the railway normal functioning became a priority of the Bolshevik Russian Government.
In February 1918 the decree of the People's Commissars Council (SNK) founded the All-Russian Interdepartmental Extraordinary Commission on the Railways Protection that came to include all the existing specialized organizations.
On 26 March 1918 another SNK decree "On the Administration Centralization, Railway Protection and Throughput Increase" created the specialized units of the railway military security.
In April 1918 was issued the decree "On Taking State Measures to Fight Fire". For the railway personnel this was the beginning of a huge work on forming a large and branchy fire fighting system.
On 4 March 1921 the Council of Labour and Defense entitled the military department to guard the railway, and the forces of the All-Russian Extraordinary Commission (VCK) - the railway stations and objects.
On 15 April 1921 the People's Commissariat of Railways (NKPS) was headed by Felix Dzerzhinsky. As a result the force function and the railway management got concentrated in the same hands and there was founded the special Transbureau VCK.
The 9 December 1921 became a notable date for the Railway military security, as this day VCIK (All-Russian Central Executive Committee) and the Council of Labour and Defense (STO) issued the decree "On the guarding of warehouses, storehouses, as well as other objects on railway and water routes". The degree determined our service' birthday, when it became an independent subdivision NKPS (MPS).
In 1922 there started the purposeful fight against thefts during the transportation process. In the course of commission's inspections on the Moscow-Kazan railway there were found dozens of thousand of commercial acts. At the same time in Moscow were found secret commercial companies accepting and selling stolen cargoes.
As eliminating such companies could not resolve the problem in general, the NKPS order No 1310 of 26 February 1923 introduced the guards' personal responsibility for taking measures to prevent thefts. At the same time the conductor teams were entitled to protect the trains in their responsibility and to pass them on receipt to the guard upon arriving at a station; it became necessary to attract the service of patrol dogs.
On 21 March 1926 in Moscow took place the inauguration of a school for communications officers, in which in early 1927 was organized a department on training top and higher officers to be further divided into courses of the supreme staff in command and the department for the top officers.
In 1932 there opened the courses to train the experts on patrol dogs. The first class of 100 graduates left the school on 3 July 1933. Patrol dogs were used in the sentry, and sometimes were trained for research and patrol services.
During the Great Patriotic War the railway transport served to ensure uninterrupted army supply. All the significant objects - bridges, tunnels, stations, warehouses, telegraph and telephone stations and communications were controlled by NKVD forces. Almost all of the security service' snipers were mobilized to the front-line forces or volunteered to the front. The shooting communications security was divided into the armed watch and the NKPS militarized fire fighting service.
Before and during the war the militarized security service underwent a number of organizational and structural changes depending on the tasks set before it.
Since 1951 the MPS militarized security service became the railway's only armed security. It carries out the cargo protection on the stations and on route; providing for the admission regime on the railway stations, guarding the especially important technical objects and special facilities, ensuring the fire safety of the railway sector in general, and other tasks.

Priceless contribution to the railway operation
In the modern conditions the Federal State Enterprise "Vedomstvennaya Okhrana MPS of Russia" (Security Service) renders services on the railway cargo protection and ensuring fire safety of railway objects throughout the country territory.
The Security Service retains its legal and organizational status of a state enterprise carrying out its functions on the legal basis pursuing the state interests, as well as those of RZD, consigners and consignees.
The enterprise subdivisions operations fit organically the freight transportation technology, the traffic safety ensuring system and other elements of the common transportation process. The guard units work not simply together with the railway companies, but are in fact part of the freight transportation technological process.
At present our enterprise has some 60 thousand of qualified experts, the modern end use material and technical basis, stable salary and social guarantees. In the market and competition conditions the accumulated experience on protecting the world's largest infrastructure and transportation process in the greatest value.
All the operations to prevent thefts during railway transportation are entrusted to the specialized groups joined with militsia (SSGs). In 2004 SSGs prevented over 3 thousand of thefts for the total of RUR 14.5 million.
The specialized groups carry out active work to make accountable those guilty of administrative and other law violations in the transportation process. In 2004 there were detained 3750 of thieves and some 400 thousand of those having committed administrative violations.
Thanks to the Security Service staff vigilance only in the past year there were prevented and solved over 3,8 thousand of thefts of carried cargo and railway transport property for over RUR 19 million. About 7 thousand people were detained for the indicated crimes. Against the past year the crime detection increased by 13% up to 89%.
In the indicated period the fire safety units reacted to 3 thousand alarms, liquidated over 470 of emergency situations with dangerous cargoes.
It is hard to overestimate the contribution of the Security Service in ensuring uninterrupted operation of the Russian railway transport, being the industry of strategic importance for the country's economy. It would suffice to say that according to the List approved by the RF Government Regulation the Security Service is responsible for over 300 artificial objects, among which are such unique ones as the BAM's Severo-Muysk tunnel - the longest in Asia, the two-storied bridge via Amur on the Transsib. And there are several dozens of such objects.
3 thousand of patrol dogs assist the railway transport guards, part of them being trained to find explosives and ammunition, following the trail. They are widely used to guard the cargoes being carried and in research operations, by guarding of the most significant objects of the railway transport - bridges, warehouses, deposits.
With the help of patrol dogs in 2004 there were prevented and solved 657 thefts for the total of RUR1.4 million 944 criminals were detained, and over 40 thousand of railway transport order violators. 13.2 th. trains were escorted.

New technologies: all is under control
Ensuring cargo and property safety is impossible without settling the problem of the security service technical equipment.
56% of the most important objects are equipped with the technical security means. In 2004 according to the Plan of railway transport technical security equipment provides for implementing technical security means on 108 objects of 388,2 mln. rubles total cost.
The security units pay special attention to introducing innovative information technologies, work on automating workplaces, creating local networks and connecting railways to the automated systems.
To automate the system of the Security Service management, efficient processing of data on cargoes movement in 2003 there was developed and experimentally implemented the automated management system "Railway Transport Security Service" (ASU-CUO).
A wide range of duties of the security personnel in the matters of ensuring the throughput and internal regime, cargoes and objects protection, preventing crimes and administrative violations requires from them professional and legal knowledge, physical training, ability to withstand criminals and violators.

Guard's strength - in personnel
The Security Service's management pays special attention to the personnel and social aspects of the security units.
Constant multi-aspect personnel training, improvement of the professional skills and knowledge is the most significant aspect of work with personnel.
The central link of the manpower policy is the common system of uninterrupted training, retraining and professional development of the security personnel. Only in 2003-2004 academic year there were trained and retrained 8457 experts, including 1067 in the study centers, 2109 - in the training centers and 3270 - in units.
At present the training, retraining and professional development of the Security Service personnel is carried out in the Central, Uralsky, Sibirsky and Far-Eastern regions on the basis of the regional training centers.
The system of social security and the personnel guarantees is aimed at tightening their connection with the organization, improving the micro-climate in the units, increasing the role of image and authority. The company provides retirement payments, payments to the veteran-guards and honoured-fund pensioners, non-state pensions, payments for the medical services and sanatorium-and-spa treatment. The social guarantees are supposed to be provided as the organization's bonuses.
It is impossible to ignore the special attention to the organization further development and expansion of its participation in the industry reform process on the part of the head of the Federal Agency of Railway Transport M.P.Akulov and the RF Minister of Transport I.E.Levitin.
President of the Russian Railway JSC (RZD) G.M.Fadeyev, a highly experienced manager and a state-scale thinker, also gives the organization a lot of support.

Keeping up to date
Market is market and one needs to be competitive. The enterprise developed a complex program of the its development for 2004-2006. It works on the improvement of the company's structure and composition: at present it corresponds to RZD needs, but tomorrow we are ready to adapt it to fit the structure of the corporation's subsidiaries.
We continue working on making the tariffs for our services, on the one hand, stable in amount and validity term, but on the other, - flexible to meet the market situation requirement. This is achieved primarily by means of improving the technology of our joined work, cutting production and time costs, increasing the labour productivity in general.
Our main goal is carrying out the tasks set before us by the RF legislation and, naturally, by meeting our contract responsibilities before our customers.
The company's personnel will go on giving all their efforts, knowledge, skills, energy and talents to further improve and develop the service.
[~DETAIL_TEXT] => The Federal State Enterprise "Vedomstvennaya Okhrana MPS of Russia" rendering services on the railway cargo guarding and ensuring fire safety of the railway objects throughout Russian territory is currently the largest company in this industry.

History of the security service: XIX-XXI centuries
...The guarding of cargo on the Russian state railways was carried out according to the Russian Railways Common Statute of 1879 and was entrusted to the conductor teams, watchmen, repairmen, roadmasters, station-masters, railway gendarmerie, as well as, upon the station-masters order, to other "agents".
The economic and political crisis caused by the protracted World War I resulted in failures of the well-tuned railway security system. In 1916 the state of martial law was declared on the Russian railway. Maintenance of ":the outer order, respectability and the public safety" came to be provided by the units of the railway security endowed with the same rights and duties, as the railway police.
The 1917 revolution and civil war resulted in the wrecking of the railway, the security system in particular, which caused numerous thefts in the transportation process. Terrorist and diversionary acts, largely such as arson of railway objects - bridges, warehouses, storehouses, loaded carriages, grew common. Therefore after the victory of the Soviet regime the restoration of the railway normal functioning became a priority of the Bolshevik Russian Government.
In February 1918 the decree of the People's Commissars Council (SNK) founded the All-Russian Interdepartmental Extraordinary Commission on the Railways Protection that came to include all the existing specialized organizations.
On 26 March 1918 another SNK decree "On the Administration Centralization, Railway Protection and Throughput Increase" created the specialized units of the railway military security.
In April 1918 was issued the decree "On Taking State Measures to Fight Fire". For the railway personnel this was the beginning of a huge work on forming a large and branchy fire fighting system.
On 4 March 1921 the Council of Labour and Defense entitled the military department to guard the railway, and the forces of the All-Russian Extraordinary Commission (VCK) - the railway stations and objects.
On 15 April 1921 the People's Commissariat of Railways (NKPS) was headed by Felix Dzerzhinsky. As a result the force function and the railway management got concentrated in the same hands and there was founded the special Transbureau VCK.
The 9 December 1921 became a notable date for the Railway military security, as this day VCIK (All-Russian Central Executive Committee) and the Council of Labour and Defense (STO) issued the decree "On the guarding of warehouses, storehouses, as well as other objects on railway and water routes". The degree determined our service' birthday, when it became an independent subdivision NKPS (MPS).
In 1922 there started the purposeful fight against thefts during the transportation process. In the course of commission's inspections on the Moscow-Kazan railway there were found dozens of thousand of commercial acts. At the same time in Moscow were found secret commercial companies accepting and selling stolen cargoes.
As eliminating such companies could not resolve the problem in general, the NKPS order No 1310 of 26 February 1923 introduced the guards' personal responsibility for taking measures to prevent thefts. At the same time the conductor teams were entitled to protect the trains in their responsibility and to pass them on receipt to the guard upon arriving at a station; it became necessary to attract the service of patrol dogs.
On 21 March 1926 in Moscow took place the inauguration of a school for communications officers, in which in early 1927 was organized a department on training top and higher officers to be further divided into courses of the supreme staff in command and the department for the top officers.
In 1932 there opened the courses to train the experts on patrol dogs. The first class of 100 graduates left the school on 3 July 1933. Patrol dogs were used in the sentry, and sometimes were trained for research and patrol services.
During the Great Patriotic War the railway transport served to ensure uninterrupted army supply. All the significant objects - bridges, tunnels, stations, warehouses, telegraph and telephone stations and communications were controlled by NKVD forces. Almost all of the security service' snipers were mobilized to the front-line forces or volunteered to the front. The shooting communications security was divided into the armed watch and the NKPS militarized fire fighting service.
Before and during the war the militarized security service underwent a number of organizational and structural changes depending on the tasks set before it.
Since 1951 the MPS militarized security service became the railway's only armed security. It carries out the cargo protection on the stations and on route; providing for the admission regime on the railway stations, guarding the especially important technical objects and special facilities, ensuring the fire safety of the railway sector in general, and other tasks.

Priceless contribution to the railway operation
In the modern conditions the Federal State Enterprise "Vedomstvennaya Okhrana MPS of Russia" (Security Service) renders services on the railway cargo protection and ensuring fire safety of railway objects throughout the country territory.
The Security Service retains its legal and organizational status of a state enterprise carrying out its functions on the legal basis pursuing the state interests, as well as those of RZD, consigners and consignees.
The enterprise subdivisions operations fit organically the freight transportation technology, the traffic safety ensuring system and other elements of the common transportation process. The guard units work not simply together with the railway companies, but are in fact part of the freight transportation technological process.
At present our enterprise has some 60 thousand of qualified experts, the modern end use material and technical basis, stable salary and social guarantees. In the market and competition conditions the accumulated experience on protecting the world's largest infrastructure and transportation process in the greatest value.
All the operations to prevent thefts during railway transportation are entrusted to the specialized groups joined with militsia (SSGs). In 2004 SSGs prevented over 3 thousand of thefts for the total of RUR 14.5 million.
The specialized groups carry out active work to make accountable those guilty of administrative and other law violations in the transportation process. In 2004 there were detained 3750 of thieves and some 400 thousand of those having committed administrative violations.
Thanks to the Security Service staff vigilance only in the past year there were prevented and solved over 3,8 thousand of thefts of carried cargo and railway transport property for over RUR 19 million. About 7 thousand people were detained for the indicated crimes. Against the past year the crime detection increased by 13% up to 89%.
In the indicated period the fire safety units reacted to 3 thousand alarms, liquidated over 470 of emergency situations with dangerous cargoes.
It is hard to overestimate the contribution of the Security Service in ensuring uninterrupted operation of the Russian railway transport, being the industry of strategic importance for the country's economy. It would suffice to say that according to the List approved by the RF Government Regulation the Security Service is responsible for over 300 artificial objects, among which are such unique ones as the BAM's Severo-Muysk tunnel - the longest in Asia, the two-storied bridge via Amur on the Transsib. And there are several dozens of such objects.
3 thousand of patrol dogs assist the railway transport guards, part of them being trained to find explosives and ammunition, following the trail. They are widely used to guard the cargoes being carried and in research operations, by guarding of the most significant objects of the railway transport - bridges, warehouses, deposits.
With the help of patrol dogs in 2004 there were prevented and solved 657 thefts for the total of RUR1.4 million 944 criminals were detained, and over 40 thousand of railway transport order violators. 13.2 th. trains were escorted.

New technologies: all is under control
Ensuring cargo and property safety is impossible without settling the problem of the security service technical equipment.
56% of the most important objects are equipped with the technical security means. In 2004 according to the Plan of railway transport technical security equipment provides for implementing technical security means on 108 objects of 388,2 mln. rubles total cost.
The security units pay special attention to introducing innovative information technologies, work on automating workplaces, creating local networks and connecting railways to the automated systems.
To automate the system of the Security Service management, efficient processing of data on cargoes movement in 2003 there was developed and experimentally implemented the automated management system "Railway Transport Security Service" (ASU-CUO).
A wide range of duties of the security personnel in the matters of ensuring the throughput and internal regime, cargoes and objects protection, preventing crimes and administrative violations requires from them professional and legal knowledge, physical training, ability to withstand criminals and violators.

Guard's strength - in personnel
The Security Service's management pays special attention to the personnel and social aspects of the security units.
Constant multi-aspect personnel training, improvement of the professional skills and knowledge is the most significant aspect of work with personnel.
The central link of the manpower policy is the common system of uninterrupted training, retraining and professional development of the security personnel. Only in 2003-2004 academic year there were trained and retrained 8457 experts, including 1067 in the study centers, 2109 - in the training centers and 3270 - in units.
At present the training, retraining and professional development of the Security Service personnel is carried out in the Central, Uralsky, Sibirsky and Far-Eastern regions on the basis of the regional training centers.
The system of social security and the personnel guarantees is aimed at tightening their connection with the organization, improving the micro-climate in the units, increasing the role of image and authority. The company provides retirement payments, payments to the veteran-guards and honoured-fund pensioners, non-state pensions, payments for the medical services and sanatorium-and-spa treatment. The social guarantees are supposed to be provided as the organization's bonuses.
It is impossible to ignore the special attention to the organization further development and expansion of its participation in the industry reform process on the part of the head of the Federal Agency of Railway Transport M.P.Akulov and the RF Minister of Transport I.E.Levitin.
President of the Russian Railway JSC (RZD) G.M.Fadeyev, a highly experienced manager and a state-scale thinker, also gives the organization a lot of support.

Keeping up to date
Market is market and one needs to be competitive. The enterprise developed a complex program of the its development for 2004-2006. It works on the improvement of the company's structure and composition: at present it corresponds to RZD needs, but tomorrow we are ready to adapt it to fit the structure of the corporation's subsidiaries.
We continue working on making the tariffs for our services, on the one hand, stable in amount and validity term, but on the other, - flexible to meet the market situation requirement. This is achieved primarily by means of improving the technology of our joined work, cutting production and time costs, increasing the labour productivity in general.
Our main goal is carrying out the tasks set before us by the RF legislation and, naturally, by meeting our contract responsibilities before our customers.
The company's personnel will go on giving all their efforts, knowledge, skills, energy and talents to further improve and develop the service.
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Boris Borodin, General Director of the "Vedomstvennaya Okhrana MPS of Russia"
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Boris Borodin, General Director of the "Vedomstvennaya Okhrana MPS of Russia"
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    [DETAIL_TEXT] => The Federal State Enterprise "Vedomstvennaya Okhrana MPS of Russia" rendering services on the railway cargo guarding and ensuring fire safety of the railway objects throughout Russian territory is currently the largest company in this industry.

History of the security service: XIX-XXI centuries
...The guarding of cargo on the Russian state railways was carried out according to the Russian Railways Common Statute of 1879 and was entrusted to the conductor teams, watchmen, repairmen, roadmasters, station-masters, railway gendarmerie, as well as, upon the station-masters order, to other "agents".
The economic and political crisis caused by the protracted World War I resulted in failures of the well-tuned railway security system. In 1916 the state of martial law was declared on the Russian railway. Maintenance of ":the outer order, respectability and the public safety" came to be provided by the units of the railway security endowed with the same rights and duties, as the railway police.
The 1917 revolution and civil war resulted in the wrecking of the railway, the security system in particular, which caused numerous thefts in the transportation process. Terrorist and diversionary acts, largely such as arson of railway objects - bridges, warehouses, storehouses, loaded carriages, grew common. Therefore after the victory of the Soviet regime the restoration of the railway normal functioning became a priority of the Bolshevik Russian Government.
In February 1918 the decree of the People's Commissars Council (SNK) founded the All-Russian Interdepartmental Extraordinary Commission on the Railways Protection that came to include all the existing specialized organizations.
On 26 March 1918 another SNK decree "On the Administration Centralization, Railway Protection and Throughput Increase" created the specialized units of the railway military security.
In April 1918 was issued the decree "On Taking State Measures to Fight Fire". For the railway personnel this was the beginning of a huge work on forming a large and branchy fire fighting system.
On 4 March 1921 the Council of Labour and Defense entitled the military department to guard the railway, and the forces of the All-Russian Extraordinary Commission (VCK) - the railway stations and objects.
On 15 April 1921 the People's Commissariat of Railways (NKPS) was headed by Felix Dzerzhinsky. As a result the force function and the railway management got concentrated in the same hands and there was founded the special Transbureau VCK.
The 9 December 1921 became a notable date for the Railway military security, as this day VCIK (All-Russian Central Executive Committee) and the Council of Labour and Defense (STO) issued the decree "On the guarding of warehouses, storehouses, as well as other objects on railway and water routes". The degree determined our service' birthday, when it became an independent subdivision NKPS (MPS).
In 1922 there started the purposeful fight against thefts during the transportation process. In the course of commission's inspections on the Moscow-Kazan railway there were found dozens of thousand of commercial acts. At the same time in Moscow were found secret commercial companies accepting and selling stolen cargoes.
As eliminating such companies could not resolve the problem in general, the NKPS order No 1310 of 26 February 1923 introduced the guards' personal responsibility for taking measures to prevent thefts. At the same time the conductor teams were entitled to protect the trains in their responsibility and to pass them on receipt to the guard upon arriving at a station; it became necessary to attract the service of patrol dogs.
On 21 March 1926 in Moscow took place the inauguration of a school for communications officers, in which in early 1927 was organized a department on training top and higher officers to be further divided into courses of the supreme staff in command and the department for the top officers.
In 1932 there opened the courses to train the experts on patrol dogs. The first class of 100 graduates left the school on 3 July 1933. Patrol dogs were used in the sentry, and sometimes were trained for research and patrol services.
During the Great Patriotic War the railway transport served to ensure uninterrupted army supply. All the significant objects - bridges, tunnels, stations, warehouses, telegraph and telephone stations and communications were controlled by NKVD forces. Almost all of the security service' snipers were mobilized to the front-line forces or volunteered to the front. The shooting communications security was divided into the armed watch and the NKPS militarized fire fighting service.
Before and during the war the militarized security service underwent a number of organizational and structural changes depending on the tasks set before it.
Since 1951 the MPS militarized security service became the railway's only armed security. It carries out the cargo protection on the stations and on route; providing for the admission regime on the railway stations, guarding the especially important technical objects and special facilities, ensuring the fire safety of the railway sector in general, and other tasks.

Priceless contribution to the railway operation
In the modern conditions the Federal State Enterprise "Vedomstvennaya Okhrana MPS of Russia" (Security Service) renders services on the railway cargo protection and ensuring fire safety of railway objects throughout the country territory.
The Security Service retains its legal and organizational status of a state enterprise carrying out its functions on the legal basis pursuing the state interests, as well as those of RZD, consigners and consignees.
The enterprise subdivisions operations fit organically the freight transportation technology, the traffic safety ensuring system and other elements of the common transportation process. The guard units work not simply together with the railway companies, but are in fact part of the freight transportation technological process.
At present our enterprise has some 60 thousand of qualified experts, the modern end use material and technical basis, stable salary and social guarantees. In the market and competition conditions the accumulated experience on protecting the world's largest infrastructure and transportation process in the greatest value.
All the operations to prevent thefts during railway transportation are entrusted to the specialized groups joined with militsia (SSGs). In 2004 SSGs prevented over 3 thousand of thefts for the total of RUR 14.5 million.
The specialized groups carry out active work to make accountable those guilty of administrative and other law violations in the transportation process. In 2004 there were detained 3750 of thieves and some 400 thousand of those having committed administrative violations.
Thanks to the Security Service staff vigilance only in the past year there were prevented and solved over 3,8 thousand of thefts of carried cargo and railway transport property for over RUR 19 million. About 7 thousand people were detained for the indicated crimes. Against the past year the crime detection increased by 13% up to 89%.
In the indicated period the fire safety units reacted to 3 thousand alarms, liquidated over 470 of emergency situations with dangerous cargoes.
It is hard to overestimate the contribution of the Security Service in ensuring uninterrupted operation of the Russian railway transport, being the industry of strategic importance for the country's economy. It would suffice to say that according to the List approved by the RF Government Regulation the Security Service is responsible for over 300 artificial objects, among which are such unique ones as the BAM's Severo-Muysk tunnel - the longest in Asia, the two-storied bridge via Amur on the Transsib. And there are several dozens of such objects.
3 thousand of patrol dogs assist the railway transport guards, part of them being trained to find explosives and ammunition, following the trail. They are widely used to guard the cargoes being carried and in research operations, by guarding of the most significant objects of the railway transport - bridges, warehouses, deposits.
With the help of patrol dogs in 2004 there were prevented and solved 657 thefts for the total of RUR1.4 million 944 criminals were detained, and over 40 thousand of railway transport order violators. 13.2 th. trains were escorted.

New technologies: all is under control
Ensuring cargo and property safety is impossible without settling the problem of the security service technical equipment.
56% of the most important objects are equipped with the technical security means. In 2004 according to the Plan of railway transport technical security equipment provides for implementing technical security means on 108 objects of 388,2 mln. rubles total cost.
The security units pay special attention to introducing innovative information technologies, work on automating workplaces, creating local networks and connecting railways to the automated systems.
To automate the system of the Security Service management, efficient processing of data on cargoes movement in 2003 there was developed and experimentally implemented the automated management system "Railway Transport Security Service" (ASU-CUO).
A wide range of duties of the security personnel in the matters of ensuring the throughput and internal regime, cargoes and objects protection, preventing crimes and administrative violations requires from them professional and legal knowledge, physical training, ability to withstand criminals and violators.

Guard's strength - in personnel
The Security Service's management pays special attention to the personnel and social aspects of the security units.
Constant multi-aspect personnel training, improvement of the professional skills and knowledge is the most significant aspect of work with personnel.
The central link of the manpower policy is the common system of uninterrupted training, retraining and professional development of the security personnel. Only in 2003-2004 academic year there were trained and retrained 8457 experts, including 1067 in the study centers, 2109 - in the training centers and 3270 - in units.
At present the training, retraining and professional development of the Security Service personnel is carried out in the Central, Uralsky, Sibirsky and Far-Eastern regions on the basis of the regional training centers.
The system of social security and the personnel guarantees is aimed at tightening their connection with the organization, improving the micro-climate in the units, increasing the role of image and authority. The company provides retirement payments, payments to the veteran-guards and honoured-fund pensioners, non-state pensions, payments for the medical services and sanatorium-and-spa treatment. The social guarantees are supposed to be provided as the organization's bonuses.
It is impossible to ignore the special attention to the organization further development and expansion of its participation in the industry reform process on the part of the head of the Federal Agency of Railway Transport M.P.Akulov and the RF Minister of Transport I.E.Levitin.
President of the Russian Railway JSC (RZD) G.M.Fadeyev, a highly experienced manager and a state-scale thinker, also gives the organization a lot of support.

Keeping up to date
Market is market and one needs to be competitive. The enterprise developed a complex program of the its development for 2004-2006. It works on the improvement of the company's structure and composition: at present it corresponds to RZD needs, but tomorrow we are ready to adapt it to fit the structure of the corporation's subsidiaries.
We continue working on making the tariffs for our services, on the one hand, stable in amount and validity term, but on the other, - flexible to meet the market situation requirement. This is achieved primarily by means of improving the technology of our joined work, cutting production and time costs, increasing the labour productivity in general.
Our main goal is carrying out the tasks set before us by the RF legislation and, naturally, by meeting our contract responsibilities before our customers.
The company's personnel will go on giving all their efforts, knowledge, skills, energy and talents to further improve and develop the service.
[~DETAIL_TEXT] => The Federal State Enterprise "Vedomstvennaya Okhrana MPS of Russia" rendering services on the railway cargo guarding and ensuring fire safety of the railway objects throughout Russian territory is currently the largest company in this industry.

History of the security service: XIX-XXI centuries
...The guarding of cargo on the Russian state railways was carried out according to the Russian Railways Common Statute of 1879 and was entrusted to the conductor teams, watchmen, repairmen, roadmasters, station-masters, railway gendarmerie, as well as, upon the station-masters order, to other "agents".
The economic and political crisis caused by the protracted World War I resulted in failures of the well-tuned railway security system. In 1916 the state of martial law was declared on the Russian railway. Maintenance of ":the outer order, respectability and the public safety" came to be provided by the units of the railway security endowed with the same rights and duties, as the railway police.
The 1917 revolution and civil war resulted in the wrecking of the railway, the security system in particular, which caused numerous thefts in the transportation process. Terrorist and diversionary acts, largely such as arson of railway objects - bridges, warehouses, storehouses, loaded carriages, grew common. Therefore after the victory of the Soviet regime the restoration of the railway normal functioning became a priority of the Bolshevik Russian Government.
In February 1918 the decree of the People's Commissars Council (SNK) founded the All-Russian Interdepartmental Extraordinary Commission on the Railways Protection that came to include all the existing specialized organizations.
On 26 March 1918 another SNK decree "On the Administration Centralization, Railway Protection and Throughput Increase" created the specialized units of the railway military security.
In April 1918 was issued the decree "On Taking State Measures to Fight Fire". For the railway personnel this was the beginning of a huge work on forming a large and branchy fire fighting system.
On 4 March 1921 the Council of Labour and Defense entitled the military department to guard the railway, and the forces of the All-Russian Extraordinary Commission (VCK) - the railway stations and objects.
On 15 April 1921 the People's Commissariat of Railways (NKPS) was headed by Felix Dzerzhinsky. As a result the force function and the railway management got concentrated in the same hands and there was founded the special Transbureau VCK.
The 9 December 1921 became a notable date for the Railway military security, as this day VCIK (All-Russian Central Executive Committee) and the Council of Labour and Defense (STO) issued the decree "On the guarding of warehouses, storehouses, as well as other objects on railway and water routes". The degree determined our service' birthday, when it became an independent subdivision NKPS (MPS).
In 1922 there started the purposeful fight against thefts during the transportation process. In the course of commission's inspections on the Moscow-Kazan railway there were found dozens of thousand of commercial acts. At the same time in Moscow were found secret commercial companies accepting and selling stolen cargoes.
As eliminating such companies could not resolve the problem in general, the NKPS order No 1310 of 26 February 1923 introduced the guards' personal responsibility for taking measures to prevent thefts. At the same time the conductor teams were entitled to protect the trains in their responsibility and to pass them on receipt to the guard upon arriving at a station; it became necessary to attract the service of patrol dogs.
On 21 March 1926 in Moscow took place the inauguration of a school for communications officers, in which in early 1927 was organized a department on training top and higher officers to be further divided into courses of the supreme staff in command and the department for the top officers.
In 1932 there opened the courses to train the experts on patrol dogs. The first class of 100 graduates left the school on 3 July 1933. Patrol dogs were used in the sentry, and sometimes were trained for research and patrol services.
During the Great Patriotic War the railway transport served to ensure uninterrupted army supply. All the significant objects - bridges, tunnels, stations, warehouses, telegraph and telephone stations and communications were controlled by NKVD forces. Almost all of the security service' snipers were mobilized to the front-line forces or volunteered to the front. The shooting communications security was divided into the armed watch and the NKPS militarized fire fighting service.
Before and during the war the militarized security service underwent a number of organizational and structural changes depending on the tasks set before it.
Since 1951 the MPS militarized security service became the railway's only armed security. It carries out the cargo protection on the stations and on route; providing for the admission regime on the railway stations, guarding the especially important technical objects and special facilities, ensuring the fire safety of the railway sector in general, and other tasks.

Priceless contribution to the railway operation
In the modern conditions the Federal State Enterprise "Vedomstvennaya Okhrana MPS of Russia" (Security Service) renders services on the railway cargo protection and ensuring fire safety of railway objects throughout the country territory.
The Security Service retains its legal and organizational status of a state enterprise carrying out its functions on the legal basis pursuing the state interests, as well as those of RZD, consigners and consignees.
The enterprise subdivisions operations fit organically the freight transportation technology, the traffic safety ensuring system and other elements of the common transportation process. The guard units work not simply together with the railway companies, but are in fact part of the freight transportation technological process.
At present our enterprise has some 60 thousand of qualified experts, the modern end use material and technical basis, stable salary and social guarantees. In the market and competition conditions the accumulated experience on protecting the world's largest infrastructure and transportation process in the greatest value.
All the operations to prevent thefts during railway transportation are entrusted to the specialized groups joined with militsia (SSGs). In 2004 SSGs prevented over 3 thousand of thefts for the total of RUR 14.5 million.
The specialized groups carry out active work to make accountable those guilty of administrative and other law violations in the transportation process. In 2004 there were detained 3750 of thieves and some 400 thousand of those having committed administrative violations.
Thanks to the Security Service staff vigilance only in the past year there were prevented and solved over 3,8 thousand of thefts of carried cargo and railway transport property for over RUR 19 million. About 7 thousand people were detained for the indicated crimes. Against the past year the crime detection increased by 13% up to 89%.
In the indicated period the fire safety units reacted to 3 thousand alarms, liquidated over 470 of emergency situations with dangerous cargoes.
It is hard to overestimate the contribution of the Security Service in ensuring uninterrupted operation of the Russian railway transport, being the industry of strategic importance for the country's economy. It would suffice to say that according to the List approved by the RF Government Regulation the Security Service is responsible for over 300 artificial objects, among which are such unique ones as the BAM's Severo-Muysk tunnel - the longest in Asia, the two-storied bridge via Amur on the Transsib. And there are several dozens of such objects.
3 thousand of patrol dogs assist the railway transport guards, part of them being trained to find explosives and ammunition, following the trail. They are widely used to guard the cargoes being carried and in research operations, by guarding of the most significant objects of the railway transport - bridges, warehouses, deposits.
With the help of patrol dogs in 2004 there were prevented and solved 657 thefts for the total of RUR1.4 million 944 criminals were detained, and over 40 thousand of railway transport order violators. 13.2 th. trains were escorted.

New technologies: all is under control
Ensuring cargo and property safety is impossible without settling the problem of the security service technical equipment.
56% of the most important objects are equipped with the technical security means. In 2004 according to the Plan of railway transport technical security equipment provides for implementing technical security means on 108 objects of 388,2 mln. rubles total cost.
The security units pay special attention to introducing innovative information technologies, work on automating workplaces, creating local networks and connecting railways to the automated systems.
To automate the system of the Security Service management, efficient processing of data on cargoes movement in 2003 there was developed and experimentally implemented the automated management system "Railway Transport Security Service" (ASU-CUO).
A wide range of duties of the security personnel in the matters of ensuring the throughput and internal regime, cargoes and objects protection, preventing crimes and administrative violations requires from them professional and legal knowledge, physical training, ability to withstand criminals and violators.

Guard's strength - in personnel
The Security Service's management pays special attention to the personnel and social aspects of the security units.
Constant multi-aspect personnel training, improvement of the professional skills and knowledge is the most significant aspect of work with personnel.
The central link of the manpower policy is the common system of uninterrupted training, retraining and professional development of the security personnel. Only in 2003-2004 academic year there were trained and retrained 8457 experts, including 1067 in the study centers, 2109 - in the training centers and 3270 - in units.
At present the training, retraining and professional development of the Security Service personnel is carried out in the Central, Uralsky, Sibirsky and Far-Eastern regions on the basis of the regional training centers.
The system of social security and the personnel guarantees is aimed at tightening their connection with the organization, improving the micro-climate in the units, increasing the role of image and authority. The company provides retirement payments, payments to the veteran-guards and honoured-fund pensioners, non-state pensions, payments for the medical services and sanatorium-and-spa treatment. The social guarantees are supposed to be provided as the organization's bonuses.
It is impossible to ignore the special attention to the organization further development and expansion of its participation in the industry reform process on the part of the head of the Federal Agency of Railway Transport M.P.Akulov and the RF Minister of Transport I.E.Levitin.
President of the Russian Railway JSC (RZD) G.M.Fadeyev, a highly experienced manager and a state-scale thinker, also gives the organization a lot of support.

Keeping up to date
Market is market and one needs to be competitive. The enterprise developed a complex program of the its development for 2004-2006. It works on the improvement of the company's structure and composition: at present it corresponds to RZD needs, but tomorrow we are ready to adapt it to fit the structure of the corporation's subsidiaries.
We continue working on making the tariffs for our services, on the one hand, stable in amount and validity term, but on the other, - flexible to meet the market situation requirement. This is achieved primarily by means of improving the technology of our joined work, cutting production and time costs, increasing the labour productivity in general.
Our main goal is carrying out the tasks set before us by the RF legislation and, naturally, by meeting our contract responsibilities before our customers.
The company's personnel will go on giving all their efforts, knowledge, skills, energy and talents to further improve and develop the service.
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Boris Borodin, General Director of the "Vedomstvennaya Okhrana MPS of Russia"
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Boris Borodin, General Director of the "Vedomstvennaya Okhrana MPS of Russia"
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РЖД-Партнер

Fraction or Integer?

Recently the Russian transport mechanical engineering market was marked by a strong tendency towards assets of the enterprises involved consolidation and concentration by a series of industrial-investment groups.
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PROS
Similar take-over processes have been characteristic of the western market for the last few decades, while in Russia the attractiveness of the transport mechanical engineering market was realized only recently, though the development dynamics signals the trend towards enterprizes mergers into large engineering holdings will be gaining strength. "Private business is aware that investing in transport and transport engineering is absolutely safe", - ascertained RZD president Gennady Fadeyev.
Besides, the demand on the part of the Russian and CIS natural railway monopolies for the engineering products will only be increasing, as also will the railway transportation volumes. Taking into account the actively developing segment of independent private operators (potentially up to 50% of the total demand), by 2010 the transport mechanical engineering market of Russia and CIS countries will double and constitute about 20% of the world market. Already at present the growth rates in the railway engineering industry are among the highest. Thus in 2003 the segment grew by 35,8%, and in 2004 - by 28%.

NO HOLDS BARRED?
Such a dramatic activisation of the private capital to absorb the engineering assets makes some experts worry about the healthy competition and the possible industry monopolization resulting in some couple of large holdings dictating the market conditions. At the same time they cannot but admit that at the moment such scenario is the only way out of the engineering industry crisis.
It is no secret that following the difficult economic situation in the Russian industry in 1990-ies, long production capacities lay-up and their being significantly behind the world technological level, the railway engineering today is in great need of investment. Only having corresponding assets can one increase the production volumes and quality.
The situation has notably changed for the better. The result of investors' access to the industry is palpable. The proofs may be, for example, the Transmashholding JSC (the largest transport engineering company on the Russian market), Severstaltrans JSC. and the newly emerged YuDji-Trans Company.
"Our main goal - was the comment from Transmashholding - is to create a large railway engineering company able to compete with the leading western manufacturers. While this is impossible without investment programs, without creating own design offices to develop advanced machinery and technologies, and without preparing highly-qualified personnel"
At present Transmashholding manages control stock of the Bryansk Engineering Plant JSC, Bezhitskaya Steel JSC, NEVZ JSC, Murom Pointer Plant JSC, Transport Equipment Plant Ltd, as well as 25% of the Tver Carriage Plant JSC's stock.
The last two years became the period of assets consolidation and the enterprises recovery programs. The plants being part of the holding used to be in a poor condition, with assets turnover shortage, lack of orders and other problems. But thanks to the Transmashholding active and balanced policy in 2004 all the enterprises doubled their output. The output of electrical locomotives increased by over 2 times. The tendency is expected to prevail in 2005.
Naturally to gain the required results a large-scale investment program on the enterprises complex modernization and new facilities implementation is needed. In 2004 TMH investments constituted RUR 2964 mln., including 1479 mln. in the production development. In the current 2005 the holding plans to direct about RUR 4.5 bln. on investment programs implementation.
The Severstaltrans-controlled Kolomna Diesel Locomotives Plant also demonstrates an active growth. Thus in 2004 it constituted 44% against the previous year. The sum of investment approached $10 mln.; in 2005 $20 mln. are to be invested in technological reequipment.
It needs to be noted that Kolomna is not the only Severstaltrans asset. In June 2004 the Estonian Spaceсom being part of the Severstaltrans group together with the partner Skinest Pojekt became the shareholder of the Daugava's Locomotiv JSC. The investment program of the company for the next few years will be above $10 mln.

PASSENGER BUSINESS
YuDji-Trans managing company founded in late 2004 by a group of private investors determined its strategic goal as creating a scientific-manufacturing service-exploitation holding providing with modern rolling stock such socially significant industry as suburban transportation service. "Our company entered the railway engineering sector early in the reformation process with the intention to preserve the designing and manufacturing potential and to develop in cooperation with the western engineering giants a principally new concept of electrical trains", - explained the YuDji-Trans general director Maksim Avdeev.
So far the company has selected four enterprises: Demikhov Engineering Plant JSC (Russian leader in the suburban and regional electrical trains development and manufacturing), Centrosvar JSC (Russian leader in manufacturing welded metalwork), Oktyabrsky Electric Carriages Repair Plant JSC (specializes in all kinds of passenger rolling stock repair and modernization works) and Transport Engineering Research-and-production Organization JSC (develops designing and technical documentation for local and regional electric trains modernization and for perspective models).

RZD ALONE IS NOT ENOUGH?
Naturally, the dramatic leap of the new production output rate was largely due to the strategic long-term (up to 2010) cooperation agreements between a large number of enterprises and RZD. These agreements were partially made possible by the activity of private investors, whose support serves as a guarantee for RZD of these plants financial stability and credibility.
The main developers and manufacturers of the coupler rolling stock for RZD are: Novocherkassk Electric Locomotives Plant JSC (freight electric locomotive of alternating current 2ES5К and of direct-current - 2ES4К); Kolomna Diesel Locomotives Plant (passenger electric locomotive of direct-current EP2К).
The Ural Railway Engineering Plant is working on creating a ES4K freight electric locomotive of direct-current, Kolomna Plant is working on 2ТE70 diesel locomotives; the Bryansk Engineering Plant - on 2ТE25 and ТEМ10 locomotives.
The main strategic partner and customer of the plants, which are under the investment groups control, is RZD. But this is only for the beginning. M.Avdeev noted that in future the range of customers may expand to include companies involved in suburban and long haul passenger transportations. "We are actively working with this market pioneers, such as Express-Prigorod, Okdile and Transgroup AS, as well as with railways - RZD subsidiaries". New marketing outlets may be sought in the ViceCIS as well, he added. TMH representatives also stated that the share of private transport companies in their sales keeps increasing.

