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Regress
This year the growth of the basic operating figures of OAO Russian Railways’ activity was connected with the high rates of GDP and industrial production growth in the state. In the first six months of 2008 OAO RZD transported 677.6 million tons of freight, up 19.2 million tons or 2.9% in comparison with the same period of 2007.
Railwaymen say that the first quarter of 2008 was a success, but later the dyna­mics took a downward turn. Commenting on the results of the first half of the year, Vladimir Yakunin, President of OAO RZD, emphasised that in April the loading dynamics slowed down; in May the plan was fulfilled with difficulty, and the year-on-year growth was minimal; and in June there was a deficit. Loading volume was smaller than in 2007, and even than in 2006.
Comparing the results of work in the two quarters, one can see that the loading volume in Q2 fell by 0.6% (by 2 million tons) quarter-on-quarter, and throughput fell by 0.6% (by 3.5 billion ton-kilometres).
The operating results indicated a number of problems faced by the monopoly during reform. It is possible to say that Q2 revealed “stumbling blocks” in the transportation process.
Complex reason
The first reason for the regression one can think about is the transfer of a significant portion of rolling stock to OAO The First Cargo Company, which means for OAO RZD the loss of some of its cargo. Examining this situation one should pay attention to the fact that now the private rolling stock park is larger than the public one. Sergey Kolesnikov, the First Deputy Director General of the Centre of Corporate Transport Services of OAO RZD, confirms this statement.
At the end of June and the beginning of July, loading into the wagons of private companies, including OAO The First Cargo Company, exceeded 50%. Taking into account that public wagon turnover is much more than with a private wagon, we had some problems with loading resources. They were caused by the shrinking of the OAO RZD park. It was why problems appeared with an insufficient number of wagons. 
He emphasised that he does not consider any of the reasons a key one that radically influenced the work in Q2.
One of the characteristic features of the first half of the year were changes in the structure of the transported cargoes as the shortage of rolling stock took hold, and the beginning of the work of The First Cargo Company. I can’t but mention the significant growth of infrastructure repair. Thus, the reason for the fall in Q2 is a complex one.  
One percent more… or less
In the railway freight transportation market the share of OAO RZD is about 55.6%. In H1 of 2008 the volume of transportation in Russian Railways’ wagons grew by 0.7% year-on-year, and that of private wagons by 16.9%. As a result, the share of OAO RZD in the freight transportation market fell from 58% to 55.6%.
According to the data of marketing specialists at the Centre of Corporate Transport Services, the transportation volume of the least profitable cargo (of the first class type, according to Tariff Regulation 10-01) makes up the lion’s share of the total volume – 63.2%. This figure grew by 7% year-on-year. In comparison with the increase in vo­lume of second-class and third-class cargoes, the low-profit class rises most impressively. Cargo of the second class, most of which is carried by private rolling stock (approximately 60%), makes 22% of the total volume. The growth of transportation in the freight of this class amounted to 7%.
As for the profitable cargoes, its share is the smallest – only 14.9%. Analysts at the Centre of Corporate Transport Services say that more than 47% of such cargo is carried in private and rented rolling stock. Transportation in such wagons increased by 6%.
In comparison with the volume of transportation, the loading of cargo of different classes is very demonstrative. So, the loading of low-profitable freight increased by 3.4% or 13.5 million tons; that of highly profitable cargo grew by 4.3% or 4.0 million tons; and medium-profit cargo rose by 1% or 1.7 million tons. There appears an interesting tendency: the volume of the third-class cargo transported in OAO RZD wagons fell, while the profit from its transportation increased. 
The dynamics of the growth of transportation of basic cargoes remained the same: coal (+5.4%), coke (+9.8%), oil and oil products (+1.1%), iron and manganese ore (+1.4%), ferrous metals (+4.9%), chemicals and mineral fertilizers (+3.5%), and construction materials (+7.5%).
Loading of coal coke and coal grew by 9.8% (0.6 million tons) and 5.8% (8.2 million tons) respectively. Meanwhile, the analysts at the Centre of Corporate Transport Services highlight the reduction of grain and cereals by 10.1% (1.2 million tons) and of timber by 12.1% (4.5 million tons).
Looking for technology
The growth of prices in diesel fuel, metal production, cement and other goods will cause additional expenses of RUR 64 billion to the company. And the additional indexation of tariffs (+8%), which took place on July 1, will do nothing to compensate for them. The deficit will be RUR 17.5 billion, and the average growth of loading will fall by 2% year-on-year.
It is clear that the investment programme and the approved repair plan will hardly change, because traffic safety depends on their realisation. Now it is necessary to define efficient measures to cope with downward trends and stabilise the work to adopt target figures for H2, which will help fulfill the actualised financial plan for 2008.
Anatoly Legay, Deputy Head of the Department of Freight Transportation Marketing and Tariff Policy, commented on the results of the first half of the year, “Indeed, the specialists of OAO RZD noted the reduction of loading volume in May and June of 2008. I believe that the additional indexation of tariffs that took place on July 1 is not a restraining factor, because loading of all cargoes fell. The second half of the year is defined by different trends. First of all, there is inflation. In particular, we should take into account the rapid increase in prices for metal production, as the railway is a major consumer.”
In the words of Mr Legay, after assessing the level of the transport constituent, it became clear that against the backdrop of a significant growth in the sale price, the transport constituent of the export of a product fell sharply.
“That is why we sent an offer to the Federal Tariff Service. We offered to abolish the privileged tariffs on ferrous metals carried to Far eastern ports and to western border crossings. Nowadays, we are forming offers to change tariffs on coal transportation,” said Mr Legay.
Results are unknown
At the press conference devoted to H1 results, Vladimir Yakunin said that this year is very difficult for OAO RZD. Especially if we take into account that the major task for the second half of the year is adaptation of transportation management technology to the changes in wagon park exploitation. But nobody knows how to reach this target. 
Another actual problem, which must be solved by railwaymen and by the Ministry of Transport, is drawing up the list of criteria according to which OAO RZD may decline requests for transportation, because the public park cannot fulfil all the needs of the market. It is still unclear when the solution will be found. 

by Tatyana Ovcharova
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Regress
This year the growth of the basic operating figures of OAO Russian Railways’ activity was connected with the high rates of GDP and industrial production growth in the state. In the first six months of 2008 OAO RZD transported 677.6 million tons of freight, up 19.2 million tons or 2.9% in comparison with the same period of 2007.
Railwaymen say that the first quarter of 2008 was a success, but later the dyna­mics took a downward turn. Commenting on the results of the first half of the year, Vladimir Yakunin, President of OAO RZD, emphasised that in April the loading dynamics slowed down; in May the plan was fulfilled with difficulty, and the year-on-year growth was minimal; and in June there was a deficit. Loading volume was smaller than in 2007, and even than in 2006.
Comparing the results of work in the two quarters, one can see that the loading volume in Q2 fell by 0.6% (by 2 million tons) quarter-on-quarter, and throughput fell by 0.6% (by 3.5 billion ton-kilometres).
The operating results indicated a number of problems faced by the monopoly during reform. It is possible to say that Q2 revealed “stumbling blocks” in the transportation process.
Complex reason
The first reason for the regression one can think about is the transfer of a significant portion of rolling stock to OAO The First Cargo Company, which means for OAO RZD the loss of some of its cargo. Examining this situation one should pay attention to the fact that now the private rolling stock park is larger than the public one. Sergey Kolesnikov, the First Deputy Director General of the Centre of Corporate Transport Services of OAO RZD, confirms this statement.
At the end of June and the beginning of July, loading into the wagons of private companies, including OAO The First Cargo Company, exceeded 50%. Taking into account that public wagon turnover is much more than with a private wagon, we had some problems with loading resources. They were caused by the shrinking of the OAO RZD park. It was why problems appeared with an insufficient number of wagons. 
He emphasised that he does not consider any of the reasons a key one that radically influenced the work in Q2.
One of the characteristic features of the first half of the year were changes in the structure of the transported cargoes as the shortage of rolling stock took hold, and the beginning of the work of The First Cargo Company. I can’t but mention the significant growth of infrastructure repair. Thus, the reason for the fall in Q2 is a complex one.  
One percent more… or less
In the railway freight transportation market the share of OAO RZD is about 55.6%. In H1 of 2008 the volume of transportation in Russian Railways’ wagons grew by 0.7% year-on-year, and that of private wagons by 16.9%. As a result, the share of OAO RZD in the freight transportation market fell from 58% to 55.6%.
According to the data of marketing specialists at the Centre of Corporate Transport Services, the transportation volume of the least profitable cargo (of the first class type, according to Tariff Regulation 10-01) makes up the lion’s share of the total volume – 63.2%. This figure grew by 7% year-on-year. In comparison with the increase in vo­lume of second-class and third-class cargoes, the low-profit class rises most impressively. Cargo of the second class, most of which is carried by private rolling stock (approximately 60%), makes 22% of the total volume. The growth of transportation in the freight of this class amounted to 7%.
As for the profitable cargoes, its share is the smallest – only 14.9%. Analysts at the Centre of Corporate Transport Services say that more than 47% of such cargo is carried in private and rented rolling stock. Transportation in such wagons increased by 6%.
In comparison with the volume of transportation, the loading of cargo of different classes is very demonstrative. So, the loading of low-profitable freight increased by 3.4% or 13.5 million tons; that of highly profitable cargo grew by 4.3% or 4.0 million tons; and medium-profit cargo rose by 1% or 1.7 million tons. There appears an interesting tendency: the volume of the third-class cargo transported in OAO RZD wagons fell, while the profit from its transportation increased. 
The dynamics of the growth of transportation of basic cargoes remained the same: coal (+5.4%), coke (+9.8%), oil and oil products (+1.1%), iron and manganese ore (+1.4%), ferrous metals (+4.9%), chemicals and mineral fertilizers (+3.5%), and construction materials (+7.5%).
Loading of coal coke and coal grew by 9.8% (0.6 million tons) and 5.8% (8.2 million tons) respectively. Meanwhile, the analysts at the Centre of Corporate Transport Services highlight the reduction of grain and cereals by 10.1% (1.2 million tons) and of timber by 12.1% (4.5 million tons).
Looking for technology
The growth of prices in diesel fuel, metal production, cement and other goods will cause additional expenses of RUR 64 billion to the company. And the additional indexation of tariffs (+8%), which took place on July 1, will do nothing to compensate for them. The deficit will be RUR 17.5 billion, and the average growth of loading will fall by 2% year-on-year.
It is clear that the investment programme and the approved repair plan will hardly change, because traffic safety depends on their realisation. Now it is necessary to define efficient measures to cope with downward trends and stabilise the work to adopt target figures for H2, which will help fulfill the actualised financial plan for 2008.
Anatoly Legay, Deputy Head of the Department of Freight Transportation Marketing and Tariff Policy, commented on the results of the first half of the year, “Indeed, the specialists of OAO RZD noted the reduction of loading volume in May and June of 2008. I believe that the additional indexation of tariffs that took place on July 1 is not a restraining factor, because loading of all cargoes fell. The second half of the year is defined by different trends. First of all, there is inflation. In particular, we should take into account the rapid increase in prices for metal production, as the railway is a major consumer.”
In the words of Mr Legay, after assessing the level of the transport constituent, it became clear that against the backdrop of a significant growth in the sale price, the transport constituent of the export of a product fell sharply.
“That is why we sent an offer to the Federal Tariff Service. We offered to abolish the privileged tariffs on ferrous metals carried to Far eastern ports and to western border crossings. Nowadays, we are forming offers to change tariffs on coal transportation,” said Mr Legay.
Results are unknown
At the press conference devoted to H1 results, Vladimir Yakunin said that this year is very difficult for OAO RZD. Especially if we take into account that the major task for the second half of the year is adaptation of transportation management technology to the changes in wagon park exploitation. But nobody knows how to reach this target. 
Another actual problem, which must be solved by railwaymen and by the Ministry of Transport, is drawing up the list of criteria according to which OAO RZD may decline requests for transportation, because the public park cannot fulfil all the needs of the market. It is still unclear when the solution will be found. 