PROSPECT - EXTERNAL MARKET
As a rule, acquiring assets as such is not an end in itself for investment-manufacturing groups. Usually the companies strive to create multi-purpose holdings including railway machinery manufacturing, repair, servicing and utilization. Besides, many of them (Transmashholding in particular) are set to compete with foreign rolling stock manufacturers. Since the competition will be based on the technological solutions the Russian engineering market will need really large players. This is the opinion of the Transmashholding experts. They have counted the sales volume is such companies should at least be about $2 bln. per annum. Only large corporations would be able to finance own scientific and technological developments, create new technologies and independently produce spare parts constituting the intellectual and cost basis of a product.
It needs to be noted that the foreign companies have long been interested in the Russian transport engineering market. There are numerous examples of cooperation: over 20% of the Oktyabrsk Electric Carriage Repair Plant JSC.'s stock are owned by the Bombardier company, which has been cooperating with NEVZ since 1997 with the result of a modern passenger electric locomotive EP10.
Siemens is actively taking root on the Russian market: it has concluded a Memorandum on joint production of electrical technical products with Transmashholding; with Kolomna plant it has developed a project on creating new electric locomotives; with RZD it plans the creation of a superexpress train for the Moscow-St.Petersburg railway passenger line...
Naturally, the problems of the national locomotives and carriages engineering is impossible without wide adaptation of the accumulated experience, foreign in particular. "We are most interested in the relations of equal partnership, - believes RZD Vice-President Valentin Gapanovich. - It would be wrong to merely purchase locomotives and equipment abroad. Therefore there has been adopted another strategy of cooperation with foreign manufacturers- creating on the basis of the existing Russian companies of joint ventures to produce modern locomotives and parts with the application of the advanced technologies and experience". On the initial stages the independent Russian companies are ready to cooperate with the foreign manufacturers and create joint ventures, but, as was underlined by Transmashholding, only on conditions of communicating all the technical solutions and advanced technologies.
Such a stand finds complete understanding on the part of RZD, which strives to adapt the national railway infrastructure to the demands of the new machinery and thus get ready to entering the world largest marketing outlets as soon as possible. Sooner or later Russia will join the WTO, after which competition will be with the world leaders.

Viktoria Merkusheva [~DETAIL_TEXT] =>
PROS
Similar take-over processes have been characteristic of the western market for the last few decades, while in Russia the attractiveness of the transport mechanical engineering market was realized only recently, though the development dynamics signals the trend towards enterprizes mergers into large engineering holdings will be gaining strength. "Private business is aware that investing in transport and transport engineering is absolutely safe", - ascertained RZD president Gennady Fadeyev.
Besides, the demand on the part of the Russian and CIS natural railway monopolies for the engineering products will only be increasing, as also will the railway transportation volumes. Taking into account the actively developing segment of independent private operators (potentially up to 50% of the total demand), by 2010 the transport mechanical engineering market of Russia and CIS countries will double and constitute about 20% of the world market. Already at present the growth rates in the railway engineering industry are among the highest. Thus in 2003 the segment grew by 35,8%, and in 2004 - by 28%.

NO HOLDS BARRED?
Such a dramatic activisation of the private capital to absorb the engineering assets makes some experts worry about the healthy competition and the possible industry monopolization resulting in some couple of large holdings dictating the market conditions. At the same time they cannot but admit that at the moment such scenario is the only way out of the engineering industry crisis.
It is no secret that following the difficult economic situation in the Russian industry in 1990-ies, long production capacities lay-up and their being significantly behind the world technological level, the railway engineering today is in great need of investment. Only having corresponding assets can one increase the production volumes and quality.
The situation has notably changed for the better. The result of investors' access to the industry is palpable. The proofs may be, for example, the Transmashholding JSC (the largest transport engineering company on the Russian market), Severstaltrans JSC. and the newly emerged YuDji-Trans Company.
"Our main goal - was the comment from Transmashholding - is to create a large railway engineering company able to compete with the leading western manufacturers. While this is impossible without investment programs, without creating own design offices to develop advanced machinery and technologies, and without preparing highly-qualified personnel"
At present Transmashholding manages control stock of the Bryansk Engineering Plant JSC, Bezhitskaya Steel JSC, NEVZ JSC, Murom Pointer Plant JSC, Transport Equipment Plant Ltd, as well as 25% of the Tver Carriage Plant JSC's stock.
The last two years became the period of assets consolidation and the enterprises recovery programs. The plants being part of the holding used to be in a poor condition, with assets turnover shortage, lack of orders and other problems. But thanks to the Transmashholding active and balanced policy in 2004 all the enterprises doubled their output. The output of electrical locomotives increased by over 2 times. The tendency is expected to prevail in 2005.
Naturally to gain the required results a large-scale investment program on the enterprises complex modernization and new facilities implementation is needed. In 2004 TMH investments constituted RUR 2964 mln., including 1479 mln. in the production development. In the current 2005 the holding plans to direct about RUR 4.5 bln. on investment programs implementation.
The Severstaltrans-controlled Kolomna Diesel Locomotives Plant also demonstrates an active growth. Thus in 2004 it constituted 44% against the previous year. The sum of investment approached $10 mln.; in 2005 $20 mln. are to be invested in technological reequipment.
It needs to be noted that Kolomna is not the only Severstaltrans asset. In June 2004 the Estonian Spaceсom being part of the Severstaltrans group together with the partner Skinest Pojekt became the shareholder of the Daugava's Locomotiv JSC. The investment program of the company for the next few years will be above $10 mln.

PASSENGER BUSINESS
YuDji-Trans managing company founded in late 2004 by a group of private investors determined its strategic goal as creating a scientific-manufacturing service-exploitation holding providing with modern rolling stock such socially significant industry as suburban transportation service. "Our company entered the railway engineering sector early in the reformation process with the intention to preserve the designing and manufacturing potential and to develop in cooperation with the western engineering giants a principally new concept of electrical trains", - explained the YuDji-Trans general director Maksim Avdeev.
So far the company has selected four enterprises: Demikhov Engineering Plant JSC (Russian leader in the suburban and regional electrical trains development and manufacturing), Centrosvar JSC (Russian leader in manufacturing welded metalwork), Oktyabrsky Electric Carriages Repair Plant JSC (specializes in all kinds of passenger rolling stock repair and modernization works) and Transport Engineering Research-and-production Organization JSC (develops designing and technical documentation for local and regional electric trains modernization and for perspective models).

RZD ALONE IS NOT ENOUGH?
Naturally, the dramatic leap of the new production output rate was largely due to the strategic long-term (up to 2010) cooperation agreements between a large number of enterprises and RZD. These agreements were partially made possible by the activity of private investors, whose support serves as a guarantee for RZD of these plants financial stability and credibility.
The main developers and manufacturers of the coupler rolling stock for RZD are: Novocherkassk Electric Locomotives Plant JSC (freight electric locomotive of alternating current 2ES5К and of direct-current - 2ES4К); Kolomna Diesel Locomotives Plant (passenger electric locomotive of direct-current EP2К).
The Ural Railway Engineering Plant is working on creating a ES4K freight electric locomotive of direct-current, Kolomna Plant is working on 2ТE70 diesel locomotives; the Bryansk Engineering Plant - on 2ТE25 and ТEМ10 locomotives.
The main strategic partner and customer of the plants, which are under the investment groups control, is RZD. But this is only for the beginning. M.Avdeev noted that in future the range of customers may expand to include companies involved in suburban and long haul passenger transportations. "We are actively working with this market pioneers, such as Express-Prigorod, Okdile and Transgroup AS, as well as with railways - RZD subsidiaries". New marketing outlets may be sought in the ViceCIS as well, he added. TMH representatives also stated that the share of private transport companies in their sales keeps increasing.

PROSPECT - EXTERNAL MARKET
As a rule, acquiring assets as such is not an end in itself for investment-manufacturing groups. Usually the companies strive to create multi-purpose holdings including railway machinery manufacturing, repair, servicing and utilization. Besides, many of them (Transmashholding in particular) are set to compete with foreign rolling stock manufacturers. Since the competition will be based on the technological solutions the Russian engineering market will need really large players. This is the opinion of the Transmashholding experts. They have counted the sales volume is such companies should at least be about $2 bln. per annum. Only large corporations would be able to finance own scientific and technological developments, create new technologies and independently produce spare parts constituting the intellectual and cost basis of a product.
It needs to be noted that the foreign companies have long been interested in the Russian transport engineering market. There are numerous examples of cooperation: over 20% of the Oktyabrsk Electric Carriage Repair Plant JSC.'s stock are owned by the Bombardier company, which has been cooperating with NEVZ since 1997 with the result of a modern passenger electric locomotive EP10.
Siemens is actively taking root on the Russian market: it has concluded a Memorandum on joint production of electrical technical products with Transmashholding; with Kolomna plant it has developed a project on creating new electric locomotives; with RZD it plans the creation of a superexpress train for the Moscow-St.Petersburg railway passenger line...
Naturally, the problems of the national locomotives and carriages engineering is impossible without wide adaptation of the accumulated experience, foreign in particular. "We are most interested in the relations of equal partnership, - believes RZD Vice-President Valentin Gapanovich. - It would be wrong to merely purchase locomotives and equipment abroad. Therefore there has been adopted another strategy of cooperation with foreign manufacturers- creating on the basis of the existing Russian companies of joint ventures to produce modern locomotives and parts with the application of the advanced technologies and experience". On the initial stages the independent Russian companies are ready to cooperate with the foreign manufacturers and create joint ventures, but, as was underlined by Transmashholding, only on conditions of communicating all the technical solutions and advanced technologies.
Such a stand finds complete understanding on the part of RZD, which strives to adapt the national railway infrastructure to the demands of the new machinery and thus get ready to entering the world largest marketing outlets as soon as possible. Sooner or later Russia will join the WTO, after which competition will be with the world leaders.

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PROS
Similar take-over processes have been characteristic of the western market for the last few decades, while in Russia the attractiveness of the transport mechanical engineering market was realized only recently, though the development dynamics signals the trend towards enterprizes mergers into large engineering holdings will be gaining strength. "Private business is aware that investing in transport and transport engineering is absolutely safe", - ascertained RZD president Gennady Fadeyev.
Besides, the demand on the part of the Russian and CIS natural railway monopolies for the engineering products will only be increasing, as also will the railway transportation volumes. Taking into account the actively developing segment of independent private operators (potentially up to 50% of the total demand), by 2010 the transport mechanical engineering market of Russia and CIS countries will double and constitute about 20% of the world market. Already at present the growth rates in the railway engineering industry are among the highest. Thus in 2003 the segment grew by 35,8%, and in 2004 - by 28%.

NO HOLDS BARRED?
Such a dramatic activisation of the private capital to absorb the engineering assets makes some experts worry about the healthy competition and the possible industry monopolization resulting in some couple of large holdings dictating the market conditions. At the same time they cannot but admit that at the moment such scenario is the only way out of the engineering industry crisis.
It is no secret that following the difficult economic situation in the Russian industry in 1990-ies, long production capacities lay-up and their being significantly behind the world technological level, the railway engineering today is in great need of investment. Only having corresponding assets can one increase the production volumes and quality.
The situation has notably changed for the better. The result of investors' access to the industry is palpable. The proofs may be, for example, the Transmashholding JSC (the largest transport engineering company on the Russian market), Severstaltrans JSC. and the newly emerged YuDji-Trans Company.
"Our main goal - was the comment from Transmashholding - is to create a large railway engineering company able to compete with the leading western manufacturers. While this is impossible without investment programs, without creating own design offices to develop advanced machinery and technologies, and without preparing highly-qualified personnel"
At present Transmashholding manages control stock of the Bryansk Engineering Plant JSC, Bezhitskaya Steel JSC, NEVZ JSC, Murom Pointer Plant JSC, Transport Equipment Plant Ltd, as well as 25% of the Tver Carriage Plant JSC's stock.
The last two years became the period of assets consolidation and the enterprises recovery programs. The plants being part of the holding used to be in a poor condition, with assets turnover shortage, lack of orders and other problems. But thanks to the Transmashholding active and balanced policy in 2004 all the enterprises doubled their output. The output of electrical locomotives increased by over 2 times. The tendency is expected to prevail in 2005.
Naturally to gain the required results a large-scale investment program on the enterprises complex modernization and new facilities implementation is needed. In 2004 TMH investments constituted RUR 2964 mln., including 1479 mln. in the production development. In the current 2005 the holding plans to direct about RUR 4.5 bln. on investment programs implementation.
The Severstaltrans-controlled Kolomna Diesel Locomotives Plant also demonstrates an active growth. Thus in 2004 it constituted 44% against the previous year. The sum of investment approached $10 mln.; in 2005 $20 mln. are to be invested in technological reequipment.
It needs to be noted that Kolomna is not the only Severstaltrans asset. In June 2004 the Estonian Spaceсom being part of the Severstaltrans group together with the partner Skinest Pojekt became the shareholder of the Daugava's Locomotiv JSC. The investment program of the company for the next few years will be above $10 mln.

PASSENGER BUSINESS
YuDji-Trans managing company founded in late 2004 by a group of private investors determined its strategic goal as creating a scientific-manufacturing service-exploitation holding providing with modern rolling stock such socially significant industry as suburban transportation service. "Our company entered the railway engineering sector early in the reformation process with the intention to preserve the designing and manufacturing potential and to develop in cooperation with the western engineering giants a principally new concept of electrical trains", - explained the YuDji-Trans general director Maksim Avdeev.
So far the company has selected four enterprises: Demikhov Engineering Plant JSC (Russian leader in the suburban and regional electrical trains development and manufacturing), Centrosvar JSC (Russian leader in manufacturing welded metalwork), Oktyabrsky Electric Carriages Repair Plant JSC (specializes in all kinds of passenger rolling stock repair and modernization works) and Transport Engineering Research-and-production Organization JSC (develops designing and technical documentation for local and regional electric trains modernization and for perspective models).

RZD ALONE IS NOT ENOUGH?
Naturally, the dramatic leap of the new production output rate was largely due to the strategic long-term (up to 2010) cooperation agreements between a large number of enterprises and RZD. These agreements were partially made possible by the activity of private investors, whose support serves as a guarantee for RZD of these plants financial stability and credibility.
The main developers and manufacturers of the coupler rolling stock for RZD are: Novocherkassk Electric Locomotives Plant JSC (freight electric locomotive of alternating current 2ES5К and of direct-current - 2ES4К); Kolomna Diesel Locomotives Plant (passenger electric locomotive of direct-current EP2К).
The Ural Railway Engineering Plant is working on creating a ES4K freight electric locomotive of direct-current, Kolomna Plant is working on 2ТE70 diesel locomotives; the Bryansk Engineering Plant - on 2ТE25 and ТEМ10 locomotives.
The main strategic partner and customer of the plants, which are under the investment groups control, is RZD. But this is only for the beginning. M.Avdeev noted that in future the range of customers may expand to include companies involved in suburban and long haul passenger transportations. "We are actively working with this market pioneers, such as Express-Prigorod, Okdile and Transgroup AS, as well as with railways - RZD subsidiaries". New marketing outlets may be sought in the ViceCIS as well, he added. TMH representatives also stated that the share of private transport companies in their sales keeps increasing.

PROSPECT - EXTERNAL MARKET
As a rule, acquiring assets as such is not an end in itself for investment-manufacturing groups. Usually the companies strive to create multi-purpose holdings including railway machinery manufacturing, repair, servicing and utilization. Besides, many of them (Transmashholding in particular) are set to compete with foreign rolling stock manufacturers. Since the competition will be based on the technological solutions the Russian engineering market will need really large players. This is the opinion of the Transmashholding experts. They have counted the sales volume is such companies should at least be about $2 bln. per annum. Only large corporations would be able to finance own scientific and technological developments, create new technologies and independently produce spare parts constituting the intellectual and cost basis of a product.
It needs to be noted that the foreign companies have long been interested in the Russian transport engineering market. There are numerous examples of cooperation: over 20% of the Oktyabrsk Electric Carriage Repair Plant JSC.'s stock are owned by the Bombardier company, which has been cooperating with NEVZ since 1997 with the result of a modern passenger electric locomotive EP10.
Siemens is actively taking root on the Russian market: it has concluded a Memorandum on joint production of electrical technical products with Transmashholding; with Kolomna plant it has developed a project on creating new electric locomotives; with RZD it plans the creation of a superexpress train for the Moscow-St.Petersburg railway passenger line...
Naturally, the problems of the national locomotives and carriages engineering is impossible without wide adaptation of the accumulated experience, foreign in particular. "We are most interested in the relations of equal partnership, - believes RZD Vice-President Valentin Gapanovich. - It would be wrong to merely purchase locomotives and equipment abroad. Therefore there has been adopted another strategy of cooperation with foreign manufacturers- creating on the basis of the existing Russian companies of joint ventures to produce modern locomotives and parts with the application of the advanced technologies and experience". On the initial stages the independent Russian companies are ready to cooperate with the foreign manufacturers and create joint ventures, but, as was underlined by Transmashholding, only on conditions of communicating all the technical solutions and advanced technologies.
Such a stand finds complete understanding on the part of RZD, which strives to adapt the national railway infrastructure to the demands of the new machinery and thus get ready to entering the world largest marketing outlets as soon as possible. Sooner or later Russia will join the WTO, after which competition will be with the world leaders.

Viktoria Merkusheva [~DETAIL_TEXT] =>
PROS
Similar take-over processes have been characteristic of the western market for the last few decades, while in Russia the attractiveness of the transport mechanical engineering market was realized only recently, though the development dynamics signals the trend towards enterprizes mergers into large engineering holdings will be gaining strength. "Private business is aware that investing in transport and transport engineering is absolutely safe", - ascertained RZD president Gennady Fadeyev.
Besides, the demand on the part of the Russian and CIS natural railway monopolies for the engineering products will only be increasing, as also will the railway transportation volumes. Taking into account the actively developing segment of independent private operators (potentially up to 50% of the total demand), by 2010 the transport mechanical engineering market of Russia and CIS countries will double and constitute about 20% of the world market. Already at present the growth rates in the railway engineering industry are among the highest. Thus in 2003 the segment grew by 35,8%, and in 2004 - by 28%.

NO HOLDS BARRED?
Such a dramatic activisation of the private capital to absorb the engineering assets makes some experts worry about the healthy competition and the possible industry monopolization resulting in some couple of large holdings dictating the market conditions. At the same time they cannot but admit that at the moment such scenario is the only way out of the engineering industry crisis.
It is no secret that following the difficult economic situation in the Russian industry in 1990-ies, long production capacities lay-up and their being significantly behind the world technological level, the railway engineering today is in great need of investment. Only having corresponding assets can one increase the production volumes and quality.
The situation has notably changed for the better. The result of investors' access to the industry is palpable. The proofs may be, for example, the Transmashholding JSC (the largest transport engineering company on the Russian market), Severstaltrans JSC. and the newly emerged YuDji-Trans Company.
"Our main goal - was the comment from Transmashholding - is to create a large railway engineering company able to compete with the leading western manufacturers. While this is impossible without investment programs, without creating own design offices to develop advanced machinery and technologies, and without preparing highly-qualified personnel"
At present Transmashholding manages control stock of the Bryansk Engineering Plant JSC, Bezhitskaya Steel JSC, NEVZ JSC, Murom Pointer Plant JSC, Transport Equipment Plant Ltd, as well as 25% of the Tver Carriage Plant JSC's stock.
The last two years became the period of assets consolidation and the enterprises recovery programs. The plants being part of the holding used to be in a poor condition, with assets turnover shortage, lack of orders and other problems. But thanks to the Transmashholding active and balanced policy in 2004 all the enterprises doubled their output. The output of electrical locomotives increased by over 2 times. The tendency is expected to prevail in 2005.
Naturally to gain the required results a large-scale investment program on the enterprises complex modernization and new facilities implementation is needed. In 2004 TMH investments constituted RUR 2964 mln., including 1479 mln. in the production development. In the current 2005 the holding plans to direct about RUR 4.5 bln. on investment programs implementation.
The Severstaltrans-controlled Kolomna Diesel Locomotives Plant also demonstrates an active growth. Thus in 2004 it constituted 44% against the previous year. The sum of investment approached $10 mln.; in 2005 $20 mln. are to be invested in technological reequipment.
It needs to be noted that Kolomna is not the only Severstaltrans asset. In June 2004 the Estonian Spaceсom being part of the Severstaltrans group together with the partner Skinest Pojekt became the shareholder of the Daugava's Locomotiv JSC. The investment program of the company for the next few years will be above $10 mln.

PASSENGER BUSINESS
YuDji-Trans managing company founded in late 2004 by a group of private investors determined its strategic goal as creating a scientific-manufacturing service-exploitation holding providing with modern rolling stock such socially significant industry as suburban transportation service. "Our company entered the railway engineering sector early in the reformation process with the intention to preserve the designing and manufacturing potential and to develop in cooperation with the western engineering giants a principally new concept of electrical trains", - explained the YuDji-Trans general director Maksim Avdeev.
So far the company has selected four enterprises: Demikhov Engineering Plant JSC (Russian leader in the suburban and regional electrical trains development and manufacturing), Centrosvar JSC (Russian leader in manufacturing welded metalwork), Oktyabrsky Electric Carriages Repair Plant JSC (specializes in all kinds of passenger rolling stock repair and modernization works) and Transport Engineering Research-and-production Organization JSC (develops designing and technical documentation for local and regional electric trains modernization and for perspective models).

RZD ALONE IS NOT ENOUGH?
Naturally, the dramatic leap of the new production output rate was largely due to the strategic long-term (up to 2010) cooperation agreements between a large number of enterprises and RZD. These agreements were partially made possible by the activity of private investors, whose support serves as a guarantee for RZD of these plants financial stability and credibility.
The main developers and manufacturers of the coupler rolling stock for RZD are: Novocherkassk Electric Locomotives Plant JSC (freight electric locomotive of alternating current 2ES5К and of direct-current - 2ES4К); Kolomna Diesel Locomotives Plant (passenger electric locomotive of direct-current EP2К).
The Ural Railway Engineering Plant is working on creating a ES4K freight electric locomotive of direct-current, Kolomna Plant is working on 2ТE70 diesel locomotives; the Bryansk Engineering Plant - on 2ТE25 and ТEМ10 locomotives.
The main strategic partner and customer of the plants, which are under the investment groups control, is RZD. But this is only for the beginning. M.Avdeev noted that in future the range of customers may expand to include companies involved in suburban and long haul passenger transportations. "We are actively working with this market pioneers, such as Express-Prigorod, Okdile and Transgroup AS, as well as with railways - RZD subsidiaries". New marketing outlets may be sought in the ViceCIS as well, he added. TMH representatives also stated that the share of private transport companies in their sales keeps increasing.

PROSPECT - EXTERNAL MARKET
As a rule, acquiring assets as such is not an end in itself for investment-manufacturing groups. Usually the companies strive to create multi-purpose holdings including railway machinery manufacturing, repair, servicing and utilization. Besides, many of them (Transmashholding in particular) are set to compete with foreign rolling stock manufacturers. Since the competition will be based on the technological solutions the Russian engineering market will need really large players. This is the opinion of the Transmashholding experts. They have counted the sales volume is such companies should at least be about $2 bln. per annum. Only large corporations would be able to finance own scientific and technological developments, create new technologies and independently produce spare parts constituting the intellectual and cost basis of a product.
It needs to be noted that the foreign companies have long been interested in the Russian transport engineering market. There are numerous examples of cooperation: over 20% of the Oktyabrsk Electric Carriage Repair Plant JSC.'s stock are owned by the Bombardier company, which has been cooperating with NEVZ since 1997 with the result of a modern passenger electric locomotive EP10.
Siemens is actively taking root on the Russian market: it has concluded a Memorandum on joint production of electrical technical products with Transmashholding; with Kolomna plant it has developed a project on creating new electric locomotives; with RZD it plans the creation of a superexpress train for the Moscow-St.Petersburg railway passenger line...
Naturally, the problems of the national locomotives and carriages engineering is impossible without wide adaptation of the accumulated experience, foreign in particular. "We are most interested in the relations of equal partnership, - believes RZD Vice-President Valentin Gapanovich. - It would be wrong to merely purchase locomotives and equipment abroad. Therefore there has been adopted another strategy of cooperation with foreign manufacturers- creating on the basis of the existing Russian companies of joint ventures to produce modern locomotives and parts with the application of the advanced technologies and experience". On the initial stages the independent Russian companies are ready to cooperate with the foreign manufacturers and create joint ventures, but, as was underlined by Transmashholding, only on conditions of communicating all the technical solutions and advanced technologies.
Such a stand finds complete understanding on the part of RZD, which strives to adapt the national railway infrastructure to the demands of the new machinery and thus get ready to entering the world largest marketing outlets as soon as possible. Sooner or later Russia will join the WTO, after which competition will be with the world leaders.

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РЖД-Партнер

TEDIM Joins Russia and the EU North Area

One of the most important aspects of Russia and the EU's relations development is considered to be creation of the real conditions for speeding up cargo transportation within international communication with help of new technologies.
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    [DETAIL_TEXT] => On the initiative of Finland in the end of 1994 while Germany and Russia's active participation within the framework of trilateral cooperation the Programme called TEDIM was worked out which stands for "Telematics in Foreign Trade Logistics  and  Delivery Management Programm to improve logistics system in the  Baltic  seabord  and adjacent areas". During the ten years of this programme functioning about 35 projects on optimization of railway, maritime and motor transport operation have been developed included projects on customs procedures improvement.

Transport Forum for West and East
Ten years ago on January,9 (1995) the Ministry of Transport and Communication of Finland, the Ministry of Transport of Federal Republic of Germany altogether with the Ministry of Transport and the Ministry of Railways and Communication of Russia under participation of the Governement of Saint-Petersburg ratified "Memorandum on Mutual Understanding for launching the development programme "Telematics in foreign trade logistics and delivery management to improve logistics system in the Baltic regions seabord and adjacent areas (TEDIM)".
Some countries joined the project later (Estonia- 1996, Latvia- 2000,Poland- 2001). In 2003 at the 12th meeting of the ICC International Co-ordinating Committee Lithuania was taken as a member. Now Sweden and Denmark perform as observers at the international sessions dedicated to the programme development and also participate in some its projects.
Marina Yemelina, head of the working group of the State Computing Center, says: "TEDIM isn't just technology, it is a sort of flexible forum on coordination and discussions that includes certain development projects. The major responsibility for these projects implementation lies on private companies participating according to the wish expressed by the sides. The role of the social bodies is provided for working out optimal conditions for these companies functioning. The target of the Programme is to become an instrument of the North area of the EU- "New Northern Europe"
Initially TEDIM was determined at freight transportation competitiveness development included maritime transportation in for the Baltic sea regions and adjacent areas by applying the systems of telematics for international transportat and logistics. The problems of common technical standards working out, cooperation of customs bodies while border crossing procedures were emphasised.
TEDIM programme development was carried out under conditions of cooperation of the state and private companies. The experience acquired is of positive character and it is going to be implemented for the programme's further development.
In the Northern Europe and the EU TEDIM has become a well-known development forum and day-by-day new state and companies join the programme as it gives start for the new projects implementation.
It is important to mention customers' demand are considered by developers. Great attention is paid to upgraded and available now new technologies and procedures. At the first stage the projects should increase companies' competitiveness rates, i.e. those ones that function on the market of the Northern Europe and after on all the European markets.
Motivation for different companies and states participation in the programme is based on mutual profitability. Companies functioning out of TEDIM's territory can also take part in the projects. Great share of attention is paid to the sea transportation that plays the key role in the foreign trade relations between Russia and the EU countries. Railway transportation is also important as Finland is used to the same gauge as Russia is. The major factors in regards to railway transport are believed to be environmental principles. Among other key areas are custom services cooperation, standartisation and unified control of logistics systems, controlling cargo flows and safety issues.

Technologies for OAO RZD
ОАО RZD within the framework of TEDIM programme participates in the projects on mutual information data exchange for Russian-Finland communication - RailCom project deals with invoice for freight loading procedures; RailTrack is directed to data-exchange while cargo movement; RailCust is provided for creation the system of information cooperation of customs bodies and railways to speed up cars, containers, cargoes servicing rates at the border check-points of Russia and Finnish State Railways (VR) on the base of preliminary transfer of railway invoices via the systems of data transmission; EuroRail-Kaliningrad was started to provide information convoy for freight transportation on the route Poland-Kaliningrad
Such data exchange allows to regulate rail cars and containers flow towards the border check-points, to shorten the time spent on customs procedures and to create the base for cargo transportation according to "green street" principle.
In 2003 all the stages of RailCom project were completed and put into operation. 100% transmission of e-data for invoices between RZD and VR has been settled by now. Constant work is being held on e-data invoices authenticity achievement while their filling in at loading stations. Last year significant functional improvements were made. At that very moment tests of e-data transmission to Buslovskaya border railway station were carried on which was preliminary information on Finnish import invoices with using the experimental testing ground of ETRAN system. In 2005 after transfer to a new server and a new platform it is planned to the system into permanent operation and to carry on with work on transmitted information volumes expanding
As it has already been said within the framework of RailTrack project software for EDI-system to establish message-exchange under UN/EDIFACT standard was developed. In 2004 testing was carried on the Kirishi-Sheldvik ground. According to the results of testing procedures the project was amended and maintenance documentation re-considered. In the middle January, 2005 testing of automated exchange was repeated and after some errors delimination new testing will be held on the Mukkula-Saint-Petersburg route and Nakhodka-Buslovskaya (Transsib) line.
The programme implementation on the above-mentioned sectors helped to sort out some problems. For example, EDI-system organisation for Russian-Finland communicatin became possible that in its turn will allow to keep the international standards of UN/EDIFACT while electronic document turnover. Transit and import payment control till the moment of cargoes factual arriving has become much more efficient. Additional cargo volumes have been attracted to the route.

EDI or Contribution into Future
Perspectively ОАО RZD plans to expand experience of information exchange according to UN/EDIFACT standard within Russian-Finland communication towards information cooperation with railways of other countries and domestic railway departments. Considering RailCom, RailTrаck, RailCust, EuroRail-Kaliningrad projects of the TEDIM programme the EDI system for the Russian railways network is being improved for freight transportation under the international standards UN/EDIFACT, ebXML in order to launch electronic documentation flow for all the transportation participants who got interested in such service.
This system of electronic exchange of data on freight transportation will help providing information flow in the direct international communication between Russia, CIS and Baltic countries as well as the EU ones.
Data exchange is envisaged for information technologies creation that would provide all the transportation market participants and cargo owners with the needed information.
At the present moment according to the concluded agreements on testing e-data exchange is being implemented with Belarus, Latvia and Ukraine.
For further EDI system development ОАО RZD pland to sign agreements with Poland, Estonia, Kazakhstan and China.
Fast implantation e-data exchange while freight transportation on the international routes will assist on deliveries terms shortening, getting more rolling stock available and to reduce the prime-cost of transportation.
[~DETAIL_TEXT] => On the initiative of Finland in the end of 1994 while Germany and Russia's active participation within the framework of trilateral cooperation the Programme called TEDIM was worked out which stands for "Telematics in Foreign Trade Logistics and Delivery Management Programm to improve logistics system in the Baltic seabord and adjacent areas". During the ten years of this programme functioning about 35 projects on optimization of railway, maritime and motor transport operation have been developed included projects on customs procedures improvement.

Transport Forum for West and East
Ten years ago on January,9 (1995) the Ministry of Transport and Communication of Finland, the Ministry of Transport of Federal Republic of Germany altogether with the Ministry of Transport and the Ministry of Railways and Communication of Russia under participation of the Governement of Saint-Petersburg ratified "Memorandum on Mutual Understanding for launching the development programme "Telematics in foreign trade logistics and delivery management to improve logistics system in the Baltic regions seabord and adjacent areas (TEDIM)".
Some countries joined the project later (Estonia- 1996, Latvia- 2000,Poland- 2001). In 2003 at the 12th meeting of the ICC International Co-ordinating Committee Lithuania was taken as a member. Now Sweden and Denmark perform as observers at the international sessions dedicated to the programme development and also participate in some its projects.
Marina Yemelina, head of the working group of the State Computing Center, says: "TEDIM isn't just technology, it is a sort of flexible forum on coordination and discussions that includes certain development projects. The major responsibility for these projects implementation lies on private companies participating according to the wish expressed by the sides. The role of the social bodies is provided for working out optimal conditions for these companies functioning. The target of the Programme is to become an instrument of the North area of the EU- "New Northern Europe"
Initially TEDIM was determined at freight transportation competitiveness development included maritime transportation in for the Baltic sea regions and adjacent areas by applying the systems of telematics for international transportat and logistics. The problems of common technical standards working out, cooperation of customs bodies while border crossing procedures were emphasised.
TEDIM programme development was carried out under conditions of cooperation of the state and private companies. The experience acquired is of positive character and it is going to be implemented for the programme's further development.
In the Northern Europe and the EU TEDIM has become a well-known development forum and day-by-day new state and companies join the programme as it gives start for the new projects implementation.
It is important to mention customers' demand are considered by developers. Great attention is paid to upgraded and available now new technologies and procedures. At the first stage the projects should increase companies' competitiveness rates, i.e. those ones that function on the market of the Northern Europe and after on all the European markets.
Motivation for different companies and states participation in the programme is based on mutual profitability. Companies functioning out of TEDIM's territory can also take part in the projects. Great share of attention is paid to the sea transportation that plays the key role in the foreign trade relations between Russia and the EU countries. Railway transportation is also important as Finland is used to the same gauge as Russia is. The major factors in regards to railway transport are believed to be environmental principles. Among other key areas are custom services cooperation, standartisation and unified control of logistics systems, controlling cargo flows and safety issues.

Technologies for OAO RZD
ОАО RZD within the framework of TEDIM programme participates in the projects on mutual information data exchange for Russian-Finland communication - RailCom project deals with invoice for freight loading procedures; RailTrack is directed to data-exchange while cargo movement; RailCust is provided for creation the system of information cooperation of customs bodies and railways to speed up cars, containers, cargoes servicing rates at the border check-points of Russia and Finnish State Railways (VR) on the base of preliminary transfer of railway invoices via the systems of data transmission; EuroRail-Kaliningrad was started to provide information convoy for freight transportation on the route Poland-Kaliningrad
Such data exchange allows to regulate rail cars and containers flow towards the border check-points, to shorten the time spent on customs procedures and to create the base for cargo transportation according to "green street" principle.
In 2003 all the stages of RailCom project were completed and put into operation. 100% transmission of e-data for invoices between RZD and VR has been settled by now. Constant work is being held on e-data invoices authenticity achievement while their filling in at loading stations. Last year significant functional improvements were made. At that very moment tests of e-data transmission to Buslovskaya border railway station were carried on which was preliminary information on Finnish import invoices with using the experimental testing ground of ETRAN system. In 2005 after transfer to a new server and a new platform it is planned to the system into permanent operation and to carry on with work on transmitted information volumes expanding
As it has already been said within the framework of RailTrack project software for EDI-system to establish message-exchange under UN/EDIFACT standard was developed. In 2004 testing was carried on the Kirishi-Sheldvik ground. According to the results of testing procedures the project was amended and maintenance documentation re-considered. In the middle January, 2005 testing of automated exchange was repeated and after some errors delimination new testing will be held on the Mukkula-Saint-Petersburg route and Nakhodka-Buslovskaya (Transsib) line.
The programme implementation on the above-mentioned sectors helped to sort out some problems. For example, EDI-system organisation for Russian-Finland communicatin became possible that in its turn will allow to keep the international standards of UN/EDIFACT while electronic document turnover. Transit and import payment control till the moment of cargoes factual arriving has become much more efficient. Additional cargo volumes have been attracted to the route.

EDI or Contribution into Future
Perspectively ОАО RZD plans to expand experience of information exchange according to UN/EDIFACT standard within Russian-Finland communication towards information cooperation with railways of other countries and domestic railway departments. Considering RailCom, RailTrаck, RailCust, EuroRail-Kaliningrad projects of the TEDIM programme the EDI system for the Russian railways network is being improved for freight transportation under the international standards UN/EDIFACT, ebXML in order to launch electronic documentation flow for all the transportation participants who got interested in such service.
This system of electronic exchange of data on freight transportation will help providing information flow in the direct international communication between Russia, CIS and Baltic countries as well as the EU ones.
Data exchange is envisaged for information technologies creation that would provide all the transportation market participants and cargo owners with the needed information.
At the present moment according to the concluded agreements on testing e-data exchange is being implemented with Belarus, Latvia and Ukraine.
For further EDI system development ОАО RZD pland to sign agreements with Poland, Estonia, Kazakhstan and China.
Fast implantation e-data exchange while freight transportation on the international routes will assist on deliveries terms shortening, getting more rolling stock available and to reduce the prime-cost of transportation.
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[~PREVIEW_TEXT] => One of the most important aspects of Russia and the EU's relations development is considered to be creation of the real conditions for speeding up cargo transportation within international communication with help of new technologies.
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    [DETAIL_TEXT] => On the initiative of Finland in the end of 1994 while Germany and Russia's active participation within the framework of trilateral cooperation the Programme called TEDIM was worked out which stands for "Telematics in Foreign Trade Logistics  and  Delivery Management Programm to improve logistics system in the  Baltic  seabord  and adjacent areas". During the ten years of this programme functioning about 35 projects on optimization of railway, maritime and motor transport operation have been developed included projects on customs procedures improvement.

Transport Forum for West and East
Ten years ago on January,9 (1995) the Ministry of Transport and Communication of Finland, the Ministry of Transport of Federal Republic of Germany altogether with the Ministry of Transport and the Ministry of Railways and Communication of Russia under participation of the Governement of Saint-Petersburg ratified "Memorandum on Mutual Understanding for launching the development programme "Telematics in foreign trade logistics and delivery management to improve logistics system in the Baltic regions seabord and adjacent areas (TEDIM)".
Some countries joined the project later (Estonia- 1996, Latvia- 2000,Poland- 2001). In 2003 at the 12th meeting of the ICC International Co-ordinating Committee Lithuania was taken as a member. Now Sweden and Denmark perform as observers at the international sessions dedicated to the programme development and also participate in some its projects.
Marina Yemelina, head of the working group of the State Computing Center, says: "TEDIM isn't just technology, it is a sort of flexible forum on coordination and discussions that includes certain development projects. The major responsibility for these projects implementation lies on private companies participating according to the wish expressed by the sides. The role of the social bodies is provided for working out optimal conditions for these companies functioning. The target of the Programme is to become an instrument of the North area of the EU- "New Northern Europe"
Initially TEDIM was determined at freight transportation competitiveness development included maritime transportation in for the Baltic sea regions and adjacent areas by applying the systems of telematics for international transportat and logistics. The problems of common technical standards working out, cooperation of customs bodies while border crossing procedures were emphasised.
TEDIM programme development was carried out under conditions of cooperation of the state and private companies. The experience acquired is of positive character and it is going to be implemented for the programme's further development.
In the Northern Europe and the EU TEDIM has become a well-known development forum and day-by-day new state and companies join the programme as it gives start for the new projects implementation.
It is important to mention customers' demand are considered by developers. Great attention is paid to upgraded and available now new technologies and procedures. At the first stage the projects should increase companies' competitiveness rates, i.e. those ones that function on the market of the Northern Europe and after on all the European markets.
Motivation for different companies and states participation in the programme is based on mutual profitability. Companies functioning out of TEDIM's territory can also take part in the projects. Great share of attention is paid to the sea transportation that plays the key role in the foreign trade relations between Russia and the EU countries. Railway transportation is also important as Finland is used to the same gauge as Russia is. The major factors in regards to railway transport are believed to be environmental principles. Among other key areas are custom services cooperation, standartisation and unified control of logistics systems, controlling cargo flows and safety issues.

Technologies for OAO RZD
ОАО RZD within the framework of TEDIM programme participates in the projects on mutual information data exchange for Russian-Finland communication - RailCom project deals with invoice for freight loading procedures; RailTrack is directed to data-exchange while cargo movement; RailCust is provided for creation the system of information cooperation of customs bodies and railways to speed up cars, containers, cargoes servicing rates at the border check-points of Russia and Finnish State Railways (VR) on the base of preliminary transfer of railway invoices via the systems of data transmission; EuroRail-Kaliningrad was started to provide information convoy for freight transportation on the route Poland-Kaliningrad
Such data exchange allows to regulate rail cars and containers flow towards the border check-points, to shorten the time spent on customs procedures and to create the base for cargo transportation according to "green street" principle.
In 2003 all the stages of RailCom project were completed and put into operation. 100% transmission of e-data for invoices between RZD and VR has been settled by now. Constant work is being held on e-data invoices authenticity achievement while their filling in at loading stations. Last year significant functional improvements were made. At that very moment tests of e-data transmission to Buslovskaya border railway station were carried on which was preliminary information on Finnish import invoices with using the experimental testing ground of ETRAN system. In 2005 after transfer to a new server and a new platform it is planned to the system into permanent operation and to carry on with work on transmitted information volumes expanding
As it has already been said within the framework of RailTrack project software for EDI-system to establish message-exchange under UN/EDIFACT standard was developed. In 2004 testing was carried on the Kirishi-Sheldvik ground. According to the results of testing procedures the project was amended and maintenance documentation re-considered. In the middle January, 2005 testing of automated exchange was repeated and after some errors delimination new testing will be held on the Mukkula-Saint-Petersburg route and Nakhodka-Buslovskaya (Transsib) line.
The programme implementation on the above-mentioned sectors helped to sort out some problems. For example, EDI-system organisation for Russian-Finland communicatin became possible that in its turn will allow to keep the international standards of UN/EDIFACT while electronic document turnover. Transit and import payment control till the moment of cargoes factual arriving has become much more efficient. Additional cargo volumes have been attracted to the route.