by Tatyana Ovcharova
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Regress
This year the growth of the basic operating figures of OAO Russian Railways’ activity was connected with the high rates of GDP and industrial production growth in the state. In the first six months of 2008 OAO RZD transported 677.6 million tons of freight, up 19.2 million tons or 2.9% in comparison with the same period of 2007.
Railwaymen say that the first quarter of 2008 was a success, but later the dyna­mics took a downward turn. Commenting on the results of the first half of the year, Vladimir Yakunin, President of OAO RZD, emphasised that in April the loading dynamics slowed down; in May the plan was fulfilled with difficulty, and the year-on-year growth was minimal; and in June there was a deficit. Loading volume was smaller than in 2007, and even than in 2006.
Comparing the results of work in the two quarters, one can see that the loading volume in Q2 fell by 0.6% (by 2 million tons) quarter-on-quarter, and throughput fell by 0.6% (by 3.5 billion ton-kilometres).
The operating results indicated a number of problems faced by the monopoly during reform. It is possible to say that Q2 revealed “stumbling blocks” in the transportation process.
Complex reason
The first reason for the regression one can think about is the transfer of a significant portion of rolling stock to OAO The First Cargo Company, which means for OAO RZD the loss of some of its cargo. Examining this situation one should pay attention to the fact that now the private rolling stock park is larger than the public one. Sergey Kolesnikov, the First Deputy Director General of the Centre of Corporate Transport Services of OAO RZD, confirms this statement.
At the end of June and the beginning of July, loading into the wagons of private companies, including OAO The First Cargo Company, exceeded 50%. Taking into account that public wagon turnover is much more than with a private wagon, we had some problems with loading resources. They were caused by the shrinking of the OAO RZD park. It was why problems appeared with an insufficient number of wagons. 
He emphasised that he does not consider any of the reasons a key one that radically influenced the work in Q2.
One of the characteristic features of the first half of the year were changes in the structure of the transported cargoes as the shortage of rolling stock took hold, and the beginning of the work of The First Cargo Company. I can’t but mention the significant growth of infrastructure repair. Thus, the reason for the fall in Q2 is a complex one.  
One percent more… or less
In the railway freight transportation market the share of OAO RZD is about 55.6%. In H1 of 2008 the volume of transportation in Russian Railways’ wagons grew by 0.7% year-on-year, and that of private wagons by 16.9%. As a result, the share of OAO RZD in the freight transportation market fell from 58% to 55.6%.
According to the data of marketing specialists at the Centre of Corporate Transport Services, the transportation volume of the least profitable cargo (of the first class type, according to Tariff Regulation 10-01) makes up the lion’s share of the total volume – 63.2%. This figure grew by 7% year-on-year. In comparison with the increase in vo­lume of second-class and third-class cargoes, the low-profit class rises most impressively. Cargo of the second class, most of which is carried by private rolling stock (approximately 60%), makes 22% of the total volume. The growth of transportation in the freight of this class amounted to 7%.
As for the profitable cargoes, its share is the smallest – only 14.9%. Analysts at the Centre of Corporate Transport Services say that more than 47% of such cargo is carried in private and rented rolling stock. Transportation in such wagons increased by 6%.
In comparison with the volume of transportation, the loading of cargo of different classes is very demonstrative. So, the loading of low-profitable freight increased by 3.4% or 13.5 million tons; that of highly profitable cargo grew by 4.3% or 4.0 million tons; and medium-profit cargo rose by 1% or 1.7 million tons. There appears an interesting tendency: the volume of the third-class cargo transported in OAO RZD wagons fell, while the profit from its transportation increased. 
The dynamics of the growth of transportation of basic cargoes remained the same: coal (+5.4%), coke (+9.8%), oil and oil products (+1.1%), iron and manganese ore (+1.4%), ferrous metals (+4.9%), chemicals and mineral fertilizers (+3.5%), and construction materials (+7.5%).
Loading of coal coke and coal grew by 9.8% (0.6 million tons) and 5.8% (8.2 million tons) respectively. Meanwhile, the analysts at the Centre of Corporate Transport Services highlight the reduction of grain and cereals by 10.1% (1.2 million tons) and of timber by 12.1% (4.5 million tons).
Looking for technology
The growth of prices in diesel fuel, metal production, cement and other goods will cause additional expenses of RUR 64 billion to the company. And the additional indexation of tariffs (+8%), which took place on July 1, will do nothing to compensate for them. The deficit will be RUR 17.5 billion, and the average growth of loading will fall by 2% year-on-year.
It is clear that the investment programme and the approved repair plan will hardly change, because traffic safety depends on their realisation. Now it is necessary to define efficient measures to cope with downward trends and stabilise the work to adopt target figures for H2, which will help fulfill the actualised financial plan for 2008.
Anatoly Legay, Deputy Head of the Department of Freight Transportation Marketing and Tariff Policy, commented on the results of the first half of the year, “Indeed, the specialists of OAO RZD noted the reduction of loading volume in May and June of 2008. I believe that the additional indexation of tariffs that took place on July 1 is not a restraining factor, because loading of all cargoes fell. The second half of the year is defined by different trends. First of all, there is inflation. In particular, we should take into account the rapid increase in prices for metal production, as the railway is a major consumer.”
In the words of Mr Legay, after assessing the level of the transport constituent, it became clear that against the backdrop of a significant growth in the sale price, the transport constituent of the export of a product fell sharply.
“That is why we sent an offer to the Federal Tariff Service. We offered to abolish the privileged tariffs on ferrous metals carried to Far eastern ports and to western border crossings. Nowadays, we are forming offers to change tariffs on coal transportation,” said Mr Legay.
Results are unknown
At the press conference devoted to H1 results, Vladimir Yakunin said that this year is very difficult for OAO RZD. Especially if we take into account that the major task for the second half of the year is adaptation of transportation management technology to the changes in wagon park exploitation. But nobody knows how to reach this target. 
Another actual problem, which must be solved by railwaymen and by the Ministry of Transport, is drawing up the list of criteria according to which OAO RZD may decline requests for transportation, because the public park cannot fulfil all the needs of the market. It is still unclear when the solution will be found. 

by Tatyana Ovcharova
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Regress
This year the growth of the basic operating figures of OAO Russian Railways’ activity was connected with the high rates of GDP and industrial production growth in the state. In the first six months of 2008 OAO RZD transported 677.6 million tons of freight, up 19.2 million tons or 2.9% in comparison with the same period of 2007.
Railwaymen say that the first quarter of 2008 was a success, but later the dyna­mics took a downward turn. Commenting on the results of the first half of the year, Vladimir Yakunin, President of OAO RZD, emphasised that in April the loading dynamics slowed down; in May the plan was fulfilled with difficulty, and the year-on-year growth was minimal; and in June there was a deficit. Loading volume was smaller than in 2007, and even than in 2006.
Comparing the results of work in the two quarters, one can see that the loading volume in Q2 fell by 0.6% (by 2 million tons) quarter-on-quarter, and throughput fell by 0.6% (by 3.5 billion ton-kilometres).
The operating results indicated a number of problems faced by the monopoly during reform. It is possible to say that Q2 revealed “stumbling blocks” in the transportation process.
Complex reason
The first reason for the regression one can think about is the transfer of a significant portion of rolling stock to OAO The First Cargo Company, which means for OAO RZD the loss of some of its cargo. Examining this situation one should pay attention to the fact that now the private rolling stock park is larger than the public one. Sergey Kolesnikov, the First Deputy Director General of the Centre of Corporate Transport Services of OAO RZD, confirms this statement.
At the end of June and the beginning of July, loading into the wagons of private companies, including OAO The First Cargo Company, exceeded 50%. Taking into account that public wagon turnover is much more than with a private wagon, we had some problems with loading resources. They were caused by the shrinking of the OAO RZD park. It was why problems appeared with an insufficient number of wagons. 
He emphasised that he does not consider any of the reasons a key one that radically influenced the work in Q2.
One of the characteristic features of the first half of the year were changes in the structure of the transported cargoes as the shortage of rolling stock took hold, and the beginning of the work of The First Cargo Company. I can’t but mention the significant growth of infrastructure repair. Thus, the reason for the fall in Q2 is a complex one.  
One percent more… or less
In the railway freight transportation market the share of OAO RZD is about 55.6%. In H1 of 2008 the volume of transportation in Russian Railways’ wagons grew by 0.7% year-on-year, and that of private wagons by 16.9%. As a result, the share of OAO RZD in the freight transportation market fell from 58% to 55.6%.
According to the data of marketing specialists at the Centre of Corporate Transport Services, the transportation volume of the least profitable cargo (of the first class type, according to Tariff Regulation 10-01) makes up the lion’s share of the total volume – 63.2%. This figure grew by 7% year-on-year. In comparison with the increase in vo­lume of second-class and third-class cargoes, the low-profit class rises most impressively. Cargo of the second class, most of which is carried by private rolling stock (approximately 60%), makes 22% of the total volume. The growth of transportation in the freight of this class amounted to 7%.
As for the profitable cargoes, its share is the smallest – only 14.9%. Analysts at the Centre of Corporate Transport Services say that more than 47% of such cargo is carried in private and rented rolling stock. Transportation in such wagons increased by 6%.
In comparison with the volume of transportation, the loading of cargo of different classes is very demonstrative. So, the loading of low-profitable freight increased by 3.4% or 13.5 million tons; that of highly profitable cargo grew by 4.3% or 4.0 million tons; and medium-profit cargo rose by 1% or 1.7 million tons. There appears an interesting tendency: the volume of the third-class cargo transported in OAO RZD wagons fell, while the profit from its transportation increased. 
The dynamics of the growth of transportation of basic cargoes remained the same: coal (+5.4%), coke (+9.8%), oil and oil products (+1.1%), iron and manganese ore (+1.4%), ferrous metals (+4.9%), chemicals and mineral fertilizers (+3.5%), and construction materials (+7.5%).
Loading of coal coke and coal grew by 9.8% (0.6 million tons) and 5.8% (8.2 million tons) respectively. Meanwhile, the analysts at the Centre of Corporate Transport Services highlight the reduction of grain and cereals by 10.1% (1.2 million tons) and of timber by 12.1% (4.5 million tons).
Looking for technology
The growth of prices in diesel fuel, metal production, cement and other goods will cause additional expenses of RUR 64 billion to the company. And the additional indexation of tariffs (+8%), which took place on July 1, will do nothing to compensate for them. The deficit will be RUR 17.5 billion, and the average growth of loading will fall by 2% year-on-year.
It is clear that the investment programme and the approved repair plan will hardly change, because traffic safety depends on their realisation. Now it is necessary to define efficient measures to cope with downward trends and stabilise the work to adopt target figures for H2, which will help fulfill the actualised financial plan for 2008.
Anatoly Legay, Deputy Head of the Department of Freight Transportation Marketing and Tariff Policy, commented on the results of the first half of the year, “Indeed, the specialists of OAO RZD noted the reduction of loading volume in May and June of 2008. I believe that the additional indexation of tariffs that took place on July 1 is not a restraining factor, because loading of all cargoes fell. The second half of the year is defined by different trends. First of all, there is inflation. In particular, we should take into account the rapid increase in prices for metal production, as the railway is a major consumer.”
In the words of Mr Legay, after assessing the level of the transport constituent, it became clear that against the backdrop of a significant growth in the sale price, the transport constituent of the export of a product fell sharply.
“That is why we sent an offer to the Federal Tariff Service. We offered to abolish the privileged tariffs on ferrous metals carried to Far eastern ports and to western border crossings. Nowadays, we are forming offers to change tariffs on coal transportation,” said Mr Legay.
Results are unknown
At the press conference devoted to H1 results, Vladimir Yakunin said that this year is very difficult for OAO RZD. Especially if we take into account that the major task for the second half of the year is adaptation of transportation management technology to the changes in wagon park exploitation. But nobody knows how to reach this target. 
Another actual problem, which must be solved by railwaymen and by the Ministry of Transport, is drawing up the list of criteria according to which OAO RZD may decline requests for transportation, because the public park cannot fulfil all the needs of the market. It is still unclear when the solution will be found. 

by Tatyana Ovcharova
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Standardisation for RZD
On May 23, 2008, Russian Railways signed a cooperation agreement with the Federal Agency for Technical Regulation and
Metrology.
The two sides concluded the agreement in order to establish cooperation on technical regulation and standardisation in rail transport. 
The parties intend to combine their efforts in the following main activities: 
• agreeing policy on the technical regulation of railways, including on the Russian Federation’s legislative and regulatory framework; 
• joint work on technical regulation and standardisation in the railway sector; 
• creation of a Technical Committee for Standardisation in Railway Transport, with a further delegation of its expert functions to the relevant structures of the International Standards Organisation (ISO), International Electrical Engineering Commission (IEEC), SEN and SENELEC from the Russian Federation; 
• the exchange of information resources on standardisation; 
• joint participation in scientific and technical councils, seminars and meetings on legal and regulatory matters, standardisation and accreditation compliance, international scientific and technical conferences, exhibitions and other events. 
The agreement came into effect on signing and will be valid for three years and can be rolled over upon expiry.

Moody’s upgrades outlook on Russian Railways to positive
Moody’s, the international rating agency, changed the outlook on Russian Railways from “stable” to “positive”.
The improved outlook is a result of the higher credit rating of the Russian Federation, which Moody’s has increased from “Baa2” to “Baa1” outlook “positive”. 
In early 2008, Moody’s confirmed the long-term rating of Russian Railways on its international scale in foreign currency at “A3”.

100 Mainline Locomotives for OAO RZD
Russian Railways and Transmashholding signed on May 21, 2008, an agreement for the supply of 100 new 2 TE25A Vityaz mainline locomotives with asynchronous traction. 
The total value of the contract is around RUR 15 billion, with dates and delivery schedules to be determined later. The 2 TE25A Vityaz locomotive with asynchronous traction was developed at the Bryansk Machine Building Plant (BMBP) using only Russia’s own domestic technology base. It is the first Russian freight locomotive with asynchronous traction control. The construction uses a diesel from the Kolomensky Locomotive Manufacturing Plant with electronic injection and a new bogie design. Trials of the first locomotive are currently being completed and the Certificate of Compliance is expected in 2008. During trials, the 2 TE25A Vityaz pulled trains weighing up to 7,800 tons, which is on a par with the best locomotives in the world and far ahead of the pulling power of locomotives which make up most of the fleet in CIS countries, such as the 2 TE10, which can pull approximately 5,200 tons. 
The main line locomotive is a new product not only for BMBP, but also for the Russian transport engineering industry as a whole. Serial production of this class of locomotives began in Russia in 2007 at the Kolomensky Plant (2 model TE70) and BMBP (model 2 TE25K Peresvet), both of which are owned by Transmashholding. 

Russian Railways implement environmental safety programme
OAO RZD is investing more than RUR 725 million in 2008 into the project “Ensuring Environmental Safety.” 
According to the investment programme, during the current year it is planned to carry out on the rail network the construction and reconstruction of 24 environmental protection facilities, 13 of which will be put into operation in 2008. In addition, it is also planned to develop designs and cost estimates for 24 environmental facilities to be built in 2009. 
The investment project “Ensuring Environmental Security” also provides for the purchase of 136 units of plant and equipment to clean up emissions and waste, 394 pieces of technical equipment to eliminate damage to the environment following accidents, 316 analytical instruments and measuring devices for environmental laboratories and 21 sets of special laboratory furniture, as well as nine mobile environmental laboratories mounted on cars.

New Terminal in Novorossiysk Port
At the end of July 2008, OAO Novorossiysk Commercial Sea Port announced that it had put into operation the Novorossiysk grain terminal to handle grain and oil-bearing crops. The capacity of the new terminal is 4 million tons per annum.
The volume of investment into the project amounted to USD 82.6 million.

TransGroup AS to Build a Logistics Centre in Sheremetyevo
OAO Sheremetyevo International Airport and transport and logistics company TransGroup AS are carrying out a joint project to build a large logistics centre. In the framework of the project, a new multimodal 10,000 sq. m. cargo terminal is to be constructed at Sheremetyevo airport in Moscow before the end of 2009. 
The project is carried out in accordance with the scaled national programme of Sheremetyevo airport reconstruction and modernisation. Its target is to improve the quality of services provided to passengers and air companies, and make the airport a modern hub. The contract for the terminal’s construction was signed by Mikhail Vasilenko, CEO of Sheremetyevo airport, and Maxim Liksutov, Chairman of the Board of Directors of OOO TransGroup AS. 

TransContainer Expands Services for Volkswagen
On July 3, 2008, the General Director of JSC TransContainer, Peter Baskakov, and the Managing Director of Volkswagen Rus, Friedrich-Wilhelm Lenz, signed an additional agreement to organise logistics services at the Volkswagen plant in Kaluga. 
This agreement supplements the contract signed by the two companies in November 2007 for the transportation of VW Passat, VW Jetta, VW Tiguan, and Skoda components for vehicle assembly from the cities of Kosice (Slovakia) and Mlada Boleslav (Czech Republic) to the Volkswagen plant in Kaluga. 
“Under the new agreement, the loading and unloading of containers at the plant will be performed by TransContainer. We plan to provide integrated logistics services to the Volkswagen concern as a third party logistics provider, and this agreement marks the beginning of our work along these lines,” said Peter Baskakov after the signing ceremony. 
He recalled that JSC TransContainer has opened its fully functional agency at Kaluga Station. “This agency is operated by 10 employees of our company, but we are now increasing its staff to 50, with the partial placement of offices within the plant, to improve our service efficiency. The range of services offered to Volkswagen will be expanded in the very near future: in particular, we will coordinate all loading/unloading operations at the plant, handle documentation, etc. Thus, our company is being integrated into the vehicle production process,” emphasised Mr Baskakov. 
Since the beginning of the year, TransContainer has transported about 17,500 TEU of Volkswagen components. Its partner in this project is the German company Schenker Automotive Railnet, a subsidiary of Deutsche Bahn AG. 

The RF Ministry of Economic Development Agrees to Sell 25% of Refservice
The Russian Ministry of Economic Development gave to the Government a draft document on the sale of a 25% shareholding in Refservice (a daughter company of OAO RZD which specialises in transportation of perishables). Before that, the Ministry suggested reviewing the terms of Refservice’s privatisation, defined by the Russian Railways’ Board of Directors at the end of November 2007. According to them, a 25% shareholding of the daughter company of OAO RZD was to be sold at an open auction.
The Ministry of Economic Development wanted to enlarge the shareholding to 50%, saying that it was necessary to attract a strategic investor. “In the document we approved the sale of 25% of the company’s authorised stock at an auction. Now the Government is discussing the reasonability of such a solution,” said an official from the Ministry. Meanwhile, the Ministry obliged OAO RZD to attract “professional market players” to the auction. The starting price of the blocking shareholding of Refservice, estimated by OAO RZD’s Board of Directors at RUR 872.87 million (USD 37.2 million) is to be changed. The shares of the company will be re-estimated, and the market cost of the blocking shareholding will be the starting price at the auction.

Appointments in Russian Railways’ Top Management
Alexander Zhukov, Russian Vice Prime Minister, was elected Chairman of the Board of Directors of OAO RZD. The Chairman of Russian Railways’ Board of Directors is elected every year. The meeting of the Board took place in early August, and in the five years of the company’s existence, Alexander Zhukov has headed OAO RZD’s Board of Directors four times.
Earlier, in June, Vladimir Putin, Prime Minister of the RF Government, appointed Vladimir Yakunin the President of OAO RZD for another three-year term. According to the Code of OAO RZD (100% shareholding of the company is owned by the Russian Federation), the company’s President is appointed and relieved by the RF Government.
According to the decision of the Board of Directors and a decree of the President of OAO RZD, Valentin Gapanovich was appointed Senior Vice President of Russian Railways. In the new position he is responsible for the company’s technical policy issues. 
The President of OAO RZD in his decree appointed Alexey Vorotilkin a Vice President of the company. Earlier Mr Vorotilkin was the Head of the East-Siberian Railway (an affiliate of OAO RZD). Now, Alexey Vorotilkin is in charge of the company’s locomotive and wagon affairs.

Year of Tank-Wagons for Byelorussian Railway
This year the Byelorussian railway is going to purchase 1,000 tank-wagons for oil bulk transportation.
“We analysed our demands and decided that new tank-wagons are especially important for us this year,” claimed Nikolay Bekish, Seniour Economist of the Byelorussian railway.
In the words of the specialist, a long-term leasing scheme is being used to attract finances to enlarge the railway’s rolling stock park.
“The major target today is transportation of export goods. Already now we suffer from a continual lack of rolling stock. If earlier we said that we have enough wagons for 20 years of economic development, today the economy has left us far behind,” stated the Byelorussian railway representative.
    [~DETAIL_TEXT] => 
Standardisation for RZD
On May 23, 2008, Russian Railways signed a cooperation agreement with the Federal Agency for Technical Regulation and
Metrology.
The two sides concluded the agreement in order to establish cooperation on technical regulation and standardisation in rail transport. 
The parties intend to combine their efforts in the following main activities: 
• agreeing policy on the technical regulation of railways, including on the Russian Federation’s legislative and regulatory framework; 
• joint work on technical regulation and standardisation in the railway sector; 
• creation of a Technical Committee for Standardisation in Railway Transport, with a further delegation of its expert functions to the relevant structures of the International Standards Organisation (ISO), International Electrical Engineering Commission (IEEC), SEN and SENELEC from the Russian Federation; 
• the exchange of information resources on standardisation; 
• joint participation in scientific and technical councils, seminars and meetings on legal and regulatory matters, standardisation and accreditation compliance, international scientific and technical conferences, exhibitions and other events. 
The agreement came into effect on signing and will be valid for three years and can be rolled over upon expiry.

Moody’s upgrades outlook on Russian Railways to positive
Moody’s, the international rating agency, changed the outlook on Russian Railways from “stable” to “positive”.
The improved outlook is a result of the higher credit rating of the Russian Federation, which Moody’s has increased from “Baa2” to “Baa1” outlook “positive”. 
In early 2008, Moody’s confirmed the long-term rating of Russian Railways on its international scale in foreign currency at “A3”.

100 Mainline Locomotives for OAO RZD
Russian Railways and Transmashholding signed on May 21, 2008, an agreement for the supply of 100 new 2 TE25A Vityaz mainline locomotives with asynchronous traction. 
The total value of the contract is around RUR 15 billion, with dates and delivery schedules to be determined later. The 2 TE25A Vityaz locomotive with asynchronous traction was developed at the Bryansk Machine Building Plant (BMBP) using only Russia’s own domestic technology base. It is the first Russian freight locomotive with asynchronous traction control. The construction uses a diesel from the Kolomensky Locomotive Manufacturing Plant with electronic injection and a new bogie design. Trials of the first locomotive are currently being completed and the Certificate of Compliance is expected in 2008. During trials, the 2 TE25A Vityaz pulled trains weighing up to 7,800 tons, which is on a par with the best locomotives in the world and far ahead of the pulling power of locomotives which make up most of the fleet in CIS countries, such as the 2 TE10, which can pull approximately 5,200 tons. 
The main line locomotive is a new product not only for BMBP, but also for the Russian transport engineering industry as a whole. Serial production of this class of locomotives began in Russia in 2007 at the Kolomensky Plant (2 model TE70) and BMBP (model 2 TE25K Peresvet), both of which are owned by Transmashholding. 

Russian Railways implement environmental safety programme
OAO RZD is investing more than RUR 725 million in 2008 into the project “Ensuring Environmental Safety.” 
According to the investment programme, during the current year it is planned to carry out on the rail network the construction and reconstruction of 24 environmental protection facilities, 13 of which will be put into operation in 2008. In addition, it is also planned to develop designs and cost estimates for 24 environmental facilities to be built in 2009. 
The investment project “Ensuring Environmental Security” also provides for the purchase of 136 units of plant and equipment to clean up emissions and waste, 394 pieces of technical equipment to eliminate damage to the environment following accidents, 316 analytical instruments and measuring devices for environmental laboratories and 21 sets of special laboratory furniture, as well as nine mobile environmental laboratories mounted on cars.

New Terminal in Novorossiysk Port
At the end of July 2008, OAO Novorossiysk Commercial Sea Port announced that it had put into operation the Novorossiysk grain terminal to handle grain and oil-bearing crops. The capacity of the new terminal is 4 million tons per annum.
The volume of investment into the project amounted to USD 82.6 million.

TransGroup AS to Build a Logistics Centre in Sheremetyevo
OAO Sheremetyevo International Airport and transport and logistics company TransGroup AS are carrying out a joint project to build a large logistics centre. In the framework of the project, a new multimodal 10,000 sq. m. cargo terminal is to be constructed at Sheremetyevo airport in Moscow before the end of 2009. 
The project is carried out in accordance with the scaled national programme of Sheremetyevo airport reconstruction and modernisation. Its target is to improve the quality of services provided to passengers and air companies, and make the airport a modern hub. The contract for the terminal’s construction was signed by Mikhail Vasilenko, CEO of Sheremetyevo airport, and Maxim Liksutov, Chairman of the Board of Directors of OOO TransGroup AS. 

TransContainer Expands Services for Volkswagen
On July 3, 2008, the General Director of JSC TransContainer, Peter Baskakov, and the Managing Director of Volkswagen Rus, Friedrich-Wilhelm Lenz, signed an additional agreement to organise logistics services at the Volkswagen plant in Kaluga. 
This agreement supplements the contract signed by the two companies in November 2007 for the transportation of VW Passat, VW Jetta, VW Tiguan, and Skoda components for vehicle assembly from the cities of Kosice (Slovakia) and Mlada Boleslav (Czech Republic) to the Volkswagen plant in Kaluga. 
“Under the new agreement, the loading and unloading of containers at the plant will be performed by TransContainer. We plan to provide integrated logistics services to the Volkswagen concern as a third party logistics provider, and this agreement marks the beginning of our work along these lines,” said Peter Baskakov after the signing ceremony. 
He recalled that JSC TransContainer has opened its fully functional agency at Kaluga Station. “This agency is operated by 10 employees of our company, but we are now increasing its staff to 50, with the partial placement of offices within the plant, to improve our service efficiency. The range of services offered to Volkswagen will be expanded in the very near future: in particular, we will coordinate all loading/unloading operations at the plant, handle documentation, etc. Thus, our company is being integrated into the vehicle production process,” emphasised Mr Baskakov. 
Since the beginning of the year, TransContainer has transported about 17,500 TEU of Volkswagen components. Its partner in this project is the German company Schenker Automotive Railnet, a subsidiary of Deutsche Bahn AG. 