EDI or Contribution into Future
Perspectively ОАО RZD plans to expand experience of information exchange according to UN/EDIFACT standard within Russian-Finland communication towards information cooperation with railways of other countries and domestic railway departments. Considering RailCom, RailTrаck, RailCust, EuroRail-Kaliningrad projects of the TEDIM programme the EDI system for the Russian railways network is being improved for freight transportation under the international standards UN/EDIFACT, ebXML in order to launch electronic documentation flow for all the transportation participants who got interested in such service.
This system of electronic exchange of data on freight transportation will help providing information flow in the direct international communication between Russia, CIS and Baltic countries as well as the EU ones.
Data exchange is envisaged for information technologies creation that would provide all the transportation market participants and cargo owners with the needed information.
At the present moment according to the concluded agreements on testing e-data exchange is being implemented with Belarus, Latvia and Ukraine.
For further EDI system development ОАО RZD pland to sign agreements with Poland, Estonia, Kazakhstan and China.
Fast implantation e-data exchange while freight transportation on the international routes will assist on deliveries terms shortening, getting more rolling stock available and to reduce the prime-cost of transportation.
[~DETAIL_TEXT] => On the initiative of Finland in the end of 1994 while Germany and Russia's active participation within the framework of trilateral cooperation the Programme called TEDIM was worked out which stands for "Telematics in Foreign Trade Logistics and Delivery Management Programm to improve logistics system in the Baltic seabord and adjacent areas". During the ten years of this programme functioning about 35 projects on optimization of railway, maritime and motor transport operation have been developed included projects on customs procedures improvement.

Transport Forum for West and East
Ten years ago on January,9 (1995) the Ministry of Transport and Communication of Finland, the Ministry of Transport of Federal Republic of Germany altogether with the Ministry of Transport and the Ministry of Railways and Communication of Russia under participation of the Governement of Saint-Petersburg ratified "Memorandum on Mutual Understanding for launching the development programme "Telematics in foreign trade logistics and delivery management to improve logistics system in the Baltic regions seabord and adjacent areas (TEDIM)".
Some countries joined the project later (Estonia- 1996, Latvia- 2000,Poland- 2001). In 2003 at the 12th meeting of the ICC International Co-ordinating Committee Lithuania was taken as a member. Now Sweden and Denmark perform as observers at the international sessions dedicated to the programme development and also participate in some its projects.
Marina Yemelina, head of the working group of the State Computing Center, says: "TEDIM isn't just technology, it is a sort of flexible forum on coordination and discussions that includes certain development projects. The major responsibility for these projects implementation lies on private companies participating according to the wish expressed by the sides. The role of the social bodies is provided for working out optimal conditions for these companies functioning. The target of the Programme is to become an instrument of the North area of the EU- "New Northern Europe"
Initially TEDIM was determined at freight transportation competitiveness development included maritime transportation in for the Baltic sea regions and adjacent areas by applying the systems of telematics for international transportat and logistics. The problems of common technical standards working out, cooperation of customs bodies while border crossing procedures were emphasised.
TEDIM programme development was carried out under conditions of cooperation of the state and private companies. The experience acquired is of positive character and it is going to be implemented for the programme's further development.
In the Northern Europe and the EU TEDIM has become a well-known development forum and day-by-day new state and companies join the programme as it gives start for the new projects implementation.
It is important to mention customers' demand are considered by developers. Great attention is paid to upgraded and available now new technologies and procedures. At the first stage the projects should increase companies' competitiveness rates, i.e. those ones that function on the market of the Northern Europe and after on all the European markets.
Motivation for different companies and states participation in the programme is based on mutual profitability. Companies functioning out of TEDIM's territory can also take part in the projects. Great share of attention is paid to the sea transportation that plays the key role in the foreign trade relations between Russia and the EU countries. Railway transportation is also important as Finland is used to the same gauge as Russia is. The major factors in regards to railway transport are believed to be environmental principles. Among other key areas are custom services cooperation, standartisation and unified control of logistics systems, controlling cargo flows and safety issues.

Technologies for OAO RZD
ОАО RZD within the framework of TEDIM programme participates in the projects on mutual information data exchange for Russian-Finland communication - RailCom project deals with invoice for freight loading procedures; RailTrack is directed to data-exchange while cargo movement; RailCust is provided for creation the system of information cooperation of customs bodies and railways to speed up cars, containers, cargoes servicing rates at the border check-points of Russia and Finnish State Railways (VR) on the base of preliminary transfer of railway invoices via the systems of data transmission; EuroRail-Kaliningrad was started to provide information convoy for freight transportation on the route Poland-Kaliningrad
Such data exchange allows to regulate rail cars and containers flow towards the border check-points, to shorten the time spent on customs procedures and to create the base for cargo transportation according to "green street" principle.
In 2003 all the stages of RailCom project were completed and put into operation. 100% transmission of e-data for invoices between RZD and VR has been settled by now. Constant work is being held on e-data invoices authenticity achievement while their filling in at loading stations. Last year significant functional improvements were made. At that very moment tests of e-data transmission to Buslovskaya border railway station were carried on which was preliminary information on Finnish import invoices with using the experimental testing ground of ETRAN system. In 2005 after transfer to a new server and a new platform it is planned to the system into permanent operation and to carry on with work on transmitted information volumes expanding
As it has already been said within the framework of RailTrack project software for EDI-system to establish message-exchange under UN/EDIFACT standard was developed. In 2004 testing was carried on the Kirishi-Sheldvik ground. According to the results of testing procedures the project was amended and maintenance documentation re-considered. In the middle January, 2005 testing of automated exchange was repeated and after some errors delimination new testing will be held on the Mukkula-Saint-Petersburg route and Nakhodka-Buslovskaya (Transsib) line.
The programme implementation on the above-mentioned sectors helped to sort out some problems. For example, EDI-system organisation for Russian-Finland communicatin became possible that in its turn will allow to keep the international standards of UN/EDIFACT while electronic document turnover. Transit and import payment control till the moment of cargoes factual arriving has become much more efficient. Additional cargo volumes have been attracted to the route.

EDI or Contribution into Future
Perspectively ОАО RZD plans to expand experience of information exchange according to UN/EDIFACT standard within Russian-Finland communication towards information cooperation with railways of other countries and domestic railway departments. Considering RailCom, RailTrаck, RailCust, EuroRail-Kaliningrad projects of the TEDIM programme the EDI system for the Russian railways network is being improved for freight transportation under the international standards UN/EDIFACT, ebXML in order to launch electronic documentation flow for all the transportation participants who got interested in such service.
This system of electronic exchange of data on freight transportation will help providing information flow in the direct international communication between Russia, CIS and Baltic countries as well as the EU ones.
Data exchange is envisaged for information technologies creation that would provide all the transportation market participants and cargo owners with the needed information.
At the present moment according to the concluded agreements on testing e-data exchange is being implemented with Belarus, Latvia and Ukraine.
For further EDI system development ОАО RZD pland to sign agreements with Poland, Estonia, Kazakhstan and China.
Fast implantation e-data exchange while freight transportation on the international routes will assist on deliveries terms shortening, getting more rolling stock available and to reduce the prime-cost of transportation.
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РЖД-Партнер

From Conception to Realization

Vladimir Chernakov Lengiprotrans, OJSC Director General
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    [DETAIL_TEXT] => One of the recognized leaders of the Russian transport infrastructure objects planning market is institute of planning and pioneering of transport construction "Lengiprotrans", OJSC. Currently the company takes 60% of the market, developing in the Russian North-West.

The company apart from successful performance in Russia is experienced in cooperation with foreign partners. "Lengiprotrans" was involved in transport approaches to the Golf of Finland ports planning, participated in the Saint-Petersburg ring road plan development. The institute planned railways for Turkey, Syria, Latvia and Lithuania. Today the company cooperates with German and Finnish partners.
Also, working in all engineering zones, "Lengiprotrans" is experienced in road bed in the permafrost. The institute performs the whole planning cycle from exploratory design to survey and technical documents providing. Due to successful management strategy focused on complex approach to planning, the company developed the most difficult and serious projects in the Russia's North-West.
By Saint-Petersburg anniversary "Lengiprotrans" performed reconstruction and repair of railway stations of the city - Moscow, Vitebsk, Baltic, Finland, Detskoselsky, Novo-Peterhof and Oranienbaum ones, as well as construction of a new passenger rail terminal Ladozhskaya.
The project of high-speed rail transportation joining Saint-Petersburg and Helsinki development is underway. The key objective of the project is to reduce delivery period from Helsinki to the Ladozhsky railway station to 3 hours and10 minutes. In order to increase average train speed to 200 km/h the decision on division of freight and passenger traffic and construction of new groundwork for freight trains was made. According to our estimation, the best solution is to reroute cargo flows to the Losevo-Kamennogorsk-Vyborg direction and construct the new line Losevo-Kamennogorsk This enables to make high-speed rail transportation safety, reasonably use way to Finland via Svetogorsk and take cargo from Vyborg rail junction.
As a present to its 70th anniversary the institute got the contract on development of one of the most ambitious projects of latest decade - construction of the bridge from Far-Eastern mainland to the Russky island through the Bosporus Vostochny.
In order to optimize operations "Lengiprotrans", OJSC worked out Mission, which reflects key principles of the company's approach to commerce. The institute performs whole cycle of planning, research and engineering at the best professional level. The company gives top priority to traditional key corporate clients servicing but also works with smaller transport companies.
The company is guided by the idea of profitability in the project development. We are experienced in construction in any geographical zones. We continually improve quality of our services, enhance technological and information potential to meet today's market requirements.
In cooperation with our business partners company's management is guided by the principle of mutually beneficial results based on trust and meet all obligations.

Address: 196105, Russia, Saint-Petersburg
Moscovky pr., 143
Telephone: +7 (812) 387-77-06
Fax: +7 (812) 388-93-88
E-mail: mark@lgt.ru
Web-site: www.lgt.ru
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The company apart from successful performance in Russia is experienced in cooperation with foreign partners. "Lengiprotrans" was involved in transport approaches to the Golf of Finland ports planning, participated in the Saint-Petersburg ring road plan development. The institute planned railways for Turkey, Syria, Latvia and Lithuania. Today the company cooperates with German and Finnish partners.
Also, working in all engineering zones, "Lengiprotrans" is experienced in road bed in the permafrost. The institute performs the whole planning cycle from exploratory design to survey and technical documents providing. Due to successful management strategy focused on complex approach to planning, the company developed the most difficult and serious projects in the Russia's North-West.
By Saint-Petersburg anniversary "Lengiprotrans" performed reconstruction and repair of railway stations of the city - Moscow, Vitebsk, Baltic, Finland, Detskoselsky, Novo-Peterhof and Oranienbaum ones, as well as construction of a new passenger rail terminal Ladozhskaya.
The project of high-speed rail transportation joining Saint-Petersburg and Helsinki development is underway. The key objective of the project is to reduce delivery period from Helsinki to the Ladozhsky railway station to 3 hours and10 minutes. In order to increase average train speed to 200 km/h the decision on division of freight and passenger traffic and construction of new groundwork for freight trains was made. According to our estimation, the best solution is to reroute cargo flows to the Losevo-Kamennogorsk-Vyborg direction and construct the new line Losevo-Kamennogorsk This enables to make high-speed rail transportation safety, reasonably use way to Finland via Svetogorsk and take cargo from Vyborg rail junction.
As a present to its 70th anniversary the institute got the contract on development of one of the most ambitious projects of latest decade - construction of the bridge from Far-Eastern mainland to the Russky island through the Bosporus Vostochny.
In order to optimize operations "Lengiprotrans", OJSC worked out Mission, which reflects key principles of the company's approach to commerce. The institute performs whole cycle of planning, research and engineering at the best professional level. The company gives top priority to traditional key corporate clients servicing but also works with smaller transport companies.
The company is guided by the idea of profitability in the project development. We are experienced in construction in any geographical zones. We continually improve quality of our services, enhance technological and information potential to meet today's market requirements.
In cooperation with our business partners company's management is guided by the principle of mutually beneficial results based on trust and meet all obligations.

Address: 196105, Russia, Saint-Petersburg
Moscovky pr., 143
Telephone: +7 (812) 387-77-06
Fax: +7 (812) 388-93-88
E-mail: mark@lgt.ru
Web-site: www.lgt.ru
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Vladimir Chernakov Lengiprotrans, OJSC Director General
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    [DETAIL_TEXT] => One of the recognized leaders of the Russian transport infrastructure objects planning market is institute of planning and pioneering of transport construction "Lengiprotrans", OJSC. Currently the company takes 60% of the market, developing in the Russian North-West.

The company apart from successful performance in Russia is experienced in cooperation with foreign partners. "Lengiprotrans" was involved in transport approaches to the Golf of Finland ports planning, participated in the Saint-Petersburg ring road plan development. The institute planned railways for Turkey, Syria, Latvia and Lithuania. Today the company cooperates with German and Finnish partners.
Also, working in all engineering zones, "Lengiprotrans" is experienced in road bed in the permafrost. The institute performs the whole planning cycle from exploratory design to survey and technical documents providing. Due to successful management strategy focused on complex approach to planning, the company developed the most difficult and serious projects in the Russia's North-West.
By Saint-Petersburg anniversary "Lengiprotrans" performed reconstruction and repair of railway stations of the city - Moscow, Vitebsk, Baltic, Finland, Detskoselsky, Novo-Peterhof and Oranienbaum ones, as well as construction of a new passenger rail terminal Ladozhskaya.
The project of high-speed rail transportation joining Saint-Petersburg and Helsinki development is underway. The key objective of the project is to reduce delivery period from Helsinki to the Ladozhsky railway station to 3 hours and10 minutes. In order to increase average train speed to 200 km/h the decision on division of freight and passenger traffic and construction of new groundwork for freight trains was made. According to our estimation, the best solution is to reroute cargo flows to the Losevo-Kamennogorsk-Vyborg direction and construct the new line Losevo-Kamennogorsk This enables to make high-speed rail transportation safety, reasonably use way to Finland via Svetogorsk and take cargo from Vyborg rail junction.
As a present to its 70th anniversary the institute got the contract on development of one of the most ambitious projects of latest decade - construction of the bridge from Far-Eastern mainland to the Russky island through the Bosporus Vostochny.
In order to optimize operations "Lengiprotrans", OJSC worked out Mission, which reflects key principles of the company's approach to commerce. The institute performs whole cycle of planning, research and engineering at the best professional level. The company gives top priority to traditional key corporate clients servicing but also works with smaller transport companies.
The company is guided by the idea of profitability in the project development. We are experienced in construction in any geographical zones. We continually improve quality of our services, enhance technological and information potential to meet today's market requirements.
In cooperation with our business partners company's management is guided by the principle of mutually beneficial results based on trust and meet all obligations.

Address: 196105, Russia, Saint-Petersburg
Moscovky pr., 143
Telephone: +7 (812) 387-77-06
Fax: +7 (812) 388-93-88
E-mail: mark@lgt.ru
Web-site: www.lgt.ru
[~DETAIL_TEXT] => One of the recognized leaders of the Russian transport infrastructure objects planning market is institute of planning and pioneering of transport construction "Lengiprotrans", OJSC. Currently the company takes 60% of the market, developing in the Russian North-West.

The company apart from successful performance in Russia is experienced in cooperation with foreign partners. "Lengiprotrans" was involved in transport approaches to the Golf of Finland ports planning, participated in the Saint-Petersburg ring road plan development. The institute planned railways for Turkey, Syria, Latvia and Lithuania. Today the company cooperates with German and Finnish partners.
Also, working in all engineering zones, "Lengiprotrans" is experienced in road bed in the permafrost. The institute performs the whole planning cycle from exploratory design to survey and technical documents providing. Due to successful management strategy focused on complex approach to planning, the company developed the most difficult and serious projects in the Russia's North-West.
By Saint-Petersburg anniversary "Lengiprotrans" performed reconstruction and repair of railway stations of the city - Moscow, Vitebsk, Baltic, Finland, Detskoselsky, Novo-Peterhof and Oranienbaum ones, as well as construction of a new passenger rail terminal Ladozhskaya.
The project of high-speed rail transportation joining Saint-Petersburg and Helsinki development is underway. The key objective of the project is to reduce delivery period from Helsinki to the Ladozhsky railway station to 3 hours and10 minutes. In order to increase average train speed to 200 km/h the decision on division of freight and passenger traffic and construction of new groundwork for freight trains was made. According to our estimation, the best solution is to reroute cargo flows to the Losevo-Kamennogorsk-Vyborg direction and construct the new line Losevo-Kamennogorsk This enables to make high-speed rail transportation safety, reasonably use way to Finland via Svetogorsk and take cargo from Vyborg rail junction.
As a present to its 70th anniversary the institute got the contract on development of one of the most ambitious projects of latest decade - construction of the bridge from Far-Eastern mainland to the Russky island through the Bosporus Vostochny.
In order to optimize operations "Lengiprotrans", OJSC worked out Mission, which reflects key principles of the company's approach to commerce. The institute performs whole cycle of planning, research and engineering at the best professional level. The company gives top priority to traditional key corporate clients servicing but also works with smaller transport companies.
The company is guided by the idea of profitability in the project development. We are experienced in construction in any geographical zones. We continually improve quality of our services, enhance technological and information potential to meet today's market requirements.
In cooperation with our business partners company's management is guided by the principle of mutually beneficial results based on trust and meet all obligations.

Address: 196105, Russia, Saint-Petersburg
Moscovky pr., 143
Telephone: +7 (812) 387-77-06
Fax: +7 (812) 388-93-88
E-mail: mark@lgt.ru
Web-site: www.lgt.ru
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Vladimir Chernakov Lengiprotrans, OJSC Director General
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Vladimir Chernakov Lengiprotrans, OJSC Director General
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РЖД-Партнер

Transport-Forwarding Market of Russia: Peculiarities and Tendencies

Semyon Rezer Guild of Forwarders President
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    [DETAIL_TEXT] => By now transport-forwarding sector of Russia has been privatized. Moreover 17 thousand of enterprises providing their services for domestic and international transportation have been involved into it. Prior state transport-forwarding and agent enterprises have become joint-stock companies including the state stock participation. Though forwarding market in Russia can't be called stable and absolutely "civilized" one.

Railway Forwarding Market of Russia
At today's world market the process of goods deliveries goes hand in hand with a set of additional operations and services providing but just transportation that makes possible effective distribution of goods within the chain of deliveries. While this transport-forwarding companies are aimed at the task of such distribution in the logistic chain. Forwarding service now is the most important consistent of transportation process including delivery, warehousing services, packaging and aggregation as well as transportation by any mode of transport, defining optimal routes for transportation within direct, intermodal and international communication, choosing best tariff rate.
Main part for the international turnover servicing belongs to biggest forwarding and carrier companies with staff of over 2000 employees that have wide net of business relations all over the world. They possess their own park of rail cars and containers, large storage areas in big cities, ports and other transport junctions, vessels and berths. Among such companies operating in Russia are Schenker and Co, Danzas, Kuehne and Nagel, ASG, Nippon Express, Panalpina etc. Despite being registered in Germany, Switzerland, France and Japan they have turned into international monopolies defining the price level for domestic and international markets of forwarding and transport services.
At the same time for recent years active part in the process of transport-forwarding services providing our national transport and transport-forwarding enterprises located in Moscow and Saint-Petersburg and other regional centers of the country have been taking along with their foreign partners.
In the course of forwarding development in Russia three stages can be outlined that go correspondingly with the stages of forwarding service while railway transportation development. The first one (1991-1995) is connected with de-monopolization of forwarding companies organizing railway transportation. Among major problems forwarders faced at that time were the following ones: absence of normative-and-legislative base as well as normative-technological base of transport activities implementation, low quality and confined choice of services offered by forwarders, companies and their clients' lack of funds, functioning great amount of small firms-mediators, shortening of railways profit received from transport-forwarding activities.
Transfer to the second stage (1996-2002) occurred due to the state's transportation regulation strengthening. It is characterized by competition development between forwarders and establishing normative base for transport-forwarding services. Among peculiarities of the period that can be called demands to forwarders made by the Ministry of Railways of Russia getting stricter, integration of forwarders organization strengthening on the corporate level, widening the choice of transport-forwarding services, forwarding companies focusing on high-profitable cargo transportation. At this stage basic principles of economic relations of the Russian railways with forwarding companies within the sphere of payment for cargo transportation in the international communication were formed. To solve all the problems accumulated thanks to overdue debts of forwarding companies the mechanism of 100% prepayment for transportation was launched and control of funds getting in enough quantity and on time was set up.
The third stage (2003 up to the present moment) is connected with changes in forwarding activities due to railway transport restructuring and approving new Federal bills on transport-forwarding sector including. Today mutual relations of transport-forwarding companies and enterprises being serviced by them are built on the forwarding agreements basis that defines:
  • parties' liabilities;
  • types, volumes and character of transport-forwarding services provided, payment terms and conditions;
  • responsibility for breaking contractual obligations.
    Major advantages received by the companies that apply to forwarders services are in first turn connected with sale volumes increase and providing customers with better servicing then goes cutting the period of cargo delivery and ability to react market and customers' changes rapidly. As a result the company-supplier cooperating with a forwarder gets serious advantage to a rival while competing for market share. Especially it is very important for transport functioning in large junctions, sea ports where railway transport suffers great losses due to heavy congestions. In its turn forwarding company that controls the whole process of cargo delivery within all the route while intermodal communication has great advantage to sector forwarders. That is a reason of forwarders functioning in Russia being quite peculiar, i.e. large forwarder even tending towards let's say railway transportation usually possesses all the instruments for intermodal service.
    Analysis of forwarding international cargo transportation by the Russian railway showed the leading role of its dynamics and structure formation for export-import communication. At the current moment the volume of international transportation is defined by trade relations of Russia with other countries mainly. The international transportation market is greatly influenced by national currency stability, inflation rate and international raw materials markets conditions. International transportation forwarding share in aggregate freight railway transportation volume amounts to 25% and tends to increase. But resources for such transportation implementation are not used fully first of all due to trade routes via the territory of Russia being non-attractive for foreign customers, transit capacity of the Russian railways doesn't reach its maximum potential. Thus the necessity arises to work out steps directed to international transportation volumes increase, their competitiveness development and their structure optimization. Further export-import and transit cargo volumes increase via the Russian routes will be defined not only by rates of economic growth but also efficient forwarding activities. Considering great attention paid to international transport corridors development, issues on the Russian railways cooperation with forwarders are becoming more and more important as transit railway transportation can be paid only in a monopoly way via forwarding organizations having concluded contracts with OAO RZD Centers of Service Trade (the only exception is containerized transportation partially paid by OAO RZD subsidiary Transcontainer)
    The dynamics of forwarding cargo railway transportation for international routes is depicted on the graph 1. (mln.tonnes)


    Speaking of crucial problems of international transportation forwarding development the following ones can be mentioned: lack in normative-and-legislative base, first of all not well worked out system of principles of intermodal transportation organization under single forwarder control, technological problems and closely connected with them financial losses due to lack in cooperation between all the participants of cargo transportation market. It should be noticed the Russian forwarders function under conditions of heavy competitiveness, absence of civilized private undertakings traditions and still non-developed state policy that can't assist in creation of favourable surrounding for this business development. Perspectives of forwarding development are connected with implementation of modern logistic technologies, new technical equipment and IT applying, transportation process development, combining railway forwarders with forwarders of other transport modes activities, investment, and surely upgrading normative-and-legislative base.

    Legislation and perspectives of forwarding development in Russia
    Great amount of transport-forwarding enterprises owners call the state support at the current stage as just declarative and not provided with real liabilities. We can refer to the following major lacks of normative-and-legislative base of Russia in respect of transport forwarding sector:
  • functioning legislation not going hand in hand with practice;
  • divergence of normative-and-legislative bills within transport and transport-forwarding sectors for different modes of transport;
  • Law level of providing sector enterprises with information on approving this or that bill etc.
    One more crucial problem of our legislation is non-efficient system of forwarding taxation.
    Apart from the general absence of well-built structure of the Tax Code in respect of transport-forwarding sector non-professional appliance of single tax on imputed earnings at times can take place.

    Table 1
    Bill on "Transport-forwarding activities" of the RF compared to functioning bills in Japan, USA and Germany


    Problems connected with relations of transport-forwarding and state power subjects in Russia should be solved with participation of the system of public forwarders organizations. Forwarding guilds, associations, unions and other organizations of different sorts should fill the gap existing between all the levels of state power and small businesses representatives.
    Now legal relations are being formed while forwarding is regulated by set of legislative documents among which are the following ones:
    Civil Code, Part 2, Chapter 41 "Transport Forwarding"
    RF Law "On customers' rights protection"
    RF President's decrees
    Law on forwarding issued in 2003
    Commercial Seafaring Code
    Motor transport regulation
    Coastal trade regulation
    RF railways regulation and other documents.
    But all of them leave apart some principle issues. Thus forwarder's status hasn't been defined yet. What is it: mediator, logist or operator? The Ministry of Transport of the RF and other Governmental bodies believe it is a mediator. The Russian Forwarders Association and Guild of Forwarders follow the opposite definition. Their major argument is as follows: forwarder controls transportation process and provides cargo owner with additional services, and for intermodal communication forwarder is a basic link, i.e. organizer of transportation by different modes of transport.
    It is very important to sort out the issue of responsibility differentiation between forwarder and carrier as well as forwarders' responsibility to cargo owners and other transport process participants. This process can be settled by two ways.
    First, the law to give base for making contractual liabilities for forwarding services should be approved (in particular, it concerns railway forwarders).
    Second, with help of forwarders associations and guilds framework declaration should be worked out.
    In the world great attention is paid to multimodal transportation as they exclude intermediate goods handling: cargo is packaged and transport module integrity is not broken. It decreases expenditures. In Russia multimodal business suffers lack of unified transport document. Single tariff can't be defined that makes it impossible to analyze cargo flows. The Russian representatives of different modes of transport haven't come to an agreement on the unified form of e-document for freight transportation.
    The base for forwarding activities its licensing and certification can give. But the following questions haven't been solved yet: who has the right to issue the license (state bodies or forwarders associations), how obligatory certification for forwarders is, what sort of licenses forwarder involved into multimodal transportation should have (i.e. for which modes of transport) etc. All these issues should be sorted out in the shortest terms.
    In Russia in 2003 the Bill "On transport-forwarding activities" was approved and its major targets were as follows:
  • providing with conditions for high-quality services of cargo transportation;
  • unified demands to forwarders and their clients establishment while following the forwarding agreement;
  • defining the rights, liabilities and responsibilities of cargo owners and forwarders while cargo forwarding process;
  • economic efficiency increase for cargo transportation.
    In the table offered normative-and-legislative decrees of Russia and foreign countries are shown.
    According to some experts, new rules of forwarding procedures should be added to already existing ones. They are determined at major principles establishment based on which normative documents regulating transport-forwarding sector can be worked out.
    Economic relations of OAO RZD with forwarding associations in respect of cargo transportation in international communication are being formed under some factors influence. Thus outer factors condition necessity of flexible railway tariff system developing. System of Service Trade establishment in the railways sector resulted in re-organization of relations with forwarders while transportation calculating considering flexible tariff policy aspect. Inner factors influence can be observed while having accounting procedures for railway transportation the complicated organization structure and specialized software for collecting information on transportation come into force.
    Economic relations of the Russian railways with forwarders on cargo transportation in international communication (graph 2) should be directed towards accounts accuracy and transparency, efficiency increase, expenditures shortening for cooperation with forwarding organizations under conditions of following economic interests both OAO RZD and a forwarder.

    Foreign Companies Entering The Russian Forwarding Market
    The factor of great importance to evaluate perspectives of forwarding market is forecasted Russia's joining the WTO and thus welcoming intentions of Russia to cooperate with foreign transport companies. Large carriers and forwarding companies have been participating in forwarding services organization for such cargoes as oil products, ferrous and non-ferrous metals etc. for long time already.
    Though the most important issues of forwarding sector development in Russia with foreign companies' participation depend on container transportation organization level. The world's volume of container transportation has been growing annually by 8-10% starting from 1986. In 2003 it amounted to 281.4 mln. TEUs. In the developed countries about 55-60% of cargo suitable for container transportation is carried by such a way and by 2010 the level of containerization will reach 70%. Russia has weakened its positions within the world container transportation market for recent twenty years. As the beginning of stable container transportation growth in Russia the year of 1999 can be considered and for the last five years container transportation volumes have got up by two times. According to experts, under conditions of demand exceeding supply the reached growth rates of 20-25% will be kept till 2010.

    Table 2
    Dynamics and containerized cargo transportation structure in respect of modes of transport


    In 2003 containerized cargo transportation volume amounted to 7.5mln.tonnes and turnover took 66.8 bn.t/km. The container transportation share in the total volume of freight transportation in 2003 took 1.3%, for turnover it was 3.9% and in terms of profit- 3.2%. The rates of railway container transportation amount to 13-15% per year. By 2010 railway container transportation volume will reach 30 mln.tonnes.
    The structure of forwarded container transportation in Russia in 2003 is as follows: metae -17%, chemicals - 13%, other cargoes - 13%, paper - 11%, ferrous metals - 9%, industrial goods-7%, foodstuff - 7%, constructive materials -5%, machinery - 5%
    In the structure of container transportation in terms of modes of communication the major share belongs to domestic goods, though this share decreased from 78% (2000) to 63% (2003).
    All in all in 2003 some 1395 000 TEUs was transported by railways including 165 th.TEUs of transit, 155 th. TEUs of import, 220 th. TEUs of export and 855 th. TEUs of domestic communication.
    In accordance with container park structure transportation is implemented by three-tonnes, five-tonnes, 20-feet and 40-feet containers.
    20-feet and 40-feet containers are mainly used for international transportation, that in its turn is characterized by stable tendency of growth. According to available data, the transportation volume between Eastern Asia and Europe is estimated at the level of 10-12 mln.TEUs. While this transit containerized transportation volume by the Transsib amounted to 117 th. TEUs (1%). The rest volume is transported by sea transport of foreign countries. According to experts, motor transport takes 45-50% of containerized cargo transportation basically for export-import transportation for short and medium distances up to three th.km. Quite large share of containers is forwarded and transported by motor transport from and to ports bypassing railway. It concerns in first turn such ports as Novorossiysk and other terminals of Azov-Black Sea basin as well as the port of Saint-Petersburg and Baltic region. The main competing advantages of forwarders' applying to motor transport for container transportation is its high-range mobility, simplicity of cargo claiming to transportation "door-to-door" delivery opportunity, also flexible price policy that allows to minimize losses suffered from empty cars running.
    To develop competitiveness within forwarding containerized cargo sector OAO RZD participates in the projects on the companies' establishment that will implement containerized cargo transportation on some routes. For example, Russkaya Troyka JSC was established by OAO RZD and Far Eastern Shipping Company to develop transportation by the TSR.
    As the major transport services customers forwarding firms both independent and affiliated ones with large manufacturing and distribution companies perform. Their share in the total volume of container cargo transportation services provided by RZD amounts to 75% from the volumes of dispatches.
    The share of cargo owners dispatches both private and and on juridical people amounts to 20%, and the share of the state structures, for example the Ministry of Emergencies of the RF and amounts to not more than 3%.
    It is obvious nowadays further development of container transportation in Russia is impossible without establishment of large forwarding transport-logistic complexes corresponding all the modern world standards. It often happens the time saved by high-speed trains is wasted during staying on the terminus loading/unloading depots.
    To overcome the above-mentioned difficulties and enter the market of Russian import/export the most part of the leading world's carriers and independent logistic companies enlarge the range of their activities in the RF. Thus the largest railway company of America CSX via its subsidiary in logistic and terminal business controls the biggest terminal in the port Vostochny. The largest European terminal operator Eurogate altogether with the Russian partners participate in Ust-Luga port container complex development.
    Now we can speak of competing existence on the containerized cargo transportation market while the transportation itself within railway sector is still temporary-monopoly (Federal law "On Natural Monopolies" Part 1, 2 clause 4). With a transfer from natural monopolies regulation for transportation to infrastructure regulation launched for container transportation OAO RZD subsidiary "Transcontainer" will compete with forwarders and carriers established on the basis of other container park owners.
    Within services on transportation organization by railways Transcontainer competes with container park forwarders (7-10% of transportation volumes) as well as container suitable cargo transportation for other types of rolling stock.
    It should be also noticed that the great part of container suitable cargo is transported by containers leased by the Russian companies of foreign registration. In connection with Russia's joining the WTO soon competitiveness activization can follow due to our foreign partners activities. Moreover competitiveness can arise from alternative modes of transport-maritime and motor transport, in particular.
    Railway transport of Russia isn't represented on the foreign market of transport and forwarding services. While this, possible volumes of export-import of the Russian transport services are taken by foreign companies functioning in Russia. Despite this representatives of foreign transport companies believe OAO RZD having consolidated representative within the forwarding and container sector of transport market will allow to improve cooperation on issues of joint activities and international market of forwarding services.
    The most part of cargo flows was concentrated along transport corridors, in particular, along Transsib-unique transport system letting to shorten time of container deliveries from the countries of South-Eastern Asia and Europe at two times compared to traditional sea route. Meanwhile cargo owners polls show that a priority factor while choosing transportation way and route is transportation price. Speed and quality go afterwards in this case. Maximum interest is paid to through transport service which sale increases forwarder's competitiveness significantly.
    The degree of integration into the international transport system can be judged according to the share of functioning on the transport foreign market that includes forwarding activities, transport equipment providing, logistic chains organization etc.
    Russia's interests on the market of international transportation dictate necessity of powerful national forwarding companies' development.
    Russia's integration into the international transport-forwarding system may develop according to the following directions:
  • Independent joint-stock forwarding companies establishment that could be competitive on the international market. Among the brightest examples is "Transcontainer" OAO RZD subsidiary;
  • Competitiveness development on the domestic market under conditions of weakening of Centers of Service Trade of OAO RZD;
  • Container transportation development as a basis of forwarding business in Russia and all over the world;
  • Regulated tariff system;
  • Transportation operations informatisation, many of foreign companies call themselves 3PL or 4PL-logistic enterprises;
  • Participation of forwarding companies of Russia such as Severstal, Transcontainer, Far-Eastern Shipping Company in international and intermodal communication that will improve the climate on the forwarding market and to set up competitiveness with foreign forwarders.
    Transport-forwarding service development in Russia under conditions of transport restructuring has got great potential and is of highly perspective sort. It in its turn give opportunities of the Russian forwarding companies to integrate international transportation business.
    [~DETAIL_TEXT] => By now transport-forwarding sector of Russia has been privatized. Moreover 17 thousand of enterprises providing their services for domestic and international transportation have been involved into it. Prior state transport-forwarding and agent enterprises have become joint-stock companies including the state stock participation. Though forwarding market in Russia can't be called stable and absolutely "civilized" one.

    Railway Forwarding Market of Russia
    At today's world market the process of goods deliveries goes hand in hand with a set of additional operations and services providing but just transportation that makes possible effective distribution of goods within the chain of deliveries. While this transport-forwarding companies are aimed at the task of such distribution in the logistic chain. Forwarding service now is the most important consistent of transportation process including delivery, warehousing services, packaging and aggregation as well as transportation by any mode of transport, defining optimal routes for transportation within direct, intermodal and international communication, choosing best tariff rate.
    Main part for the international turnover servicing belongs to biggest forwarding and carrier companies with staff of over 2000 employees that have wide net of business relations all over the world. They possess their own park of rail cars and containers, large storage areas in big cities, ports and other transport junctions, vessels and berths. Among such companies operating in Russia are Schenker and Co, Danzas, Kuehne and Nagel, ASG, Nippon Express, Panalpina etc. Despite being registered in Germany, Switzerland, France and Japan they have turned into international monopolies defining the price level for domestic and international markets of forwarding and transport services.
    At the same time for recent years active part in the process of transport-forwarding services providing our national transport and transport-forwarding enterprises located in Moscow and Saint-Petersburg and other regional centers of the country have been taking along with their foreign partners.
    In the course of forwarding development in Russia three stages can be outlined that go correspondingly with the stages of forwarding service while railway transportation development. The first one (1991-1995) is connected with de-monopolization of forwarding companies organizing railway transportation. Among major problems forwarders faced at that time were the following ones: absence of normative-and-legislative base as well as normative-technological base of transport activities implementation, low quality and confined choice of services offered by forwarders, companies and their clients' lack of funds, functioning great amount of small firms-mediators, shortening of railways profit received from transport-forwarding activities.
    Transfer to the second stage (1996-2002) occurred due to the state's transportation regulation strengthening. It is characterized by competition development between forwarders and establishing normative base for transport-forwarding services. Among peculiarities of the period that can be called demands to forwarders made by the Ministry of Railways of Russia getting stricter, integration of forwarders organization strengthening on the corporate level, widening the choice of transport-forwarding services, forwarding companies focusing on high-profitable cargo transportation. At this stage basic principles of economic relations of the Russian railways with forwarding companies within the sphere of payment for cargo transportation in the international communication were formed. To solve all the problems accumulated thanks to overdue debts of forwarding companies the mechanism of 100% prepayment for transportation was launched and control of funds getting in enough quantity and on time was set up.
    The third stage (2003 up to the present moment) is connected with changes in forwarding activities due to railway transport restructuring and approving new Federal bills on transport-forwarding sector including. Today mutual relations of transport-forwarding companies and enterprises being serviced by them are built on the forwarding agreements basis that defines:
  • parties' liabilities;
  • types, volumes and character of transport-forwarding services provided, payment terms and conditions;
  • responsibility for breaking contractual obligations.
    Major advantages received by the companies that apply to forwarders services are in first turn connected with sale volumes increase and providing customers with better servicing then goes cutting the period of cargo delivery and ability to react market and customers' changes rapidly. As a result the company-supplier cooperating with a forwarder gets serious advantage to a rival while competing for market share. Especially it is very important for transport functioning in large junctions, sea ports where railway transport suffers great losses due to heavy congestions. In its turn forwarding company that controls the whole process of cargo delivery within all the route while intermodal communication has great advantage to sector forwarders. That is a reason of forwarders functioning in Russia being quite peculiar, i.e. large forwarder even tending towards let's say railway transportation usually possesses all the instruments for intermodal service.
    Analysis of forwarding international cargo transportation by the Russian railway showed the leading role of its dynamics and structure formation for export-import communication. At the current moment the volume of international transportation is defined by trade relations of Russia with other countries mainly. The international transportation market is greatly influenced by national currency stability, inflation rate and international raw materials markets conditions. International transportation forwarding share in aggregate freight railway transportation volume amounts to 25% and tends to increase. But resources for such transportation implementation are not used fully first of all due to trade routes via the territory of Russia being non-attractive for foreign customers, transit capacity of the Russian railways doesn't reach its maximum potential. Thus the necessity arises to work out steps directed to international transportation volumes increase, their competitiveness development and their structure optimization. Further export-import and transit cargo volumes increase via the Russian routes will be defined not only by rates of economic growth but also efficient forwarding activities. Considering great attention paid to international transport corridors development, issues on the Russian railways cooperation with forwarders are becoming more and more important as transit railway transportation can be paid only in a monopoly way via forwarding organizations having concluded contracts with OAO RZD Centers of Service Trade (the only exception is containerized transportation partially paid by OAO RZD subsidiary Transcontainer)
    The dynamics of forwarding cargo railway transportation for international routes is depicted on the graph 1. (mln.tonnes)


    Speaking of crucial problems of international transportation forwarding development the following ones can be mentioned: lack in normative-and-legislative base, first of all not well worked out system of principles of intermodal transportation organization under single forwarder control, technological problems and closely connected with them financial losses due to lack in cooperation between all the participants of cargo transportation market. It should be noticed the Russian forwarders function under conditions of heavy competitiveness, absence of civilized private undertakings traditions and still non-developed state policy that can't assist in creation of favourable surrounding for this business development. Perspectives of forwarding development are connected with implementation of modern logistic technologies, new technical equipment and IT applying, transportation process development, combining railway forwarders with forwarders of other transport modes activities, investment, and surely upgrading normative-and-legislative base.

    Legislation and perspectives of forwarding development in Russia
    Great amount of transport-forwarding enterprises owners call the state support at the current stage as just declarative and not provided with real liabilities. We can refer to the following major lacks of normative-and-legislative base of Russia in respect of transport forwarding sector:
  • functioning legislation not going hand in hand with practice;
  • divergence of normative-and-legislative bills within transport and transport-forwarding sectors for different modes of transport;
  • Law level of providing sector enterprises with information on approving this or that bill etc.
    One more crucial problem of our legislation is non-efficient system of forwarding taxation.
    Apart from the general absence of well-built structure of the Tax Code in respect of transport-forwarding sector non-professional appliance of single tax on imputed earnings at times can take place.