The RF Ministry of Economic Development Agrees to Sell 25% of Refservice
The Russian Ministry of Economic Development gave to the Government a draft document on the sale of a 25% shareholding in Refservice (a daughter company of OAO RZD which specialises in transportation of perishables). Before that, the Ministry suggested reviewing the terms of Refservice’s privatisation, defined by the Russian Railways’ Board of Directors at the end of November 2007. According to them, a 25% shareholding of the daughter company of OAO RZD was to be sold at an open auction.
The Ministry of Economic Development wanted to enlarge the shareholding to 50%, saying that it was necessary to attract a strategic investor. “In the document we approved the sale of 25% of the company’s authorised stock at an auction. Now the Government is discussing the reasonability of such a solution,” said an official from the Ministry. Meanwhile, the Ministry obliged OAO RZD to attract “professional market players” to the auction. The starting price of the blocking shareholding of Refservice, estimated by OAO RZD’s Board of Directors at RUR 872.87 million (USD 37.2 million) is to be changed. The shares of the company will be re-estimated, and the market cost of the blocking shareholding will be the starting price at the auction.

Appointments in Russian Railways’ Top Management
Alexander Zhukov, Russian Vice Prime Minister, was elected Chairman of the Board of Directors of OAO RZD. The Chairman of Russian Railways’ Board of Directors is elected every year. The meeting of the Board took place in early August, and in the five years of the company’s existence, Alexander Zhukov has headed OAO RZD’s Board of Directors four times.
Earlier, in June, Vladimir Putin, Prime Minister of the RF Government, appointed Vladimir Yakunin the President of OAO RZD for another three-year term. According to the Code of OAO RZD (100% shareholding of the company is owned by the Russian Federation), the company’s President is appointed and relieved by the RF Government.
According to the decision of the Board of Directors and a decree of the President of OAO RZD, Valentin Gapanovich was appointed Senior Vice President of Russian Railways. In the new position he is responsible for the company’s technical policy issues. 
The President of OAO RZD in his decree appointed Alexey Vorotilkin a Vice President of the company. Earlier Mr Vorotilkin was the Head of the East-Siberian Railway (an affiliate of OAO RZD). Now, Alexey Vorotilkin is in charge of the company’s locomotive and wagon affairs.

Year of Tank-Wagons for Byelorussian Railway
This year the Byelorussian railway is going to purchase 1,000 tank-wagons for oil bulk transportation.
“We analysed our demands and decided that new tank-wagons are especially important for us this year,” claimed Nikolay Bekish, Seniour Economist of the Byelorussian railway.
In the words of the specialist, a long-term leasing scheme is being used to attract finances to enlarge the railway’s rolling stock park.
“The major target today is transportation of export goods. Already now we suffer from a continual lack of rolling stock. If earlier we said that we have enough wagons for 20 years of economic development, today the economy has left us far behind,” stated the Byelorussian railway representative.
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Standardisation for RZD
On May 23, 2008, Russian Railways signed a cooperation agreement with the Federal Agency for Technical Regulation and
Metrology.
The two sides concluded the agreement in order to establish cooperation on technical regulation and standardisation in rail transport. 
The parties intend to combine their efforts in the following main activities: 
• agreeing policy on the technical regulation of railways, including on the Russian Federation’s legislative and regulatory framework; 
• joint work on technical regulation and standardisation in the railway sector; 
• creation of a Technical Committee for Standardisation in Railway Transport, with a further delegation of its expert functions to the relevant structures of the International Standards Organisation (ISO), International Electrical Engineering Commission (IEEC), SEN and SENELEC from the Russian Federation; 
• the exchange of information resources on standardisation; 
• joint participation in scientific and technical councils, seminars and meetings on legal and regulatory matters, standardisation and accreditation compliance, international scientific and technical conferences, exhibitions and other events. 
The agreement came into effect on signing and will be valid for three years and can be rolled over upon expiry.

Moody’s upgrades outlook on Russian Railways to positive
Moody’s, the international rating agency, changed the outlook on Russian Railways from “stable” to “positive”.
The improved outlook is a result of the higher credit rating of the Russian Federation, which Moody’s has increased from “Baa2” to “Baa1” outlook “positive”. 
In early 2008, Moody’s confirmed the long-term rating of Russian Railways on its international scale in foreign currency at “A3”.

100 Mainline Locomotives for OAO RZD
Russian Railways and Transmashholding signed on May 21, 2008, an agreement for the supply of 100 new 2 TE25A Vityaz mainline locomotives with asynchronous traction. 
The total value of the contract is around RUR 15 billion, with dates and delivery schedules to be determined later. The 2 TE25A Vityaz locomotive with asynchronous traction was developed at the Bryansk Machine Building Plant (BMBP) using only Russia’s own domestic technology base. It is the first Russian freight locomotive with asynchronous traction control. The construction uses a diesel from the Kolomensky Locomotive Manufacturing Plant with electronic injection and a new bogie design. Trials of the first locomotive are currently being completed and the Certificate of Compliance is expected in 2008. During trials, the 2 TE25A Vityaz pulled trains weighing up to 7,800 tons, which is on a par with the best locomotives in the world and far ahead of the pulling power of locomotives which make up most of the fleet in CIS countries, such as the 2 TE10, which can pull approximately 5,200 tons. 
The main line locomotive is a new product not only for BMBP, but also for the Russian transport engineering industry as a whole. Serial production of this class of locomotives began in Russia in 2007 at the Kolomensky Plant (2 model TE70) and BMBP (model 2 TE25K Peresvet), both of which are owned by Transmashholding. 

Russian Railways implement environmental safety programme
OAO RZD is investing more than RUR 725 million in 2008 into the project “Ensuring Environmental Safety.” 
According to the investment programme, during the current year it is planned to carry out on the rail network the construction and reconstruction of 24 environmental protection facilities, 13 of which will be put into operation in 2008. In addition, it is also planned to develop designs and cost estimates for 24 environmental facilities to be built in 2009. 
The investment project “Ensuring Environmental Security” also provides for the purchase of 136 units of plant and equipment to clean up emissions and waste, 394 pieces of technical equipment to eliminate damage to the environment following accidents, 316 analytical instruments and measuring devices for environmental laboratories and 21 sets of special laboratory furniture, as well as nine mobile environmental laboratories mounted on cars.

New Terminal in Novorossiysk Port
At the end of July 2008, OAO Novorossiysk Commercial Sea Port announced that it had put into operation the Novorossiysk grain terminal to handle grain and oil-bearing crops. The capacity of the new terminal is 4 million tons per annum.
The volume of investment into the project amounted to USD 82.6 million.

TransGroup AS to Build a Logistics Centre in Sheremetyevo
OAO Sheremetyevo International Airport and transport and logistics company TransGroup AS are carrying out a joint project to build a large logistics centre. In the framework of the project, a new multimodal 10,000 sq. m. cargo terminal is to be constructed at Sheremetyevo airport in Moscow before the end of 2009. 
The project is carried out in accordance with the scaled national programme of Sheremetyevo airport reconstruction and modernisation. Its target is to improve the quality of services provided to passengers and air companies, and make the airport a modern hub. The contract for the terminal’s construction was signed by Mikhail Vasilenko, CEO of Sheremetyevo airport, and Maxim Liksutov, Chairman of the Board of Directors of OOO TransGroup AS. 

TransContainer Expands Services for Volkswagen
On July 3, 2008, the General Director of JSC TransContainer, Peter Baskakov, and the Managing Director of Volkswagen Rus, Friedrich-Wilhelm Lenz, signed an additional agreement to organise logistics services at the Volkswagen plant in Kaluga. 
This agreement supplements the contract signed by the two companies in November 2007 for the transportation of VW Passat, VW Jetta, VW Tiguan, and Skoda components for vehicle assembly from the cities of Kosice (Slovakia) and Mlada Boleslav (Czech Republic) to the Volkswagen plant in Kaluga. 
“Under the new agreement, the loading and unloading of containers at the plant will be performed by TransContainer. We plan to provide integrated logistics services to the Volkswagen concern as a third party logistics provider, and this agreement marks the beginning of our work along these lines,” said Peter Baskakov after the signing ceremony. 
He recalled that JSC TransContainer has opened its fully functional agency at Kaluga Station. “This agency is operated by 10 employees of our company, but we are now increasing its staff to 50, with the partial placement of offices within the plant, to improve our service efficiency. The range of services offered to Volkswagen will be expanded in the very near future: in particular, we will coordinate all loading/unloading operations at the plant, handle documentation, etc. Thus, our company is being integrated into the vehicle production process,” emphasised Mr Baskakov. 
Since the beginning of the year, TransContainer has transported about 17,500 TEU of Volkswagen components. Its partner in this project is the German company Schenker Automotive Railnet, a subsidiary of Deutsche Bahn AG. 

The RF Ministry of Economic Development Agrees to Sell 25% of Refservice
The Russian Ministry of Economic Development gave to the Government a draft document on the sale of a 25% shareholding in Refservice (a daughter company of OAO RZD which specialises in transportation of perishables). Before that, the Ministry suggested reviewing the terms of Refservice’s privatisation, defined by the Russian Railways’ Board of Directors at the end of November 2007. According to them, a 25% shareholding of the daughter company of OAO RZD was to be sold at an open auction.
The Ministry of Economic Development wanted to enlarge the shareholding to 50%, saying that it was necessary to attract a strategic investor. “In the document we approved the sale of 25% of the company’s authorised stock at an auction. Now the Government is discussing the reasonability of such a solution,” said an official from the Ministry. Meanwhile, the Ministry obliged OAO RZD to attract “professional market players” to the auction. The starting price of the blocking shareholding of Refservice, estimated by OAO RZD’s Board of Directors at RUR 872.87 million (USD 37.2 million) is to be changed. The shares of the company will be re-estimated, and the market cost of the blocking shareholding will be the starting price at the auction.

Appointments in Russian Railways’ Top Management
Alexander Zhukov, Russian Vice Prime Minister, was elected Chairman of the Board of Directors of OAO RZD. The Chairman of Russian Railways’ Board of Directors is elected every year. The meeting of the Board took place in early August, and in the five years of the company’s existence, Alexander Zhukov has headed OAO RZD’s Board of Directors four times.
Earlier, in June, Vladimir Putin, Prime Minister of the RF Government, appointed Vladimir Yakunin the President of OAO RZD for another three-year term. According to the Code of OAO RZD (100% shareholding of the company is owned by the Russian Federation), the company’s President is appointed and relieved by the RF Government.
According to the decision of the Board of Directors and a decree of the President of OAO RZD, Valentin Gapanovich was appointed Senior Vice President of Russian Railways. In the new position he is responsible for the company’s technical policy issues. 
The President of OAO RZD in his decree appointed Alexey Vorotilkin a Vice President of the company. Earlier Mr Vorotilkin was the Head of the East-Siberian Railway (an affiliate of OAO RZD). Now, Alexey Vorotilkin is in charge of the company’s locomotive and wagon affairs.

Year of Tank-Wagons for Byelorussian Railway
This year the Byelorussian railway is going to purchase 1,000 tank-wagons for oil bulk transportation.
“We analysed our demands and decided that new tank-wagons are especially important for us this year,” claimed Nikolay Bekish, Seniour Economist of the Byelorussian railway.
In the words of the specialist, a long-term leasing scheme is being used to attract finances to enlarge the railway’s rolling stock park.
“The major target today is transportation of export goods. Already now we suffer from a continual lack of rolling stock. If earlier we said that we have enough wagons for 20 years of economic development, today the economy has left us far behind,” stated the Byelorussian railway representative.
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Standardisation for RZD
On May 23, 2008, Russian Railways signed a cooperation agreement with the Federal Agency for Technical Regulation and
Metrology.
The two sides concluded the agreement in order to establish cooperation on technical regulation and standardisation in rail transport. 
The parties intend to combine their efforts in the following main activities: 
• agreeing policy on the technical regulation of railways, including on the Russian Federation’s legislative and regulatory framework; 
• joint work on technical regulation and standardisation in the railway sector; 
• creation of a Technical Committee for Standardisation in Railway Transport, with a further delegation of its expert functions to the relevant structures of the International Standards Organisation (ISO), International Electrical Engineering Commission (IEEC), SEN and SENELEC from the Russian Federation; 
• the exchange of information resources on standardisation; 
• joint participation in scientific and technical councils, seminars and meetings on legal and regulatory matters, standardisation and accreditation compliance, international scientific and technical conferences, exhibitions and other events. 
The agreement came into effect on signing and will be valid for three years and can be rolled over upon expiry.

Moody’s upgrades outlook on Russian Railways to positive
Moody’s, the international rating agency, changed the outlook on Russian Railways from “stable” to “positive”.
The improved outlook is a result of the higher credit rating of the Russian Federation, which Moody’s has increased from “Baa2” to “Baa1” outlook “positive”. 
In early 2008, Moody’s confirmed the long-term rating of Russian Railways on its international scale in foreign currency at “A3”.

100 Mainline Locomotives for OAO RZD
Russian Railways and Transmashholding signed on May 21, 2008, an agreement for the supply of 100 new 2 TE25A Vityaz mainline locomotives with asynchronous traction. 
The total value of the contract is around RUR 15 billion, with dates and delivery schedules to be determined later. The 2 TE25A Vityaz locomotive with asynchronous traction was developed at the Bryansk Machine Building Plant (BMBP) using only Russia’s own domestic technology base. It is the first Russian freight locomotive with asynchronous traction control. The construction uses a diesel from the Kolomensky Locomotive Manufacturing Plant with electronic injection and a new bogie design. Trials of the first locomotive are currently being completed and the Certificate of Compliance is expected in 2008. During trials, the 2 TE25A Vityaz pulled trains weighing up to 7,800 tons, which is on a par with the best locomotives in the world and far ahead of the pulling power of locomotives which make up most of the fleet in CIS countries, such as the 2 TE10, which can pull approximately 5,200 tons. 
The main line locomotive is a new product not only for BMBP, but also for the Russian transport engineering industry as a whole. Serial production of this class of locomotives began in Russia in 2007 at the Kolomensky Plant (2 model TE70) and BMBP (model 2 TE25K Peresvet), both of which are owned by Transmashholding. 

Russian Railways implement environmental safety programme
OAO RZD is investing more than RUR 725 million in 2008 into the project “Ensuring Environmental Safety.” 
According to the investment programme, during the current year it is planned to carry out on the rail network the construction and reconstruction of 24 environmental protection facilities, 13 of which will be put into operation in 2008. In addition, it is also planned to develop designs and cost estimates for 24 environmental facilities to be built in 2009. 
The investment project “Ensuring Environmental Security” also provides for the purchase of 136 units of plant and equipment to clean up emissions and waste, 394 pieces of technical equipment to eliminate damage to the environment following accidents, 316 analytical instruments and measuring devices for environmental laboratories and 21 sets of special laboratory furniture, as well as nine mobile environmental laboratories mounted on cars.

New Terminal in Novorossiysk Port
At the end of July 2008, OAO Novorossiysk Commercial Sea Port announced that it had put into operation the Novorossiysk grain terminal to handle grain and oil-bearing crops. The capacity of the new terminal is 4 million tons per annum.
The volume of investment into the project amounted to USD 82.6 million.

TransGroup AS to Build a Logistics Centre in Sheremetyevo
OAO Sheremetyevo International Airport and transport and logistics company TransGroup AS are carrying out a joint project to build a large logistics centre. In the framework of the project, a new multimodal 10,000 sq. m. cargo terminal is to be constructed at Sheremetyevo airport in Moscow before the end of 2009. 
The project is carried out in accordance with the scaled national programme of Sheremetyevo airport reconstruction and modernisation. Its target is to improve the quality of services provided to passengers and air companies, and make the airport a modern hub. The contract for the terminal’s construction was signed by Mikhail Vasilenko, CEO of Sheremetyevo airport, and Maxim Liksutov, Chairman of the Board of Directors of OOO TransGroup AS. 

TransContainer Expands Services for Volkswagen
On July 3, 2008, the General Director of JSC TransContainer, Peter Baskakov, and the Managing Director of Volkswagen Rus, Friedrich-Wilhelm Lenz, signed an additional agreement to organise logistics services at the Volkswagen plant in Kaluga. 
This agreement supplements the contract signed by the two companies in November 2007 for the transportation of VW Passat, VW Jetta, VW Tiguan, and Skoda components for vehicle assembly from the cities of Kosice (Slovakia) and Mlada Boleslav (Czech Republic) to the Volkswagen plant in Kaluga. 
“Under the new agreement, the loading and unloading of containers at the plant will be performed by TransContainer. We plan to provide integrated logistics services to the Volkswagen concern as a third party logistics provider, and this agreement marks the beginning of our work along these lines,” said Peter Baskakov after the signing ceremony. 
He recalled that JSC TransContainer has opened its fully functional agency at Kaluga Station. “This agency is operated by 10 employees of our company, but we are now increasing its staff to 50, with the partial placement of offices within the plant, to improve our service efficiency. The range of services offered to Volkswagen will be expanded in the very near future: in particular, we will coordinate all loading/unloading operations at the plant, handle documentation, etc. Thus, our company is being integrated into the vehicle production process,” emphasised Mr Baskakov. 
Since the beginning of the year, TransContainer has transported about 17,500 TEU of Volkswagen components. Its partner in this project is the German company Schenker Automotive Railnet, a subsidiary of Deutsche Bahn AG. 

The RF Ministry of Economic Development Agrees to Sell 25% of Refservice
The Russian Ministry of Economic Development gave to the Government a draft document on the sale of a 25% shareholding in Refservice (a daughter company of OAO RZD which specialises in transportation of perishables). Before that, the Ministry suggested reviewing the terms of Refservice’s privatisation, defined by the Russian Railways’ Board of Directors at the end of November 2007. According to them, a 25% shareholding of the daughter company of OAO RZD was to be sold at an open auction.
The Ministry of Economic Development wanted to enlarge the shareholding to 50%, saying that it was necessary to attract a strategic investor. “In the document we approved the sale of 25% of the company’s authorised stock at an auction. Now the Government is discussing the reasonability of such a solution,” said an official from the Ministry. Meanwhile, the Ministry obliged OAO RZD to attract “professional market players” to the auction. The starting price of the blocking shareholding of Refservice, estimated by OAO RZD’s Board of Directors at RUR 872.87 million (USD 37.2 million) is to be changed. The shares of the company will be re-estimated, and the market cost of the blocking shareholding will be the starting price at the auction.

Appointments in Russian Railways’ Top Management
Alexander Zhukov, Russian Vice Prime Minister, was elected Chairman of the Board of Directors of OAO RZD. The Chairman of Russian Railways’ Board of Directors is elected every year. The meeting of the Board took place in early August, and in the five years of the company’s existence, Alexander Zhukov has headed OAO RZD’s Board of Directors four times.
Earlier, in June, Vladimir Putin, Prime Minister of the RF Government, appointed Vladimir Yakunin the President of OAO RZD for another three-year term. According to the Code of OAO RZD (100% shareholding of the company is owned by the Russian Federation), the company’s President is appointed and relieved by the RF Government.
According to the decision of the Board of Directors and a decree of the President of OAO RZD, Valentin Gapanovich was appointed Senior Vice President of Russian Railways. In the new position he is responsible for the company’s technical policy issues. 
The President of OAO RZD in his decree appointed Alexey Vorotilkin a Vice President of the company. Earlier Mr Vorotilkin was the Head of the East-Siberian Railway (an affiliate of OAO RZD). Now, Alexey Vorotilkin is in charge of the company’s locomotive and wagon affairs.

Year of Tank-Wagons for Byelorussian Railway
This year the Byelorussian railway is going to purchase 1,000 tank-wagons for oil bulk transportation.
“We analysed our demands and decided that new tank-wagons are especially important for us this year,” claimed Nikolay Bekish, Seniour Economist of the Byelorussian railway.
In the words of the specialist, a long-term leasing scheme is being used to attract finances to enlarge the railway’s rolling stock park.
“The major target today is transportation of export goods. Already now we suffer from a continual lack of rolling stock. If earlier we said that we have enough wagons for 20 years of economic development, today the economy has left us far behind,” stated the Byelorussian railway representative.
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Number of boxes grows. Is there room for all of them?
The process of freight flow containerisation in Russia is falling behind the rest of the world. Nowadays, the share of containerised cargo in the total throughput of RF sea ports is about 16%. Meanwhile, in Europe, the figure is 60%. Nevertheless, the Russian container market continues to develop radically. In the last four years, the container turnover of sea ports more than doubled – from 1.4 million to 3.1 million TEU. On the whole, the annual growth of container volume carried via sea ports amounted to 20-25%.

The tendency remains the same this year, as the figures prove. In H1 of 2008, the container throughput of OAO The First Container Terminal (FCT) grew by 14.5% year-on-year to 528,300 TEU. The growth of the terminal of OOO Mobi Dick was similar. OAO Petrolesport (PLP) handled 2.4 million tons of containerised cargo or 250,000 TEU – 27% up year-on-year. The throughput of OOO Vostochnaya Stevedoring Company rose by 16% to 203,400 TEU.

OAO Novorossiysk Nodal Transport and Forwarding Enterprise (NUTEP) was the only company whose throughput fell. In the first six months of 2008, its container turnover was 65,600 TEU (-0.3%). The fall was caused by a change of strategy by MSC container carrier, which is targeted at diversification of the service in the Novorossiysk port, and including Novoroslesexport terminal into its schedule. Meanwhile, as specialists at OOO National Container Company (NCC, runs NUTEP) say, a partial unloading of the container terminal allowed for a fixed berth gap for Maersk.

Experts forecast that Russian terminals will increase container throughput in 2008. In the opinion of analysts, significant transportation growth will take place, due to including export freight flows in containerisation. It is worth noting that the volume of container imports is increasing very fast – at twice the rate of container exports. It can be explained by the heterogeneity of incoming and outgoing production. Russian companies supply a lot of raw materials to the global market, and the share of containerised freight is very small. For example, last year export made up only 6.5% of the total dry cargo volume handled in containers.

North-West: The Container Capital of Russia
According to experts’ forecasts, the container turnover in Russian sea ports may amount to 6 million TEU in 2010. But infrastructure modernisation is necessary to reach this result. Already now the shortage of port capacity in this sector restrains the process of containerisation in the country.

Nowadays, about 80% of container business in Russia is controlled by two large transport groups – FESCO and N-Trans. Almost all large-scale projects to develop sea container terminal infrastructure are connected with these companies.

Investors prefer to invest their permanent assets in modernisation and construction of new capacities in the north-western region because the larger share of container flow is handled there. For example, in 2007 the north-western sea terminals handled 62.7% of the total volume of containerised cargo carried via Russian sea ports. 

Specialist believe the most interesting and promising project is in the port of Ust-Luga. There, NCC is carrying out the largest construction project in Russia and the CIS – Baltic Container Terminal (BCT). Initially its capacity will be 200,000 TEU, but by 2019 it is to increase to 3 million TEU. The first stage is to be put into operation at the end of 2008. The total investment volume will exceed USD 800 million. In the words of Evgeny Yuzhilin, Vice President for terminal development, NCC, the BCT in Ust-Luga will have several important advantages. “Firstly, it will be connected to the back terminal, logistics complex and distribution warehouses by an advanced IT system and e-document turnover. Secondly, advanced technologies will create conditions for reducing the expenses of Russian consignors. Also, at the BCT there will be modern equipment involved in the container handling system. That will allow us to service 6,000 TEU vessels,” he says.

Simultaneously with construction of new capacities, the company is modernising existing ones. In particular, until 2012, the annual capacity of the FCT is to grow from 1 million TEU to 1.6 million TEU. The programme of development is evaluated at USD 180 million.

N-Trans has ambitious plans too. Last year it bought Petrolesport (one on the largest stevedoring companies in the big port of Saint Petersburg), and now the group of companies is going to increase its container turnover six-fold to 2.3 million TEU. USD 886 million is to be invested in the terminal. The investment programme envisages creation of a new territory with an area of 15 hectares, and construction of new deep-sea berths and a refrigerated container terminal. Moreover, it is planned to enlarge the existing vehicle checkpoints, to construct a new freight front, three-level motor and railway junction and a buffer storage area near a projected motorway slip road on the Western High Speed Diameter. 

N-Trans in cooperation with Finnish company Container Finance Group is carrying out an investment programme to develop container terminal Mobi Dick in Kronshtadt (a suburb of Saint Petersburg). The project is to be completed in 2013.

Far East and South: Investments in Future Growth
A number of companies are showing interest in development of the terminals in the North-West, but the situation in the Far Eastern and Southern basin is different. In 2007, the Black Sea ports handled 371,100 TEU, a 40% increase year-on-year. NUTEP handled the major share of container turnover in the region. Nowadays, the throughput of the terminal is approximately 150,000 TEU. In the near future the figure is to grow by 250%. According to the development concept envisaged, the capacity of the terminal is to amount to 550,000 TEU by 2014. Specialists forecast that its capacity will amount to 190,000 TEU in 2008, up 50% year-on-year.