    Table 1
    Bill on "Transport-forwarding activities" of the RF compared to functioning bills in Japan, USA and Germany


    Problems connected with relations of transport-forwarding and state power subjects in Russia should be solved with participation of the system of public forwarders organizations. Forwarding guilds, associations, unions and other organizations of different sorts should fill the gap existing between all the levels of state power and small businesses representatives.
    Now legal relations are being formed while forwarding is regulated by set of legislative documents among which are the following ones:
    Civil Code, Part 2, Chapter 41 "Transport Forwarding"
    RF Law "On customers' rights protection"
    RF President's decrees
    Law on forwarding issued in 2003
    Commercial Seafaring Code
    Motor transport regulation
    Coastal trade regulation
    RF railways regulation and other documents.
    But all of them leave apart some principle issues. Thus forwarder's status hasn't been defined yet. What is it: mediator, logist or operator? The Ministry of Transport of the RF and other Governmental bodies believe it is a mediator. The Russian Forwarders Association and Guild of Forwarders follow the opposite definition. Their major argument is as follows: forwarder controls transportation process and provides cargo owner with additional services, and for intermodal communication forwarder is a basic link, i.e. organizer of transportation by different modes of transport.
    It is very important to sort out the issue of responsibility differentiation between forwarder and carrier as well as forwarders' responsibility to cargo owners and other transport process participants. This process can be settled by two ways.
    First, the law to give base for making contractual liabilities for forwarding services should be approved (in particular, it concerns railway forwarders).
    Second, with help of forwarders associations and guilds framework declaration should be worked out.
    In the world great attention is paid to multimodal transportation as they exclude intermediate goods handling: cargo is packaged and transport module integrity is not broken. It decreases expenditures. In Russia multimodal business suffers lack of unified transport document. Single tariff can't be defined that makes it impossible to analyze cargo flows. The Russian representatives of different modes of transport haven't come to an agreement on the unified form of e-document for freight transportation.
    The base for forwarding activities its licensing and certification can give. But the following questions haven't been solved yet: who has the right to issue the license (state bodies or forwarders associations), how obligatory certification for forwarders is, what sort of licenses forwarder involved into multimodal transportation should have (i.e. for which modes of transport) etc. All these issues should be sorted out in the shortest terms.
    In Russia in 2003 the Bill "On transport-forwarding activities" was approved and its major targets were as follows:
  • providing with conditions for high-quality services of cargo transportation;
  • unified demands to forwarders and their clients establishment while following the forwarding agreement;
  • defining the rights, liabilities and responsibilities of cargo owners and forwarders while cargo forwarding process;
  • economic efficiency increase for cargo transportation.
    In the table offered normative-and-legislative decrees of Russia and foreign countries are shown.
    According to some experts, new rules of forwarding procedures should be added to already existing ones. They are determined at major principles establishment based on which normative documents regulating transport-forwarding sector can be worked out.
    Economic relations of OAO RZD with forwarding associations in respect of cargo transportation in international communication are being formed under some factors influence. Thus outer factors condition necessity of flexible railway tariff system developing. System of Service Trade establishment in the railways sector resulted in re-organization of relations with forwarders while transportation calculating considering flexible tariff policy aspect. Inner factors influence can be observed while having accounting procedures for railway transportation the complicated organization structure and specialized software for collecting information on transportation come into force.
    Economic relations of the Russian railways with forwarders on cargo transportation in international communication (graph 2) should be directed towards accounts accuracy and transparency, efficiency increase, expenditures shortening for cooperation with forwarding organizations under conditions of following economic interests both OAO RZD and a forwarder.

    Foreign Companies Entering The Russian Forwarding Market
    The factor of great importance to evaluate perspectives of forwarding market is forecasted Russia's joining the WTO and thus welcoming intentions of Russia to cooperate with foreign transport companies. Large carriers and forwarding companies have been participating in forwarding services organization for such cargoes as oil products, ferrous and non-ferrous metals etc. for long time already.
    Though the most important issues of forwarding sector development in Russia with foreign companies' participation depend on container transportation organization level. The world's volume of container transportation has been growing annually by 8-10% starting from 1986. In 2003 it amounted to 281.4 mln. TEUs. In the developed countries about 55-60% of cargo suitable for container transportation is carried by such a way and by 2010 the level of containerization will reach 70%. Russia has weakened its positions within the world container transportation market for recent twenty years. As the beginning of stable container transportation growth in Russia the year of 1999 can be considered and for the last five years container transportation volumes have got up by two times. According to experts, under conditions of demand exceeding supply the reached growth rates of 20-25% will be kept till 2010.

    Table 2
    Dynamics and containerized cargo transportation structure in respect of modes of transport


    In 2003 containerized cargo transportation volume amounted to 7.5mln.tonnes and turnover took 66.8 bn.t/km. The container transportation share in the total volume of freight transportation in 2003 took 1.3%, for turnover it was 3.9% and in terms of profit- 3.2%. The rates of railway container transportation amount to 13-15% per year. By 2010 railway container transportation volume will reach 30 mln.tonnes.
    The structure of forwarded container transportation in Russia in 2003 is as follows: metae -17%, chemicals - 13%, other cargoes - 13%, paper - 11%, ferrous metals - 9%, industrial goods-7%, foodstuff - 7%, constructive materials -5%, machinery - 5%
    In the structure of container transportation in terms of modes of communication the major share belongs to domestic goods, though this share decreased from 78% (2000) to 63% (2003).
    All in all in 2003 some 1395 000 TEUs was transported by railways including 165 th.TEUs of transit, 155 th. TEUs of import, 220 th. TEUs of export and 855 th. TEUs of domestic communication.
    In accordance with container park structure transportation is implemented by three-tonnes, five-tonnes, 20-feet and 40-feet containers.
    20-feet and 40-feet containers are mainly used for international transportation, that in its turn is characterized by stable tendency of growth. According to available data, the transportation volume between Eastern Asia and Europe is estimated at the level of 10-12 mln.TEUs. While this transit containerized transportation volume by the Transsib amounted to 117 th. TEUs (1%). The rest volume is transported by sea transport of foreign countries. According to experts, motor transport takes 45-50% of containerized cargo transportation basically for export-import transportation for short and medium distances up to three th.km. Quite large share of containers is forwarded and transported by motor transport from and to ports bypassing railway. It concerns in first turn such ports as Novorossiysk and other terminals of Azov-Black Sea basin as well as the port of Saint-Petersburg and Baltic region. The main competing advantages of forwarders' applying to motor transport for container transportation is its high-range mobility, simplicity of cargo claiming to transportation "door-to-door" delivery opportunity, also flexible price policy that allows to minimize losses suffered from empty cars running.
    To develop competitiveness within forwarding containerized cargo sector OAO RZD participates in the projects on the companies' establishment that will implement containerized cargo transportation on some routes. For example, Russkaya Troyka JSC was established by OAO RZD and Far Eastern Shipping Company to develop transportation by the TSR.
    As the major transport services customers forwarding firms both independent and affiliated ones with large manufacturing and distribution companies perform. Their share in the total volume of container cargo transportation services provided by RZD amounts to 75% from the volumes of dispatches.
    The share of cargo owners dispatches both private and and on juridical people amounts to 20%, and the share of the state structures, for example the Ministry of Emergencies of the RF and amounts to not more than 3%.
    It is obvious nowadays further development of container transportation in Russia is impossible without establishment of large forwarding transport-logistic complexes corresponding all the modern world standards. It often happens the time saved by high-speed trains is wasted during staying on the terminus loading/unloading depots.
    To overcome the above-mentioned difficulties and enter the market of Russian import/export the most part of the leading world's carriers and independent logistic companies enlarge the range of their activities in the RF. Thus the largest railway company of America CSX via its subsidiary in logistic and terminal business controls the biggest terminal in the port Vostochny. The largest European terminal operator Eurogate altogether with the Russian partners participate in Ust-Luga port container complex development.
    Now we can speak of competing existence on the containerized cargo transportation market while the transportation itself within railway sector is still temporary-monopoly (Federal law "On Natural Monopolies" Part 1, 2 clause 4). With a transfer from natural monopolies regulation for transportation to infrastructure regulation launched for container transportation OAO RZD subsidiary "Transcontainer" will compete with forwarders and carriers established on the basis of other container park owners.
    Within services on transportation organization by railways Transcontainer competes with container park forwarders (7-10% of transportation volumes) as well as container suitable cargo transportation for other types of rolling stock.
    It should be also noticed that the great part of container suitable cargo is transported by containers leased by the Russian companies of foreign registration. In connection with Russia's joining the WTO soon competitiveness activization can follow due to our foreign partners activities. Moreover competitiveness can arise from alternative modes of transport-maritime and motor transport, in particular.
    Railway transport of Russia isn't represented on the foreign market of transport and forwarding services. While this, possible volumes of export-import of the Russian transport services are taken by foreign companies functioning in Russia. Despite this representatives of foreign transport companies believe OAO RZD having consolidated representative within the forwarding and container sector of transport market will allow to improve cooperation on issues of joint activities and international market of forwarding services.
    The most part of cargo flows was concentrated along transport corridors, in particular, along Transsib-unique transport system letting to shorten time of container deliveries from the countries of South-Eastern Asia and Europe at two times compared to traditional sea route. Meanwhile cargo owners polls show that a priority factor while choosing transportation way and route is transportation price. Speed and quality go afterwards in this case. Maximum interest is paid to through transport service which sale increases forwarder's competitiveness significantly.
    The degree of integration into the international transport system can be judged according to the share of functioning on the transport foreign market that includes forwarding activities, transport equipment providing, logistic chains organization etc.
    Russia's interests on the market of international transportation dictate necessity of powerful national forwarding companies' development.
    Russia's integration into the international transport-forwarding system may develop according to the following directions:
  • Independent joint-stock forwarding companies establishment that could be competitive on the international market. Among the brightest examples is "Transcontainer" OAO RZD subsidiary;
  • Competitiveness development on the domestic market under conditions of weakening of Centers of Service Trade of OAO RZD;
  • Container transportation development as a basis of forwarding business in Russia and all over the world;
  • Regulated tariff system;
  • Transportation operations informatisation, many of foreign companies call themselves 3PL or 4PL-logistic enterprises;
  • Participation of forwarding companies of Russia such as Severstal, Transcontainer, Far-Eastern Shipping Company in international and intermodal communication that will improve the climate on the forwarding market and to set up competitiveness with foreign forwarders.
    Transport-forwarding service development in Russia under conditions of transport restructuring has got great potential and is of highly perspective sort. It in its turn give opportunities of the Russian forwarding companies to integrate international transportation business.
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    Semyon Rezer Guild of Forwarders President
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    Semyon Rezer Guild of Forwarders President
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        [DETAIL_TEXT] => By now transport-forwarding sector of Russia has been privatized. Moreover 17 thousand of enterprises providing their services for domestic and international transportation have been involved into it. Prior state transport-forwarding and agent enterprises have become joint-stock companies including the state stock participation. Though forwarding market in Russia can't be called stable and absolutely "civilized" one.

    Railway Forwarding Market of Russia
    At today's world market the process of goods deliveries goes hand in hand with a set of additional operations and services providing but just transportation that makes possible effective distribution of goods within the chain of deliveries. While this transport-forwarding companies are aimed at the task of such distribution in the logistic chain. Forwarding service now is the most important consistent of transportation process including delivery, warehousing services, packaging and aggregation as well as transportation by any mode of transport, defining optimal routes for transportation within direct, intermodal and international communication, choosing best tariff rate.
    Main part for the international turnover servicing belongs to biggest forwarding and carrier companies with staff of over 2000 employees that have wide net of business relations all over the world. They possess their own park of rail cars and containers, large storage areas in big cities, ports and other transport junctions, vessels and berths. Among such companies operating in Russia are Schenker and Co, Danzas, Kuehne and Nagel, ASG, Nippon Express, Panalpina etc. Despite being registered in Germany, Switzerland, France and Japan they have turned into international monopolies defining the price level for domestic and international markets of forwarding and transport services.
    At the same time for recent years active part in the process of transport-forwarding services providing our national transport and transport-forwarding enterprises located in Moscow and Saint-Petersburg and other regional centers of the country have been taking along with their foreign partners.
    In the course of forwarding development in Russia three stages can be outlined that go correspondingly with the stages of forwarding service while railway transportation development. The first one (1991-1995) is connected with de-monopolization of forwarding companies organizing railway transportation. Among major problems forwarders faced at that time were the following ones: absence of normative-and-legislative base as well as normative-technological base of transport activities implementation, low quality and confined choice of services offered by forwarders, companies and their clients' lack of funds, functioning great amount of small firms-mediators, shortening of railways profit received from transport-forwarding activities.
    Transfer to the second stage (1996-2002) occurred due to the state's transportation regulation strengthening. It is characterized by competition development between forwarders and establishing normative base for transport-forwarding services. Among peculiarities of the period that can be called demands to forwarders made by the Ministry of Railways of Russia getting stricter, integration of forwarders organization strengthening on the corporate level, widening the choice of transport-forwarding services, forwarding companies focusing on high-profitable cargo transportation. At this stage basic principles of economic relations of the Russian railways with forwarding companies within the sphere of payment for cargo transportation in the international communication were formed. To solve all the problems accumulated thanks to overdue debts of forwarding companies the mechanism of 100% prepayment for transportation was launched and control of funds getting in enough quantity and on time was set up.
    The third stage (2003 up to the present moment) is connected with changes in forwarding activities due to railway transport restructuring and approving new Federal bills on transport-forwarding sector including. Today mutual relations of transport-forwarding companies and enterprises being serviced by them are built on the forwarding agreements basis that defines:
  • parties' liabilities;
  • types, volumes and character of transport-forwarding services provided, payment terms and conditions;
  • responsibility for breaking contractual obligations.
    Major advantages received by the companies that apply to forwarders services are in first turn connected with sale volumes increase and providing customers with better servicing then goes cutting the period of cargo delivery and ability to react market and customers' changes rapidly. As a result the company-supplier cooperating with a forwarder gets serious advantage to a rival while competing for market share. Especially it is very important for transport functioning in large junctions, sea ports where railway transport suffers great losses due to heavy congestions. In its turn forwarding company that controls the whole process of cargo delivery within all the route while intermodal communication has great advantage to sector forwarders. That is a reason of forwarders functioning in Russia being quite peculiar, i.e. large forwarder even tending towards let's say railway transportation usually possesses all the instruments for intermodal service.
    Analysis of forwarding international cargo transportation by the Russian railway showed the leading role of its dynamics and structure formation for export-import communication. At the current moment the volume of international transportation is defined by trade relations of Russia with other countries mainly. The international transportation market is greatly influenced by national currency stability, inflation rate and international raw materials markets conditions. International transportation forwarding share in aggregate freight railway transportation volume amounts to 25% and tends to increase. But resources for such transportation implementation are not used fully first of all due to trade routes via the territory of Russia being non-attractive for foreign customers, transit capacity of the Russian railways doesn't reach its maximum potential. Thus the necessity arises to work out steps directed to international transportation volumes increase, their competitiveness development and their structure optimization. Further export-import and transit cargo volumes increase via the Russian routes will be defined not only by rates of economic growth but also efficient forwarding activities. Considering great attention paid to international transport corridors development, issues on the Russian railways cooperation with forwarders are becoming more and more important as transit railway transportation can be paid only in a monopoly way via forwarding organizations having concluded contracts with OAO RZD Centers of Service Trade (the only exception is containerized transportation partially paid by OAO RZD subsidiary Transcontainer)
    The dynamics of forwarding cargo railway transportation for international routes is depicted on the graph 1. (mln.tonnes)


    Speaking of crucial problems of international transportation forwarding development the following ones can be mentioned: lack in normative-and-legislative base, first of all not well worked out system of principles of intermodal transportation organization under single forwarder control, technological problems and closely connected with them financial losses due to lack in cooperation between all the participants of cargo transportation market. It should be noticed the Russian forwarders function under conditions of heavy competitiveness, absence of civilized private undertakings traditions and still non-developed state policy that can't assist in creation of favourable surrounding for this business development. Perspectives of forwarding development are connected with implementation of modern logistic technologies, new technical equipment and IT applying, transportation process development, combining railway forwarders with forwarders of other transport modes activities, investment, and surely upgrading normative-and-legislative base.

    Legislation and perspectives of forwarding development in Russia
    Great amount of transport-forwarding enterprises owners call the state support at the current stage as just declarative and not provided with real liabilities. We can refer to the following major lacks of normative-and-legislative base of Russia in respect of transport forwarding sector:
  • functioning legislation not going hand in hand with practice;
  • divergence of normative-and-legislative bills within transport and transport-forwarding sectors for different modes of transport;
  • Law level of providing sector enterprises with information on approving this or that bill etc.
    One more crucial problem of our legislation is non-efficient system of forwarding taxation.
    Apart from the general absence of well-built structure of the Tax Code in respect of transport-forwarding sector non-professional appliance of single tax on imputed earnings at times can take place.

    Table 1
    Bill on "Transport-forwarding activities" of the RF compared to functioning bills in Japan, USA and Germany


    Problems connected with relations of transport-forwarding and state power subjects in Russia should be solved with participation of the system of public forwarders organizations. Forwarding guilds, associations, unions and other organizations of different sorts should fill the gap existing between all the levels of state power and small businesses representatives.
    Now legal relations are being formed while forwarding is regulated by set of legislative documents among which are the following ones:
    Civil Code, Part 2, Chapter 41 "Transport Forwarding"
    RF Law "On customers' rights protection"
    RF President's decrees
    Law on forwarding issued in 2003
    Commercial Seafaring Code
    Motor transport regulation
    Coastal trade regulation
    RF railways regulation and other documents.
    But all of them leave apart some principle issues. Thus forwarder's status hasn't been defined yet. What is it: mediator, logist or operator? The Ministry of Transport of the RF and other Governmental bodies believe it is a mediator. The Russian Forwarders Association and Guild of Forwarders follow the opposite definition. Their major argument is as follows: forwarder controls transportation process and provides cargo owner with additional services, and for intermodal communication forwarder is a basic link, i.e. organizer of transportation by different modes of transport.
    It is very important to sort out the issue of responsibility differentiation between forwarder and carrier as well as forwarders' responsibility to cargo owners and other transport process participants. This process can be settled by two ways.
    First, the law to give base for making contractual liabilities for forwarding services should be approved (in particular, it concerns railway forwarders).
    Second, with help of forwarders associations and guilds framework declaration should be worked out.
    In the world great attention is paid to multimodal transportation as they exclude intermediate goods handling: cargo is packaged and transport module integrity is not broken. It decreases expenditures. In Russia multimodal business suffers lack of unified transport document. Single tariff can't be defined that makes it impossible to analyze cargo flows. The Russian representatives of different modes of transport haven't come to an agreement on the unified form of e-document for freight transportation.
    The base for forwarding activities its licensing and certification can give. But the following questions haven't been solved yet: who has the right to issue the license (state bodies or forwarders associations), how obligatory certification for forwarders is, what sort of licenses forwarder involved into multimodal transportation should have (i.e. for which modes of transport) etc. All these issues should be sorted out in the shortest terms.
    In Russia in 2003 the Bill "On transport-forwarding activities" was approved and its major targets were as follows:
  • providing with conditions for high-quality services of cargo transportation;
  • unified demands to forwarders and their clients establishment while following the forwarding agreement;
  • defining the rights, liabilities and responsibilities of cargo owners and forwarders while cargo forwarding process;
  • economic efficiency increase for cargo transportation.
    In the table offered normative-and-legislative decrees of Russia and foreign countries are shown.
    According to some experts, new rules of forwarding procedures should be added to already existing ones. They are determined at major principles establishment based on which normative documents regulating transport-forwarding sector can be worked out.
    Economic relations of OAO RZD with forwarding associations in respect of cargo transportation in international communication are being formed under some factors influence. Thus outer factors condition necessity of flexible railway tariff system developing. System of Service Trade establishment in the railways sector resulted in re-organization of relations with forwarders while transportation calculating considering flexible tariff policy aspect. Inner factors influence can be observed while having accounting procedures for railway transportation the complicated organization structure and specialized software for collecting information on transportation come into force.
    Economic relations of the Russian railways with forwarders on cargo transportation in international communication (graph 2) should be directed towards accounts accuracy and transparency, efficiency increase, expenditures shortening for cooperation with forwarding organizations under conditions of following economic interests both OAO RZD and a forwarder.

    Foreign Companies Entering The Russian Forwarding Market
    The factor of great importance to evaluate perspectives of forwarding market is forecasted Russia's joining the WTO and thus welcoming intentions of Russia to cooperate with foreign transport companies. Large carriers and forwarding companies have been participating in forwarding services organization for such cargoes as oil products, ferrous and non-ferrous metals etc. for long time already.
    Though the most important issues of forwarding sector development in Russia with foreign companies' participation depend on container transportation organization level. The world's volume of container transportation has been growing annually by 8-10% starting from 1986. In 2003 it amounted to 281.4 mln. TEUs. In the developed countries about 55-60% of cargo suitable for container transportation is carried by such a way and by 2010 the level of containerization will reach 70%. Russia has weakened its positions within the world container transportation market for recent twenty years. As the beginning of stable container transportation growth in Russia the year of 1999 can be considered and for the last five years container transportation volumes have got up by two times. According to experts, under conditions of demand exceeding supply the reached growth rates of 20-25% will be kept till 2010.

    Table 2
    Dynamics and containerized cargo transportation structure in respect of modes of transport


    In 2003 containerized cargo transportation volume amounted to 7.5mln.tonnes and turnover took 66.8 bn.t/km. The container transportation share in the total volume of freight transportation in 2003 took 1.3%, for turnover it was 3.9% and in terms of profit- 3.2%. The rates of railway container transportation amount to 13-15% per year. By 2010 railway container transportation volume will reach 30 mln.tonnes.
    The structure of forwarded container transportation in Russia in 2003 is as follows: metae -17%, chemicals - 13%, other cargoes - 13%, paper - 11%, ferrous metals - 9%, industrial goods-7%, foodstuff - 7%, constructive materials -5%, machinery - 5%
    In the structure of container transportation in terms of modes of communication the major share belongs to domestic goods, though this share decreased from 78% (2000) to 63% (2003).
    All in all in 2003 some 1395 000 TEUs was transported by railways including 165 th.TEUs of transit, 155 th. TEUs of import, 220 th. TEUs of export and 855 th. TEUs of domestic communication.
    In accordance with container park structure transportation is implemented by three-tonnes, five-tonnes, 20-feet and 40-feet containers.
    20-feet and 40-feet containers are mainly used for international transportation, that in its turn is characterized by stable tendency of growth. According to available data, the transportation volume between Eastern Asia and Europe is estimated at the level of 10-12 mln.TEUs. While this transit containerized transportation volume by the Transsib amounted to 117 th. TEUs (1%). The rest volume is transported by sea transport of foreign countries. According to experts, motor transport takes 45-50% of containerized cargo transportation basically for export-import transportation for short and medium distances up to three th.km. Quite large share of containers is forwarded and transported by motor transport from and to ports bypassing railway. It concerns in first turn such ports as Novorossiysk and other terminals of Azov-Black Sea basin as well as the port of Saint-Petersburg and Baltic region. The main competing advantages of forwarders' applying to motor transport for container transportation is its high-range mobility, simplicity of cargo claiming to transportation "door-to-door" delivery opportunity, also flexible price policy that allows to minimize losses suffered from empty cars running.
    To develop competitiveness within forwarding containerized cargo sector OAO RZD participates in the projects on the companies' establishment that will implement containerized cargo transportation on some routes. For example, Russkaya Troyka JSC was established by OAO RZD and Far Eastern Shipping Company to develop transportation by the TSR.
    As the major transport services customers forwarding firms both independent and affiliated ones with large manufacturing and distribution companies perform. Their share in the total volume of container cargo transportation services provided by RZD amounts to 75% from the volumes of dispatches.
    The share of cargo owners dispatches both private and and on juridical people amounts to 20%, and the share of the state structures, for example the Ministry of Emergencies of the RF and amounts to not more than 3%.
    It is obvious nowadays further development of container transportation in Russia is impossible without establishment of large forwarding transport-logistic complexes corresponding all the modern world standards. It often happens the time saved by high-speed trains is wasted during staying on the terminus loading/unloading depots.
    To overcome the above-mentioned difficulties and enter the market of Russian import/export the most part of the leading world's carriers and independent logistic companies enlarge the range of their activities in the RF. Thus the largest railway company of America CSX via its subsidiary in logistic and terminal business controls the biggest terminal in the port Vostochny. The largest European terminal operator Eurogate altogether with the Russian partners participate in Ust-Luga port container complex development.
    Now we can speak of competing existence on the containerized cargo transportation market while the transportation itself within railway sector is still temporary-monopoly (Federal law "On Natural Monopolies" Part 1, 2 clause 4). With a transfer from natural monopolies regulation for transportation to infrastructure regulation launched for container transportation OAO RZD subsidiary "Transcontainer" will compete with forwarders and carriers established on the basis of other container park owners.
    Within services on transportation organization by railways Transcontainer competes with container park forwarders (7-10% of transportation volumes) as well as container suitable cargo transportation for other types of rolling stock.
    It should be also noticed that the great part of container suitable cargo is transported by containers leased by the Russian companies of foreign registration. In connection with Russia's joining the WTO soon competitiveness activization can follow due to our foreign partners activities. Moreover competitiveness can arise from alternative modes of transport-maritime and motor transport, in particular.
    Railway transport of Russia isn't represented on the foreign market of transport and forwarding services. While this, possible volumes of export-import of the Russian transport services are taken by foreign companies functioning in Russia. Despite this representatives of foreign transport companies believe OAO RZD having consolidated representative within the forwarding and container sector of transport market will allow to improve cooperation on issues of joint activities and international market of forwarding services.
    The most part of cargo flows was concentrated along transport corridors, in particular, along Transsib-unique transport system letting to shorten time of container deliveries from the countries of South-Eastern Asia and Europe at two times compared to traditional sea route. Meanwhile cargo owners polls show that a priority factor while choosing transportation way and route is transportation price. Speed and quality go afterwards in this case. Maximum interest is paid to through transport service which sale increases forwarder's competitiveness significantly.
    The degree of integration into the international transport system can be judged according to the share of functioning on the transport foreign market that includes forwarding activities, transport equipment providing, logistic chains organization etc.
    Russia's interests on the market of international transportation dictate necessity of powerful national forwarding companies' development.
    Russia's integration into the international transport-forwarding system may develop according to the following directions:
  • Independent joint-stock forwarding companies establishment that could be competitive on the international market. Among the brightest examples is "Transcontainer" OAO RZD subsidiary;
  • Competitiveness development on the domestic market under conditions of weakening of Centers of Service Trade of OAO RZD;
  • Container transportation development as a basis of forwarding business in Russia and all over the world;
  • Regulated tariff system;
  • Transportation operations informatisation, many of foreign companies call themselves 3PL or 4PL-logistic enterprises;
  • Participation of forwarding companies of Russia such as Severstal, Transcontainer, Far-Eastern Shipping Company in international and intermodal communication that will improve the climate on the forwarding market and to set up competitiveness with foreign forwarders.
    Transport-forwarding service development in Russia under conditions of transport restructuring has got great potential and is of highly perspective sort. It in its turn give opportunities of the Russian forwarding companies to integrate international transportation business.
    [~DETAIL_TEXT] => By now transport-forwarding sector of Russia has been privatized. Moreover 17 thousand of enterprises providing their services for domestic and international transportation have been involved into it. Prior state transport-forwarding and agent enterprises have become joint-stock companies including the state stock participation. Though forwarding market in Russia can't be called stable and absolutely "civilized" one.

    Railway Forwarding Market of Russia
    At today's world market the process of goods deliveries goes hand in hand with a set of additional operations and services providing but just transportation that makes possible effective distribution of goods within the chain of deliveries. While this transport-forwarding companies are aimed at the task of such distribution in the logistic chain. Forwarding service now is the most important consistent of transportation process including delivery, warehousing services, packaging and aggregation as well as transportation by any mode of transport, defining optimal routes for transportation within direct, intermodal and international communication, choosing best tariff rate.
    Main part for the international turnover servicing belongs to biggest forwarding and carrier companies with staff of over 2000 employees that have wide net of business relations all over the world. They possess their own park of rail cars and containers, large storage areas in big cities, ports and other transport junctions, vessels and berths. Among such companies operating in Russia are Schenker and Co, Danzas, Kuehne and Nagel, ASG, Nippon Express, Panalpina etc. Despite being registered in Germany, Switzerland, France and Japan they have turned into international monopolies defining the price level for domestic and international markets of forwarding and transport services.
    At the same time for recent years active part in the process of transport-forwarding services providing our national transport and transport-forwarding enterprises located in Moscow and Saint-Petersburg and other regional centers of the country have been taking along with their foreign partners.
    In the course of forwarding development in Russia three stages can be outlined that go correspondingly with the stages of forwarding service while railway transportation development. The first one (1991-1995) is connected with de-monopolization of forwarding companies organizing railway transportation. Among major problems forwarders faced at that time were the following ones: absence of normative-and-legislative base as well as normative-technological base of transport activities implementation, low quality and confined choice of services offered by forwarders, companies and their clients' lack of funds, functioning great amount of small firms-mediators, shortening of railways profit received from transport-forwarding activities.
    Transfer to the second stage (1996-2002) occurred due to the state's transportation regulation strengthening. It is characterized by competition development between forwarders and establishing normative base for transport-forwarding services. Among peculiarities of the period that can be called demands to forwarders made by the Ministry of Railways of Russia getting stricter, integration of forwarders organization strengthening on the corporate level, widening the choice of transport-forwarding services, forwarding companies focusing on high-profitable cargo transportation. At this stage basic principles of economic relations of the Russian railways with forwarding companies within the sphere of payment for cargo transportation in the international communication were formed. To solve all the problems accumulated thanks to overdue debts of forwarding companies the mechanism of 100% prepayment for transportation was launched and control of funds getting in enough quantity and on time was set up.
    The third stage (2003 up to the present moment) is connected with changes in forwarding activities due to railway transport restructuring and approving new Federal bills on transport-forwarding sector including. Today mutual relations of transport-forwarding companies and enterprises being serviced by them are built on the forwarding agreements basis that defines:
  • parties' liabilities;
  • types, volumes and character of transport-forwarding services provided, payment terms and conditions;
  • responsibility for breaking contractual obligations.
    Major advantages received by the companies that apply to forwarders services are in first turn connected with sale volumes increase and providing customers with better servicing then goes cutting the period of cargo delivery and ability to react market and customers' changes rapidly. As a result the company-supplier cooperating with a forwarder gets serious advantage to a rival while competing for market share. Especially it is very important for transport functioning in large junctions, sea ports where railway transport suffers great losses due to heavy congestions. In its turn forwarding company that controls the whole process of cargo delivery within all the route while intermodal communication has great advantage to sector forwarders. That is a reason of forwarders functioning in Russia being quite peculiar, i.e. large forwarder even tending towards let's say railway transportation usually possesses all the instruments for intermodal service.
    Analysis of forwarding international cargo transportation by the Russian railway showed the leading role of its dynamics and structure formation for export-import communication. At the current moment the volume of international transportation is defined by trade relations of Russia with other countries mainly. The international transportation market is greatly influenced by national currency stability, inflation rate and international raw materials markets conditions. International transportation forwarding share in aggregate freight railway transportation volume amounts to 25% and tends to increase. But resources for such transportation implementation are not used fully first of all due to trade routes via the territory of Russia being non-attractive for foreign customers, transit capacity of the Russian railways doesn't reach its maximum potential. Thus the necessity arises to work out steps directed to international transportation volumes increase, their competitiveness development and their structure optimization. Further export-import and transit cargo volumes increase via the Russian routes will be defined not only by rates of economic growth but also efficient forwarding activities. Considering great attention paid to international transport corridors development, issues on the Russian railways cooperation with forwarders are becoming more and more important as transit railway transportation can be paid only in a monopoly way via forwarding organizations having concluded contracts with OAO RZD Centers of Service Trade (the only exception is containerized transportation partially paid by OAO RZD subsidiary Transcontainer)
    The dynamics of forwarding cargo railway transportation for international routes is depicted on the graph 1. (mln.tonnes)


    Speaking of crucial problems of international transportation forwarding development the following ones can be mentioned: lack in normative-and-legislative base, first of all not well worked out system of principles of intermodal transportation organization under single forwarder control, technological problems and closely connected with them financial losses due to lack in cooperation between all the participants of cargo transportation market. It should be noticed the Russian forwarders function under conditions of heavy competitiveness, absence of civilized private undertakings traditions and still non-developed state policy that can't assist in creation of favourable surrounding for this business development. Perspectives of forwarding development are connected with implementation of modern logistic technologies, new technical equipment and IT applying, transportation process development, combining railway forwarders with forwarders of other transport modes activities, investment, and surely upgrading normative-and-legislative base.

    Legislation and perspectives of forwarding development in Russia
    Great amount of transport-forwarding enterprises owners call the state support at the current stage as just declarative and not provided with real liabilities. We can refer to the following major lacks of normative-and-legislative base of Russia in respect of transport forwarding sector:
  • functioning legislation not going hand in hand with practice;
  • divergence of normative-and-legislative bills within transport and transport-forwarding sectors for different modes of transport;
  • Law level of providing sector enterprises with information on approving this or that bill etc.
    One more crucial problem of our legislation is non-efficient system of forwarding taxation.
    Apart from the general absence of well-built structure of the Tax Code in respect of transport-forwarding sector non-professional appliance of single tax on imputed earnings at times can take place.

    Table 1
    Bill on "Transport-forwarding activities" of the RF compared to functioning bills in Japan, USA and Germany


    Problems connected with relations of transport-forwarding and state power subjects in Russia should be solved with participation of the system of public forwarders organizations. Forwarding guilds, associations, unions and other organizations of different sorts should fill the gap existing between all the levels of state power and small businesses representatives.
    Now legal relations are being formed while forwarding is regulated by set of legislative documents among which are the following ones:
    Civil Code, Part 2, Chapter 41 "Transport Forwarding"
    RF Law "On customers' rights protection"
    RF President's decrees
    Law on forwarding issued in 2003
    Commercial Seafaring Code
    Motor transport regulation
    Coastal trade regulation
    RF railways regulation and other documents.
    But all of them leave apart some principle issues. Thus forwarder's status hasn't been defined yet. What is it: mediator, logist or operator? The Ministry of Transport of the RF and other Governmental bodies believe it is a mediator. The Russian Forwarders Association and Guild of Forwarders follow the opposite definition. Their major argument is as follows: forwarder controls transportation process and provides cargo owner with additional services, and for intermodal communication forwarder is a basic link, i.e. organizer of transportation by different modes of transport.
    It is very important to sort out the issue of responsibility differentiation between forwarder and carrier as well as forwarders' responsibility to cargo owners and other transport process participants. This process can be settled by two ways.
    First, the law to give base for making contractual liabilities for forwarding services should be approved (in particular, it concerns railway forwarders).
    Second, with help of forwarders associations and guilds framework declaration should be worked out.
    In the world great attention is paid to multimodal transportation as they exclude intermediate goods handling: cargo is packaged and transport module integrity is not broken. It decreases expenditures. In Russia multimodal business suffers lack of unified transport document. Single tariff can't be defined that makes it impossible to analyze cargo flows. The Russian representatives of different modes of transport haven't come to an agreement on the unified form of e-document for freight transportation.
    The base for forwarding activities its licensing and certification can give. But the following questions haven't been solved yet: who has the right to issue the license (state bodies or forwarders associations), how obligatory certification for forwarders is, what sort of licenses forwarder involved into multimodal transportation should have (i.e. for which modes of transport) etc. All these issues should be sorted out in the shortest terms.
    In Russia in 2003 the Bill "On transport-forwarding activities" was approved and its major targets were as follows:
  • providing with conditions for high-quality services of cargo transportation;
  • unified demands to forwarders and their clients establishment while following the forwarding agreement;
  • defining the rights, liabilities and responsibilities of cargo owners and forwarders while cargo forwarding process;
  • economic efficiency increase for cargo transportation.
    In the table offered normative-and-legislative decrees of Russia and foreign countries are shown.
    According to some experts, new rules of forwarding procedures should be added to already existing ones. They are determined at major principles establishment based on which normative documents regulating transport-forwarding sector can be worked out.
    Economic relations of OAO RZD with forwarding associations in respect of cargo transportation in international communication are being formed under some factors influence. Thus outer factors condition necessity of flexible railway tariff system developing. System of Service Trade establishment in the railways sector resulted in re-organization of relations with forwarders while transportation calculating considering flexible tariff policy aspect. Inner factors influence can be observed while having accounting procedures for railway transportation the complicated organization structure and specialized software for collecting information on transportation come into force.
    Economic relations of the Russian railways with forwarders on cargo transportation in international communication (graph 2) should be directed towards accounts accuracy and transparency, efficiency increase, expenditures shortening for cooperation with forwarding organizations under conditions of following economic interests both OAO RZD and a forwarder.

    Foreign Companies Entering The Russian Forwarding Market
    The factor of great importance to evaluate perspectives of forwarding market is forecasted Russia's joining the WTO and thus welcoming intentions of Russia to cooperate with foreign transport companies. Large carriers and forwarding companies have been participating in forwarding services organization for such cargoes as oil products, ferrous and non-ferrous metals etc. for long time already.
    Though the most important issues of forwarding sector development in Russia with foreign companies' participation depend on container transportation organization level. The world's volume of container transportation has been growing annually by 8-10% starting from 1986. In 2003 it amounted to 281.4 mln. TEUs. In the developed countries about 55-60% of cargo suitable for container transportation is carried by such a way and by 2010 the level of containerization will reach 70%. Russia has weakened its positions within the world container transportation market for recent twenty years. As the beginning of stable container transportation growth in Russia the year of 1999 can be considered and for the last five years container transportation volumes have got up by two times. According to experts, under conditions of demand exceeding supply the reached growth rates of 20-25% will be kept till 2010.

    Table 2
    Dynamics and containerized cargo transportation structure in respect of modes of transport


    In 2003 containerized cargo transportation volume amounted to 7.5mln.tonnes and turnover took 66.8 bn.t/km. The container transportation share in the total volume of freight transportation in 2003 took 1.3%, for turnover it was 3.9% and in terms of profit- 3.2%. The rates of railway container transportation amount to 13-15% per year. By 2010 railway container transportation volume will reach 30 mln.tonnes.
    The structure of forwarded container transportation in Russia in 2003 is as follows: metae -17%, chemicals - 13%, other cargoes - 13%, paper - 11%, ferrous metals - 9%, industrial goods-7%, foodstuff - 7%, constructive materials -5%, machinery - 5%
    In the structure of container transportation in terms of modes of communication the major share belongs to domestic goods, though this share decreased from 78% (2000) to 63% (2003).
    All in all in 2003 some 1395 000 TEUs was transported by railways including 165 th.TEUs of transit, 155 th. TEUs of import, 220 th. TEUs of export and 855 th. TEUs of domestic communication.
    In accordance with container park structure transportation is implemented by three-tonnes, five-tonnes, 20-feet and 40-feet containers.
    20-feet and 40-feet containers are mainly used for international transportation, that in its turn is characterized by stable tendency of growth. According to available data, the transportation volume between Eastern Asia and Europe is estimated at the level of 10-12 mln.TEUs. While this transit containerized transportation volume by the Transsib amounted to 117 th. TEUs (1%). The rest volume is transported by sea transport of foreign countries. According to experts, motor transport takes 45-50% of containerized cargo transportation basically for export-import transportation for short and medium distances up to three th.km. Quite large share of containers is forwarded and transported by motor transport from and to ports bypassing railway. It concerns in first turn such ports as Novorossiysk and other terminals of Azov-Black Sea basin as well as the port of Saint-Petersburg and Baltic region. The main competing advantages of forwarders' applying to motor transport for container transportation is its high-range mobility, simplicity of cargo claiming to transportation "door-to-door" delivery opportunity, also flexible price policy that allows to minimize losses suffered from empty cars running.
    To develop competitiveness within forwarding containerized cargo sector OAO RZD participates in the projects on the companies' establishment that will implement containerized cargo transportation on some routes. For example, Russkaya Troyka JSC was established by OAO RZD and Far Eastern Shipping Company to develop transportation by the TSR.
    As the major transport services customers forwarding firms both independent and affiliated ones with large manufacturing and distribution companies perform. Their share in the total volume of container cargo transportation services provided by RZD amounts to 75% from the volumes of dispatches.
    The share of cargo owners dispatches both private and and on juridical people amounts to 20%, and the share of the state structures, for example the Ministry of Emergencies of the RF and amounts to not more than 3%.
    It is obvious nowadays further development of container transportation in Russia is impossible without establishment of large forwarding transport-logistic complexes corresponding all the modern world standards. It often happens the time saved by high-speed trains is wasted during staying on the terminus loading/unloading depots.
    To overcome the above-mentioned difficulties and enter the market of Russian import/export the most part of the leading world's carriers and independent logistic companies enlarge the range of their activities in the RF. Thus the largest railway company of America CSX via its subsidiary in logistic and terminal business controls the biggest terminal in the port Vostochny. The largest European terminal operator Eurogate altogether with the Russian partners participate in Ust-Luga port container complex development.
    Now we can speak of competing existence on the containerized cargo transportation market while the transportation itself within railway sector is still temporary-monopoly (Federal law "On Natural Monopolies" Part 1, 2 clause 4). With a transfer from natural monopolies regulation for transportation to infrastructure regulation launched for container transportation OAO RZD subsidiary "Transcontainer" will compete with forwarders and carriers established on the basis of other container park owners.
    Within services on transportation organization by railways Transcontainer competes with container park forwarders (7-10% of transportation volumes) as well as container suitable cargo transportation for other types of rolling stock.
    It should be also noticed that the great part of container suitable cargo is transported by containers leased by the Russian companies of foreign registration. In connection with Russia's joining the WTO soon competitiveness activization can follow due to our foreign partners activities. Moreover competitiveness can arise from alternative modes of transport-maritime and motor transport, in particular.
    Railway transport of Russia isn't represented on the foreign market of transport and forwarding services. While this, possible volumes of export-import of the Russian transport services are taken by foreign companies functioning in Russia. Despite this representatives of foreign transport companies believe OAO RZD having consolidated representative within the forwarding and container sector of transport market will allow to improve cooperation on issues of joint activities and international market of forwarding services.
    The most part of cargo flows was concentrated along transport corridors, in particular, along Transsib-unique transport system letting to shorten time of container deliveries from the countries of South-Eastern Asia and Europe at two times compared to traditional sea route. Meanwhile cargo owners polls show that a priority factor while choosing transportation way and route is transportation price. Speed and quality go afterwards in this case. Maximum interest is paid to through transport service which sale increases forwarder's competitiveness significantly.
    The degree of integration into the international transport system can be judged according to the share of functioning on the transport foreign market that includes forwarding activities, transport equipment providing, logistic chains organization etc.
    Russia's interests on the market of international transportation dictate necessity of powerful national forwarding companies' development.
    Russia's integration into the international transport-forwarding system may develop according to the following directions:
  • Independent joint-stock forwarding companies establishment that could be competitive on the international market. Among the brightest examples is "Transcontainer" OAO RZD subsidiary;
  • Competitiveness development on the domestic market under conditions of weakening of Centers of Service Trade of OAO RZD;
  • Container transportation development as a basis of forwarding business in Russia and all over the world;
  • Regulated tariff system;
  • Transportation operations informatisation, many of foreign companies call themselves 3PL or 4PL-logistic enterprises;
  • Participation of forwarding companies of Russia such as Severstal, Transcontainer, Far-Eastern Shipping Company in international and intermodal communication that will improve the climate on the forwarding market and to set up competitiveness with foreign forwarders.
    Transport-forwarding service development in Russia under conditions of transport restructuring has got great potential and is of highly perspective sort. It in its turn give opportunities of the Russian forwarding companies to integrate international transportation business.
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    Semyon Rezer Guild of Forwarders President
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    Semyon Rezer Guild of Forwarders President
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  • РЖД-Партнер

    Development of Private Carriers on the Russian Railways: Trends, Problems, Perspectives

    Mikhail Kozlovsky, Expert of the RF Federal Tariffs Service, Member of the RF Federal Antimonopoly Service expert council
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        [DETAIL_TEXT] => At the moment most of cargo of the Russian Federation railway transport is carried in the RZD carriages, but already 30% of all cargo is carried in rolling stock owned by private industrial and transportation companies. They dispose of 224 thousand carriages or 35,7% of the total stock. Among private owners there is a category of operator companies considered to be a prototype independent carriers.

    On subtleties of definitions
    First of all we need to define the terms and the notion of the "rolling stock owner". The first class - owner out of necessity - is usually a large manufacturer, forced by the chronical undersupply of carriages by the carrier - OAO Russian Railways (OAO RZD) - to acquire them to ensure its enterprise rhythmical operation. The demerit of this class of owners consists in the increase of the production cost due to expenses on carriages purchase and maintenance, and causing problems for railways by the empty carriages flow from the opposite direction on the way back to the owner. Naturally, such owner will not bother himself with reverse loading, as it is not his basic business.
    The second class of an owner is a transport company - a rolling stock operator. It is specializing in cargo transportation and the investment efficiency for him depends directly on the volume of cargo and carriages turnover time. Therefore an operator has own control system, regional representatives and transportation logistics.
    The third class of an owner is a carrier. What differs him from an operator? The RF Federal Law On Railway Transport in the Russian Federation (came into effect on 18 May 2003) gives the following definitions. "A carrier is a legal entity or a private entrepreneur, having undertaken according to a railway transport in common use transportation contract the obligation to deliver (:) the consignment entrusted to it by the consigner from the point of shipment to the point of destination, as well as to hand the consignment (:) to the person authorized to receive it (consignee)". Thus a carrier concludes with the consigner a transportation contract and issues a transportation document (railway bill of loading) and is fully accountable fro the cargo delivery and integrity according to the law. To carry out its functions "a carrier is to dispose of rolling stock to ensure transportation, on the basis of ownership or some other basis, conclude contracts for locomotive traction services, if the carrier has no locomotives, conclude corresponding contracts for the infrastructure use services (with the exception of cases when the carrier accomplishes transportation within its own infrastructure), the significant conditions for which are the carriage flows organization, carriages and locomotives turnover regulation, setting the order of the railway rolling stock maintenance and exploitation, the parties accountability for the obligations arising from railway transportation" and, naturally, to have corresponding licenses.
    "An operator of railway rolling stock is a legal entity or private entrepreneur having carriages, containers on the basis of ownership or some other basis, participating on the basis of a contract with the carrier in the transportation process with the use of the indicated carriages, containers". Thus the law allows an operator only to participate in the process of transportation accomplished by the carrier on the basis of a contract with the latter. The forms of this participation, the essence of the contract between an operator and a carrier, its main conditions are to be determined by the Government, but this has not been done so far and there is no legal basis for such contracts between the carrier and operators. Therefore an operator has now to work as a consigner and accomplish at that certain carrying operations of the transportation process without the specified contract and to submit itself to the fact that some of the operations accomplished by it have been paid for to the carrier as part of the transportation price (tariff).
    At the moment there is only one railway carrier in the Russian railway transport - OAO RZD, which at the same time owns the infrastructure, carriages and locomotives and carries out the transportation process management and control (for more information about the company see article by its president Gennady Fadeev in the present issue).
    It needs also to be noted that at present the two first of the mentioned classes of owners cannot legally realize their right to become carriers as they don't have the railway transport in common use infrastructure and, taking into account the requirements to a carrier they need a contract on infrastructure services use with its owner - OAO RZD. While the company's activity in this sphere has not been licensed due to a number of reasons. Therefore the work of the specified classes of owners is legally carried out only as consigners, while the practical realization of the private carriers (independent from RZD) formation has not started yet.

    Brief history of the Russian operators' movement
    The process of creating operator companies was initiated by the Russian Ministry of Railways (MPS), which, upon analyzing the results of the industry operation in the scarce in volumes 1998, came to the conclusion of the necessity to renovate the carriages stock at the expense of private investors. At that it was supposed that the investments would be repaid by providing the owners the so-called investment (reduced) tariffs for cargo transportation.
    The cost of the most capital-intensive repair works of the owned carriages affecting the repayment term was expected to be below the cost of analogous works for the MPS carriages. The Ministry developed and approved the requirements to the operator company status, the form of the business-plan to be submitted, etc., while within the framework of the MPS central mechanism there was created the special Center on working with operators (CVKO) considering and approving the suggested by them transportation technologies, operations registration and coordination, issuing certificates of the Ministry-approved form.
    MPS addressed the corresponding justifications and suggestions to the Russian Ministry of Antimonopoly Policy (MAP, now Federal Antimonopoly Service) and already in late 1999 the special Order of the MAP RF introduced the "Temporary Order of assigning exclusive (reduced) tariffs by carrying cargoes in enterprises and organizations' own carriages". The questions of equal prices for repair of MPS and owners stock were unfortunately ignored by MAP.
    Running somewhat ahead let us note that none of the operator companies eventually received the promised investment discounts from tariff. The "Temporary Order", though not repeal, is not in effect now. While the question of the MPS and owners stock repair prices inequality requires immediate solution.
    The Government's solution on the railway transport reform and in particular the Government Resolution of 18.05.2001 No 384 that approved the Program of the structural reform was of critical importance for the operator movement development. It directly prescribed the creation and development of operator companies as a competitive segment in the transportation sphere. From 2001 to 2003 the number of the railway rolling stock operating companies connected with freight transportation increased by 2.5 times.
    During the last few years there was a noticeable trend towards freight carriages acquisition by private operators. In 2003 there were purchased the total of 26.5 thousand carriages, of which 23 thousand by operators. In the first half of 2004 there were purchased about 16.7 thousand, of which 15.2 thousand - by operators. This resulted in the freight carriages output increase by 138%.
    At present there are over 80 companies having the operator status, which own about 62 thousand carriages; at that 52 operator companies own stock of over 1000 carriages. The operators' rolling stock carried about 16% of the total cargo turnover. The investment in rolling stock in 2003 totaled over 14 billion rubles, while in the period of 2002-2004 there were invested in carriages, locomotives and equipment about USD 2.2-2.4 billion. The projects of investments in repair facilities and other railway transport infrastructure objects are presently under consideration.
    Taking into account the significantly smaller volume of MPS and RZD investment in the same period it can be stated that it was the operators' investments that are largely responsible for the national carriages construction and other national engineering industries revival. Such investment volumes were possible due to the balanced (though not free of faults) policy of the RF MPS, RF Federal Energy Commission, the Government's promises of stable tariffs policy for the 5-6 years to come declared by the Tariff Regulation No 10-01 introduction.

    Legal basis
    It needs to be noted that the matters of legal basis for the operators' activity have not been settled so far. The Law on the RF Railway Transport" says: "The basis for the legal regulation of the railway rolling stock operators' activity and their interaction with the carriers are determined by the Russian Federation Government".
    According to the present thesis and to carry out the RF Government Regulation of 6 May 2003 No 283 "On approving the plan of measures to realize the Program of the railway transport structural reform for 2003-2005" MAP prepared a draft Government Regulation "On the development of competition in the sphere of railway freight transportation, legal basis for the railway rolling stock operators' activity and their interaction with the carriers".
    The document defines the operators' activity basing on the entries 2 and 13 of the RF Law "On the RF Railway Transport", i.e.: "The railway rolling stock operator's activity - carrying out operations, providing services according to contracts with carriers with the use of rolling stock, containers owned by the operator (providing rolling stock, containers according to the processed orders for cargo transportation, carrying out individual carrying operations, etc.)". The draft also reflects the regulations of operator-carrier relations in the transportation process with the use of the private rolling stock, defines the technical, economical and information conditions of the contracts to be concluded.
    Despite presence of the legal basis and the Government's regulations, this important for the operators' community regulation has not been approved so far, which, according to a number of experts, hinders the general process of the institution of private operators formation on the Russian railways.
    Nevertheless, even the given legal status of the operators' activity is a success for the sector, as a consigner who is not a rolling stock owner has got the real choice between RZD stock and an operator's one.

    Tariff and investment problems
    At present the demand for carriages conditioned by the cargo transportation volume growth, keeps growing at a rate much above that of the supply. In experts' estimation the trend is to remain for 5-7 years, at that the average annual transportation volumes growth may be above 5% up to 2010. Thus the RZD Strategic Development Program provides for the total freight carriages stock, including that of private owners, operators in particular, by 2010 to constitute over 787 thousand (43.3% - gondolas, 21.4% - cisterns, 9.7 - box cars, 6% - platforms, 18.7% - other), at that RZD plans to leave in its ownership only 50% or 393 thousand (38 th. - box carriages, 23.8 th. - platforms, 170.5 th. - gondolas, 84 th. - cisterns, 73.5 th. - other) carriages, as it is prescribed by the Program of the industry structural reform.

    Stock of Russian-owned carriages in the end of 2003 (according to the RZD JSC. data for the 3rd quarter 2003): Table1


    But does it pay to own a carriages stock today? Planning to distribute the rolling stock in the 50:50 proportion and to replenish and modernize it at the expense of private companies does the state (and RZD in particular) care to create conditions to stimulate operators' rolling stock acquisition? The operators' work reveals that not too much so far. The investments in rolling stock repayment term is much above that normal for Europe of 6-8 years. The share of the carriage component in the tariff for private carriages according to Tariff Regulation No 10-01 is 15.4%, while according to the Carries and Operators Association it is to be 22-25%. As has been said above, the Government's Regulation on operators is not being passed. The unfair prices for rolling stock repairs remain, etc.
    In this respect there gains topicality the question of creating equal economic conditions for private (independent) transport companies and the RZD subsidiary carrying companies to be created in the course of the reform second phase. There is risk that the subsidiaries, having received gratis carriages, and probably, locomotives, part of the repair, handling facilities and other infrastructure objects and the possibility to operate at the same tariff schemes as the operators do today, will turn out a fortiori more competitive.
    In this respect it needs to be understood that the whole operator business consists in the difference between the payment according to the Tariff Regulation No 10-01 for cargo transportation in a carriage in common use and the own carriage including the empty mileage of the latter (return trip).
    This difference between tariffs is in fact almost the only source to return the company's investments in rolling stock, clear the credit and leasing, maintain the rolling stock, ensure the company's existence in general. At that in practice an operator's tariff is 1-2% below that of RZD (equal to it in the maximum), otherwise the consigner would prefer RZD and not the operator.
    The diagrams provided illustrate that the terms of universal carriages repayment, other things being equal, depend strongly on the tariffs for various cargoes transportation: the higher the class of the cargo transported, the less is the repayment term. This relation is most vivid by transportation in boxcars and on platforms - the repayment term may be cut by 11-13 years; while for gondolas it is less significant, with the maximum reduction achievable of 4 years. Nevertheless, taking into account the normative terms of the universal carriages exploitation (gondolas - 22 years; boxcars and platforms - 32 years) and the correct repayment terms (6-8 years) one can conclude that huge investments in new universal carriages are doubtful.
    Naturally, for the development of Price List No 10-01 "Tariffs for cargoes transportation and infrastructure services provided by the Russian Railway" are crucial for the Russian operator and carrier companies prospects. In late 2004 RZD addressed to the Federal Tariffs Service a draft of a new section N 4 "Rules of tariffs application by defining the cost of services on RZD infrastructure exploitation by the haul of trains formed of carriages and locomotives belonging on various bases to the carriers". The given document arose much criticism on the part of operating companies. According to the Carriers and Operators Association, the new tariff schemes NN 134-139 increase the rates by 40-70% against the existing ones according to the Price List entry 2.17.
    The RZD's suggestion as to the regulation of tariffs for cargoes transportation in the inventory stock carriages in full or in the carriage component (tariff "V"). The operators are disturbed that this may give RZD the possibility under the cover of reducing the tariff burden on customers to set dumping prices for cargoes transportation in their carriages. The Association is certain that the Federal Tariffs Service' accepting these suggestions of the monopolist would negatively affect the private transport business and may even lead to its vanishing.
    The Association appealed the executive power federal bodies' managements with the suggestion to declare a moratorium on any changes and additions to the current Price List No 10-01 up to 31 December 2005 - the term of the "Plan of measures on the railway transport structural reform realization for 2003-2005".
    No decisions on the questions have been made so far.

    Prospects
    What are the prospects of the operators turning into carriers? Entering the class of carriers an operator becomes a rival to RZD. In this respect the following aspects need to be considered.
    RZD as a carrier got its carriages, locomotives, infrastructure for free; the company's subsidiaries also receive property free of charge, while an operator-carrier will have to pay a lot, at that normally of borrowed money. So we see the efforts are not equal. Besides, an operator-carrier will have to pay for the infrastructure services according to the tariffs, while the carrier-owner of the infrastructure - only the prime cost.
    The principal matter here is the undiscriminated access of independent carriers to the infrastructure. At present there are "Rules of rendering services on the use of the railway transport in common use infrastructure" approved by the RF Government order of 20.11.2003 No 703, and the "Rules of undiscriminated access of carriers to the railway transport in common use infrastructure" approved by the RF Government order of 25.11.2003 No 710. But they are not being applied so far and cannot be applied, in particular due to lack of the "List of criteria serving basis for refusal to accomplish transportation orders" to be approved by the RF Government. And, the last, but not the least important is the financial side of the matter: there are no adequately calculated in the new conditions tariffs on the infrastructure services.
    It would be ideal for the private entrepreneurship in the sphere of freight transportation to separate the RZD's carrier and infrastructure businesses. But, according to the Reform Program, certain prerequisites are needed for that.
    According to the RF Ministry of Transport and RZD management the first full-scale private carriers are to emerge in 2006. The necessary conditions are being created now, such as the normative base elaboration and settling a number of organizational issues. Among the practical matters of the private carrier business development the question of use of own locomotive traction is outstanding (the share of private locomotives is currently below 0.5% of the total number).
    At present RZD is working on the drafts "Order of rendering the RZD locomotive traction services" and "Order of rendering services on locomotives and locomotives staff servicing when accomplishing transportation by private carriers". Besides the following Acts are being currently agreed: Order of concluding the approximate forms of contracts for the services of infrastructure use; Order of settling accounts related to the use of infrastructure; Order of accepting and agreeing carriers' orders for the services of infrastructure use and other.
    The transport market hopes the state supervising bodies related to the railway transport reform realization will bring the matters of the competitive relations in the sphere of freight transportation solution to the logical end. It will be first of all the railway services consumers to benefit from it.
    [~DETAIL_TEXT] => At the moment most of cargo of the Russian Federation railway transport is carried in the RZD carriages, but already 30% of all cargo is carried in rolling stock owned by private industrial and transportation companies. They dispose of 224 thousand carriages or 35,7% of the total stock. Among private owners there is a category of operator companies considered to be a prototype independent carriers.

    On subtleties of definitions
    First of all we need to define the terms and the notion of the "rolling stock owner". The first class - owner out of necessity - is usually a large manufacturer, forced by the chronical undersupply of carriages by the carrier - OAO Russian Railways (OAO RZD) - to acquire them to ensure its enterprise rhythmical operation. The demerit of this class of owners consists in the increase of the production cost due to expenses on carriages purchase and maintenance, and causing problems for railways by the empty carriages flow from the opposite direction on the way back to the owner. Naturally, such owner will not bother himself with reverse loading, as it is not his basic business.
    The second class of an owner is a transport company - a rolling stock operator. It is specializing in cargo transportation and the investment efficiency for him depends directly on the volume of cargo and carriages turnover time. Therefore an operator has own control system, regional representatives and transportation logistics.
    The third class of an owner is a carrier. What differs him from an operator? The RF Federal Law On Railway Transport in the Russian Federation (came into effect on 18 May 2003) gives the following definitions. "A carrier is a legal entity or a private entrepreneur, having undertaken according to a railway transport in common use transportation contract the obligation to deliver (:) the consignment entrusted to it by the consigner from the point of shipment to the point of destination, as well as to hand the consignment (:) to the person authorized to receive it (consignee)". Thus a carrier concludes with the consigner a transportation contract and issues a transportation document (railway bill of loading) and is fully accountable fro the cargo delivery and integrity according to the law. To carry out its functions "a carrier is to dispose of rolling stock to ensure transportation, on the basis of ownership or some other basis, conclude contracts for locomotive traction services, if the carrier has no locomotives, conclude corresponding contracts for the infrastructure use services (with the exception of cases when the carrier accomplishes transportation within its own infrastructure), the significant conditions for which are the carriage flows organization, carriages and locomotives turnover regulation, setting the order of the railway rolling stock maintenance and exploitation, the parties accountability for the obligations arising from railway transportation" and, naturally, to have corresponding licenses.
    "An operator of railway rolling stock is a legal entity or private entrepreneur having carriages, containers on the basis of ownership or some other basis, participating on the basis of a contract with the carrier in the transportation process with the use of the indicated carriages, containers". Thus the law allows an operator only to participate in the process of transportation accomplished by the carrier on the basis of a contract with the latter. The forms of this participation, the essence of the contract between an operator and a carrier, its main conditions are to be determined by the Government, but this has not been done so far and there is no legal basis for such contracts between the carrier and operators. Therefore an operator has now to work as a consigner and accomplish at that certain carrying operations of the transportation process without the specified contract and to submit itself to the fact that some of the operations accomplished by it have been paid for to the carrier as part of the transportation price (tariff).
    At the moment there is only one railway carrier in the Russian railway transport - OAO RZD, which at the same time owns the infrastructure, carriages and locomotives and carries out the transportation process management and control (for more information about the company see article by its president Gennady Fadeev in the present issue).
    It needs also to be noted that at present the two first of the mentioned classes of owners cannot legally realize their right to become carriers as they don't have the railway transport in common use infrastructure and, taking into account the requirements to a carrier they need a contract on infrastructure services use with its owner - OAO RZD. While the company's activity in this sphere has not been licensed due to a number of reasons. Therefore the work of the specified classes of owners is legally carried out only as consigners, while the practical realization of the private carriers (independent from RZD) formation has not started yet.

    Brief history of the Russian operators' movement
    The process of creating operator companies was initiated by the Russian Ministry of Railways (MPS), which, upon analyzing the results of the industry operation in the scarce in volumes 1998, came to the conclusion of the necessity to renovate the carriages stock at the expense of private investors. At that it was supposed that the investments would be repaid by providing the owners the so-called investment (reduced) tariffs for cargo transportation.
    The cost of the most capital-intensive repair works of the owned carriages affecting the repayment term was expected to be below the cost of analogous works for the MPS carriages. The Ministry developed and approved the requirements to the operator company status, the form of the business-plan to be submitted, etc., while within the framework of the MPS central mechanism there was created the special Center on working with operators (CVKO) considering and approving the suggested by them transportation technologies, operations registration and coordination, issuing certificates of the Ministry-approved form.
    MPS addressed the corresponding justifications and suggestions to the Russian Ministry of Antimonopoly Policy (MAP, now Federal Antimonopoly Service) and already in late 1999 the special Order of the MAP RF introduced the "Temporary Order of assigning exclusive (reduced) tariffs by carrying cargoes in enterprises and organizations' own carriages". The questions of equal prices for repair of MPS and owners stock were unfortunately ignored by MAP.
    Running somewhat ahead let us note that none of the operator companies eventually received the promised investment discounts from tariff. The "Temporary Order", though not repeal, is not in effect now. While the question of the MPS and owners stock repair prices inequality requires immediate solution.
    The Government's solution on the railway transport reform and in particular the Government Resolution of 18.05.2001 No 384 that approved the Program of the structural reform was of critical importance for the operator movement development. It directly prescribed the creation and development of operator companies as a competitive segment in the transportation sphere. From 2001 to 2003 the number of the railway rolling stock operating companies connected with freight transportation increased by 2.5 times.
    During the last few years there was a noticeable trend towards freight carriages acquisition by private operators. In 2003 there were purchased the total of 26.5 thousand carriages, of which 23 thousand by operators. In the first half of 2004 there were purchased about 16.7 thousand, of which 15.2 thousand - by operators. This resulted in the freight carriages output increase by 138%.
    At present there are over 80 companies having the operator status, which own about 62 thousand carriages; at that 52 operator companies own stock of over 1000 carriages. The operators' rolling stock carried about 16% of the total cargo turnover. The investment in rolling stock in 2003 totaled over 14 billion rubles, while in the period of 2002-2004 there were invested in carriages, locomotives and equipment about USD 2.2-2.4 billion. The projects of investments in repair facilities and other railway transport infrastructure objects are presently under consideration.
    Taking into account the significantly smaller volume of MPS and RZD investment in the same period it can be stated that it was the operators' investments that are largely responsible for the national carriages construction and other national engineering industries revival. Such investment volumes were possible due to the balanced (though not free of faults) policy of the RF MPS, RF Federal Energy Commission, the Government's promises of stable tariffs policy for the 5-6 years to come declared by the Tariff Regulation No 10-01 introduction.

    Legal basis
    It needs to be noted that the matters of legal basis for the operators' activity have not been settled so far. The Law on the RF Railway Transport" says: "The basis for the legal regulation of the railway rolling stock operators' activity and their interaction with the carriers are determined by the Russian Federation Government".
    According to the present thesis and to carry out the RF Government Regulation of 6 May 2003 No 283 "On approving the plan of measures to realize the Program of the railway transport structural reform for 2003-2005" MAP prepared a draft Government Regulation "On the development of competition in the sphere of railway freight transportation, legal basis for the railway rolling stock operators' activity and their interaction with the carriers".
    The document defines the operators' activity basing on the entries 2 and 13 of the RF Law "On the RF Railway Transport", i.e.: "The railway rolling stock operator's activity - carrying out operations, providing services according to contracts with carriers with the use of rolling stock, containers owned by the operator (providing rolling stock, containers according to the processed orders for cargo transportation, carrying out individual carrying operations, etc.)". The draft also reflects the regulations of operator-carrier relations in the transportation process with the use of the private rolling stock, defines the technical, economical and information conditions of the contracts to be concluded.
    Despite presence of the legal basis and the Government's regulations, this important for the operators' community regulation has not been approved so far, which, according to a number of experts, hinders the general process of the institution of private operators formation on the Russian railways.
    Nevertheless, even the given legal status of the operators' activity is a success for the sector, as a consigner who is not a rolling stock owner has got the real choice between RZD stock and an operator's one.

    Tariff and investment problems
    At present the demand for carriages conditioned by the cargo transportation volume growth, keeps growing at a rate much above that of the supply. In experts' estimation the trend is to remain for 5-7 years, at that the average annual transportation volumes growth may be above 5% up to 2010. Thus the RZD Strategic Development Program provides for the total freight carriages stock, including that of private owners, operators in particular, by 2010 to constitute over 787 thousand (43.3% - gondolas, 21.4% - cisterns, 9.7 - box cars, 6% - platforms, 18.7% - other), at that RZD plans to leave in its ownership only 50% or 393 thousand (38 th. - box carriages, 23.8 th. - platforms, 170.5 th. - gondolas, 84 th. - cisterns, 73.5 th. - other) carriages, as it is prescribed by the Program of the industry structural reform.

    Stock of Russian-owned carriages in the end of 2003 (according to the RZD JSC. data for the 3rd quarter 2003): Table1


    But does it pay to own a carriages stock today? Planning to distribute the rolling stock in the 50:50 proportion and to replenish and modernize it at the expense of private companies does the state (and RZD in particular) care to create conditions to stimulate operators' rolling stock acquisition? The operators' work reveals that not too much so far. The investments in rolling stock repayment term is much above that normal for Europe of 6-8 years. The share of the carriage component in the tariff for private carriages according to Tariff Regulation No 10-01 is 15.4%, while according to the Carries and Operators Association it is to be 22-25%. As has been said above, the Government's Regulation on operators is not being passed. The unfair prices for rolling stock repairs remain, etc.
    In this respect there gains topicality the question of creating equal economic conditions for private (independent) transport companies and the RZD subsidiary carrying companies to be created in the course of the reform second phase. There is risk that the subsidiaries, having received gratis carriages, and probably, locomotives, part of the repair, handling facilities and other infrastructure objects and the possibility to operate at the same tariff schemes as the operators do today, will turn out a fortiori more competitive.
    In this respect it needs to be understood that the whole operator business consists in the difference between the payment according to the Tariff Regulation No 10-01 for cargo transportation in a carriage in common use and the own carriage including the empty mileage of the latter (return trip).
    This difference between tariffs is in fact almost the only source to return the company's investments in rolling stock, clear the credit and leasing, maintain the rolling stock, ensure the company's existence in general. At that in practice an operator's tariff is 1-2% below that of RZD (equal to it in the maximum), otherwise the consigner would prefer RZD and not the operator.
    The diagrams provided illustrate that the terms of universal carriages repayment, other things being equal, depend strongly on the tariffs for various cargoes transportation: the higher the class of the cargo transported, the less is the repayment term. This relation is most vivid by transportation in boxcars and on platforms - the repayment term may be cut by 11-13 years; while for gondolas it is less significant, with the maximum reduction achievable of 4 years. Nevertheless, taking into account the normative terms of the universal carriages exploitation (gondolas - 22 years; boxcars and platforms - 32 years) and the correct repayment terms (6-8 years) one can conclude that huge investments in new universal carriages are doubtful.
    Naturally, for the development of Price List No 10-01 "Tariffs for cargoes transportation and infrastructure services provided by the Russian Railway" are crucial for the Russian operator and carrier companies prospects. In late 2004 RZD addressed to the Federal Tariffs Service a draft of a new section N 4 "Rules of tariffs application by defining the cost of services on RZD infrastructure exploitation by the haul of trains formed of carriages and locomotives belonging on various bases to the carriers". The given document arose much criticism on the part of operating companies. According to the Carriers and Operators Association, the new tariff schemes NN 134-139 increase the rates by 40-70% against the existing ones according to the Price List entry 2.17.
    The RZD's suggestion as to the regulation of tariffs for cargoes transportation in the inventory stock carriages in full or in the carriage component (tariff "V"). The operators are disturbed that this may give RZD the possibility under the cover of reducing the tariff burden on customers to set dumping prices for cargoes transportation in their carriages. The Association is certain that the Federal Tariffs Service' accepting these suggestions of the monopolist would negatively affect the private transport business and may even lead to its vanishing.
    The Association appealed the executive power federal bodies' managements with the suggestion to declare a moratorium on any changes and additions to the current Price List No 10-01 up to 31 December 2005 - the term of the "Plan of measures on the railway transport structural reform realization for 2003-2005".
    No decisions on the questions have been made so far.

    Prospects
    What are the prospects of the operators turning into carriers? Entering the class of carriers an operator becomes a rival to RZD. In this respect the following aspects need to be considered.
    RZD as a carrier got its carriages, locomotives, infrastructure for free; the company's subsidiaries also receive property free of charge, while an operator-carrier will have to pay a lot, at that normally of borrowed money. So we see the efforts are not equal. Besides, an operator-carrier will have to pay for the infrastructure services according to the tariffs, while the carrier-owner of the infrastructure - only the prime cost.
    The principal matter here is the undiscriminated access of independent carriers to the infrastructure. At present there are "Rules of rendering services on the use of the railway transport in common use infrastructure" approved by the RF Government order of 20.11.2003 No 703, and the "Rules of undiscriminated access of carriers to the railway transport in common use infrastructure" approved by the RF Government order of 25.11.2003 No 710. But they are not being applied so far and cannot be applied, in particular due to lack of the "List of criteria serving basis for refusal to accomplish transportation orders" to be approved by the RF Government. And, the last, but not the least important is the financial side of the matter: there are no adequately calculated in the new conditions tariffs on the infrastructure services.
    It would be ideal for the private entrepreneurship in the sphere of freight transportation to separate the RZD's carrier and infrastructure businesses. But, according to the Reform Program, certain prerequisites are needed for that.
    According to the RF Ministry of Transport and RZD management the first full-scale private carriers are to emerge in 2006. The necessary conditions are being created now, such as the normative base elaboration and settling a number of organizational issues. Among the practical matters of the private carrier business development the question of use of own locomotive traction is outstanding (the share of private locomotives is currently below 0.5% of the total number).
    At present RZD is working on the drafts "Order of rendering the RZD locomotive traction services" and "Order of rendering services on locomotives and locomotives staff servicing when accomplishing transportation by private carriers". Besides the following Acts are being currently agreed: Order of concluding the approximate forms of contracts for the services of infrastructure use; Order of settling accounts related to the use of infrastructure; Order of accepting and agreeing carriers' orders for the services of infrastructure use and other.
    The transport market hopes the state supervising bodies related to the railway transport reform realization will bring the matters of the competitive relations in the sphere of freight transportation solution to the logical end. It will be first of all the railway services consumers to benefit from it.
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    Mikhail Kozlovsky, Expert of the RF Federal Tariffs Service, Member of the RF Federal Antimonopoly Service expert council
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    Mikhail Kozlovsky, Expert of the RF Federal Tariffs Service, Member of the RF Federal Antimonopoly Service expert council
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        [DETAIL_TEXT] => At the moment most of cargo of the Russian Federation railway transport is carried in the RZD carriages, but already 30% of all cargo is carried in rolling stock owned by private industrial and transportation companies. They dispose of 224 thousand carriages or 35,7% of the total stock. Among private owners there is a category of operator companies considered to be a prototype independent carriers.

    On subtleties of definitions
    First of all we need to define the terms and the notion of the "rolling stock owner". The first class - owner out of necessity - is usually a large manufacturer, forced by the chronical undersupply of carriages by the carrier - OAO Russian Railways (OAO RZD) - to acquire them to ensure its enterprise rhythmical operation. The demerit of this class of owners consists in the increase of the production cost due to expenses on carriages purchase and maintenance, and causing problems for railways by the empty carriages flow from the opposite direction on the way back to the owner. Naturally, such owner will not bother himself with reverse loading, as it is not his basic business.
    The second class of an owner is a transport company - a rolling stock operator. It is specializing in cargo transportation and the investment efficiency for him depends directly on the volume of cargo and carriages turnover time. Therefore an operator has own control system, regional representatives and transportation logistics.
    The third class of an owner is a carrier. What differs him from an operator? The RF Federal Law On Railway Transport in the Russian Federation (came into effect on 18 May 2003) gives the following definitions. "A carrier is a legal entity or a private entrepreneur, having undertaken according to a railway transport in common use transportation contract the obligation to deliver (:) the consignment entrusted to it by the consigner from the point of shipment to the point of destination, as well as to hand the consignment (:) to the person authorized to receive it (consignee)". Thus a carrier concludes with the consigner a transportation contract and issues a transportation document (railway bill of loading) and is fully accountable fro the cargo delivery and integrity according to the law. To carry out its functions "a carrier is to dispose of rolling stock to ensure transportation, on the basis of ownership or some other basis, conclude contracts for locomotive traction services, if the carrier has no locomotives, conclude corresponding contracts for the infrastructure use services (with the exception of cases when the carrier accomplishes transportation within its own infrastructure), the significant conditions for which are the carriage flows organization, carriages and locomotives turnover regulation, setting the order of the railway rolling stock maintenance and exploitation, the parties accountability for the obligations arising from railway transportation" and, naturally, to have corresponding licenses.
    "An operator of railway rolling stock is a legal entity or private entrepreneur having carriages, containers on the basis of ownership or some other basis, participating on the basis of a contract with the carrier in the transportation process with the use of the indicated carriages, containers". Thus the law allows an operator only to participate in the process of transportation accomplished by the carrier on the basis of a contract with the latter. The forms of this participation, the essence of the contract between an operator and a carrier, its main conditions are to be determined by the Government, but this has not been done so far and there is no legal basis for such contracts between the carrier and operators. Therefore an operator has now to work as a consigner and accomplish at that certain carrying operations of the transportation process without the specified contract and to submit itself to the fact that some of the operations accomplished by it have been paid for to the carrier as part of the transportation price (tariff).
    At the moment there is only one railway carrier in the Russian railway transport - OAO RZD, which at the same time owns the infrastructure, carriages and locomotives and carries out the transportation process management and control (for more information about the company see article by its president Gennady Fadeev in the present issue).
    It needs also to be noted that at present the two first of the mentioned classes of owners cannot legally realize their right to become carriers as they don't have the railway transport in common use infrastructure and, taking into account the requirements to a carrier they need a contract on infrastructure services use with its owner - OAO RZD. While the company's activity in this sphere has not been licensed due to a number of reasons. Therefore the work of the specified classes of owners is legally carried out only as consigners, while the practical realization of the private carriers (independent from RZD) formation has not started yet.

    Brief history of the Russian operators' movement
    The process of creating operator companies was initiated by the Russian Ministry of Railways (MPS), which, upon analyzing the results of the industry operation in the scarce in volumes 1998, came to the conclusion of the necessity to renovate the carriages stock at the expense of private investors. At that it was supposed that the investments would be repaid by providing the owners the so-called investment (reduced) tariffs for cargo transportation.
    The cost of the most capital-intensive repair works of the owned carriages affecting the repayment term was expected to be below the cost of analogous works for the MPS carriages. The Ministry developed and approved the requirements to the operator company status, the form of the business-plan to be submitted, etc., while within the framework of the MPS central mechanism there was created the special Center on working with operators (CVKO) considering and approving the suggested by them transportation technologies, operations registration and coordination, issuing certificates of the Ministry-approved form.
    MPS addressed the corresponding justifications and suggestions to the Russian Ministry of Antimonopoly Policy (MAP, now Federal Antimonopoly Service) and already in late 1999 the special Order of the MAP RF introduced the "Temporary Order of assigning exclusive (reduced) tariffs by carrying cargoes in enterprises and organizations' own carriages". The questions of equal prices for repair of MPS and owners stock were unfortunately ignored by MAP.
    Running somewhat ahead let us note that none of the operator companies eventually received the promised investment discounts from tariff. The "Temporary Order", though not repeal, is not in effect now. While the question of the MPS and owners stock repair prices inequality requires immediate solution.
    The Government's solution on the railway transport reform and in particular the Government Resolution of 18.05.2001 No 384 that approved the Program of the structural reform was of critical importance for the operator movement development. It directly prescribed the creation and development of operator companies as a competitive segment in the transportation sphere. From 2001 to 2003 the number of the railway rolling stock operating companies connected with freight transportation increased by 2.5 times.
    During the last few years there was a noticeable trend towards freight carriages acquisition by private operators. In 2003 there were purchased the total of 26.5 thousand carriages, of which 23 thousand by operators. In the first half of 2004 there were purchased about 16.7 thousand, of which 15.2 thousand - by operators. This resulted in the freight carriages output increase by 138%.
    At present there are over 80 companies having the operator status, which own about 62 thousand carriages; at that 52 operator companies own stock of over 1000 carriages. The operators' rolling stock carried about 16% of the total cargo turnover. The investment in rolling stock in 2003 totaled over 14 billion rubles, while in the period of 2002-2004 there were invested in carriages, locomotives and equipment about USD 2.2-2.4 billion. The projects of investments in repair facilities and other railway transport infrastructure objects are presently under consideration.
    Taking into account the significantly smaller volume of MPS and RZD investment in the same period it can be stated that it was the operators' investments that are largely responsible for the national carriages construction and other national engineering industries revival. Such investment volumes were possible due to the balanced (though not free of faults) policy of the RF MPS, RF Federal Energy Commission, the Government's promises of stable tariffs policy for the 5-6 years to come declared by the Tariff Regulation No 10-01 introduction.

    Legal basis
    It needs to be noted that the matters of legal basis for the operators' activity have not been settled so far. The Law on the RF Railway Transport" says: "The basis for the legal regulation of the railway rolling stock operators' activity and their interaction with the carriers are determined by the Russian Federation Government".
    According to the present thesis and to carry out the RF Government Regulation of 6 May 2003 No 283 "On approving the plan of measures to realize the Program of the railway transport structural reform for 2003-2005" MAP prepared a draft Government Regulation "On the development of competition in the sphere of railway freight transportation, legal basis for the railway rolling stock operators' activity and their interaction with the carriers".
    The document defines the operators' activity basing on the entries 2 and 13 of the RF Law "On the RF Railway Transport", i.e.: "The railway rolling stock operator's activity - carrying out operations, providing services according to contracts with carriers with the use of rolling stock, containers owned by the operator (providing rolling stock, containers according to the processed orders for cargo transportation, carrying out individual carrying operations, etc.)". The draft also reflects the regulations of operator-carrier relations in the transportation process with the use of the private rolling stock, defines the technical, economical and information conditions of the contracts to be concluded.
    Despite presence of the legal basis and the Government's regulations, this important for the operators' community regulation has not been approved so far, which, according to a number of experts, hinders the general process of the institution of private operators formation on the Russian railways.
    Nevertheless, even the given legal status of the operators' activity is a success for the sector, as a consigner who is not a rolling stock owner has got the real choice between RZD stock and an operator's one.

    Tariff and investment problems
    At present the demand for carriages conditioned by the cargo transportation volume growth, keeps growing at a rate much above that of the supply. In experts' estimation the trend is to remain for 5-7 years, at that the average annual transportation volumes growth may be above 5% up to 2010. Thus the RZD Strategic Development Program provides for the total freight carriages stock, including that of private owners, operators in particular, by 2010 to constitute over 787 thousand (43.3% - gondolas, 21.4% - cisterns, 9.7 - box cars, 6% - platforms, 18.7% - other), at that RZD plans to leave in its ownership only 50% or 393 thousand (38 th. - box carriages, 23.8 th. - platforms, 170.5 th. - gondolas, 84 th. - cisterns, 73.5 th. - other) carriages, as it is prescribed by the Program of the industry structural reform.

    Stock of Russian-owned carriages in the end of 2003 (according to the RZD JSC. data for the 3rd quarter 2003): Table1


    But does it pay to own a carriages stock today? Planning to distribute the rolling stock in the 50:50 proportion and to replenish and modernize it at the expense of private companies does the state (and RZD in particular) care to create conditions to stimulate operators' rolling stock acquisition? The operators' work reveals that not too much so far. The investments in rolling stock repayment term is much above that normal for Europe of 6-8 years. The share of the carriage component in the tariff for private carriages according to Tariff Regulation No 10-01 is 15.4%, while according to the Carries and Operators Association it is to be 22-25%. As has been said above, the Government's Regulation on operators is not being passed. The unfair prices for rolling stock repairs remain, etc.
    In this respect there gains topicality the question of creating equal economic conditions for private (independent) transport companies and the RZD subsidiary carrying companies to be created in the course of the reform second phase. There is risk that the subsidiaries, having received gratis carriages, and probably, locomotives, part of the repair, handling facilities and other infrastructure objects and the possibility to operate at the same tariff schemes as the operators do today, will turn out a fortiori more competitive.
    In this respect it needs to be understood that the whole operator business consists in the difference between the payment according to the Tariff Regulation No 10-01 for cargo transportation in a carriage in common use and the own carriage including the empty mileage of the latter (return trip).
    This difference between tariffs is in fact almost the only source to return the company's investments in rolling stock, clear the credit and leasing, maintain the rolling stock, ensure the company's existence in general. At that in practice an operator's tariff is 1-2% below that of RZD (equal to it in the maximum), otherwise the consigner would prefer RZD and not the operator.
    The diagrams provided illustrate that the terms of universal carriages repayment, other things being equal, depend strongly on the tariffs for various cargoes transportation: the higher the class of the cargo transported, the less is the repayment term. This relation is most vivid by transportation in boxcars and on platforms - the repayment term may be cut by 11-13 years; while for gondolas it is less significant, with the maximum reduction achievable of 4 years. Nevertheless, taking into account the normative terms of the universal carriages exploitation (gondolas - 22 years; boxcars and platforms - 32 years) and the correct repayment terms (6-8 years) one can conclude that huge investments in new universal carriages are doubtful.
    Naturally, for the development of Price List No 10-01 "Tariffs for cargoes transportation and infrastructure services provided by the Russian Railway" are crucial for the Russian operator and carrier companies prospects. In late 2004 RZD addressed to the Federal Tariffs Service a draft of a new section N 4 "Rules of tariffs application by defining the cost of services on RZD infrastructure exploitation by the haul of trains formed of carriages and locomotives belonging on various bases to the carriers". The given document arose much criticism on the part of operating companies. According to the Carriers and Operators Association, the new tariff schemes NN 134-139 increase the rates by 40-70% against the existing ones according to the Price List entry 2.17.
    The RZD's suggestion as to the regulation of tariffs for cargoes transportation in the inventory stock carriages in full or in the carriage component (tariff "V"). The operators are disturbed that this may give RZD the possibility under the cover of reducing the tariff burden on customers to set dumping prices for cargoes transportation in their carriages. The Association is certain that the Federal Tariffs Service' accepting these suggestions of the monopolist would negatively affect the private transport business and may even lead to its vanishing.
    The Association appealed the executive power federal bodies' managements with the suggestion to declare a moratorium on any changes and additions to the current Price List No 10-01 up to 31 December 2005 - the term of the "Plan of measures on the railway transport structural reform realization for 2003-2005".
    No decisions on the questions have been made so far.