The NCC managing company announced that investment in developing NUTEP container terminal will amount to more than USD 140 million. The funds will be spent on design and construction and equipment renewal. In particular, the waterside with be lengthened and deepened; an area for storing refrigerated containers will be built; and new loaders will be purchased. Also it is planned to optimise the usage of the container warehouse by installing a Rubber Tire Gantry (RTG) and Rail-Mounted Gantry (RMG) instead of reach stackers.

In the Far Eastern region, containers are handled mainly by N-Trans in cooperation with port operator DP World. The companies are co-shareholders of the VSC (Vostochnaya Stevedoring Company). In 2007, the throughput of the terminal grew by 27% to 370,000 TEU. And in January-June 2008 it handled 203,400 TEU, up 16% year-on-year.

Nowadays, the capacity of the terminal is 650,000 TEU. In spite of the fact that the VSC is underloaded, the managing company continues to carry out the developing programme. “The growth of the container market in the Far East will provide a stable growth in volume handled by the VSC in several years’ time. And the volume may exceed the capacity of the terminal. Thus, the terminal must be ready to fulfill market demand for container handling. The total volume of investment will amount to USD 460 million, so the terminal capacity will increase to 2.2 million TEU,” explains John Skurtis, Director General of OOO VSC.

A lot of experts share the opinion of Mr Skurtis about the rapid development of container transportation in the Far East. The growth in container turnover will be 20-25% per annum. Specialists at ZAO MorcentreTEK believe that in 2015 the capacity of container terminals, taking into consideration the construction of new capacities and modernisation of existing ones, will increase five-fold and amount to 15-17 million TEU annually. In the words of the analysts, the shares of the North-Western, Southern and Far Eastern basins will remain the same (60%, 20% and 20% respectively). 

Viewpoint
Anatoly Shutka, 
Adviser to the Director General,  ZAO MorcentreTEK:
– There must be no barriers against modernisation and construction of container terminals. And the previous Federal target programme for ports development proved it.
Meanwhile, to develop container transportation via Russian sea ports it is necessary to speed up the process of customs registration of containers. Secondly, the companies should continue to enlarge the container park in Russia and construct container flat wagons using all the opportunities provided by OAO RZD, consignors and operators. Thirdly, the construction of container terminals and logistics centres with railway and motor approaches should be continued in large industrial centres.

John Skurtis, 
Director General, OOO Vostochnaya Stevedoring Company:
– The container flow carried via the terminal of the VSC may be increased only if all the efforts of all the handling process participants are consolidated. To do it, the Coordinating Council for Container Transportation in Vostochny port recommenced its work. The members of the Council are the top managers of the VSC container terminal, the Sea Administration of Vostochny port, Nakhodka-Vostochnaya railway station, Nakhodka customs, the administrators of the customs terminal “Sea Port Vostochny” and the forwarding companies operating on the territory of the VSC. 
The list of the most important targets includes optimisation of the processes of loading rolling stock for delivery, development of railway infrastructure at the port station, enlargement of the area where accumulating and sorting containers takes place and improvement of customs screening procedures.

Egor Govorukhin, 
Vice President for Commercial Work, OOO National Container Company:
– When any terminal is put into operation, one of the most important things is fulfillment of state obligations on construction of approaches to a port, i.e. external infrastructure development on time and in accordance with the requirements of the terminal. It is very important to get all necessary agreements and permissions on time. Unfortunately, now such “paper” problems are solved very slowly, which hampers terminal construction. The acting legislative base and the practice of applying the adopted laws are not enough to solve them.
For example, we faced such a problem when building a container terminal in Ust-Luga port. Not observing the laws and the uncoordinated actions of officials and investors may cause delays, and construction of a new port may drag on for some time.
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Number of boxes grows. Is there room for all of them?
The process of freight flow containerisation in Russia is falling behind the rest of the world. Nowadays, the share of containerised cargo in the total throughput of RF sea ports is about 16%. Meanwhile, in Europe, the figure is 60%. Nevertheless, the Russian container market continues to develop radically. In the last four years, the container turnover of sea ports more than doubled – from 1.4 million to 3.1 million TEU. On the whole, the annual growth of container volume carried via sea ports amounted to 20-25%.

The tendency remains the same this year, as the figures prove. In H1 of 2008, the container throughput of OAO The First Container Terminal (FCT) grew by 14.5% year-on-year to 528,300 TEU. The growth of the terminal of OOO Mobi Dick was similar. OAO Petrolesport (PLP) handled 2.4 million tons of containerised cargo or 250,000 TEU – 27% up year-on-year. The throughput of OOO Vostochnaya Stevedoring Company rose by 16% to 203,400 TEU.

OAO Novorossiysk Nodal Transport and Forwarding Enterprise (NUTEP) was the only company whose throughput fell. In the first six months of 2008, its container turnover was 65,600 TEU (-0.3%). The fall was caused by a change of strategy by MSC container carrier, which is targeted at diversification of the service in the Novorossiysk port, and including Novoroslesexport terminal into its schedule. Meanwhile, as specialists at OOO National Container Company (NCC, runs NUTEP) say, a partial unloading of the container terminal allowed for a fixed berth gap for Maersk.

Experts forecast that Russian terminals will increase container throughput in 2008. In the opinion of analysts, significant transportation growth will take place, due to including export freight flows in containerisation. It is worth noting that the volume of container imports is increasing very fast – at twice the rate of container exports. It can be explained by the heterogeneity of incoming and outgoing production. Russian companies supply a lot of raw materials to the global market, and the share of containerised freight is very small. For example, last year export made up only 6.5% of the total dry cargo volume handled in containers.

North-West: The Container Capital of Russia
According to experts’ forecasts, the container turnover in Russian sea ports may amount to 6 million TEU in 2010. But infrastructure modernisation is necessary to reach this result. Already now the shortage of port capacity in this sector restrains the process of containerisation in the country.

Nowadays, about 80% of container business in Russia is controlled by two large transport groups – FESCO and N-Trans. Almost all large-scale projects to develop sea container terminal infrastructure are connected with these companies.

Investors prefer to invest their permanent assets in modernisation and construction of new capacities in the north-western region because the larger share of container flow is handled there. For example, in 2007 the north-western sea terminals handled 62.7% of the total volume of containerised cargo carried via Russian sea ports. 

Specialist believe the most interesting and promising project is in the port of Ust-Luga. There, NCC is carrying out the largest construction project in Russia and the CIS – Baltic Container Terminal (BCT). Initially its capacity will be 200,000 TEU, but by 2019 it is to increase to 3 million TEU. The first stage is to be put into operation at the end of 2008. The total investment volume will exceed USD 800 million. In the words of Evgeny Yuzhilin, Vice President for terminal development, NCC, the BCT in Ust-Luga will have several important advantages. “Firstly, it will be connected to the back terminal, logistics complex and distribution warehouses by an advanced IT system and e-document turnover. Secondly, advanced technologies will create conditions for reducing the expenses of Russian consignors. Also, at the BCT there will be modern equipment involved in the container handling system. That will allow us to service 6,000 TEU vessels,” he says.

Simultaneously with construction of new capacities, the company is modernising existing ones. In particular, until 2012, the annual capacity of the FCT is to grow from 1 million TEU to 1.6 million TEU. The programme of development is evaluated at USD 180 million.

N-Trans has ambitious plans too. Last year it bought Petrolesport (one on the largest stevedoring companies in the big port of Saint Petersburg), and now the group of companies is going to increase its container turnover six-fold to 2.3 million TEU. USD 886 million is to be invested in the terminal. The investment programme envisages creation of a new territory with an area of 15 hectares, and construction of new deep-sea berths and a refrigerated container terminal. Moreover, it is planned to enlarge the existing vehicle checkpoints, to construct a new freight front, three-level motor and railway junction and a buffer storage area near a projected motorway slip road on the Western High Speed Diameter. 

N-Trans in cooperation with Finnish company Container Finance Group is carrying out an investment programme to develop container terminal Mobi Dick in Kronshtadt (a suburb of Saint Petersburg). The project is to be completed in 2013.

Far East and South: Investments in Future Growth
A number of companies are showing interest in development of the terminals in the North-West, but the situation in the Far Eastern and Southern basin is different. In 2007, the Black Sea ports handled 371,100 TEU, a 40% increase year-on-year. NUTEP handled the major share of container turnover in the region. Nowadays, the throughput of the terminal is approximately 150,000 TEU. In the near future the figure is to grow by 250%. According to the development concept envisaged, the capacity of the terminal is to amount to 550,000 TEU by 2014. Specialists forecast that its capacity will amount to 190,000 TEU in 2008, up 50% year-on-year.

The NCC managing company announced that investment in developing NUTEP container terminal will amount to more than USD 140 million. The funds will be spent on design and construction and equipment renewal. In particular, the waterside with be lengthened and deepened; an area for storing refrigerated containers will be built; and new loaders will be purchased. Also it is planned to optimise the usage of the container warehouse by installing a Rubber Tire Gantry (RTG) and Rail-Mounted Gantry (RMG) instead of reach stackers.

In the Far Eastern region, containers are handled mainly by N-Trans in cooperation with port operator DP World. The companies are co-shareholders of the VSC (Vostochnaya Stevedoring Company). In 2007, the throughput of the terminal grew by 27% to 370,000 TEU. And in January-June 2008 it handled 203,400 TEU, up 16% year-on-year.

Nowadays, the capacity of the terminal is 650,000 TEU. In spite of the fact that the VSC is underloaded, the managing company continues to carry out the developing programme. “The growth of the container market in the Far East will provide a stable growth in volume handled by the VSC in several years’ time. And the volume may exceed the capacity of the terminal. Thus, the terminal must be ready to fulfill market demand for container handling. The total volume of investment will amount to USD 460 million, so the terminal capacity will increase to 2.2 million TEU,” explains John Skurtis, Director General of OOO VSC.

A lot of experts share the opinion of Mr Skurtis about the rapid development of container transportation in the Far East. The growth in container turnover will be 20-25% per annum. Specialists at ZAO MorcentreTEK believe that in 2015 the capacity of container terminals, taking into consideration the construction of new capacities and modernisation of existing ones, will increase five-fold and amount to 15-17 million TEU annually. In the words of the analysts, the shares of the North-Western, Southern and Far Eastern basins will remain the same (60%, 20% and 20% respectively). 

Viewpoint
Anatoly Shutka, 
Adviser to the Director General,  ZAO MorcentreTEK:
– There must be no barriers against modernisation and construction of container terminals. And the previous Federal target programme for ports development proved it.
Meanwhile, to develop container transportation via Russian sea ports it is necessary to speed up the process of customs registration of containers. Secondly, the companies should continue to enlarge the container park in Russia and construct container flat wagons using all the opportunities provided by OAO RZD, consignors and operators. Thirdly, the construction of container terminals and logistics centres with railway and motor approaches should be continued in large industrial centres.

John Skurtis, 
Director General, OOO Vostochnaya Stevedoring Company:
– The container flow carried via the terminal of the VSC may be increased only if all the efforts of all the handling process participants are consolidated. To do it, the Coordinating Council for Container Transportation in Vostochny port recommenced its work. The members of the Council are the top managers of the VSC container terminal, the Sea Administration of Vostochny port, Nakhodka-Vostochnaya railway station, Nakhodka customs, the administrators of the customs terminal “Sea Port Vostochny” and the forwarding companies operating on the territory of the VSC. 
The list of the most important targets includes optimisation of the processes of loading rolling stock for delivery, development of railway infrastructure at the port station, enlargement of the area where accumulating and sorting containers takes place and improvement of customs screening procedures.

Egor Govorukhin, 
Vice President for Commercial Work, OOO National Container Company:
– When any terminal is put into operation, one of the most important things is fulfillment of state obligations on construction of approaches to a port, i.e. external infrastructure development on time and in accordance with the requirements of the terminal. It is very important to get all necessary agreements and permissions on time. Unfortunately, now such “paper” problems are solved very slowly, which hampers terminal construction. The acting legislative base and the practice of applying the adopted laws are not enough to solve them.
For example, we faced such a problem when building a container terminal in Ust-Luga port. Not observing the laws and the uncoordinated actions of officials and investors may cause delays, and construction of a new port may drag on for some time.
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Number of boxes grows. Is there room for all of them?
The process of freight flow containerisation in Russia is falling behind the rest of the world. Nowadays, the share of containerised cargo in the total throughput of RF sea ports is about 16%. Meanwhile, in Europe, the figure is 60%. Nevertheless, the Russian container market continues to develop radically. In the last four years, the container turnover of sea ports more than doubled – from 1.4 million to 3.1 million TEU. On the whole, the annual growth of container volume carried via sea ports amounted to 20-25%.