    Prospects
    What are the prospects of the operators turning into carriers? Entering the class of carriers an operator becomes a rival to RZD. In this respect the following aspects need to be considered.
    RZD as a carrier got its carriages, locomotives, infrastructure for free; the company's subsidiaries also receive property free of charge, while an operator-carrier will have to pay a lot, at that normally of borrowed money. So we see the efforts are not equal. Besides, an operator-carrier will have to pay for the infrastructure services according to the tariffs, while the carrier-owner of the infrastructure - only the prime cost.
    The principal matter here is the undiscriminated access of independent carriers to the infrastructure. At present there are "Rules of rendering services on the use of the railway transport in common use infrastructure" approved by the RF Government order of 20.11.2003 No 703, and the "Rules of undiscriminated access of carriers to the railway transport in common use infrastructure" approved by the RF Government order of 25.11.2003 No 710. But they are not being applied so far and cannot be applied, in particular due to lack of the "List of criteria serving basis for refusal to accomplish transportation orders" to be approved by the RF Government. And, the last, but not the least important is the financial side of the matter: there are no adequately calculated in the new conditions tariffs on the infrastructure services.
    It would be ideal for the private entrepreneurship in the sphere of freight transportation to separate the RZD's carrier and infrastructure businesses. But, according to the Reform Program, certain prerequisites are needed for that.
    According to the RF Ministry of Transport and RZD management the first full-scale private carriers are to emerge in 2006. The necessary conditions are being created now, such as the normative base elaboration and settling a number of organizational issues. Among the practical matters of the private carrier business development the question of use of own locomotive traction is outstanding (the share of private locomotives is currently below 0.5% of the total number).
    At present RZD is working on the drafts "Order of rendering the RZD locomotive traction services" and "Order of rendering services on locomotives and locomotives staff servicing when accomplishing transportation by private carriers". Besides the following Acts are being currently agreed: Order of concluding the approximate forms of contracts for the services of infrastructure use; Order of settling accounts related to the use of infrastructure; Order of accepting and agreeing carriers' orders for the services of infrastructure use and other.
    The transport market hopes the state supervising bodies related to the railway transport reform realization will bring the matters of the competitive relations in the sphere of freight transportation solution to the logical end. It will be first of all the railway services consumers to benefit from it.
    [~DETAIL_TEXT] => At the moment most of cargo of the Russian Federation railway transport is carried in the RZD carriages, but already 30% of all cargo is carried in rolling stock owned by private industrial and transportation companies. They dispose of 224 thousand carriages or 35,7% of the total stock. Among private owners there is a category of operator companies considered to be a prototype independent carriers.

    On subtleties of definitions
    First of all we need to define the terms and the notion of the "rolling stock owner". The first class - owner out of necessity - is usually a large manufacturer, forced by the chronical undersupply of carriages by the carrier - OAO Russian Railways (OAO RZD) - to acquire them to ensure its enterprise rhythmical operation. The demerit of this class of owners consists in the increase of the production cost due to expenses on carriages purchase and maintenance, and causing problems for railways by the empty carriages flow from the opposite direction on the way back to the owner. Naturally, such owner will not bother himself with reverse loading, as it is not his basic business.
    The second class of an owner is a transport company - a rolling stock operator. It is specializing in cargo transportation and the investment efficiency for him depends directly on the volume of cargo and carriages turnover time. Therefore an operator has own control system, regional representatives and transportation logistics.
    The third class of an owner is a carrier. What differs him from an operator? The RF Federal Law On Railway Transport in the Russian Federation (came into effect on 18 May 2003) gives the following definitions. "A carrier is a legal entity or a private entrepreneur, having undertaken according to a railway transport in common use transportation contract the obligation to deliver (:) the consignment entrusted to it by the consigner from the point of shipment to the point of destination, as well as to hand the consignment (:) to the person authorized to receive it (consignee)". Thus a carrier concludes with the consigner a transportation contract and issues a transportation document (railway bill of loading) and is fully accountable fro the cargo delivery and integrity according to the law. To carry out its functions "a carrier is to dispose of rolling stock to ensure transportation, on the basis of ownership or some other basis, conclude contracts for locomotive traction services, if the carrier has no locomotives, conclude corresponding contracts for the infrastructure use services (with the exception of cases when the carrier accomplishes transportation within its own infrastructure), the significant conditions for which are the carriage flows organization, carriages and locomotives turnover regulation, setting the order of the railway rolling stock maintenance and exploitation, the parties accountability for the obligations arising from railway transportation" and, naturally, to have corresponding licenses.
    "An operator of railway rolling stock is a legal entity or private entrepreneur having carriages, containers on the basis of ownership or some other basis, participating on the basis of a contract with the carrier in the transportation process with the use of the indicated carriages, containers". Thus the law allows an operator only to participate in the process of transportation accomplished by the carrier on the basis of a contract with the latter. The forms of this participation, the essence of the contract between an operator and a carrier, its main conditions are to be determined by the Government, but this has not been done so far and there is no legal basis for such contracts between the carrier and operators. Therefore an operator has now to work as a consigner and accomplish at that certain carrying operations of the transportation process without the specified contract and to submit itself to the fact that some of the operations accomplished by it have been paid for to the carrier as part of the transportation price (tariff).
    At the moment there is only one railway carrier in the Russian railway transport - OAO RZD, which at the same time owns the infrastructure, carriages and locomotives and carries out the transportation process management and control (for more information about the company see article by its president Gennady Fadeev in the present issue).
    It needs also to be noted that at present the two first of the mentioned classes of owners cannot legally realize their right to become carriers as they don't have the railway transport in common use infrastructure and, taking into account the requirements to a carrier they need a contract on infrastructure services use with its owner - OAO RZD. While the company's activity in this sphere has not been licensed due to a number of reasons. Therefore the work of the specified classes of owners is legally carried out only as consigners, while the practical realization of the private carriers (independent from RZD) formation has not started yet.

    Brief history of the Russian operators' movement
    The process of creating operator companies was initiated by the Russian Ministry of Railways (MPS), which, upon analyzing the results of the industry operation in the scarce in volumes 1998, came to the conclusion of the necessity to renovate the carriages stock at the expense of private investors. At that it was supposed that the investments would be repaid by providing the owners the so-called investment (reduced) tariffs for cargo transportation.
    The cost of the most capital-intensive repair works of the owned carriages affecting the repayment term was expected to be below the cost of analogous works for the MPS carriages. The Ministry developed and approved the requirements to the operator company status, the form of the business-plan to be submitted, etc., while within the framework of the MPS central mechanism there was created the special Center on working with operators (CVKO) considering and approving the suggested by them transportation technologies, operations registration and coordination, issuing certificates of the Ministry-approved form.
    MPS addressed the corresponding justifications and suggestions to the Russian Ministry of Antimonopoly Policy (MAP, now Federal Antimonopoly Service) and already in late 1999 the special Order of the MAP RF introduced the "Temporary Order of assigning exclusive (reduced) tariffs by carrying cargoes in enterprises and organizations' own carriages". The questions of equal prices for repair of MPS and owners stock were unfortunately ignored by MAP.
    Running somewhat ahead let us note that none of the operator companies eventually received the promised investment discounts from tariff. The "Temporary Order", though not repeal, is not in effect now. While the question of the MPS and owners stock repair prices inequality requires immediate solution.
    The Government's solution on the railway transport reform and in particular the Government Resolution of 18.05.2001 No 384 that approved the Program of the structural reform was of critical importance for the operator movement development. It directly prescribed the creation and development of operator companies as a competitive segment in the transportation sphere. From 2001 to 2003 the number of the railway rolling stock operating companies connected with freight transportation increased by 2.5 times.
    During the last few years there was a noticeable trend towards freight carriages acquisition by private operators. In 2003 there were purchased the total of 26.5 thousand carriages, of which 23 thousand by operators. In the first half of 2004 there were purchased about 16.7 thousand, of which 15.2 thousand - by operators. This resulted in the freight carriages output increase by 138%.
    At present there are over 80 companies having the operator status, which own about 62 thousand carriages; at that 52 operator companies own stock of over 1000 carriages. The operators' rolling stock carried about 16% of the total cargo turnover. The investment in rolling stock in 2003 totaled over 14 billion rubles, while in the period of 2002-2004 there were invested in carriages, locomotives and equipment about USD 2.2-2.4 billion. The projects of investments in repair facilities and other railway transport infrastructure objects are presently under consideration.
    Taking into account the significantly smaller volume of MPS and RZD investment in the same period it can be stated that it was the operators' investments that are largely responsible for the national carriages construction and other national engineering industries revival. Such investment volumes were possible due to the balanced (though not free of faults) policy of the RF MPS, RF Federal Energy Commission, the Government's promises of stable tariffs policy for the 5-6 years to come declared by the Tariff Regulation No 10-01 introduction.

    Legal basis
    It needs to be noted that the matters of legal basis for the operators' activity have not been settled so far. The Law on the RF Railway Transport" says: "The basis for the legal regulation of the railway rolling stock operators' activity and their interaction with the carriers are determined by the Russian Federation Government".
    According to the present thesis and to carry out the RF Government Regulation of 6 May 2003 No 283 "On approving the plan of measures to realize the Program of the railway transport structural reform for 2003-2005" MAP prepared a draft Government Regulation "On the development of competition in the sphere of railway freight transportation, legal basis for the railway rolling stock operators' activity and their interaction with the carriers".
    The document defines the operators' activity basing on the entries 2 and 13 of the RF Law "On the RF Railway Transport", i.e.: "The railway rolling stock operator's activity - carrying out operations, providing services according to contracts with carriers with the use of rolling stock, containers owned by the operator (providing rolling stock, containers according to the processed orders for cargo transportation, carrying out individual carrying operations, etc.)". The draft also reflects the regulations of operator-carrier relations in the transportation process with the use of the private rolling stock, defines the technical, economical and information conditions of the contracts to be concluded.
    Despite presence of the legal basis and the Government's regulations, this important for the operators' community regulation has not been approved so far, which, according to a number of experts, hinders the general process of the institution of private operators formation on the Russian railways.
    Nevertheless, even the given legal status of the operators' activity is a success for the sector, as a consigner who is not a rolling stock owner has got the real choice between RZD stock and an operator's one.

    Tariff and investment problems
    At present the demand for carriages conditioned by the cargo transportation volume growth, keeps growing at a rate much above that of the supply. In experts' estimation the trend is to remain for 5-7 years, at that the average annual transportation volumes growth may be above 5% up to 2010. Thus the RZD Strategic Development Program provides for the total freight carriages stock, including that of private owners, operators in particular, by 2010 to constitute over 787 thousand (43.3% - gondolas, 21.4% - cisterns, 9.7 - box cars, 6% - platforms, 18.7% - other), at that RZD plans to leave in its ownership only 50% or 393 thousand (38 th. - box carriages, 23.8 th. - platforms, 170.5 th. - gondolas, 84 th. - cisterns, 73.5 th. - other) carriages, as it is prescribed by the Program of the industry structural reform.

    Stock of Russian-owned carriages in the end of 2003 (according to the RZD JSC. data for the 3rd quarter 2003): Table1


    But does it pay to own a carriages stock today? Planning to distribute the rolling stock in the 50:50 proportion and to replenish and modernize it at the expense of private companies does the state (and RZD in particular) care to create conditions to stimulate operators' rolling stock acquisition? The operators' work reveals that not too much so far. The investments in rolling stock repayment term is much above that normal for Europe of 6-8 years. The share of the carriage component in the tariff for private carriages according to Tariff Regulation No 10-01 is 15.4%, while according to the Carries and Operators Association it is to be 22-25%. As has been said above, the Government's Regulation on operators is not being passed. The unfair prices for rolling stock repairs remain, etc.
    In this respect there gains topicality the question of creating equal economic conditions for private (independent) transport companies and the RZD subsidiary carrying companies to be created in the course of the reform second phase. There is risk that the subsidiaries, having received gratis carriages, and probably, locomotives, part of the repair, handling facilities and other infrastructure objects and the possibility to operate at the same tariff schemes as the operators do today, will turn out a fortiori more competitive.
    In this respect it needs to be understood that the whole operator business consists in the difference between the payment according to the Tariff Regulation No 10-01 for cargo transportation in a carriage in common use and the own carriage including the empty mileage of the latter (return trip).
    This difference between tariffs is in fact almost the only source to return the company's investments in rolling stock, clear the credit and leasing, maintain the rolling stock, ensure the company's existence in general. At that in practice an operator's tariff is 1-2% below that of RZD (equal to it in the maximum), otherwise the consigner would prefer RZD and not the operator.
    The diagrams provided illustrate that the terms of universal carriages repayment, other things being equal, depend strongly on the tariffs for various cargoes transportation: the higher the class of the cargo transported, the less is the repayment term. This relation is most vivid by transportation in boxcars and on platforms - the repayment term may be cut by 11-13 years; while for gondolas it is less significant, with the maximum reduction achievable of 4 years. Nevertheless, taking into account the normative terms of the universal carriages exploitation (gondolas - 22 years; boxcars and platforms - 32 years) and the correct repayment terms (6-8 years) one can conclude that huge investments in new universal carriages are doubtful.
    Naturally, for the development of Price List No 10-01 "Tariffs for cargoes transportation and infrastructure services provided by the Russian Railway" are crucial for the Russian operator and carrier companies prospects. In late 2004 RZD addressed to the Federal Tariffs Service a draft of a new section N 4 "Rules of tariffs application by defining the cost of services on RZD infrastructure exploitation by the haul of trains formed of carriages and locomotives belonging on various bases to the carriers". The given document arose much criticism on the part of operating companies. According to the Carriers and Operators Association, the new tariff schemes NN 134-139 increase the rates by 40-70% against the existing ones according to the Price List entry 2.17.
    The RZD's suggestion as to the regulation of tariffs for cargoes transportation in the inventory stock carriages in full or in the carriage component (tariff "V"). The operators are disturbed that this may give RZD the possibility under the cover of reducing the tariff burden on customers to set dumping prices for cargoes transportation in their carriages. The Association is certain that the Federal Tariffs Service' accepting these suggestions of the monopolist would negatively affect the private transport business and may even lead to its vanishing.
    The Association appealed the executive power federal bodies' managements with the suggestion to declare a moratorium on any changes and additions to the current Price List No 10-01 up to 31 December 2005 - the term of the "Plan of measures on the railway transport structural reform realization for 2003-2005".
    No decisions on the questions have been made so far.

    Prospects
    What are the prospects of the operators turning into carriers? Entering the class of carriers an operator becomes a rival to RZD. In this respect the following aspects need to be considered.
    RZD as a carrier got its carriages, locomotives, infrastructure for free; the company's subsidiaries also receive property free of charge, while an operator-carrier will have to pay a lot, at that normally of borrowed money. So we see the efforts are not equal. Besides, an operator-carrier will have to pay for the infrastructure services according to the tariffs, while the carrier-owner of the infrastructure - only the prime cost.
    The principal matter here is the undiscriminated access of independent carriers to the infrastructure. At present there are "Rules of rendering services on the use of the railway transport in common use infrastructure" approved by the RF Government order of 20.11.2003 No 703, and the "Rules of undiscriminated access of carriers to the railway transport in common use infrastructure" approved by the RF Government order of 25.11.2003 No 710. But they are not being applied so far and cannot be applied, in particular due to lack of the "List of criteria serving basis for refusal to accomplish transportation orders" to be approved by the RF Government. And, the last, but not the least important is the financial side of the matter: there are no adequately calculated in the new conditions tariffs on the infrastructure services.
    It would be ideal for the private entrepreneurship in the sphere of freight transportation to separate the RZD's carrier and infrastructure businesses. But, according to the Reform Program, certain prerequisites are needed for that.
    According to the RF Ministry of Transport and RZD management the first full-scale private carriers are to emerge in 2006. The necessary conditions are being created now, such as the normative base elaboration and settling a number of organizational issues. Among the practical matters of the private carrier business development the question of use of own locomotive traction is outstanding (the share of private locomotives is currently below 0.5% of the total number).
    At present RZD is working on the drafts "Order of rendering the RZD locomotive traction services" and "Order of rendering services on locomotives and locomotives staff servicing when accomplishing transportation by private carriers". Besides the following Acts are being currently agreed: Order of concluding the approximate forms of contracts for the services of infrastructure use; Order of settling accounts related to the use of infrastructure; Order of accepting and agreeing carriers' orders for the services of infrastructure use and other.
    The transport market hopes the state supervising bodies related to the railway transport reform realization will bring the matters of the competitive relations in the sphere of freight transportation solution to the logical end. It will be first of all the railway services consumers to benefit from it.
    [DETAIL_TEXT_TYPE] => html [~DETAIL_TEXT_TYPE] => html [PREVIEW_TEXT] =>
    Mikhail Kozlovsky, Expert of the RF Federal Tariffs Service, Member of the RF Federal Antimonopoly Service expert council
    [~PREVIEW_TEXT] =>
    Mikhail Kozlovsky, Expert of the RF Federal Tariffs Service, Member of the RF Federal Antimonopoly Service expert council
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Development of Private Carriers on the Russian Railways: Trends, Problems, Perspectives [SECTION_PICTURE_FILE_TITLE] => Development of Private Carriers on the Russian Railways: Trends, Problems, Perspectives [SECTION_DETAIL_PICTURE_FILE_ALT] => Development of Private Carriers on the Russian Railways: Trends, Problems, Perspectives [SECTION_DETAIL_PICTURE_FILE_TITLE] => Development of Private Carriers on the Russian Railways: Trends, Problems, Perspectives [ELEMENT_PREVIEW_PICTURE_FILE_ALT] => Development of Private Carriers on the Russian Railways: Trends, Problems, Perspectives [ELEMENT_PREVIEW_PICTURE_FILE_TITLE] => Development of Private Carriers on the Russian Railways: Trends, Problems, Perspectives [ELEMENT_DETAIL_PICTURE_FILE_ALT] => Development of Private Carriers on the Russian Railways: Trends, Problems, Perspectives [ELEMENT_DETAIL_PICTURE_FILE_TITLE] => Development of Private Carriers on the Russian Railways: Trends, Problems, Perspectives ) )
    РЖД-Партнер

    Russian Far East Started from Shipping

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        [DETAIL_TEXT] => The key player of the Russian Far-Eastern basin shipping market is Far-Eastern Shipping Company OJSC (FESCO). Within 2 year past the company considerably improved its operation efficiency due to both profit of fleet operated growth and expenses reduction. On company's top priorities tells its CEO Yevgeny Ambrosov.

    - Mr.Ambrosov, what is FESCO doing for international relations enhancement, services geography extension and fleet renovation?
    - At the beginning I'd like to notice that Far-Eastern Shipping Company is one of the largest and oldest Russian transport companies. This year FESCO celebrates its 125th anniversary. Russian Far-East development started after first ship call at the region. Today our shipping company offers freight transportation on the services connecting ports of Russian Far East, with South Korea, Japan, China, Taiwan, Vietnam, Australia, New Zealand and USA, also provides ice-breaking tugging in Arctic and services largest oil and gas companies producing in the region. We extend geography of services for both coastal and foreign trade routes. Apart from this, we continually upgrade and improve our existing services. Thus following our clients' interests we change port rotation, increase tonnage, try to simplify freight registration procedure.
    Fleet aquisition and renewal is given the top priority by FESCO. In order to reach the objective the Programme of fleet and container park modernization and renovation worth some USD 400 million was developed and started realizing. Within last year within the frame of the programme our company acquired 3 new vessels - a 33 thousand tons dwt bulker, developed by German companies and 2 container vessels. Today this vessels operate international lines of FESCO. In May of 2005 in Finland the first FESCO's ice-breaker combining functions of a supply and rescue vessel is to be launched. The ice-breaker within12 years is to operate oil-boring platfom in the Sea of Okhotsk. In 2006 7 vessels, whereof 3 are 2800 TEU subpanamax container vessels are to be delivered. 3 vessels are to be delievered in 2008. Generally speaking, FESCO has not made such fleet extension for many years.
    We also plan serious extension of our container park. Today FESCO operates some 50 thousand TEUs.
    - What is FESCO doing for client servicing improvement?
    - We realize that company's operating results depend on quality of services provided. That is why Far-Eastern Shipping Company developed and is implementing policy of quality in the sphere of shipping, which envisages FESCO's top priorities in the field. Particularly, we stand on maximum meeting the client's needs, providing of cargo safety, prevention of cargo loss, accidents, health and life protection and environmental control principles.
    In order to reach these objectives quality management system was established and is developed. Our quality management system fully meets standards, conventions, codes, rules and instructions of international organizations, particularly ISO 9001:2000 standard, which showed FESCO's reaching world standard of fleet and, in general, company's operating. ISO 9001:2000 certificate proves to customers that the company has all necessary for and is capable of high quality services providing.
    Quality management system implementation was FESCO's advantage in tenders, competitions, federal orders getting, investment attraction and contract concluding.
    As a result FESCO is included in top-100 of Russia's largest companies, forming the country's economy. On terms of capitalization FESCO is a leader of all Russian shipping companies and the second in transport sector.
    Following the principles of quality policy is necessary for every FESCO's employee independent on the position. As a result Far-Eastern Shipping Company has many times already been granted by world awards for best service.
    - What is the company's strategy in foreign markets?
    - In foreign markets FESCO tries to follow flexible policy, taking into consideration peculiarities of every part of the globe. As I've already mentioned, apart from new lines launch, we continually enhance existing ones. For example, the company re-considered terms of some contracts on several lines. Lately FESCO switched from stiff competition with other shipping companies to partnership in the frame of tonnage exchange. If we realize that some of our liner direction is overtonnaged we trying to reach some compromise and agreement with other operators to reduce tonnage proportionally and save common cost. Such measures of common sense help us introduce rationalization of services, better fleet capacity utilization and better service for clients due to coordinated schedules, more frequient service and better port call coverage. And clients appreciate our work: FESCO has got international awards for best service. For example, in 2004 we were considered the best ocean carrier on the Australian route by Canadian international forwarders association second year in a row; American magazine "Logistics" also granted our American line with quality award of the year.
    - What is the key target of the project Russkaya Troyka? How will its realization influence operating of Far-Eastern Shipping Company?
    - Russkaya Troyka is a joint project of FESCO, as Russia's leader in container shipping, and a key rail company - OAO RZD. The project is aimed at complex services providing for consignors of Russia and Asia-Pacific countries. The company will offer multimodal container transportation using key Russian transport corridors. Today one of the main objectives of the company is to attract part of cargo flow, which today is shipped by deep sea from the Asian-Pacific region to European countries, through Russian territory. This enables Russia to get substantial financial income as well as to realize key railways, first of all the TSR, carrying capacity and to stimulate container transportation market development, which is crucially important for FESCO as one of key players.
    [~DETAIL_TEXT] => The key player of the Russian Far-Eastern basin shipping market is Far-Eastern Shipping Company OJSC (FESCO). Within 2 year past the company considerably improved its operation efficiency due to both profit of fleet operated growth and expenses reduction. On company's top priorities tells its CEO Yevgeny Ambrosov.

    - Mr.Ambrosov, what is FESCO doing for international relations enhancement, services geography extension and fleet renovation?
    - At the beginning I'd like to notice that Far-Eastern Shipping Company is one of the largest and oldest Russian transport companies. This year FESCO celebrates its 125th anniversary. Russian Far-East development started after first ship call at the region. Today our shipping company offers freight transportation on the services connecting ports of Russian Far East, with South Korea, Japan, China, Taiwan, Vietnam, Australia, New Zealand and USA, also provides ice-breaking tugging in Arctic and services largest oil and gas companies producing in the region. We extend geography of services for both coastal and foreign trade routes. Apart from this, we continually upgrade and improve our existing services. Thus following our clients' interests we change port rotation, increase tonnage, try to simplify freight registration procedure.
    Fleet aquisition and renewal is given the top priority by FESCO. In order to reach the objective the Programme of fleet and container park modernization and renovation worth some USD 400 million was developed and started realizing. Within last year within the frame of the programme our company acquired 3 new vessels - a 33 thousand tons dwt bulker, developed by German companies and 2 container vessels. Today this vessels operate international lines of FESCO. In May of 2005 in Finland the first FESCO's ice-breaker combining functions of a supply and rescue vessel is to be launched. The ice-breaker within12 years is to operate oil-boring platfom in the Sea of Okhotsk. In 2006 7 vessels, whereof 3 are 2800 TEU subpanamax container vessels are to be delivered. 3 vessels are to be delievered in 2008. Generally speaking, FESCO has not made such fleet extension for many years.
    We also plan serious extension of our container park. Today FESCO operates some 50 thousand TEUs.
    - What is FESCO doing for client servicing improvement?
    - We realize that company's operating results depend on quality of services provided. That is why Far-Eastern Shipping Company developed and is implementing policy of quality in the sphere of shipping, which envisages FESCO's top priorities in the field. Particularly, we stand on maximum meeting the client's needs, providing of cargo safety, prevention of cargo loss, accidents, health and life protection and environmental control principles.
    In order to reach these objectives quality management system was established and is developed. Our quality management system fully meets standards, conventions, codes, rules and instructions of international organizations, particularly ISO 9001:2000 standard, which showed FESCO's reaching world standard of fleet and, in general, company's operating. ISO 9001:2000 certificate proves to customers that the company has all necessary for and is capable of high quality services providing.
    Quality management system implementation was FESCO's advantage in tenders, competitions, federal orders getting, investment attraction and contract concluding.
    As a result FESCO is included in top-100 of Russia's largest companies, forming the country's economy. On terms of capitalization FESCO is a leader of all Russian shipping companies and the second in transport sector.
    Following the principles of quality policy is necessary for every FESCO's employee independent on the position. As a result Far-Eastern Shipping Company has many times already been granted by world awards for best service.
    - What is the company's strategy in foreign markets?
    - In foreign markets FESCO tries to follow flexible policy, taking into consideration peculiarities of every part of the globe. As I've already mentioned, apart from new lines launch, we continually enhance existing ones. For example, the company re-considered terms of some contracts on several lines. Lately FESCO switched from stiff competition with other shipping companies to partnership in the frame of tonnage exchange. If we realize that some of our liner direction is overtonnaged we trying to reach some compromise and agreement with other operators to reduce tonnage proportionally and save common cost. Such measures of common sense help us introduce rationalization of services, better fleet capacity utilization and better service for clients due to coordinated schedules, more frequient service and better port call coverage. And clients appreciate our work: FESCO has got international awards for best service. For example, in 2004 we were considered the best ocean carrier on the Australian route by Canadian international forwarders association second year in a row; American magazine "Logistics" also granted our American line with quality award of the year.
    - What is the key target of the project Russkaya Troyka? How will its realization influence operating of Far-Eastern Shipping Company?
    - Russkaya Troyka is a joint project of FESCO, as Russia's leader in container shipping, and a key rail company - OAO RZD. The project is aimed at complex services providing for consignors of Russia and Asia-Pacific countries. The company will offer multimodal container transportation using key Russian transport corridors. Today one of the main objectives of the company is to attract part of cargo flow, which today is shipped by deep sea from the Asian-Pacific region to European countries, through Russian territory. This enables Russia to get substantial financial income as well as to realize key railways, first of all the TSR, carrying capacity and to stimulate container transportation market development, which is crucially important for FESCO as one of key players.
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        [DETAIL_TEXT] => The key player of the Russian Far-Eastern basin shipping market is Far-Eastern Shipping Company OJSC (FESCO). Within 2 year past the company considerably improved its operation efficiency due to both profit of fleet operated growth and expenses reduction. On company's top priorities tells its CEO Yevgeny Ambrosov.

    - Mr.Ambrosov, what is FESCO doing for international relations enhancement, services geography extension and fleet renovation?
    - At the beginning I'd like to notice that Far-Eastern Shipping Company is one of the largest and oldest Russian transport companies. This year FESCO celebrates its 125th anniversary. Russian Far-East development started after first ship call at the region. Today our shipping company offers freight transportation on the services connecting ports of Russian Far East, with South Korea, Japan, China, Taiwan, Vietnam, Australia, New Zealand and USA, also provides ice-breaking tugging in Arctic and services largest oil and gas companies producing in the region. We extend geography of services for both coastal and foreign trade routes. Apart from this, we continually upgrade and improve our existing services. Thus following our clients' interests we change port rotation, increase tonnage, try to simplify freight registration procedure.
    Fleet aquisition and renewal is given the top priority by FESCO. In order to reach the objective the Programme of fleet and container park modernization and renovation worth some USD 400 million was developed and started realizing. Within last year within the frame of the programme our company acquired 3 new vessels - a 33 thousand tons dwt bulker, developed by German companies and 2 container vessels. Today this vessels operate international lines of FESCO. In May of 2005 in Finland the first FESCO's ice-breaker combining functions of a supply and rescue vessel is to be launched. The ice-breaker within12 years is to operate oil-boring platfom in the Sea of Okhotsk. In 2006 7 vessels, whereof 3 are 2800 TEU subpanamax container vessels are to be delivered. 3 vessels are to be delievered in 2008. Generally speaking, FESCO has not made such fleet extension for many years.
    We also plan serious extension of our container park. Today FESCO operates some 50 thousand TEUs.
    - What is FESCO doing for client servicing improvement?
    - We realize that company's operating results depend on quality of services provided. That is why Far-Eastern Shipping Company developed and is implementing policy of quality in the sphere of shipping, which envisages FESCO's top priorities in the field. Particularly, we stand on maximum meeting the client's needs, providing of cargo safety, prevention of cargo loss, accidents, health and life protection and environmental control principles.
    In order to reach these objectives quality management system was established and is developed. Our quality management system fully meets standards, conventions, codes, rules and instructions of international organizations, particularly ISO 9001:2000 standard, which showed FESCO's reaching world standard of fleet and, in general, company's operating. ISO 9001:2000 certificate proves to customers that the company has all necessary for and is capable of high quality services providing.
    Quality management system implementation was FESCO's advantage in tenders, competitions, federal orders getting, investment attraction and contract concluding.
    As a result FESCO is included in top-100 of Russia's largest companies, forming the country's economy. On terms of capitalization FESCO is a leader of all Russian shipping companies and the second in transport sector.
    Following the principles of quality policy is necessary for every FESCO's employee independent on the position. As a result Far-Eastern Shipping Company has many times already been granted by world awards for best service.
    - What is the company's strategy in foreign markets?
    - In foreign markets FESCO tries to follow flexible policy, taking into consideration peculiarities of every part of the globe. As I've already mentioned, apart from new lines launch, we continually enhance existing ones. For example, the company re-considered terms of some contracts on several lines. Lately FESCO switched from stiff competition with other shipping companies to partnership in the frame of tonnage exchange. If we realize that some of our liner direction is overtonnaged we trying to reach some compromise and agreement with other operators to reduce tonnage proportionally and save common cost. Such measures of common sense help us introduce rationalization of services, better fleet capacity utilization and better service for clients due to coordinated schedules, more frequient service and better port call coverage. And clients appreciate our work: FESCO has got international awards for best service. For example, in 2004 we were considered the best ocean carrier on the Australian route by Canadian international forwarders association second year in a row; American magazine "Logistics" also granted our American line with quality award of the year.
    - What is the key target of the project Russkaya Troyka? How will its realization influence operating of Far-Eastern Shipping Company?
    - Russkaya Troyka is a joint project of FESCO, as Russia's leader in container shipping, and a key rail company - OAO RZD. The project is aimed at complex services providing for consignors of Russia and Asia-Pacific countries. The company will offer multimodal container transportation using key Russian transport corridors. Today one of the main objectives of the company is to attract part of cargo flow, which today is shipped by deep sea from the Asian-Pacific region to European countries, through Russian territory. This enables Russia to get substantial financial income as well as to realize key railways, first of all the TSR, carrying capacity and to stimulate container transportation market development, which is crucially important for FESCO as one of key players.
    [~DETAIL_TEXT] => The key player of the Russian Far-Eastern basin shipping market is Far-Eastern Shipping Company OJSC (FESCO). Within 2 year past the company considerably improved its operation efficiency due to both profit of fleet operated growth and expenses reduction. On company's top priorities tells its CEO Yevgeny Ambrosov.

    - Mr.Ambrosov, what is FESCO doing for international relations enhancement, services geography extension and fleet renovation?
    - At the beginning I'd like to notice that Far-Eastern Shipping Company is one of the largest and oldest Russian transport companies. This year FESCO celebrates its 125th anniversary. Russian Far-East development started after first ship call at the region. Today our shipping company offers freight transportation on the services connecting ports of Russian Far East, with South Korea, Japan, China, Taiwan, Vietnam, Australia, New Zealand and USA, also provides ice-breaking tugging in Arctic and services largest oil and gas companies producing in the region. We extend geography of services for both coastal and foreign trade routes. Apart from this, we continually upgrade and improve our existing services. Thus following our clients' interests we change port rotation, increase tonnage, try to simplify freight registration procedure.
    Fleet aquisition and renewal is given the top priority by FESCO. In order to reach the objective the Programme of fleet and container park modernization and renovation worth some USD 400 million was developed and started realizing. Within last year within the frame of the programme our company acquired 3 new vessels - a 33 thousand tons dwt bulker, developed by German companies and 2 container vessels. Today this vessels operate international lines of FESCO. In May of 2005 in Finland the first FESCO's ice-breaker combining functions of a supply and rescue vessel is to be launched. The ice-breaker within12 years is to operate oil-boring platfom in the Sea of Okhotsk. In 2006 7 vessels, whereof 3 are 2800 TEU subpanamax container vessels are to be delivered. 3 vessels are to be delievered in 2008. Generally speaking, FESCO has not made such fleet extension for many years.
    We also plan serious extension of our container park. Today FESCO operates some 50 thousand TEUs.
    - What is FESCO doing for client servicing improvement?
    - We realize that company's operating results depend on quality of services provided. That is why Far-Eastern Shipping Company developed and is implementing policy of quality in the sphere of shipping, which envisages FESCO's top priorities in the field. Particularly, we stand on maximum meeting the client's needs, providing of cargo safety, prevention of cargo loss, accidents, health and life protection and environmental control principles.
    In order to reach these objectives quality management system was established and is developed. Our quality management system fully meets standards, conventions, codes, rules and instructions of international organizations, particularly ISO 9001:2000 standard, which showed FESCO's reaching world standard of fleet and, in general, company's operating. ISO 9001:2000 certificate proves to customers that the company has all necessary for and is capable of high quality services providing.
    Quality management system implementation was FESCO's advantage in tenders, competitions, federal orders getting, investment attraction and contract concluding.
    As a result FESCO is included in top-100 of Russia's largest companies, forming the country's economy. On terms of capitalization FESCO is a leader of all Russian shipping companies and the second in transport sector.
    Following the principles of quality policy is necessary for every FESCO's employee independent on the position. As a result Far-Eastern Shipping Company has many times already been granted by world awards for best service.
    - What is the company's strategy in foreign markets?
    - In foreign markets FESCO tries to follow flexible policy, taking into consideration peculiarities of every part of the globe. As I've already mentioned, apart from new lines launch, we continually enhance existing ones. For example, the company re-considered terms of some contracts on several lines. Lately FESCO switched from stiff competition with other shipping companies to partnership in the frame of tonnage exchange. If we realize that some of our liner direction is overtonnaged we trying to reach some compromise and agreement with other operators to reduce tonnage proportionally and save common cost. Such measures of common sense help us introduce rationalization of services, better fleet capacity utilization and better service for clients due to coordinated schedules, more frequient service and better port call coverage. And clients appreciate our work: FESCO has got international awards for best service. For example, in 2004 we were considered the best ocean carrier on the Australian route by Canadian international forwarders association second year in a row; American magazine "Logistics" also granted our American line with quality award of the year.
    - What is the key target of the project Russkaya Troyka? How will its realization influence operating of Far-Eastern Shipping Company?
    - Russkaya Troyka is a joint project of FESCO, as Russia's leader in container shipping, and a key rail company - OAO RZD. The project is aimed at complex services providing for consignors of Russia and Asia-Pacific countries. The company will offer multimodal container transportation using key Russian transport corridors. Today one of the main objectives of the company is to attract part of cargo flow, which today is shipped by deep sea from the Asian-Pacific region to European countries, through Russian territory. This enables Russia to get substantial financial income as well as to realize key railways, first of all the TSR, carrying capacity and to stimulate container transportation market development, which is crucially important for FESCO as one of key players.
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    РЖД-Партнер

    Per Aspera ad Astra

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        [DETAIL_TEXT] => Fast development of Russian ports within 6 years and intensive construction in the sector marks the new stage of the country's transport history. The next one is to start after basic Bills approval. On the current situation and sector's prospects comments the Chairman of the Directors Board of the Association of sea port of Russia Vitaly Yuzhilin.

    - How could you evaluate today's situation in the Russia's port sector?
    - Since 2001 on terms of production volumes the Russian sea ports have become leaders among other industrial sectors. After the USSR disintegration Russia's port complexes didn't develop for 10 years. And in late 90-s country's foreign trade revived and Russia faced deficiency of handling capacity on key export routes, as terminals going hand in hand with that-time requirements constructed by the Soviet Union in last decade are in Ukraine and Baltic countries.
    Within 6 years we restored lost capacity. Since 1999 after approval of the Federal programmes and "Maritime doctrine of the RF for the period until 2020" the state set strategic priorities of sea ports development as a main element of the country's transport and foreign trade policy.

    Cargo rate of Russia's ports in 2004 (thousand tons)


    In order to implement the above-mentioned documents strategic decisions were made by the Ministry of Transport, Ministry of Railways, Federal Economy Commission and the RF Government, including first stage of rail tariff unification start. Thus economic prerequisites for speeded development of port sector as well as for investment attraction in the field were created.
    Thanks to combination of the state's policy and favourible market situation (after collapse of 1998 the class of exporters-investors appeared) new facilities were put into operation, private investment flew into the sector and thus the Russian ports increased cargo turnover. In the period of 2000-2004 Russia's port sector doubled handling capacity to 170 million tones.
    Key development directions are connected with necessity to supply foreign trade cargo turnover of the country. Russia is export-oriented: coastal trade and transit volume in 2004 amounted to only 9% of the total throughput, import - to 6%. During the years passed we increased export handling capacity: fertilizer terminals were put into operation on the Baltic sea and in the Russian Far-East, container terminal capacity were extended, coal handling complexes on the Baltic sea were constructed. New oil terminals are working, for example in Primorsk and Vysotsk. Existing facilities are modernized, equipment, fleet and berth infrastructure - upgrated.
    - Please, comment on the figures of foreign trade cargo handling in 2004, how could the tendency of turnover growth be explained?
    - In 2004 Russia and neighbouring countries' ports handled over 420 million tones of Russian foreign trade cargo, 18% up year-on-year. Dry cargo volume increased by 20% to 191.9 milion tons, oil and products - by 15% to 228.5 million tons. The tendency of considerable foreign trade cargo flow growth and the share of neighbouring countries in Russia's cargo handling was kept. Export and import handling of Russian ports increased by 66.8 million tons, while that of the Ukrainian and Baltic ones dropped by 3 million tons. Foreign ports handled 84.4 million of Russian cargo, 3.4% down year-on-year.
    As in 2003 Russian export constituted of oil and products, coal, fertilizers, timber and logs and metal. Russia's ports continually increase their share in foreign trade cargo handling: in 2000 they handled 170 million tons of the total volume of 238 million tones, while in 2004 it was 336 million tons. Last year the share of the Russian ports was up to 80% against 75% in 2003. Growth is, first of all, connected with investment programmes implementation and new capacities putting into operation.
    - Which are the most "loaded" routes, from your point of view? What is the structure of Russia's ports throughput?
    - Today Russian cargo flows are carried by 3 main directions. Far-Eastern ports take a fifth of aggregate cargo turnover, the rest is equally divided between the North-Western and Southern basins. 5 key ports handle over 70% of the total volume. Stevedoring companies operating in the ports of Saint-Petersburg, including Primorsk, Novorossiysk, Murmansk, Tuapse and Vostochny handled over 256 million tons out of 356 million tons of aggregate turnover. For instance, Novorossiysk handled almost 98 million tons of 142 million tons of the Southern basin throughput.

    Cargo rate of Russia's ports in 2004 (thousand tons)


    Oil and products take the lion's share (198 million tons) of aggregate handling and are followed by coal (39 million tons), metal (30 million tons), timber and logs (almost 14 million tons) and fertilizers (11 million tons). Totally, in Russia oil and products and coal transportation grew by a third, container carriage - by 50%. However, the structure of the Russia's ports aggregate turnover didn't seriously change: export constituted 85%, import - 6%, transit - 3% and coastal trade - 6%.
    Analyzing the situation of freight distribution by basins, most part of oil and products is handled by the Southern ports, which take almost 55% of the total. They are followed by the Russian Baltic ports handling 40%. The Far-Eastern ports handle mostly dry cargo (80% of their throughput), particularly over 48% of total coal turnover.
    By the way, in 2004 the North-Western ports were leaders of throughput growth which amounted to over 40%. Such considerable increase is explained by liquid bulk handling increase, first of all at the port of Primorsk. For the first time the North-Western ports' cargo turnover exceeded that of the Baltics.
    - What could you say about the Russian ports competition? Is there intersectoral coordination?
    - Today the Russian ports are specialized by the cargo rate handled. There is no intersectoral competition and couldn't be. The port is a natural monopoly subject. And competition between ports leads to economic losses. It's profitable neither for the state nor for ports. Facilities development requires considerable investment and constructing extra capacities in Russia is unreasonable. The Russian ports should be competitive with other countries' ones, which corresponds with the state transport policy.
    - Which Russian ports development is seen as most prospective?
    - The Federal programme of sea ports development envisages throughput growth to 540 million tons in 2010. Meanwhile we are to make our ports competitive. Thus North-Western ports will develop faster, as liquid and break bulk and general cargo terminals are to be constructed there. In the Southern basin oil and products, LNG and fertilizers handling complexes are planned. Developing of the Far-Eastern ports is not so intensive. We mostly speak about existing capacities (coal, container and fertilizers terminals) extension. On the top of that conditions creation for ocean vessels servicing, for instance at the ports of Ust-Luga, Novorossiysk, Zhelezny Rog, is given top priority.
    - Please, characterize the structure and system of Russia's ports control.
    - The reform of transport sector started over a year ago is aimed at administrative and economic functions division. Thus, the Ministry of Transport should develop the state's transport policy, work out legislative base of the sector functioning and control and coordinate Agencies and a Service on transport control. The latter ones took functions on state's control and servicing providing. Such a system is of maximum sense from point of view of ideology.
    - What is the structure of private and state investment into ports development?
    - Within 2000-2004 investment into Russian port sector amounted to over RUR 23 billion. Private investment constituted 90% of the part "Sea ports development" of the Federal programme "Russian transport system development". The RF Ministry of Transport forecasts in 2005 investment into sea port infrastructure growth by over 3 times to RUR 20.7 billion, while non-budget funds take RUR19 billion.