The tendency remains the same this year, as the figures prove. In H1 of 2008, the container throughput of OAO The First Container Terminal (FCT) grew by 14.5% year-on-year to 528,300 TEU. The growth of the terminal of OOO Mobi Dick was similar. OAO Petrolesport (PLP) handled 2.4 million tons of containerised cargo or 250,000 TEU – 27% up year-on-year. The throughput of OOO Vostochnaya Stevedoring Company rose by 16% to 203,400 TEU.

OAO Novorossiysk Nodal Transport and Forwarding Enterprise (NUTEP) was the only company whose throughput fell. In the first six months of 2008, its container turnover was 65,600 TEU (-0.3%). The fall was caused by a change of strategy by MSC container carrier, which is targeted at diversification of the service in the Novorossiysk port, and including Novoroslesexport terminal into its schedule. Meanwhile, as specialists at OOO National Container Company (NCC, runs NUTEP) say, a partial unloading of the container terminal allowed for a fixed berth gap for Maersk.

Experts forecast that Russian terminals will increase container throughput in 2008. In the opinion of analysts, significant transportation growth will take place, due to including export freight flows in containerisation. It is worth noting that the volume of container imports is increasing very fast – at twice the rate of container exports. It can be explained by the heterogeneity of incoming and outgoing production. Russian companies supply a lot of raw materials to the global market, and the share of containerised freight is very small. For example, last year export made up only 6.5% of the total dry cargo volume handled in containers.

North-West: The Container Capital of Russia
According to experts’ forecasts, the container turnover in Russian sea ports may amount to 6 million TEU in 2010. But infrastructure modernisation is necessary to reach this result. Already now the shortage of port capacity in this sector restrains the process of containerisation in the country.

Nowadays, about 80% of container business in Russia is controlled by two large transport groups – FESCO and N-Trans. Almost all large-scale projects to develop sea container terminal infrastructure are connected with these companies.

Investors prefer to invest their permanent assets in modernisation and construction of new capacities in the north-western region because the larger share of container flow is handled there. For example, in 2007 the north-western sea terminals handled 62.7% of the total volume of containerised cargo carried via Russian sea ports. 

Specialist believe the most interesting and promising project is in the port of Ust-Luga. There, NCC is carrying out the largest construction project in Russia and the CIS – Baltic Container Terminal (BCT). Initially its capacity will be 200,000 TEU, but by 2019 it is to increase to 3 million TEU. The first stage is to be put into operation at the end of 2008. The total investment volume will exceed USD 800 million. In the words of Evgeny Yuzhilin, Vice President for terminal development, NCC, the BCT in Ust-Luga will have several important advantages. “Firstly, it will be connected to the back terminal, logistics complex and distribution warehouses by an advanced IT system and e-document turnover. Secondly, advanced technologies will create conditions for reducing the expenses of Russian consignors. Also, at the BCT there will be modern equipment involved in the container handling system. That will allow us to service 6,000 TEU vessels,” he says.

Simultaneously with construction of new capacities, the company is modernising existing ones. In particular, until 2012, the annual capacity of the FCT is to grow from 1 million TEU to 1.6 million TEU. The programme of development is evaluated at USD 180 million.

N-Trans has ambitious plans too. Last year it bought Petrolesport (one on the largest stevedoring companies in the big port of Saint Petersburg), and now the group of companies is going to increase its container turnover six-fold to 2.3 million TEU. USD 886 million is to be invested in the terminal. The investment programme envisages creation of a new territory with an area of 15 hectares, and construction of new deep-sea berths and a refrigerated container terminal. Moreover, it is planned to enlarge the existing vehicle checkpoints, to construct a new freight front, three-level motor and railway junction and a buffer storage area near a projected motorway slip road on the Western High Speed Diameter. 

N-Trans in cooperation with Finnish company Container Finance Group is carrying out an investment programme to develop container terminal Mobi Dick in Kronshtadt (a suburb of Saint Petersburg). The project is to be completed in 2013.

Far East and South: Investments in Future Growth
A number of companies are showing interest in development of the terminals in the North-West, but the situation in the Far Eastern and Southern basin is different. In 2007, the Black Sea ports handled 371,100 TEU, a 40% increase year-on-year. NUTEP handled the major share of container turnover in the region. Nowadays, the throughput of the terminal is approximately 150,000 TEU. In the near future the figure is to grow by 250%. According to the development concept envisaged, the capacity of the terminal is to amount to 550,000 TEU by 2014. Specialists forecast that its capacity will amount to 190,000 TEU in 2008, up 50% year-on-year.

The NCC managing company announced that investment in developing NUTEP container terminal will amount to more than USD 140 million. The funds will be spent on design and construction and equipment renewal. In particular, the waterside with be lengthened and deepened; an area for storing refrigerated containers will be built; and new loaders will be purchased. Also it is planned to optimise the usage of the container warehouse by installing a Rubber Tire Gantry (RTG) and Rail-Mounted Gantry (RMG) instead of reach stackers.

In the Far Eastern region, containers are handled mainly by N-Trans in cooperation with port operator DP World. The companies are co-shareholders of the VSC (Vostochnaya Stevedoring Company). In 2007, the throughput of the terminal grew by 27% to 370,000 TEU. And in January-June 2008 it handled 203,400 TEU, up 16% year-on-year.

Nowadays, the capacity of the terminal is 650,000 TEU. In spite of the fact that the VSC is underloaded, the managing company continues to carry out the developing programme. “The growth of the container market in the Far East will provide a stable growth in volume handled by the VSC in several years’ time. And the volume may exceed the capacity of the terminal. Thus, the terminal must be ready to fulfill market demand for container handling. The total volume of investment will amount to USD 460 million, so the terminal capacity will increase to 2.2 million TEU,” explains John Skurtis, Director General of OOO VSC.

A lot of experts share the opinion of Mr Skurtis about the rapid development of container transportation in the Far East. The growth in container turnover will be 20-25% per annum. Specialists at ZAO MorcentreTEK believe that in 2015 the capacity of container terminals, taking into consideration the construction of new capacities and modernisation of existing ones, will increase five-fold and amount to 15-17 million TEU annually. In the words of the analysts, the shares of the North-Western, Southern and Far Eastern basins will remain the same (60%, 20% and 20% respectively). 

Viewpoint
Anatoly Shutka, 
Adviser to the Director General,  ZAO MorcentreTEK:
– There must be no barriers against modernisation and construction of container terminals. And the previous Federal target programme for ports development proved it.
Meanwhile, to develop container transportation via Russian sea ports it is necessary to speed up the process of customs registration of containers. Secondly, the companies should continue to enlarge the container park in Russia and construct container flat wagons using all the opportunities provided by OAO RZD, consignors and operators. Thirdly, the construction of container terminals and logistics centres with railway and motor approaches should be continued in large industrial centres.

John Skurtis, 
Director General, OOO Vostochnaya Stevedoring Company:
– The container flow carried via the terminal of the VSC may be increased only if all the efforts of all the handling process participants are consolidated. To do it, the Coordinating Council for Container Transportation in Vostochny port recommenced its work. The members of the Council are the top managers of the VSC container terminal, the Sea Administration of Vostochny port, Nakhodka-Vostochnaya railway station, Nakhodka customs, the administrators of the customs terminal “Sea Port Vostochny” and the forwarding companies operating on the territory of the VSC. 
The list of the most important targets includes optimisation of the processes of loading rolling stock for delivery, development of railway infrastructure at the port station, enlargement of the area where accumulating and sorting containers takes place and improvement of customs screening procedures.

Egor Govorukhin, 
Vice President for Commercial Work, OOO National Container Company:
– When any terminal is put into operation, one of the most important things is fulfillment of state obligations on construction of approaches to a port, i.e. external infrastructure development on time and in accordance with the requirements of the terminal. It is very important to get all necessary agreements and permissions on time. Unfortunately, now such “paper” problems are solved very slowly, which hampers terminal construction. The acting legislative base and the practice of applying the adopted laws are not enough to solve them.
For example, we faced such a problem when building a container terminal in Ust-Luga port. Not observing the laws and the uncoordinated actions of officials and investors may cause delays, and construction of a new port may drag on for some time.
    [~DETAIL_TEXT] => 
Number of boxes grows. Is there room for all of them?
The process of freight flow containerisation in Russia is falling behind the rest of the world. Nowadays, the share of containerised cargo in the total throughput of RF sea ports is about 16%. Meanwhile, in Europe, the figure is 60%. Nevertheless, the Russian container market continues to develop radically. In the last four years, the container turnover of sea ports more than doubled – from 1.4 million to 3.1 million TEU. On the whole, the annual growth of container volume carried via sea ports amounted to 20-25%.

The tendency remains the same this year, as the figures prove. In H1 of 2008, the container throughput of OAO The First Container Terminal (FCT) grew by 14.5% year-on-year to 528,300 TEU. The growth of the terminal of OOO Mobi Dick was similar. OAO Petrolesport (PLP) handled 2.4 million tons of containerised cargo or 250,000 TEU – 27% up year-on-year. The throughput of OOO Vostochnaya Stevedoring Company rose by 16% to 203,400 TEU.

OAO Novorossiysk Nodal Transport and Forwarding Enterprise (NUTEP) was the only company whose throughput fell. In the first six months of 2008, its container turnover was 65,600 TEU (-0.3%). The fall was caused by a change of strategy by MSC container carrier, which is targeted at diversification of the service in the Novorossiysk port, and including Novoroslesexport terminal into its schedule. Meanwhile, as specialists at OOO National Container Company (NCC, runs NUTEP) say, a partial unloading of the container terminal allowed for a fixed berth gap for Maersk.

Experts forecast that Russian terminals will increase container throughput in 2008. In the opinion of analysts, significant transportation growth will take place, due to including export freight flows in containerisation. It is worth noting that the volume of container imports is increasing very fast – at twice the rate of container exports. It can be explained by the heterogeneity of incoming and outgoing production. Russian companies supply a lot of raw materials to the global market, and the share of containerised freight is very small. For example, last year export made up only 6.5% of the total dry cargo volume handled in containers.

North-West: The Container Capital of Russia
According to experts’ forecasts, the container turnover in Russian sea ports may amount to 6 million TEU in 2010. But infrastructure modernisation is necessary to reach this result. Already now the shortage of port capacity in this sector restrains the process of containerisation in the country.

Nowadays, about 80% of container business in Russia is controlled by two large transport groups – FESCO and N-Trans. Almost all large-scale projects to develop sea container terminal infrastructure are connected with these companies.

Investors prefer to invest their permanent assets in modernisation and construction of new capacities in the north-western region because the larger share of container flow is handled there. For example, in 2007 the north-western sea terminals handled 62.7% of the total volume of containerised cargo carried via Russian sea ports. 

Specialist believe the most interesting and promising project is in the port of Ust-Luga. There, NCC is carrying out the largest construction project in Russia and the CIS – Baltic Container Terminal (BCT). Initially its capacity will be 200,000 TEU, but by 2019 it is to increase to 3 million TEU. The first stage is to be put into operation at the end of 2008. The total investment volume will exceed USD 800 million. In the words of Evgeny Yuzhilin, Vice President for terminal development, NCC, the BCT in Ust-Luga will have several important advantages. “Firstly, it will be connected to the back terminal, logistics complex and distribution warehouses by an advanced IT system and e-document turnover. Secondly, advanced technologies will create conditions for reducing the expenses of Russian consignors. Also, at the BCT there will be modern equipment involved in the container handling system. That will allow us to service 6,000 TEU vessels,” he says.

Simultaneously with construction of new capacities, the company is modernising existing ones. In particular, until 2012, the annual capacity of the FCT is to grow from 1 million TEU to 1.6 million TEU. The programme of development is evaluated at USD 180 million.

N-Trans has ambitious plans too. Last year it bought Petrolesport (one on the largest stevedoring companies in the big port of Saint Petersburg), and now the group of companies is going to increase its container turnover six-fold to 2.3 million TEU. USD 886 million is to be invested in the terminal. The investment programme envisages creation of a new territory with an area of 15 hectares, and construction of new deep-sea berths and a refrigerated container terminal. Moreover, it is planned to enlarge the existing vehicle checkpoints, to construct a new freight front, three-level motor and railway junction and a buffer storage area near a projected motorway slip road on the Western High Speed Diameter. 

N-Trans in cooperation with Finnish company Container Finance Group is carrying out an investment programme to develop container terminal Mobi Dick in Kronshtadt (a suburb of Saint Petersburg). The project is to be completed in 2013.

Far East and South: Investments in Future Growth
A number of companies are showing interest in development of the terminals in the North-West, but the situation in the Far Eastern and Southern basin is different. In 2007, the Black Sea ports handled 371,100 TEU, a 40% increase year-on-year. NUTEP handled the major share of container turnover in the region. Nowadays, the throughput of the terminal is approximately 150,000 TEU. In the near future the figure is to grow by 250%. According to the development concept envisaged, the capacity of the terminal is to amount to 550,000 TEU by 2014. Specialists forecast that its capacity will amount to 190,000 TEU in 2008, up 50% year-on-year.