    Private investment today, and not only in Russia, is the basic financial fund for transport infrastructure development whatever transport mode considered. Partnership of the state and private investors has been proved to be most efficient model balancing the country and companies' interests in joint investment programmes implementation.
    Five years ago shippers-exporters - oil, metal, fertilizers and coal producers - were first to acquire shares of stevedoring companies due to favourable market situation. Private companies coming to ports enabled to develop infrastructure especially where there had been handling capacity shortage. Investment programmes are intensively implemented in oil and products, coal and fertilizers handling sectors. And today we can state that the transport infrastructure development programmes are mainly implemented by large shippers and their operators, which react to economic market changes.
    - Is foreign investors attracting real?
    - In order to attract foreign investment into the Russian transport infrastructure we are to create necessary conditions for investment activity. Western companies though interested in developing the Russia's transport market will not invest without guarantees. Legislative base should be improved. Firstly, law on concessions should be approved to attract long-term investment in exchange letting companies to operate the object.
    The state is to define key transport modes, limiting sectors (port rail stations, hydroengineering constructions, rail stations, railway approaches, domestic water ways etc.). The whole list of the investment programmes needs approving, as well as investment attracting terms, state's participation in these projects implementation and length of investor's participation in the project. In Russia today business is waiting for new legislation defining terms of partnership with the state.
    I'm optimistic about the current situation. The RF Ministry of transport pays attention to the transport infrastructure development issues and realizes that the state can't resolve the problem alone. The Ministry develops various forms of business participation in investment projects. Discussions are held in the Government and all connected bodies are involved in them. First of all, we are speaking about the legislative base, which creates transparent and long-term guarantees for investors.
    - Mr. Yuzhilin, please, evaluate efficiency of Russia's port capacity in transit transportation supply.
    - Today, as I've already mentioned, Russia is export-oriented. And despite transit potential attractiveness the country's sea ports are to supply export and import cargo flows. In 2002 Russian ports handled some 260 million tons and the index is to be doubled by 2010. But today's proportion of export, import and transit will remain. Thus, transit cargo flow getting is of secondary importance. However, if Russia's transport system is capable to create conditions for transit volume, for example of containers, increase, it will be positive.
    - Why are you so skeptical about transit?
    - Strictly speaking, I'm not, but I strongly believe that transit cargo flow attracting is a very complicated task and it could not be reached by just declarations. This depends not only on Russia's good will. We should realize that currently transport routes bypassing our country have been formed. In order to turn into a full consistent of international transport flows Russia is to create the legislative base, resolve issues of cooperation with the state controlling bodies, acquire up-to-date IT, enhance national transport infrastructure capable of competing with foreign ones, create efficient system of through transit rates by the state's regulating of natural monopolies' tariffs.
    - What, in your opinion, prevents Russian ports from further development?
    - As has been mentioned above, first of all, the legislative base needs improving. Today we are close to the Bill on Ports approval, which regulates sea transport enterprises activity. The draft bill is considered in the ministries and I'm sure it should be submitted to the State Duma soon.
    Speaking on the port complex operating, for investors the conditions to be created are long-term rent, expected rent rate rise, investment payback. The draft bill envisages minimum rent period at 15 years, the condition that maximum rent rate rise does not exceed inflation rate. It also sets precise port handling complexes construction order and procedure of private investment into state's property payback and sets the list of objects which could be only state-owned ones.
    All this, according to the Association of sea ports of Russia's experts, forms the scheme for investment attraction, funds payback and define objects which could be owned by private companies. Investor waits for transparent, understandable and stable rules for private-and-state partnership and without all these, I'm absolutely sure, further development is doubtful.
    - Please, tell us about cooperation of ports and railway?
    - The key objective of the Russian transport sector is to supply further development and improve competitiveness of the sector. Thus, understanding that transport sectors could not develop separately is crucial. The port is firstly a transport junction where several transport modes - maritime, rail, motor and pipeline ones - cooperate. Today's success of Russia's port sector is tightly connected with implementation in 2002-2003 the railway infrastructure development programme, particularly rail access lines to the ports development. Thus we can not develop port infrastructure without coordination with investment programmes of other sectors.
    We should avoid capacity surplus. For example, detailed analysis of the transport system shows that not all projects are complex and enable optimally use all transport modes. In my point of view, it is caused by transport bodies had been separated before the joint Transport ministry establishing and other sectors had not been taken into consideration.
    - Are today's port tariffs acceptable? What is the way of tariff policy enhancement?
    - Three years ago Russia and neighbouring countries' transport complexes realized that tariff policy is an extremely powerful tool. With help of tariff policy the country resolves problems of remote industrial centers, capacities loading, entering new markets. The first stage of tariff unification created favourable conditions for Russian exporters and importers, who got the chance to participate in transport infrastructure development. It was tariff policy which made it possible to improve competitiveness of the Russian ports.
    Current tariffs create conditions for maximum loading of Russian handling facilities. Meanwhile we realize that tariffs for rail transportation to Russia and neighbouring countries' ports will be levelled, however if the process is long-term and expected Russian stevedores not to suffer.
    - What's your opinion on rail tariff 12.5% rise for transportation to Russian ports, while that for cargo destined for foreign ports remain unchanged? Will it cause Russia's ports competitiveness decrease?
    - I'm absolutely sure that issues of tariff indexation are to be economically explained and necessity considered to save Russian transport complex investment attractiveness. 12.5% rail tariff rise was discussed in late 2004 by all parties involved, i.e. the Ministry of transport, the Ministry of economic development and trade and Federal tariff service. The Association of sea ports of Russia also took part in the discussion. As a result compromise was reached: factors for rail tariffs to the neighbouring countries' ports were implemented. Thus, generally Russian ports didn't loose cargo flows. Forming the tariff necessity to keep existing proportion of cargo flow distribution between Russian and foreign ports, which meet the state transport policy requirements and the objective to increase Russia's ports share in national cargo handling.

    Interviewed by Irina Korcheva [~DETAIL_TEXT] => Fast development of Russian ports within 6 years and intensive construction in the sector marks the new stage of the country's transport history. The next one is to start after basic Bills approval. On the current situation and sector's prospects comments the Chairman of the Directors Board of the Association of sea port of Russia Vitaly Yuzhilin.

    - How could you evaluate today's situation in the Russia's port sector?
    - Since 2001 on terms of production volumes the Russian sea ports have become leaders among other industrial sectors. After the USSR disintegration Russia's port complexes didn't develop for 10 years. And in late 90-s country's foreign trade revived and Russia faced deficiency of handling capacity on key export routes, as terminals going hand in hand with that-time requirements constructed by the Soviet Union in last decade are in Ukraine and Baltic countries.
    Within 6 years we restored lost capacity. Since 1999 after approval of the Federal programmes and "Maritime doctrine of the RF for the period until 2020" the state set strategic priorities of sea ports development as a main element of the country's transport and foreign trade policy.

    Cargo rate of Russia's ports in 2004 (thousand tons)


    In order to implement the above-mentioned documents strategic decisions were made by the Ministry of Transport, Ministry of Railways, Federal Economy Commission and the RF Government, including first stage of rail tariff unification start. Thus economic prerequisites for speeded development of port sector as well as for investment attraction in the field were created.
    Thanks to combination of the state's policy and favourible market situation (after collapse of 1998 the class of exporters-investors appeared) new facilities were put into operation, private investment flew into the sector and thus the Russian ports increased cargo turnover. In the period of 2000-2004 Russia's port sector doubled handling capacity to 170 million tones.
    Key development directions are connected with necessity to supply foreign trade cargo turnover of the country. Russia is export-oriented: coastal trade and transit volume in 2004 amounted to only 9% of the total throughput, import - to 6%. During the years passed we increased export handling capacity: fertilizer terminals were put into operation on the Baltic sea and in the Russian Far-East, container terminal capacity were extended, coal handling complexes on the Baltic sea were constructed. New oil terminals are working, for example in Primorsk and Vysotsk. Existing facilities are modernized, equipment, fleet and berth infrastructure - upgrated.
    - Please, comment on the figures of foreign trade cargo handling in 2004, how could the tendency of turnover growth be explained?
    - In 2004 Russia and neighbouring countries' ports handled over 420 million tones of Russian foreign trade cargo, 18% up year-on-year. Dry cargo volume increased by 20% to 191.9 milion tons, oil and products - by 15% to 228.5 million tons. The tendency of considerable foreign trade cargo flow growth and the share of neighbouring countries in Russia's cargo handling was kept. Export and import handling of Russian ports increased by 66.8 million tons, while that of the Ukrainian and Baltic ones dropped by 3 million tons. Foreign ports handled 84.4 million of Russian cargo, 3.4% down year-on-year.
    As in 2003 Russian export constituted of oil and products, coal, fertilizers, timber and logs and metal. Russia's ports continually increase their share in foreign trade cargo handling: in 2000 they handled 170 million tons of the total volume of 238 million tones, while in 2004 it was 336 million tons. Last year the share of the Russian ports was up to 80% against 75% in 2003. Growth is, first of all, connected with investment programmes implementation and new capacities putting into operation.
    - Which are the most "loaded" routes, from your point of view? What is the structure of Russia's ports throughput?
    - Today Russian cargo flows are carried by 3 main directions. Far-Eastern ports take a fifth of aggregate cargo turnover, the rest is equally divided between the North-Western and Southern basins. 5 key ports handle over 70% of the total volume. Stevedoring companies operating in the ports of Saint-Petersburg, including Primorsk, Novorossiysk, Murmansk, Tuapse and Vostochny handled over 256 million tons out of 356 million tons of aggregate turnover. For instance, Novorossiysk handled almost 98 million tons of 142 million tons of the Southern basin throughput.

    Cargo rate of Russia's ports in 2004 (thousand tons)


    Oil and products take the lion's share (198 million tons) of aggregate handling and are followed by coal (39 million tons), metal (30 million tons), timber and logs (almost 14 million tons) and fertilizers (11 million tons). Totally, in Russia oil and products and coal transportation grew by a third, container carriage - by 50%. However, the structure of the Russia's ports aggregate turnover didn't seriously change: export constituted 85%, import - 6%, transit - 3% and coastal trade - 6%.
    Analyzing the situation of freight distribution by basins, most part of oil and products is handled by the Southern ports, which take almost 55% of the total. They are followed by the Russian Baltic ports handling 40%. The Far-Eastern ports handle mostly dry cargo (80% of their throughput), particularly over 48% of total coal turnover.
    By the way, in 2004 the North-Western ports were leaders of throughput growth which amounted to over 40%. Such considerable increase is explained by liquid bulk handling increase, first of all at the port of Primorsk. For the first time the North-Western ports' cargo turnover exceeded that of the Baltics.
    - What could you say about the Russian ports competition? Is there intersectoral coordination?
    - Today the Russian ports are specialized by the cargo rate handled. There is no intersectoral competition and couldn't be. The port is a natural monopoly subject. And competition between ports leads to economic losses. It's profitable neither for the state nor for ports. Facilities development requires considerable investment and constructing extra capacities in Russia is unreasonable. The Russian ports should be competitive with other countries' ones, which corresponds with the state transport policy.
    - Which Russian ports development is seen as most prospective?
    - The Federal programme of sea ports development envisages throughput growth to 540 million tons in 2010. Meanwhile we are to make our ports competitive. Thus North-Western ports will develop faster, as liquid and break bulk and general cargo terminals are to be constructed there. In the Southern basin oil and products, LNG and fertilizers handling complexes are planned. Developing of the Far-Eastern ports is not so intensive. We mostly speak about existing capacities (coal, container and fertilizers terminals) extension. On the top of that conditions creation for ocean vessels servicing, for instance at the ports of Ust-Luga, Novorossiysk, Zhelezny Rog, is given top priority.
    - Please, characterize the structure and system of Russia's ports control.
    - The reform of transport sector started over a year ago is aimed at administrative and economic functions division. Thus, the Ministry of Transport should develop the state's transport policy, work out legislative base of the sector functioning and control and coordinate Agencies and a Service on transport control. The latter ones took functions on state's control and servicing providing. Such a system is of maximum sense from point of view of ideology.
    - What is the structure of private and state investment into ports development?
    - Within 2000-2004 investment into Russian port sector amounted to over RUR 23 billion. Private investment constituted 90% of the part "Sea ports development" of the Federal programme "Russian transport system development". The RF Ministry of Transport forecasts in 2005 investment into sea port infrastructure growth by over 3 times to RUR 20.7 billion, while non-budget funds take RUR19 billion.


    Private investment today, and not only in Russia, is the basic financial fund for transport infrastructure development whatever transport mode considered. Partnership of the state and private investors has been proved to be most efficient model balancing the country and companies' interests in joint investment programmes implementation.
    Five years ago shippers-exporters - oil, metal, fertilizers and coal producers - were first to acquire shares of stevedoring companies due to favourable market situation. Private companies coming to ports enabled to develop infrastructure especially where there had been handling capacity shortage. Investment programmes are intensively implemented in oil and products, coal and fertilizers handling sectors. And today we can state that the transport infrastructure development programmes are mainly implemented by large shippers and their operators, which react to economic market changes.
    - Is foreign investors attracting real?
    - In order to attract foreign investment into the Russian transport infrastructure we are to create necessary conditions for investment activity. Western companies though interested in developing the Russia's transport market will not invest without guarantees. Legislative base should be improved. Firstly, law on concessions should be approved to attract long-term investment in exchange letting companies to operate the object.
    The state is to define key transport modes, limiting sectors (port rail stations, hydroengineering constructions, rail stations, railway approaches, domestic water ways etc.). The whole list of the investment programmes needs approving, as well as investment attracting terms, state's participation in these projects implementation and length of investor's participation in the project. In Russia today business is waiting for new legislation defining terms of partnership with the state.
    I'm optimistic about the current situation. The RF Ministry of transport pays attention to the transport infrastructure development issues and realizes that the state can't resolve the problem alone. The Ministry develops various forms of business participation in investment projects. Discussions are held in the Government and all connected bodies are involved in them. First of all, we are speaking about the legislative base, which creates transparent and long-term guarantees for investors.
    - Mr. Yuzhilin, please, evaluate efficiency of Russia's port capacity in transit transportation supply.
    - Today, as I've already mentioned, Russia is export-oriented. And despite transit potential attractiveness the country's sea ports are to supply export and import cargo flows. In 2002 Russian ports handled some 260 million tons and the index is to be doubled by 2010. But today's proportion of export, import and transit will remain. Thus, transit cargo flow getting is of secondary importance. However, if Russia's transport system is capable to create conditions for transit volume, for example of containers, increase, it will be positive.
    - Why are you so skeptical about transit?
    - Strictly speaking, I'm not, but I strongly believe that transit cargo flow attracting is a very complicated task and it could not be reached by just declarations. This depends not only on Russia's good will. We should realize that currently transport routes bypassing our country have been formed. In order to turn into a full consistent of international transport flows Russia is to create the legislative base, resolve issues of cooperation with the state controlling bodies, acquire up-to-date IT, enhance national transport infrastructure capable of competing with foreign ones, create efficient system of through transit rates by the state's regulating of natural monopolies' tariffs.
    - What, in your opinion, prevents Russian ports from further development?
    - As has been mentioned above, first of all, the legislative base needs improving. Today we are close to the Bill on Ports approval, which regulates sea transport enterprises activity. The draft bill is considered in the ministries and I'm sure it should be submitted to the State Duma soon.
    Speaking on the port complex operating, for investors the conditions to be created are long-term rent, expected rent rate rise, investment payback. The draft bill envisages minimum rent period at 15 years, the condition that maximum rent rate rise does not exceed inflation rate. It also sets precise port handling complexes construction order and procedure of private investment into state's property payback and sets the list of objects which could be only state-owned ones.
    All this, according to the Association of sea ports of Russia's experts, forms the scheme for investment attraction, funds payback and define objects which could be owned by private companies. Investor waits for transparent, understandable and stable rules for private-and-state partnership and without all these, I'm absolutely sure, further development is doubtful.
    - Please, tell us about cooperation of ports and railway?
    - The key objective of the Russian transport sector is to supply further development and improve competitiveness of the sector. Thus, understanding that transport sectors could not develop separately is crucial. The port is firstly a transport junction where several transport modes - maritime, rail, motor and pipeline ones - cooperate. Today's success of Russia's port sector is tightly connected with implementation in 2002-2003 the railway infrastructure development programme, particularly rail access lines to the ports development. Thus we can not develop port infrastructure without coordination with investment programmes of other sectors.
    We should avoid capacity surplus. For example, detailed analysis of the transport system shows that not all projects are complex and enable optimally use all transport modes. In my point of view, it is caused by transport bodies had been separated before the joint Transport ministry establishing and other sectors had not been taken into consideration.
    - Are today's port tariffs acceptable? What is the way of tariff policy enhancement?
    - Three years ago Russia and neighbouring countries' transport complexes realized that tariff policy is an extremely powerful tool. With help of tariff policy the country resolves problems of remote industrial centers, capacities loading, entering new markets. The first stage of tariff unification created favourable conditions for Russian exporters and importers, who got the chance to participate in transport infrastructure development. It was tariff policy which made it possible to improve competitiveness of the Russian ports.
    Current tariffs create conditions for maximum loading of Russian handling facilities. Meanwhile we realize that tariffs for rail transportation to Russia and neighbouring countries' ports will be levelled, however if the process is long-term and expected Russian stevedores not to suffer.
    - What's your opinion on rail tariff 12.5% rise for transportation to Russian ports, while that for cargo destined for foreign ports remain unchanged? Will it cause Russia's ports competitiveness decrease?
    - I'm absolutely sure that issues of tariff indexation are to be economically explained and necessity considered to save Russian transport complex investment attractiveness. 12.5% rail tariff rise was discussed in late 2004 by all parties involved, i.e. the Ministry of transport, the Ministry of economic development and trade and Federal tariff service. The Association of sea ports of Russia also took part in the discussion. As a result compromise was reached: factors for rail tariffs to the neighbouring countries' ports were implemented. Thus, generally Russian ports didn't loose cargo flows. Forming the tariff necessity to keep existing proportion of cargo flow distribution between Russian and foreign ports, which meet the state transport policy requirements and the objective to increase Russia's ports share in national cargo handling.

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        [DETAIL_TEXT] => Fast development of Russian ports within 6 years and intensive construction in the sector marks the new stage of the country's transport history. The next one is to start after basic Bills approval. On the current situation and sector's prospects comments the Chairman of the Directors Board of the Association of sea port of Russia Vitaly Yuzhilin.

    - How could you evaluate today's situation in the Russia's port sector?
    - Since 2001 on terms of production volumes the Russian sea ports have become leaders among other industrial sectors. After the USSR disintegration Russia's port complexes didn't develop for 10 years. And in late 90-s country's foreign trade revived and Russia faced deficiency of handling capacity on key export routes, as terminals going hand in hand with that-time requirements constructed by the Soviet Union in last decade are in Ukraine and Baltic countries.
    Within 6 years we restored lost capacity. Since 1999 after approval of the Federal programmes and "Maritime doctrine of the RF for the period until 2020" the state set strategic priorities of sea ports development as a main element of the country's transport and foreign trade policy.

    Cargo rate of Russia's ports in 2004 (thousand tons)


    In order to implement the above-mentioned documents strategic decisions were made by the Ministry of Transport, Ministry of Railways, Federal Economy Commission and the RF Government, including first stage of rail tariff unification start. Thus economic prerequisites for speeded development of port sector as well as for investment attraction in the field were created.
    Thanks to combination of the state's policy and favourible market situation (after collapse of 1998 the class of exporters-investors appeared) new facilities were put into operation, private investment flew into the sector and thus the Russian ports increased cargo turnover. In the period of 2000-2004 Russia's port sector doubled handling capacity to 170 million tones.
    Key development directions are connected with necessity to supply foreign trade cargo turnover of the country. Russia is export-oriented: coastal trade and transit volume in 2004 amounted to only 9% of the total throughput, import - to 6%. During the years passed we increased export handling capacity: fertilizer terminals were put into operation on the Baltic sea and in the Russian Far-East, container terminal capacity were extended, coal handling complexes on the Baltic sea were constructed. New oil terminals are working, for example in Primorsk and Vysotsk. Existing facilities are modernized, equipment, fleet and berth infrastructure - upgrated.
    - Please, comment on the figures of foreign trade cargo handling in 2004, how could the tendency of turnover growth be explained?
    - In 2004 Russia and neighbouring countries' ports handled over 420 million tones of Russian foreign trade cargo, 18% up year-on-year. Dry cargo volume increased by 20% to 191.9 milion tons, oil and products - by 15% to 228.5 million tons. The tendency of considerable foreign trade cargo flow growth and the share of neighbouring countries in Russia's cargo handling was kept. Export and import handling of Russian ports increased by 66.8 million tons, while that of the Ukrainian and Baltic ones dropped by 3 million tons. Foreign ports handled 84.4 million of Russian cargo, 3.4% down year-on-year.
    As in 2003 Russian export constituted of oil and products, coal, fertilizers, timber and logs and metal. Russia's ports continually increase their share in foreign trade cargo handling: in 2000 they handled 170 million tons of the total volume of 238 million tones, while in 2004 it was 336 million tons. Last year the share of the Russian ports was up to 80% against 75% in 2003. Growth is, first of all, connected with investment programmes implementation and new capacities putting into operation.
    - Which are the most "loaded" routes, from your point of view? What is the structure of Russia's ports throughput?
    - Today Russian cargo flows are carried by 3 main directions. Far-Eastern ports take a fifth of aggregate cargo turnover, the rest is equally divided between the North-Western and Southern basins. 5 key ports handle over 70% of the total volume. Stevedoring companies operating in the ports of Saint-Petersburg, including Primorsk, Novorossiysk, Murmansk, Tuapse and Vostochny handled over 256 million tons out of 356 million tons of aggregate turnover. For instance, Novorossiysk handled almost 98 million tons of 142 million tons of the Southern basin throughput.

    Cargo rate of Russia's ports in 2004 (thousand tons)


    Oil and products take the lion's share (198 million tons) of aggregate handling and are followed by coal (39 million tons), metal (30 million tons), timber and logs (almost 14 million tons) and fertilizers (11 million tons). Totally, in Russia oil and products and coal transportation grew by a third, container carriage - by 50%. However, the structure of the Russia's ports aggregate turnover didn't seriously change: export constituted 85%, import - 6%, transit - 3% and coastal trade - 6%.
    Analyzing the situation of freight distribution by basins, most part of oil and products is handled by the Southern ports, which take almost 55% of the total. They are followed by the Russian Baltic ports handling 40%. The Far-Eastern ports handle mostly dry cargo (80% of their throughput), particularly over 48% of total coal turnover.
    By the way, in 2004 the North-Western ports were leaders of throughput growth which amounted to over 40%. Such considerable increase is explained by liquid bulk handling increase, first of all at the port of Primorsk. For the first time the North-Western ports' cargo turnover exceeded that of the Baltics.
    - What could you say about the Russian ports competition? Is there intersectoral coordination?
    - Today the Russian ports are specialized by the cargo rate handled. There is no intersectoral competition and couldn't be. The port is a natural monopoly subject. And competition between ports leads to economic losses. It's profitable neither for the state nor for ports. Facilities development requires considerable investment and constructing extra capacities in Russia is unreasonable. The Russian ports should be competitive with other countries' ones, which corresponds with the state transport policy.
    - Which Russian ports development is seen as most prospective?
    - The Federal programme of sea ports development envisages throughput growth to 540 million tons in 2010. Meanwhile we are to make our ports competitive. Thus North-Western ports will develop faster, as liquid and break bulk and general cargo terminals are to be constructed there. In the Southern basin oil and products, LNG and fertilizers handling complexes are planned. Developing of the Far-Eastern ports is not so intensive. We mostly speak about existing capacities (coal, container and fertilizers terminals) extension. On the top of that conditions creation for ocean vessels servicing, for instance at the ports of Ust-Luga, Novorossiysk, Zhelezny Rog, is given top priority.
    - Please, characterize the structure and system of Russia's ports control.
    - The reform of transport sector started over a year ago is aimed at administrative and economic functions division. Thus, the Ministry of Transport should develop the state's transport policy, work out legislative base of the sector functioning and control and coordinate Agencies and a Service on transport control. The latter ones took functions on state's control and servicing providing. Such a system is of maximum sense from point of view of ideology.
    - What is the structure of private and state investment into ports development?
    - Within 2000-2004 investment into Russian port sector amounted to over RUR 23 billion. Private investment constituted 90% of the part "Sea ports development" of the Federal programme "Russian transport system development". The RF Ministry of Transport forecasts in 2005 investment into sea port infrastructure growth by over 3 times to RUR 20.7 billion, while non-budget funds take RUR19 billion.


    Private investment today, and not only in Russia, is the basic financial fund for transport infrastructure development whatever transport mode considered. Partnership of the state and private investors has been proved to be most efficient model balancing the country and companies' interests in joint investment programmes implementation.
    Five years ago shippers-exporters - oil, metal, fertilizers and coal producers - were first to acquire shares of stevedoring companies due to favourable market situation. Private companies coming to ports enabled to develop infrastructure especially where there had been handling capacity shortage. Investment programmes are intensively implemented in oil and products, coal and fertilizers handling sectors. And today we can state that the transport infrastructure development programmes are mainly implemented by large shippers and their operators, which react to economic market changes.
    - Is foreign investors attracting real?
    - In order to attract foreign investment into the Russian transport infrastructure we are to create necessary conditions for investment activity. Western companies though interested in developing the Russia's transport market will not invest without guarantees. Legislative base should be improved. Firstly, law on concessions should be approved to attract long-term investment in exchange letting companies to operate the object.
    The state is to define key transport modes, limiting sectors (port rail stations, hydroengineering constructions, rail stations, railway approaches, domestic water ways etc.). The whole list of the investment programmes needs approving, as well as investment attracting terms, state's participation in these projects implementation and length of investor's participation in the project. In Russia today business is waiting for new legislation defining terms of partnership with the state.
    I'm optimistic about the current situation. The RF Ministry of transport pays attention to the transport infrastructure development issues and realizes that the state can't resolve the problem alone. The Ministry develops various forms of business participation in investment projects. Discussions are held in the Government and all connected bodies are involved in them. First of all, we are speaking about the legislative base, which creates transparent and long-term guarantees for investors.
    - Mr. Yuzhilin, please, evaluate efficiency of Russia's port capacity in transit transportation supply.
    - Today, as I've already mentioned, Russia is export-oriented. And despite transit potential attractiveness the country's sea ports are to supply export and import cargo flows. In 2002 Russian ports handled some 260 million tons and the index is to be doubled by 2010. But today's proportion of export, import and transit will remain. Thus, transit cargo flow getting is of secondary importance. However, if Russia's transport system is capable to create conditions for transit volume, for example of containers, increase, it will be positive.
    - Why are you so skeptical about transit?
    - Strictly speaking, I'm not, but I strongly believe that transit cargo flow attracting is a very complicated task and it could not be reached by just declarations. This depends not only on Russia's good will. We should realize that currently transport routes bypassing our country have been formed. In order to turn into a full consistent of international transport flows Russia is to create the legislative base, resolve issues of cooperation with the state controlling bodies, acquire up-to-date IT, enhance national transport infrastructure capable of competing with foreign ones, create efficient system of through transit rates by the state's regulating of natural monopolies' tariffs.
    - What, in your opinion, prevents Russian ports from further development?
    - As has been mentioned above, first of all, the legislative base needs improving. Today we are close to the Bill on Ports approval, which regulates sea transport enterprises activity. The draft bill is considered in the ministries and I'm sure it should be submitted to the State Duma soon.
    Speaking on the port complex operating, for investors the conditions to be created are long-term rent, expected rent rate rise, investment payback. The draft bill envisages minimum rent period at 15 years, the condition that maximum rent rate rise does not exceed inflation rate. It also sets precise port handling complexes construction order and procedure of private investment into state's property payback and sets the list of objects which could be only state-owned ones.
    All this, according to the Association of sea ports of Russia's experts, forms the scheme for investment attraction, funds payback and define objects which could be owned by private companies. Investor waits for transparent, understandable and stable rules for private-and-state partnership and without all these, I'm absolutely sure, further development is doubtful.
    - Please, tell us about cooperation of ports and railway?
    - The key objective of the Russian transport sector is to supply further development and improve competitiveness of the sector. Thus, understanding that transport sectors could not develop separately is crucial. The port is firstly a transport junction where several transport modes - maritime, rail, motor and pipeline ones - cooperate. Today's success of Russia's port sector is tightly connected with implementation in 2002-2003 the railway infrastructure development programme, particularly rail access lines to the ports development. Thus we can not develop port infrastructure without coordination with investment programmes of other sectors.
    We should avoid capacity surplus. For example, detailed analysis of the transport system shows that not all projects are complex and enable optimally use all transport modes. In my point of view, it is caused by transport bodies had been separated before the joint Transport ministry establishing and other sectors had not been taken into consideration.
    - Are today's port tariffs acceptable? What is the way of tariff policy enhancement?
    - Three years ago Russia and neighbouring countries' transport complexes realized that tariff policy is an extremely powerful tool. With help of tariff policy the country resolves problems of remote industrial centers, capacities loading, entering new markets. The first stage of tariff unification created favourable conditions for Russian exporters and importers, who got the chance to participate in transport infrastructure development. It was tariff policy which made it possible to improve competitiveness of the Russian ports.
    Current tariffs create conditions for maximum loading of Russian handling facilities. Meanwhile we realize that tariffs for rail transportation to Russia and neighbouring countries' ports will be levelled, however if the process is long-term and expected Russian stevedores not to suffer.
    - What's your opinion on rail tariff 12.5% rise for transportation to Russian ports, while that for cargo destined for foreign ports remain unchanged? Will it cause Russia's ports competitiveness decrease?
    - I'm absolutely sure that issues of tariff indexation are to be economically explained and necessity considered to save Russian transport complex investment attractiveness. 12.5% rail tariff rise was discussed in late 2004 by all parties involved, i.e. the Ministry of transport, the Ministry of economic development and trade and Federal tariff service. The Association of sea ports of Russia also took part in the discussion. As a result compromise was reached: factors for rail tariffs to the neighbouring countries' ports were implemented. Thus, generally Russian ports didn't loose cargo flows. Forming the tariff necessity to keep existing proportion of cargo flow distribution between Russian and foreign ports, which meet the state transport policy requirements and the objective to increase Russia's ports share in national cargo handling.

    Interviewed by Irina Korcheva [~DETAIL_TEXT] => Fast development of Russian ports within 6 years and intensive construction in the sector marks the new stage of the country's transport history. The next one is to start after basic Bills approval. On the current situation and sector's prospects comments the Chairman of the Directors Board of the Association of sea port of Russia Vitaly Yuzhilin.

    - How could you evaluate today's situation in the Russia's port sector?
    - Since 2001 on terms of production volumes the Russian sea ports have become leaders among other industrial sectors. After the USSR disintegration Russia's port complexes didn't develop for 10 years. And in late 90-s country's foreign trade revived and Russia faced deficiency of handling capacity on key export routes, as terminals going hand in hand with that-time requirements constructed by the Soviet Union in last decade are in Ukraine and Baltic countries.
    Within 6 years we restored lost capacity. Since 1999 after approval of the Federal programmes and "Maritime doctrine of the RF for the period until 2020" the state set strategic priorities of sea ports development as a main element of the country's transport and foreign trade policy.

    Cargo rate of Russia's ports in 2004 (thousand tons)


    In order to implement the above-mentioned documents strategic decisions were made by the Ministry of Transport, Ministry of Railways, Federal Economy Commission and the RF Government, including first stage of rail tariff unification start. Thus economic prerequisites for speeded development of port sector as well as for investment attraction in the field were created.
    Thanks to combination of the state's policy and favourible market situation (after collapse of 1998 the class of exporters-investors appeared) new facilities were put into operation, private investment flew into the sector and thus the Russian ports increased cargo turnover. In the period of 2000-2004 Russia's port sector doubled handling capacity to 170 million tones.
    Key development directions are connected with necessity to supply foreign trade cargo turnover of the country. Russia is export-oriented: coastal trade and transit volume in 2004 amounted to only 9% of the total throughput, import - to 6%. During the years passed we increased export handling capacity: fertilizer terminals were put into operation on the Baltic sea and in the Russian Far-East, container terminal capacity were extended, coal handling complexes on the Baltic sea were constructed. New oil terminals are working, for example in Primorsk and Vysotsk. Existing facilities are modernized, equipment, fleet and berth infrastructure - upgrated.
    - Please, comment on the figures of foreign trade cargo handling in 2004, how could the tendency of turnover growth be explained?
    - In 2004 Russia and neighbouring countries' ports handled over 420 million tones of Russian foreign trade cargo, 18% up year-on-year. Dry cargo volume increased by 20% to 191.9 milion tons, oil and products - by 15% to 228.5 million tons. The tendency of considerable foreign trade cargo flow growth and the share of neighbouring countries in Russia's cargo handling was kept. Export and import handling of Russian ports increased by 66.8 million tons, while that of the Ukrainian and Baltic ones dropped by 3 million tons. Foreign ports handled 84.4 million of Russian cargo, 3.4% down year-on-year.
    As in 2003 Russian export constituted of oil and products, coal, fertilizers, timber and logs and metal. Russia's ports continually increase their share in foreign trade cargo handling: in 2000 they handled 170 million tons of the total volume of 238 million tones, while in 2004 it was 336 million tons. Last year the share of the Russian ports was up to 80% against 75% in 2003. Growth is, first of all, connected with investment programmes implementation and new capacities putting into operation.
    - Which are the most "loaded" routes, from your point of view? What is the structure of Russia's ports throughput?
    - Today Russian cargo flows are carried by 3 main directions. Far-Eastern ports take a fifth of aggregate cargo turnover, the rest is equally divided between the North-Western and Southern basins. 5 key ports handle over 70% of the total volume. Stevedoring companies operating in the ports of Saint-Petersburg, including Primorsk, Novorossiysk, Murmansk, Tuapse and Vostochny handled over 256 million tons out of 356 million tons of aggregate turnover. For instance, Novorossiysk handled almost 98 million tons of 142 million tons of the Southern basin throughput.

    Cargo rate of Russia's ports in 2004 (thousand tons)


    Oil and products take the lion's share (198 million tons) of aggregate handling and are followed by coal (39 million tons), metal (30 million tons), timber and logs (almost 14 million tons) and fertilizers (11 million tons). Totally, in Russia oil and products and coal transportation grew by a third, container carriage - by 50%. However, the structure of the Russia's ports aggregate turnover didn't seriously change: export constituted 85%, import - 6%, transit - 3% and coastal trade - 6%.
    Analyzing the situation of freight distribution by basins, most part of oil and products is handled by the Southern ports, which take almost 55% of the total. They are followed by the Russian Baltic ports handling 40%. The Far-Eastern ports handle mostly dry cargo (80% of their throughput), particularly over 48% of total coal turnover.
    By the way, in 2004 the North-Western ports were leaders of throughput growth which amounted to over 40%. Such considerable increase is explained by liquid bulk handling increase, first of all at the port of Primorsk. For the first time the North-Western ports' cargo turnover exceeded that of the Baltics.
    - What could you say about the Russian ports competition? Is there intersectoral coordination?
    - Today the Russian ports are specialized by the cargo rate handled. There is no intersectoral competition and couldn't be. The port is a natural monopoly subject. And competition between ports leads to economic losses. It's profitable neither for the state nor for ports. Facilities development requires considerable investment and constructing extra capacities in Russia is unreasonable. The Russian ports should be competitive with other countries' ones, which corresponds with the state transport policy.
    - Which Russian ports development is seen as most prospective?
    - The Federal programme of sea ports development envisages throughput growth to 540 million tons in 2010. Meanwhile we are to make our ports competitive. Thus North-Western ports will develop faster, as liquid and break bulk and general cargo terminals are to be constructed there. In the Southern basin oil and products, LNG and fertilizers handling complexes are planned. Developing of the Far-Eastern ports is not so intensive. We mostly speak about existing capacities (coal, container and fertilizers terminals) extension. On the top of that conditions creation for ocean vessels servicing, for instance at the ports of Ust-Luga, Novorossiysk, Zhelezny Rog, is given top priority.
    - Please, characterize the structure and system of Russia's ports control.
    - The reform of transport sector started over a year ago is aimed at administrative and economic functions division. Thus, the Ministry of Transport should develop the state's transport policy, work out legislative base of the sector functioning and control and coordinate Agencies and a Service on transport control. The latter ones took functions on state's control and servicing providing. Such a system is of maximum sense from point of view of ideology.
    - What is the structure of private and state investment into ports development?
    - Within 2000-2004 investment into Russian port sector amounted to over RUR 23 billion. Private investment constituted 90% of the part "Sea ports development" of the Federal programme "Russian transport system development". The RF Ministry of Transport forecasts in 2005 investment into sea port infrastructure growth by over 3 times to RUR 20.7 billion, while non-budget funds take RUR19 billion.


    Private investment today, and not only in Russia, is the basic financial fund for transport infrastructure development whatever transport mode considered. Partnership of the state and private investors has been proved to be most efficient model balancing the country and companies' interests in joint investment programmes implementation.
    Five years ago shippers-exporters - oil, metal, fertilizers and coal producers - were first to acquire shares of stevedoring companies due to favourable market situation. Private companies coming to ports enabled to develop infrastructure especially where there had been handling capacity shortage. Investment programmes are intensively implemented in oil and products, coal and fertilizers handling sectors. And today we can state that the transport infrastructure development programmes are mainly implemented by large shippers and their operators, which react to economic market changes.
    - Is foreign investors attracting real?
    - In order to attract foreign investment into the Russian transport infrastructure we are to create necessary conditions for investment activity. Western companies though interested in developing the Russia's transport market will not invest without guarantees. Legislative base should be improved. Firstly, law on concessions should be approved to attract long-term investment in exchange letting companies to operate the object.
    The state is to define key transport modes, limiting sectors (port rail stations, hydroengineering constructions, rail stations, railway approaches, domestic water ways etc.). The whole list of the investment programmes needs approving, as well as investment attracting terms, state's participation in these projects implementation and length of investor's participation in the project. In Russia today business is waiting for new legislation defining terms of partnership with the state.
    I'm optimistic about the current situation. The RF Ministry of transport pays attention to the transport infrastructure development issues and realizes that the state can't resolve the problem alone. The Ministry develops various forms of business participation in investment projects. Discussions are held in the Government and all connected bodies are involved in them. First of all, we are speaking about the legislative base, which creates transparent and long-term guarantees for investors.
    - Mr. Yuzhilin, please, evaluate efficiency of Russia's port capacity in transit transportation supply.
    - Today, as I've already mentioned, Russia is export-oriented. And despite transit potential attractiveness the country's sea ports are to supply export and import cargo flows. In 2002 Russian ports handled some 260 million tons and the index is to be doubled by 2010. But today's proportion of export, import and transit will remain. Thus, transit cargo flow getting is of secondary importance. However, if Russia's transport system is capable to create conditions for transit volume, for example of containers, increase, it will be positive.
    - Why are you so skeptical about transit?
    - Strictly speaking, I'm not, but I strongly believe that transit cargo flow attracting is a very complicated task and it could not be reached by just declarations. This depends not only on Russia's good will. We should realize that currently transport routes bypassing our country have been formed. In order to turn into a full consistent of international transport flows Russia is to create the legislative base, resolve issues of cooperation with the state controlling bodies, acquire up-to-date IT, enhance national transport infrastructure capable of competing with foreign ones, create efficient system of through transit rates by the state's regulating of natural monopolies' tariffs.
    - What, in your opinion, prevents Russian ports from further development?
    - As has been mentioned above, first of all, the legislative base needs improving. Today we are close to the Bill on Ports approval, which regulates sea transport enterprises activity. The draft bill is considered in the ministries and I'm sure it should be submitted to the State Duma soon.
    Speaking on the port complex operating, for investors the conditions to be created are long-term rent, expected rent rate rise, investment payback. The draft bill envisages minimum rent period at 15 years, the condition that maximum rent rate rise does not exceed inflation rate. It also sets precise port handling complexes construction order and procedure of private investment into state's property payback and sets the list of objects which could be only state-owned ones.
    All this, according to the Association of sea ports of Russia's experts, forms the scheme for investment attraction, funds payback and define objects which could be owned by private companies. Investor waits for transparent, understandable and stable rules for private-and-state partnership and without all these, I'm absolutely sure, further development is doubtful.
    - Please, tell us about cooperation of ports and railway?
    - The key objective of the Russian transport sector is to supply further development and improve competitiveness of the sector. Thus, understanding that transport sectors could not develop separately is crucial. The port is firstly a transport junction where several transport modes - maritime, rail, motor and pipeline ones - cooperate. Today's success of Russia's port sector is tightly connected with implementation in 2002-2003 the railway infrastructure development programme, particularly rail access lines to the ports development. Thus we can not develop port infrastructure without coordination with investment programmes of other sectors.
    We should avoid capacity surplus. For example, detailed analysis of the transport system shows that not all projects are complex and enable optimally use all transport modes. In my point of view, it is caused by transport bodies had been separated before the joint Transport ministry establishing and other sectors had not been taken into consideration.
    - Are today's port tariffs acceptable? What is the way of tariff policy enhancement?
    - Three years ago Russia and neighbouring countries' transport complexes realized that tariff policy is an extremely powerful tool. With help of tariff policy the country resolves problems of remote industrial centers, capacities loading, entering new markets. The first stage of tariff unification created favourable conditions for Russian exporters and importers, who got the chance to participate in transport infrastructure development. It was tariff policy which made it possible to improve competitiveness of the Russian ports.
    Current tariffs create conditions for maximum loading of Russian handling facilities. Meanwhile we realize that tariffs for rail transportation to Russia and neighbouring countries' ports will be levelled, however if the process is long-term and expected Russian stevedores not to suffer.
    - What's your opinion on rail tariff 12.5% rise for transportation to Russian ports, while that for cargo destined for foreign ports remain unchanged? Will it cause Russia's ports competitiveness decrease?
    - I'm absolutely sure that issues of tariff indexation are to be economically explained and necessity considered to save Russian transport complex investment attractiveness. 12.5% rail tariff rise was discussed in late 2004 by all parties involved, i.e. the Ministry of transport, the Ministry of economic development and trade and Federal tariff service. The Association of sea ports of Russia also took part in the discussion. As a result compromise was reached: factors for rail tariffs to the neighbouring countries' ports were implemented. Thus, generally Russian ports didn't loose cargo flows. Forming the tariff necessity to keep existing proportion of cargo flow distribution between Russian and foreign ports, which meet the state transport policy requirements and the objective to increase Russia's ports share in national cargo handling.

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    РЖД-Партнер

    Panorama

    TransTeleCom: Results of 2004
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        [DETAIL_TEXT] => In 2004 the revenue of TransTeleCom, an affiliated company of OAO RZD, and its subsidiaries was over USD390 million.

    The revenue of the group of companies (that consists of the head company and 17 regional enterprises) was USD394 million, which is 24% more than the figure planned in budget.
    The TTC group's receipt on providing telecommunication services was USD202 million, which is two times more than the previous year's level. The head company's receipt in this sector was USD182 million. During last 4 years the receipt on telecommunication services grew 9-fold.
    In 2004 TTC paid Russian Railways public corporation almost 2.5 billion roubles for leasing the united telecommunications backbone network, the 2005 payments to be over 3 billion roubles.
    The company's revenues place TransTeleCom among three leading alternative providers of fixed telecommunications. TTC is the largest system-forming provider on Russian telecommunications market, providing the market with nearly a half of backbone infrastructure. TTC lets 40% of long-distance channels for lease, and provides 40% of regional Internet market. Last year the company again proved its leading position in providing innovative telecommunication services by occupying 54% in this market segment.
    Among 300 largest corporate customers of TTC are: Ingosstrah, Alpha-Bank, SUAL group, Academy of Sciences of Russia, and the Federal Space Agency. Such companies as MAIR industrial group, Oriflame, Lebedyansky public corporation, Ochakovo beer and soft drink factory, and many other enterprises became the customers of TTC last year.
    In 2004 TTC was the first backbone provider certified by the State Technical Committee under the President of Russia confirming the network to be safe for the transmission of limited access information. Second year in a row TTC is declared the best telecommunication company of the year by Rosbusinessconsulting agency.

    Latvian Shipping Acquires Tankers
    Latvian Shipping is to renew its tanker fleet to get into accordance with the EU standards.

    In order to complete renewal the company has got guarantee for the credit worth USD360 million for construction of 14 tankers.
    10 vessels are to be constructed by Croatian shipyard "3 Maj", and the rest - by South-Korean "Hyundai MipoDockyard Co Ltd". Latvian shipping plans to get 70% of the sum as credits and invest 30% itself.
    Today the company operates 33 tankers, 2 gas-carriers, 5 reefers and a dry-carrier.

    RZD to Launch TSETS
    OAO Russian Railways is launching an electronic trading site in the near future.

    The corporation plans to launch an electronic trading site in order to further develop its effective cooperation with industrial enterprises (in the North West Federal District, in particular), as well as to optimise the interaction with industry in other regions of Russia.
    This innovation will inform prospective suppliers not only about bidding contests but also about the corporation's needs for specific products and resources. In addition, a registration procedure of an enterprise as the corporation's supplier will be implemented at the electronic trading site.
    However, the most important result of implementing the electronic trading site will be switching to electronic document circulation between railway transport customers and Russian Railways public corporation.
    Transport Service Electronic Trading Site (TSETS) automates the process of providing transport services to the customers of OAO RZD.
    The key task of the project is to provide all customers and partners of the corporation with equal access to railway infrastructure in order to guarantee integrated freight transport and provide additional services utilising modern information technologies.
    Prospective users of TSETS are consignors, consignees, operators, forwarders, and transporters.
    Some of the purposes for creating TSETS are:
    - to speed up the exchange of information between Russian Railways public corporation and its customers and partners;
    - to improve customer service by means of eliminating mistakes and simplifying the procedure of placing orders for transport services;
    - to create a new sales channel for transport services as well as to create a modern business tool.
    TS ETS will bring the following benefits to the users:
    - information about the location and status of carriages or containers;
    - information about tariffs and prices on services;
    - on-line preliminary estimation of freight fare;
    - freight paperwork processing (order, transport documents, etc.).

    Latvian Railway Concern to Stop Existing
    The Minister of Communication of Latvia Inars Shlesers stated today he's made a decision on the "Latvian Railway" concern restructurization.

    During 2005 it is planned to establish three independent joint-stock companies which should separately deal with: infrastructure issues, freight transportation, passenger transportation. In this respect the Minister asked the Latvian Railway authorities to get ready with the certain plan and all the accounts for further submitting the documents to the country's government. According to the Ministry of Communication the process of restructurization should be completed by the end of the year.
    "Minister's decision is one of opportunity to sort out the problem of passenger transportation being non-profitable", Sarma Kochane, head of the press-service of the Ministry said.

    Russian Ural Trucks Delivered to Mexico
    The Mexican Ministry of Navy has signed a contract with the Ural automaker to deliver a new batch of Russian trucks to Mexico, Alexei Kovalev, the head of the Ural plant delegation.

    At issue is the delivery of 22 Russian trucks. The first agreement to purchase 52 Ural trucks was concluded last June.
    Over this period, Russian trucks have won a good reputation with Mexican cross-country drivers.
    According to Mr. Kovalev, the trucks were purchased for the Mexican Navy and used in the hardly passable areas having no byroads.
    Mexican seamen now trust Russian trucks so much that Ural trucks are now heading from Mexico for Indonesia onboard two amphibious ships to assist in eliminating the consequences of the tsunami.
    According to the chief of the Urals delegation, the excellent recommendations that the Mexicans gave to the Russian trucks made it possible to sign another contract and to make real plans of further cooperation.
    These plans in particular include the project to set up a plant to assemble Urals trucks in Mexico. An agreement to the effect was reached at a meeting between the Russian and Mexican presidents in Mexico in June 2004.
    Besides the military, the trucks aroused interest of the governments of the Guanajuato and Oaxaca states. The Ural trucks are expected to deliver humanitarian cargoes to Indian communities living in high mountains and in remote areas accessible only by helicopters. Besides, they will carry coffee harvest from the plantations on the mountain slopes.

    RZD and Ukrainian Railway: E-Data Exchange
    In compliance with the Plan of measures to be undertaken on the Concept of RF and Ukraine transport systems integration RZD and Sate Administration of Railway Transport of Ukraine ("Ukrzaliznitsya") came to an agreement on e-data exchange while cargo transportation on the international railway routes.

    RZD has developed complex of information technologies which allow commercial and maintenance cargo transportation procedures implementation on the basis of e-data handling. Such informatization will let to expand information services range for clients and provide the railways with modern transport technologies

    RZD Plans to Make Passenger Operations Self-Sustaining
    Russian Railways, a public joint-stock company, plans to make its passenger operations economically self-sustaining by 2010, Vladimir Yakunin, a company vice president told.

    "At present the losses from passenger operations fall on local operators and OAO RZD. No one needs the continuation of these losses. They need to be gradually reduced and eventually eliminated by 2010", Mr.Yakunin said. At the same time, he added that, "it will be quite difficult to do this, and the prospect is remote".
    Speaking about the possibilities of profit making in passenger operations, Mr.Yakunin said that it could be done "by reducing the expense element, in other words, operating costs and by increasing the revenue element, that is, the tariffs and service quality".
    V.Yakunin added that at present OAO RZD was transforming its methods of doing business in order to establish a separate company for passenger operations, as part of the Federal Passenger Direction, in the near future. It was reported earlier that the company's Board of Directors would consider the matter of the Federal Passenger Direction in September.
    The subsidiary would unite the passenger business serving long-distance traffic for the whole rail network as a single structure. The value of the property owned by the subsidiary would exceed USD33.3 million.
    It is estimated that over 130 thousand employees would work there. It will include about 60 railway and regional directions, 51 rail car depots, over 300 passenger stations, 26-thousand passenger stock and other property in territories throughout the entire country.
    [~DETAIL_TEXT] => In 2004 the revenue of TransTeleCom, an affiliated company of OAO RZD, and its subsidiaries was over USD390 million.

    The revenue of the group of companies (that consists of the head company and 17 regional enterprises) was USD394 million, which is 24% more than the figure planned in budget.
    The TTC group's receipt on providing telecommunication services was USD202 million, which is two times more than the previous year's level. The head company's receipt in this sector was USD182 million. During last 4 years the receipt on telecommunication services grew 9-fold.
    In 2004 TTC paid Russian Railways public corporation almost 2.5 billion roubles for leasing the united telecommunications backbone network, the 2005 payments to be over 3 billion roubles.
    The company's revenues place TransTeleCom among three leading alternative providers of fixed telecommunications. TTC is the largest system-forming provider on Russian telecommunications market, providing the market with nearly a half of backbone infrastructure. TTC lets 40% of long-distance channels for lease, and provides 40% of regional Internet market. Last year the company again proved its leading position in providing innovative telecommunication services by occupying 54% in this market segment.
    Among 300 largest corporate customers of TTC are: Ingosstrah, Alpha-Bank, SUAL group, Academy of Sciences of Russia, and the Federal Space Agency. Such companies as MAIR industrial group, Oriflame, Lebedyansky public corporation, Ochakovo beer and soft drink factory, and many other enterprises became the customers of TTC last year.
    In 2004 TTC was the first backbone provider certified by the State Technical Committee under the President of Russia confirming the network to be safe for the transmission of limited access information. Second year in a row TTC is declared the best telecommunication company of the year by Rosbusinessconsulting agency.

    Latvian Shipping Acquires Tankers
    Latvian Shipping is to renew its tanker fleet to get into accordance with the EU standards.

    In order to complete renewal the company has got guarantee for the credit worth USD360 million for construction of 14 tankers.
    10 vessels are to be constructed by Croatian shipyard "3 Maj", and the rest - by South-Korean "Hyundai MipoDockyard Co Ltd". Latvian shipping plans to get 70% of the sum as credits and invest 30% itself.
    Today the company operates 33 tankers, 2 gas-carriers, 5 reefers and a dry-carrier.

    RZD to Launch TSETS
    OAO Russian Railways is launching an electronic trading site in the near future.

    The corporation plans to launch an electronic trading site in order to further develop its effective cooperation with industrial enterprises (in the North West Federal District, in particular), as well as to optimise the interaction with industry in other regions of Russia.
    This innovation will inform prospective suppliers not only about bidding contests but also about the corporation's needs for specific products and resources. In addition, a registration procedure of an enterprise as the corporation's supplier will be implemented at the electronic trading site.
    However, the most important result of implementing the electronic trading site will be switching to electronic document circulation between railway transport customers and Russian Railways public corporation.
    Transport Service Electronic Trading Site (TSETS) automates the process of providing transport services to the customers of OAO RZD.
    The key task of the project is to provide all customers and partners of the corporation with equal access to railway infrastructure in order to guarantee integrated freight transport and provide additional services utilising modern information technologies.
    Prospective users of TSETS are consignors, consignees, operators, forwarders, and transporters.
    Some of the purposes for creating TSETS are:
    - to speed up the exchange of information between Russian Railways public corporation and its customers and partners;
    - to improve customer service by means of eliminating mistakes and simplifying the procedure of placing orders for transport services;
    - to create a new sales channel for transport services as well as to create a modern business tool.
    TS ETS will bring the following benefits to the users:
    - information about the location and status of carriages or containers;
    - information about tariffs and prices on services;
    - on-line preliminary estimation of freight fare;
    - freight paperwork processing (order, transport documents, etc.).

    Latvian Railway Concern to Stop Existing
    The Minister of Communication of Latvia Inars Shlesers stated today he's made a decision on the "Latvian Railway" concern restructurization.

    During 2005 it is planned to establish three independent joint-stock companies which should separately deal with: infrastructure issues, freight transportation, passenger transportation. In this respect the Minister asked the Latvian Railway authorities to get ready with the certain plan and all the accounts for further submitting the documents to the country's government. According to the Ministry of Communication the process of restructurization should be completed by the end of the year.
    "Minister's decision is one of opportunity to sort out the problem of passenger transportation being non-profitable", Sarma Kochane, head of the press-service of the Ministry said.

    Russian Ural Trucks Delivered to Mexico
    The Mexican Ministry of Navy has signed a contract with the Ural automaker to deliver a new batch of Russian trucks to Mexico, Alexei Kovalev, the head of the Ural plant delegation.

    At issue is the delivery of 22 Russian trucks. The first agreement to purchase 52 Ural trucks was concluded last June.
    Over this period, Russian trucks have won a good reputation with Mexican cross-country drivers.
    According to Mr. Kovalev, the trucks were purchased for the Mexican Navy and used in the hardly passable areas having no byroads.
    Mexican seamen now trust Russian trucks so much that Ural trucks are now heading from Mexico for Indonesia onboard two amphibious ships to assist in eliminating the consequences of the tsunami.
    According to the chief of the Urals delegation, the excellent recommendations that the Mexicans gave to the Russian trucks made it possible to sign another contract and to make real plans of further cooperation.
    These plans in particular include the project to set up a plant to assemble Urals trucks in Mexico. An agreement to the effect was reached at a meeting between the Russian and Mexican presidents in Mexico in June 2004.
    Besides the military, the trucks aroused interest of the governments of the Guanajuato and Oaxaca states. The Ural trucks are expected to deliver humanitarian cargoes to Indian communities living in high mountains and in remote areas accessible only by helicopters. Besides, they will carry coffee harvest from the plantations on the mountain slopes.

    RZD and Ukrainian Railway: E-Data Exchange
    In compliance with the Plan of measures to be undertaken on the Concept of RF and Ukraine transport systems integration RZD and Sate Administration of Railway Transport of Ukraine ("Ukrzaliznitsya") came to an agreement on e-data exchange while cargo transportation on the international railway routes.

    RZD has developed complex of information technologies which allow commercial and maintenance cargo transportation procedures implementation on the basis of e-data handling. Such informatization will let to expand information services range for clients and provide the railways with modern transport technologies

    RZD Plans to Make Passenger Operations Self-Sustaining
    Russian Railways, a public joint-stock company, plans to make its passenger operations economically self-sustaining by 2010, Vladimir Yakunin, a company vice president told.

    "At present the losses from passenger operations fall on local operators and OAO RZD. No one needs the continuation of these losses. They need to be gradually reduced and eventually eliminated by 2010", Mr.Yakunin said. At the same time, he added that, "it will be quite difficult to do this, and the prospect is remote".
    Speaking about the possibilities of profit making in passenger operations, Mr.Yakunin said that it could be done "by reducing the expense element, in other words, operating costs and by increasing the revenue element, that is, the tariffs and service quality".
    V.Yakunin added that at present OAO RZD was transforming its methods of doing business in order to establish a separate company for passenger operations, as part of the Federal Passenger Direction, in the near future. It was reported earlier that the company's Board of Directors would consider the matter of the Federal Passenger Direction in September.
    The subsidiary would unite the passenger business serving long-distance traffic for the whole rail network as a single structure. The value of the property owned by the subsidiary would exceed USD33.3 million.
    It is estimated that over 130 thousand employees would work there. It will include about 60 railway and regional directions, 51 rail car depots, over 300 passenger stations, 26-thousand passenger stock and other property in territories throughout the entire country.
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        [DETAIL_TEXT] => In 2004 the revenue of TransTeleCom, an affiliated company of OAO RZD, and its subsidiaries was over USD390 million.

    The revenue of the group of companies (that consists of the head company and 17 regional enterprises) was USD394 million, which is 24% more than the figure planned in budget.
    The TTC group's receipt on providing telecommunication services was USD202 million, which is two times more than the previous year's level. The head company's receipt in this sector was USD182 million. During last 4 years the receipt on telecommunication services grew 9-fold.
    In 2004 TTC paid Russian Railways public corporation almost 2.5 billion roubles for leasing the united telecommunications backbone network, the 2005 payments to be over 3 billion roubles.
    The company's revenues place TransTeleCom among three leading alternative providers of fixed telecommunications. TTC is the largest system-forming provider on Russian telecommunications market, providing the market with nearly a half of backbone infrastructure. TTC lets 40% of long-distance channels for lease, and provides 40% of regional Internet market. Last year the company again proved its leading position in providing innovative telecommunication services by occupying 54% in this market segment.
    Among 300 largest corporate customers of TTC are: Ingosstrah, Alpha-Bank, SUAL group, Academy of Sciences of Russia, and the Federal Space Agency. Such companies as MAIR industrial group, Oriflame, Lebedyansky public corporation, Ochakovo beer and soft drink factory, and many other enterprises became the customers of TTC last year.
    In 2004 TTC was the first backbone provider certified by the State Technical Committee under the President of Russia confirming the network to be safe for the transmission of limited access information. Second year in a row TTC is declared the best telecommunication company of the year by Rosbusinessconsulting agency.

    Latvian Shipping Acquires Tankers
    Latvian Shipping is to renew its tanker fleet to get into accordance with the EU standards.

    In order to complete renewal the company has got guarantee for the credit worth USD360 million for construction of 14 tankers.
    10 vessels are to be constructed by Croatian shipyard "3 Maj", and the rest - by South-Korean "Hyundai MipoDockyard Co Ltd". Latvian shipping plans to get 70% of the sum as credits and invest 30% itself.
    Today the company operates 33 tankers, 2 gas-carriers, 5 reefers and a dry-carrier.

    RZD to Launch TSETS
    OAO Russian Railways is launching an electronic trading site in the near future.

    The corporation plans to launch an electronic trading site in order to further develop its effective cooperation with industrial enterprises (in the North West Federal District, in particular), as well as to optimise the interaction with industry in other regions of Russia.
    This innovation will inform prospective suppliers not only about bidding contests but also about the corporation's needs for specific products and resources. In addition, a registration procedure of an enterprise as the corporation's supplier will be implemented at the electronic trading site.
    However, the most important result of implementing the electronic trading site will be switching to electronic document circulation between railway transport customers and Russian Railways public corporation.
    Transport Service Electronic Trading Site (TSETS) automates the process of providing transport services to the customers of OAO RZD.
    The key task of the project is to provide all customers and partners of the corporation with equal access to railway infrastructure in order to guarantee integrated freight transport and provide additional services utilising modern information technologies.
    Prospective users of TSETS are consignors, consignees, operators, forwarders, and transporters.
    Some of the purposes for creating TSETS are:
    - to speed up the exchange of information between Russian Railways public corporation and its customers and partners;
    - to improve customer service by means of eliminating mistakes and simplifying the procedure of placing orders for transport services;
    - to create a new sales channel for transport services as well as to create a modern business tool.
    TS ETS will bring the following benefits to the users:
    - information about the location and status of carriages or containers;
    - information about tariffs and prices on services;
    - on-line preliminary estimation of freight fare;
    - freight paperwork processing (order, transport documents, etc.).

    Latvian Railway Concern to Stop Existing
    The Minister of Communication of Latvia Inars Shlesers stated today he's made a decision on the "Latvian Railway" concern restructurization.

    During 2005 it is planned to establish three independent joint-stock companies which should separately deal with: infrastructure issues, freight transportation, passenger transportation. In this respect the Minister asked the Latvian Railway authorities to get ready with the certain plan and all the accounts for further submitting the documents to the country's government. According to the Ministry of Communication the process of restructurization should be completed by the end of the year.
    "Minister's decision is one of opportunity to sort out the problem of passenger transportation being non-profitable", Sarma Kochane, head of the press-service of the Ministry said.

    Russian Ural Trucks Delivered to Mexico
    The Mexican Ministry of Navy has signed a contract with the Ural automaker to deliver a new batch of Russian trucks to Mexico, Alexei Kovalev, the head of the Ural plant delegation.

    At issue is the delivery of 22 Russian trucks. The first agreement to purchase 52 Ural trucks was concluded last June.
    Over this period, Russian trucks have won a good reputation with Mexican cross-country drivers.
    According to Mr. Kovalev, the trucks were purchased for the Mexican Navy and used in the hardly passable areas having no byroads.
    Mexican seamen now trust Russian trucks so much that Ural trucks are now heading from Mexico for Indonesia onboard two amphibious ships to assist in eliminating the consequences of the tsunami.
    According to the chief of the Urals delegation, the excellent recommendations that the Mexicans gave to the Russian trucks made it possible to sign another contract and to make real plans of further cooperation.
    These plans in particular include the project to set up a plant to assemble Urals trucks in Mexico. An agreement to the effect was reached at a meeting between the Russian and Mexican presidents in Mexico in June 2004.
    Besides the military, the trucks aroused interest of the governments of the Guanajuato and Oaxaca states. The Ural trucks are expected to deliver humanitarian cargoes to Indian communities living in high mountains and in remote areas accessible only by helicopters. Besides, they will carry coffee harvest from the plantations on the mountain slopes.

    RZD and Ukrainian Railway: E-Data Exchange
    In compliance with the Plan of measures to be undertaken on the Concept of RF and Ukraine transport systems integration RZD and Sate Administration of Railway Transport of Ukraine ("Ukrzaliznitsya") came to an agreement on e-data exchange while cargo transportation on the international railway routes.

    RZD has developed complex of information technologies which allow commercial and maintenance cargo transportation procedures implementation on the basis of e-data handling. Such informatization will let to expand information services range for clients and provide the railways with modern transport technologies

    RZD Plans to Make Passenger Operations Self-Sustaining
    Russian Railways, a public joint-stock company, plans to make its passenger operations economically self-sustaining by 2010, Vladimir Yakunin, a company vice president told.

    "At present the losses from passenger operations fall on local operators and OAO RZD. No one needs the continuation of these losses. They need to be gradually reduced and eventually eliminated by 2010", Mr.Yakunin said. At the same time, he added that, "it will be quite difficult to do this, and the prospect is remote".
    Speaking about the possibilities of profit making in passenger operations, Mr.Yakunin said that it could be done "by reducing the expense element, in other words, operating costs and by increasing the revenue element, that is, the tariffs and service quality".
    V.Yakunin added that at present OAO RZD was transforming its methods of doing business in order to establish a separate company for passenger operations, as part of the Federal Passenger Direction, in the near future. It was reported earlier that the company's Board of Directors would consider the matter of the Federal Passenger Direction in September.
    The subsidiary would unite the passenger business serving long-distance traffic for the whole rail network as a single structure. The value of the property owned by the subsidiary would exceed USD33.3 million.
    It is estimated that over 130 thousand employees would work there. It will include about 60 railway and regional directions, 51 rail car depots, over 300 passenger stations, 26-thousand passenger stock and other property in territories throughout the entire country.
    [~DETAIL_TEXT] => In 2004 the revenue of TransTeleCom, an affiliated company of OAO RZD, and its subsidiaries was over USD390 million.

    The revenue of the group of companies (that consists of the head company and 17 regional enterprises) was USD394 million, which is 24% more than the figure planned in budget.
    The TTC group's receipt on providing telecommunication services was USD202 million, which is two times more than the previous year's level. The head company's receipt in this sector was USD182 million. During last 4 years the receipt on telecommunication services grew 9-fold.
    In 2004 TTC paid Russian Railways public corporation almost 2.5 billion roubles for leasing the united telecommunications backbone network, the 2005 payments to be over 3 billion roubles.
    The company's revenues place TransTeleCom among three leading alternative providers of fixed telecommunications. TTC is the largest system-forming provider on Russian telecommunications market, providing the market with nearly a half of backbone infrastructure. TTC lets 40% of long-distance channels for lease, and provides 40% of regional Internet market. Last year the company again proved its leading position in providing innovative telecommunication services by occupying 54% in this market segment.
    Among 300 largest corporate customers of TTC are: Ingosstrah, Alpha-Bank, SUAL group, Academy of Sciences of Russia, and the Federal Space Agency. Such companies as MAIR industrial group, Oriflame, Lebedyansky public corporation, Ochakovo beer and soft drink factory, and many other enterprises became the customers of TTC last year.
    In 2004 TTC was the first backbone provider certified by the State Technical Committee under the President of Russia confirming the network to be safe for the transmission of limited access information. Second year in a row TTC is declared the best telecommunication company of the year by Rosbusinessconsulting agency.

    Latvian Shipping Acquires Tankers
    Latvian Shipping is to renew its tanker fleet to get into accordance with the EU standards.

    In order to complete renewal the company has got guarantee for the credit worth USD360 million for construction of 14 tankers.
    10 vessels are to be constructed by Croatian shipyard "3 Maj", and the rest - by South-Korean "Hyundai MipoDockyard Co Ltd". Latvian shipping plans to get 70% of the sum as credits and invest 30% itself.
    Today the company operates 33 tankers, 2 gas-carriers, 5 reefers and a dry-carrier.

    RZD to Launch TSETS
    OAO Russian Railways is launching an electronic trading site in the near future.

    The corporation plans to launch an electronic trading site in order to further develop its effective cooperation with industrial enterprises (in the North West Federal District, in particular), as well as to optimise the interaction with industry in other regions of Russia.
    This innovation will inform prospective suppliers not only about bidding contests but also about the corporation's needs for specific products and resources. In addition, a registration procedure of an enterprise as the corporation's supplier will be implemented at the electronic trading site.
    However, the most important result of implementing the electronic trading site will be switching to electronic document circulation between railway transport customers and Russian Railways public corporation.
    Transport Service Electronic Trading Site (TSETS) automates the process of providing transport services to the customers of OAO RZD.
    The key task of the project is to provide all customers and partners of the corporation with equal access to railway infrastructure in order to guarantee integrated freight transport and provide additional services utilising modern information technologies.
    Prospective users of TSETS are consignors, consignees, operators, forwarders, and transporters.
    Some of the purposes for creating TSETS are:
    - to speed up the exchange of information between Russian Railways public corporation and its customers and partners;
    - to improve customer service by means of eliminating mistakes and simplifying the procedure of placing orders for transport services;
    - to create a new sales channel for transport services as well as to create a modern business tool.
    TS ETS will bring the following benefits to the users:
    - information about the location and status of carriages or containers;
    - information about tariffs and prices on services;
    - on-line preliminary estimation of freight fare;
    - freight paperwork processing (order, transport documents, etc.).

    Latvian Railway Concern to Stop Existing
    The Minister of Communication of Latvia Inars Shlesers stated today he's made a decision on the "Latvian Railway" concern restructurization.

    During 2005 it is planned to establish three independent joint-stock companies which should separately deal with: infrastructure issues, freight transportation, passenger transportation. In this respect the Minister asked the Latvian Railway authorities to get ready with the certain plan and all the accounts for further submitting the documents to the country's government. According to the Ministry of Communication the process of restructurization should be completed by the end of the year.
    "Minister's decision is one of opportunity to sort out the problem of passenger transportation being non-profitable", Sarma Kochane, head of the press-service of the Ministry said.

    Russian Ural Trucks Delivered to Mexico
    The Mexican Ministry of Navy has signed a contract with the Ural automaker to deliver a new batch of Russian trucks to Mexico, Alexei Kovalev, the head of the Ural plant delegation.

    At issue is the delivery of 22 Russian trucks. The first agreement to purchase 52 Ural trucks was concluded last June.
    Over this period, Russian trucks have won a good reputation with Mexican cross-country drivers.
    According to Mr. Kovalev, the trucks were purchased for the Mexican Navy and used in the hardly passable areas having no byroads.
    Mexican seamen now trust Russian trucks so much that Ural trucks are now heading from Mexico for Indonesia onboard two amphibious ships to assist in eliminating the consequences of the tsunami.
    According to the chief of the Urals delegation, the excellent recommendations that the Mexicans gave to the Russian trucks made it possible to sign another contract and to make real plans of further cooperation.
    These plans in particular include the project to set up a plant to assemble Urals trucks in Mexico. An agreement to the effect was reached at a meeting between the Russian and Mexican presidents in Mexico in June 2004.
    Besides the military, the trucks aroused interest of the governments of the Guanajuato and Oaxaca states. The Ural trucks are expected to deliver humanitarian cargoes to Indian communities living in high mountains and in remote areas accessible only by helicopters. Besides, they will carry coffee harvest from the plantations on the mountain slopes.

    RZD and Ukrainian Railway: E-Data Exchange
    In compliance with the Plan of measures to be undertaken on the Concept of RF and Ukraine transport systems integration RZD and Sate Administration of Railway Transport of Ukraine ("Ukrzaliznitsya") came to an agreement on e-data exchange while cargo transportation on the international railway routes.

    RZD has developed complex of information technologies which allow commercial and maintenance cargo transportation procedures implementation on the basis of e-data handling. Such informatization will let to expand information services range for clients and provide the railways with modern transport technologies

    RZD Plans to Make Passenger Operations Self-Sustaining
    Russian Railways, a public joint-stock company, plans to make its passenger operations economically self-sustaining by 2010, Vladimir Yakunin, a company vice president told.

    "At present the losses from passenger operations fall on local operators and OAO RZD. No one needs the continuation of these losses. They need to be gradually reduced and eventually eliminated by 2010", Mr.Yakunin said. At the same time, he added that, "it will be quite difficult to do this, and the prospect is remote".
    Speaking about the possibilities of profit making in passenger operations, Mr.Yakunin said that it could be done "by reducing the expense element, in other words, operating costs and by increasing the revenue element, that is, the tariffs and service quality".
    V.Yakunin added that at present OAO RZD was transforming its methods of doing business in order to establish a separate company for passenger operations, as part of the Federal Passenger Direction, in the near future. It was reported earlier that the company's Board of Directors would consider the matter of the Federal Passenger Direction in September.
    The subsidiary would unite the passenger business serving long-distance traffic for the whole rail network as a single structure. The value of the property owned by the subsidiary would exceed USD33.3 million.
    It is estimated that over 130 thousand employees would work there. It will include about 60 railway and regional directions, 51 rail car depots, over 300 passenger stations, 26-thousand passenger stock and other property in territories throughout the entire country.
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    [PREVIEW_TEXT_TYPE] => html [~PREVIEW_TEXT_TYPE] => html [PREVIEW_PICTURE] => [~PREVIEW_PICTURE] => [LANG_DIR] => / [~LANG_DIR] => / [CODE] => 2958 [~CODE] => 2958 [EXTERNAL_ID] => 2958 [~EXTERNAL_ID] => 2958 [IBLOCK_TYPE_ID] => info [~IBLOCK_TYPE_ID] => info [IBLOCK_CODE] => articles_magazines [~IBLOCK_CODE] => articles_magazines [IBLOCK_EXTERNAL_ID] => [~IBLOCK_EXTERNAL_ID] => [LID] => s1 [~LID] => s1 [EDIT_LINK] => [DELETE_LINK] => [DISPLAY_ACTIVE_FROM] => [FIELDS] => Array ( ) [PROPERTIES] => Array ( [AUTHOR] => Array ( [ID] => 97 [IBLOCK_ID] => 25 [NAME] => Автор [ACTIVE] => Y [SORT] => 400 [CODE] => AUTHOR [DEFAULT_VALUE] => [PROPERTY_TYPE] => S [ROW_COUNT] => 1 [COL_COUNT] => 30 [LIST_TYPE] => L [MULTIPLE] => N [XML_ID] => [FILE_TYPE] => [MULTIPLE_CNT] => 5 [LINK_IBLOCK_ID] => 0 [WITH_DESCRIPTION] => N [SEARCHABLE] => Y [FILTRABLE] => N [IS_REQUIRED] => N [VERSION] => 2 [USER_TYPE] => [USER_TYPE_SETTINGS] => [HINT] => [~NAME] => Автор [~DEFAULT_VALUE] => [VALUE_ENUM] => [VALUE_XML_ID] => [VALUE_SORT] => [VALUE] => [PROPERTY_VALUE_ID] => 107904:97 [DESCRIPTION] => [~DESCRIPTION] => [~VALUE] => ) [AUTHOR_PHOTO] => Array ( [ID] => 108 [IBLOCK_ID] => 25 [NAME] => Автор фото [ACTIVE] => Y [SORT] => 410 [CODE] => AUTHOR_PHOTO [DEFAULT_VALUE] => [PROPERTY_TYPE] => S [ROW_COUNT] => 1 [COL_COUNT] => 30 [LIST_TYPE] => L [MULTIPLE] => N [XML_ID] => [FILE_TYPE] => [MULTIPLE_CNT] => 5 [LINK_IBLOCK_ID] => 0 [WITH_DESCRIPTION] => N [SEARCHABLE] => N [FILTRABLE] => N [IS_REQUIRED] => N [VERSION] => 2 [USER_TYPE] => [USER_TYPE_SETTINGS] => [HINT] => [~NAME] => Автор фото [~DEFAULT_VALUE] => [VALUE_ENUM] => [VALUE_XML_ID] => [VALUE_SORT] => [VALUE] => [PROPERTY_VALUE_ID] => 107904:108 [DESCRIPTION] => [~DESCRIPTION] => [~VALUE] => ) [ISSUE] => Array ( [ID] => 93 [IBLOCK_ID] => 25 [NAME] => Выпуск [ACTIVE] => Y [SORT] => 500 [CODE] => ISSUE [DEFAULT_VALUE] => [PROPERTY_TYPE] => E [ROW_COUNT] => 1 [COL_COUNT] => 30 [LIST_TYPE] => L [MULTIPLE] => N [XML_ID] => [FILE_TYPE] => [MULTIPLE_CNT] => 5 [LINK_IBLOCK_ID] => 0 [WITH_DESCRIPTION] => N [SEARCHABLE] => N [FILTRABLE] => N [IS_REQUIRED] => Y [VERSION] => 2 [USER_TYPE] => [USER_TYPE_SETTINGS] => [HINT] => [~NAME] => Выпуск [~DEFAULT_VALUE] => [VALUE_ENUM] => [VALUE_XML_ID] => [VALUE_SORT] => [VALUE] => 105214 [PROPERTY_VALUE_ID] => 107904:93 [DESCRIPTION] => [~VALUE] => 105214 [~DESCRIPTION] => ) [BLOG_POST_ID] => Array ( [ID] => 94 [IBLOCK_ID] => 25 [NAME] => ID поста блога для комментариев [ACTIVE] => Y [SORT] => 500 [CODE] => BLOG_POST_ID [DEFAULT_VALUE] => [PROPERTY_TYPE] => N [ROW_COUNT] => 1 [COL_COUNT] => 30 [LIST_TYPE] => L [MULTIPLE] => N [XML_ID] => [FILE_TYPE] => [MULTIPLE_CNT] => 5 [LINK_IBLOCK_ID] => 0 [WITH_DESCRIPTION] => N [SEARCHABLE] => N [FILTRABLE] => N [IS_REQUIRED] => N [VERSION] => 1 [USER_TYPE] => [USER_TYPE_SETTINGS] => [HINT] => [~NAME] => ID поста блога для комментариев [~DEFAULT_VALUE] => [VALUE_ENUM] => [VALUE_XML_ID] => [VALUE_SORT] => [VALUE] => [PROPERTY_VALUE_ID] => 107904:94 [DESCRIPTION] => [~DESCRIPTION] => [~VALUE] => ) [BLOG_COMMENTS_CNT] => Array ( [ID] => 95 [IBLOCK_ID] => 25 [NAME] => Количество комментариев [ACTIVE] => Y [SORT] => 500 [CODE] => BLOG_COMMENTS_CNT [DEFAULT_VALUE] => [PROPERTY_TYPE] => N [ROW_COUNT] => 1 [COL_COUNT] => 30 [LIST_TYPE] => L [MULTIPLE] => N [XML_ID] => [FILE_TYPE] => [MULTIPLE_CNT] => 5 [LINK_IBLOCK_ID] => 0 [WITH_DESCRIPTION] => N [SEARCHABLE] => N [FILTRABLE] => N [IS_REQUIRED] => N [VERSION] => 1 [USER_TYPE] => [USER_TYPE_SETTINGS] => [HINT] => [~NAME] => Количество комментариев [~DEFAULT_VALUE] => [VALUE_ENUM] => [VALUE_XML_ID] => [VALUE_SORT] => [VALUE] => [PROPERTY_VALUE_ID] => 107904:95 [DESCRIPTION] => [~DESCRIPTION] => [~VALUE] => ) [MORE_PHOTO] => Array ( [ID] => 98 [IBLOCK_ID] => 25 [NAME] => Дополнительные фотографии [ACTIVE] => Y [SORT] => 500 [CODE] => MORE_PHOTO [DEFAULT_VALUE] => [PROPERTY_TYPE] => F [ROW_COUNT] => 1 [COL_COUNT] => 30 [LIST_TYPE] => L [MULTIPLE] => Y [XML_ID] => [FILE_TYPE] => jpg, gif, bmp, png, jpeg [MULTIPLE_CNT] => 5 [LINK_IBLOCK_ID] => 0 [WITH_DESCRIPTION] => N [SEARCHABLE] => N [FILTRABLE] => N [IS_REQUIRED] => N [VERSION] => 2 [USER_TYPE] => [USER_TYPE_SETTINGS] => [HINT] => [~NAME] => Дополнительные фотографии [~DEFAULT_VALUE] => [VALUE_ENUM] => [VALUE_XML_ID] => [VALUE_SORT] => [VALUE] => [PROPERTY_VALUE_ID] => [DESCRIPTION] => [~DESCRIPTION] => [~VALUE] => ) [PUBLIC_ACCESS] => Array ( [ID] => 110 [IBLOCK_ID] => 25 [NAME] => Открытый доступ [ACTIVE] => Y [SORT] => 500 [CODE] => PUBLIC_ACCESS [DEFAULT_VALUE] => [PROPERTY_TYPE] => L [ROW_COUNT] => 1 [COL_COUNT] => 30 [LIST_TYPE] => C [MULTIPLE] => N [XML_ID] => [FILE_TYPE] => [MULTIPLE_CNT] => 5 [LINK_IBLOCK_ID] => 0 [WITH_DESCRIPTION] => N [SEARCHABLE] => N [FILTRABLE] => N [IS_REQUIRED] => N [VERSION] => 2 [USER_TYPE] => [USER_TYPE_SETTINGS] => [HINT] => [~NAME] => Открытый доступ [~DEFAULT_VALUE] => [VALUE_ENUM] => [VALUE_XML_ID] => [VALUE_SORT] => [VALUE] => [PROPERTY_VALUE_ID] => 107904:110 [DESCRIPTION] => [~DESCRIPTION] => [~VALUE] => [VALUE_ENUM_ID] => ) [ATTACHED_PDF] => Array ( [ID] => 324 [IBLOCK_ID] => 25 [NAME] => Прикрепленный PDF [ACTIVE] => Y [SORT] => 500 [CODE] => ATTACHED_PDF [DEFAULT_VALUE] => [PROPERTY_TYPE] => F [ROW_COUNT] => 1 [COL_COUNT] => 30 [LIST_TYPE] => L [MULTIPLE] => N [XML_ID] => [FILE_TYPE] => pdf [MULTIPLE_CNT] => 5 [LINK_IBLOCK_ID] => 0 [WITH_DESCRIPTION] => N [SEARCHABLE] => N [FILTRABLE] => N [IS_REQUIRED] => N [VERSION] => 2 [USER_TYPE] => [USER_TYPE_SETTINGS] => [HINT] => [~NAME] => Прикрепленный PDF [~DEFAULT_VALUE] => [VALUE_ENUM] => [VALUE_XML_ID] => [VALUE_SORT] => [VALUE] => [PROPERTY_VALUE_ID] => 107904:324 [DESCRIPTION] => [~DESCRIPTION] => [~VALUE] => ) ) [DISPLAY_PROPERTIES] => Array ( ) [IPROPERTY_VALUES] => Array ( [SECTION_META_TITLE] => Panorama [SECTION_META_KEYWORDS] => panorama [SECTION_META_DESCRIPTION] => <B>TransTeleCom: Results of 2004</B><BR> [ELEMENT_META_TITLE] => Panorama [ELEMENT_META_KEYWORDS] => panorama [ELEMENT_META_DESCRIPTION] => <B>TransTeleCom: Results of 2004</B><BR> [SECTION_PICTURE_FILE_ALT] => Panorama [SECTION_PICTURE_FILE_TITLE] => Panorama [SECTION_DETAIL_PICTURE_FILE_ALT] => Panorama [SECTION_DETAIL_PICTURE_FILE_TITLE] => Panorama [ELEMENT_PREVIEW_PICTURE_FILE_ALT] => Panorama [ELEMENT_PREVIEW_PICTURE_FILE_TITLE] => Panorama [ELEMENT_DETAIL_PICTURE_FILE_ALT] => Panorama [ELEMENT_DETAIL_PICTURE_FILE_TITLE] => Panorama ) )



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