The NCC managing company announced that investment in developing NUTEP container terminal will amount to more than USD 140 million. The funds will be spent on design and construction and equipment renewal. In particular, the waterside with be lengthened and deepened; an area for storing refrigerated containers will be built; and new loaders will be purchased. Also it is planned to optimise the usage of the container warehouse by installing a Rubber Tire Gantry (RTG) and Rail-Mounted Gantry (RMG) instead of reach stackers.

In the Far Eastern region, containers are handled mainly by N-Trans in cooperation with port operator DP World. The companies are co-shareholders of the VSC (Vostochnaya Stevedoring Company). In 2007, the throughput of the terminal grew by 27% to 370,000 TEU. And in January-June 2008 it handled 203,400 TEU, up 16% year-on-year.

Nowadays, the capacity of the terminal is 650,000 TEU. In spite of the fact that the VSC is underloaded, the managing company continues to carry out the developing programme. “The growth of the container market in the Far East will provide a stable growth in volume handled by the VSC in several years’ time. And the volume may exceed the capacity of the terminal. Thus, the terminal must be ready to fulfill market demand for container handling. The total volume of investment will amount to USD 460 million, so the terminal capacity will increase to 2.2 million TEU,” explains John Skurtis, Director General of OOO VSC.

A lot of experts share the opinion of Mr Skurtis about the rapid development of container transportation in the Far East. The growth in container turnover will be 20-25% per annum. Specialists at ZAO MorcentreTEK believe that in 2015 the capacity of container terminals, taking into consideration the construction of new capacities and modernisation of existing ones, will increase five-fold and amount to 15-17 million TEU annually. In the words of the analysts, the shares of the North-Western, Southern and Far Eastern basins will remain the same (60%, 20% and 20% respectively). 

Viewpoint
Anatoly Shutka, 
Adviser to the Director General,  ZAO MorcentreTEK:
– There must be no barriers against modernisation and construction of container terminals. And the previous Federal target programme for ports development proved it.
Meanwhile, to develop container transportation via Russian sea ports it is necessary to speed up the process of customs registration of containers. Secondly, the companies should continue to enlarge the container park in Russia and construct container flat wagons using all the opportunities provided by OAO RZD, consignors and operators. Thirdly, the construction of container terminals and logistics centres with railway and motor approaches should be continued in large industrial centres.

John Skurtis, 
Director General, OOO Vostochnaya Stevedoring Company:
– The container flow carried via the terminal of the VSC may be increased only if all the efforts of all the handling process participants are consolidated. To do it, the Coordinating Council for Container Transportation in Vostochny port recommenced its work. The members of the Council are the top managers of the VSC container terminal, the Sea Administration of Vostochny port, Nakhodka-Vostochnaya railway station, Nakhodka customs, the administrators of the customs terminal “Sea Port Vostochny” and the forwarding companies operating on the territory of the VSC. 
The list of the most important targets includes optimisation of the processes of loading rolling stock for delivery, development of railway infrastructure at the port station, enlargement of the area where accumulating and sorting containers takes place and improvement of customs screening procedures.

Egor Govorukhin, 
Vice President for Commercial Work, OOO National Container Company:
– When any terminal is put into operation, one of the most important things is fulfillment of state obligations on construction of approaches to a port, i.e. external infrastructure development on time and in accordance with the requirements of the terminal. It is very important to get all necessary agreements and permissions on time. Unfortunately, now such “paper” problems are solved very slowly, which hampers terminal construction. The acting legislative base and the practice of applying the adopted laws are not enough to solve them.
For example, we faced such a problem when building a container terminal in Ust-Luga port. Not observing the laws and the uncoordinated actions of officials and investors may cause delays, and construction of a new port may drag on for some time.
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Just for domestic consumption
“The total volume of containers produced in the world in 2007 is about 3.9 million TEU. On the whole, the volume of container production is cyclical in the sector, meanwhile, in the last seven years there has been an international tendency to increase container production volumes,” notes Mikhail Lazarev, Head of Analysis and Sea Linear Services Development Department, FESCO Transport Group. 

According to the data of research agency Blackseatrans, about 22 million TEUs are in use in the world now. The share of ship-owners in the volume is 56%, and that of leasing companies is 40-44%. In 25 years of container transportation development, the Soviet park of containers on vessels grew to 140,000 TEU, 90% of which were purchased, using the “rent under the right-to-buy” system. 

The author of the research “Containerisation: the role of rent and leasing”, Blackseatrans company, says that one should take into account the 150,000 TEU which were owned by the RF Ministry of Railways. 95% of the volume was produced by Abakan plant, with the remaining 5% in India. Although, the 150,000 TEU were an of out-of-date design and were hardly used for international transportation. In other words, the containers of the Ministry of Railways were just for domestic consumption. This tendency continued to 2007. “When the creation of the Centre for Freight Transportation in Containers started (the Centre later turned into OAO TransContainer), there were about 400 long, 40TEU containers produced by OAO Abakanvagonmash in the park of OAO RZD. The boxes were of out-to-date and not certified to international standards. And it was at a time when the whole world had been using 40-foot long containers of economical type for almost a decade,” highlights Lev Matyushin, Leading Expert on Logistics, OAO TransContainer.

Country Collapse and Market Growth
Meanwhile, in the past 20 years, significant changes happened even in the container market of the former USSR. “In particular, the foreign trade share of freight transportation on former USSR vessels reduced significantly: from 60-70% to 5%. In addition, the container park of two large Soviet shipping companies – the Baltic and the Black Sea shipping companies – disappeared. And three years after 1991, the same thing happened to Latvian and Estonian shipping companies. Simultaneously, the share of foreign trade cargo grew fast,” say analysts from Blackseatrans. As a result, almost all the tactics and strategy of containerised foreign trade cargo transportation for Russia and other former states of the USSR are regulated by foreign ship-owners, who increase the volume of intermodal transportation stage-by-stage. 

Thus, according to the results of 2007, the largest players in the sector of containers for dry cargo in Russia and former USSR countries are Maersk, OOCL, CMA CGM and other foreign carriers. Among Russian transporters participating in the sector there are OAO Far Eastern Shipping Company (FESCO), which manages more than 43,000 units of machinery, and a daughter company of OAO RZD – OAO TransContainer that uses a park of 10,000 40TEU long containers of the economical type. All other Russian players are smaller companies operating 20TEU and 40TEU containers rented from different foreign leasing companies. 

Abakan versus China
Today, OAO Abakanvagonmash continues to manufacture dry cargo containers in Russia and the cost of its production often exceeds average international prices by 20-30%. “The problem with Russian containers is their price. And the plant producing containers is located far from the main loading places. World best practice shows that a customer prefers to use the containers for loading immediately. It was the same case in the USSR, when a significant portion of containers were produced in India,” says Mr Matyushin.

But the manufacturing in Abakan is essential to a degree, considers Mikael Gevorkyan, CEO for the CIS, GESeaCo leasing company. “These containers are produced in Russia and they can be used without certification. This is a way out for domestic transportation, although the boxes produced there are quite expensive and their quality is sometimes not high enough. It is because of a lack of a culture of mass production. It allows doubt to creep in that one container produced in Abakan today is to the same as one manufactured there in a week’s time, and that both of them will be exploited over a designated time period as well as other containers produced somewhere else,” emphasises the expert.

Market players say that today it is much easier to enlarge or renew or organise one’s own park of dry cargo containers by purchasing them in China. Up to 90% of world container manufacture is located in China; the producing capacities are concentrated there. The countries of the Asian and Pacific region such as Indonesia, South Korea, Vietnam, Japan and Taiwan play an important role in the sector too. “I believe the trend will hardly change in the near future, because Chinese manufacturers hardly have any real and global competitors, and they set quality, price and reliability standards trend in the sector,” notes Mr Lazarev.

Mainly, the deliveries are fulfilled according to the “rent under the right-to-buy” scheme. “In 2007, about 12,000 TEU were purchased using this principle. In 2008, approximately 10,000 TEU may be bought using this scheme,” calculate specialists of Blackseatrans. In July 2007, OAO TransContainer concluded a direct contract for container purchase from the manufacturer, a Chinese company called Jindo. According to official data, two types of container will be purchased – high 40TEU and 20TEU containers of increased capacity. The total volume will amount to more than 5,000 TEU. A number of other Russian companies operating in the container transportation market also prefer to buy boxes from a producer. For example, FE Trans company, which uses 40 TEU containers.

Price for Chinese Production 
There are several urgent problems facing any potential new owners of a “Chinese park.” “Firstly, a lot of Russian companies, which would like to buy containers in China, cannot give large orders to local enterprises, since the demand for production there is small. As a result, the production lots they purchase are small and Chinese manufacturers have an opportunity to earn from speculative prices,” explains Mr Gevorkyan. In his words, the cost of such an order may significantly exceed the average market price.

The second problem arises because boxes made in China, as well as elsewhere, are to be certified by different international classification unions. If such a container is used for domestic transportation in Russia, a certificate from the Russian Register may be demanded at regional stations.

The last problem is that Russian companies often have no ability to take the purchased containers from the manufacturer because they have no freight base there for the transportation. “There appears a paradox: there is a finished cheap product, there is cargo that can be transported in the box, but there is no opportunity to take all this. Such containers often idle for a long time, which lessens the value of the profit from their production in China. Sometimes companies find a way out of this situation. They allow other companies to use these boxes for a one-time trip to Russia, and then give them back to the owner,” tells Mr Gevorkyan. In his words, there were only a few such cases, and such relations between sometimes competing structures are not established.

Even after a container is purchased and delivered to Russia, operators have problems with its usage. For example, there is a lack of service capacity to maintain and repair containers. Moreover, there is a big risk that containers may be damaged during exploitation on the railway. For example, the existing lifting capacities operating at stations are often out-of-date. And the safety standards are not always observed during container handling. In the words of market players, different operators, which own container parks, have to solve these problems by themselves.

Viewpoint
Lev Matyushin,
Leading Expert on Logistics, OAO TransContainer:
– One of the actual problems with containers made in China is caused by the fact that unfair suppliers of the goods, together with some Russian forwarders, purchase  second-hand boxes – often in China – and send them loaded to Russia. According to international laws, these containers must not be used for international transportation, since their life-time is exhausted and they are written off from a container owner’s assets. Rules state that the mark-up code must be painted over on such a container, so it turns into a simple box for residential use. Sometimes, however, this does not happen and the mark-up codes are kept, and such boxes are used for freight transportation to different places, including Russia. Their cost is included in the cost of goods, while the boxes cannot be used for transportation any longer.
The authorities should strictly control containers at the border. They should take into account a list of parameters. In particular, they must check the CSC tables (International Convention for Safe Containers, ISO/IMO, 1972), and their requirements are to be compared with the data painted on a container. Also, they must take into account the year the box was manufactured and whether its owner is in the BIC catalogues (International Container Bureau). According to the Customs Convention of 1972, customs bodies must check all this at border crossings, but in fact, it is done neither in ports nor at railway border crossings. 

Mikhail Lazarev, 
Head of Analysis and Sea Liner Services Development Department, FESCO Transport Group:
– The process of purchasing Chinese containers is not a problem for our specialists. As a rule, direct purchase of production, as well as leasing of containers, is used. The difference between customers that are residents and non-residents is customs formalities only.
There are hardly any difficulties and differences in terms of the maintenance of Chinese containers. After-sales services are provided regularly. I cannot help mentioning the lack of service capacity for box repair in Russia. Meanwhile, Russian container owners often face much more serious difficulties. For example, at border crossings, the containers of Russian owners are declared as cargo, and this negatively influences their competitiveness. And plenty of customs formalities slow down the transportation process significantly.

Mikael Gevorkyan, 
CEO for the CIS, GESeaCo:
– Often Russian companies do not understand that the price of containers may vary significantly during a year. There are a lot of factors influencing it. For example, the dynamics of demand and offer, the season, etc. If one does not understand the situation, he can hardly choose the right time to purchase containers.
    [~DETAIL_TEXT] => 
Just for domestic consumption
“The total volume of containers produced in the world in 2007 is about 3.9 million TEU. On the whole, the volume of container production is cyclical in the sector, meanwhile, in the last seven years there has been an international tendency to increase container production volumes,” notes Mikhail Lazarev, Head of Analysis and Sea Linear Services Development Department, FESCO Transport Group. 

According to the data of research agency Blackseatrans, about 22 million TEUs are in use in the world now. The share of ship-owners in the volume is 56%, and that of leasing companies is 40-44%. In 25 years of container transportation development, the Soviet park of containers on vessels grew to 140,000 TEU, 90% of which were purchased, using the “rent under the right-to-buy” system. 

The author of the research “Containerisation: the role of rent and leasing”, Blackseatrans company, says that one should take into account the 150,000 TEU which were owned by the RF Ministry of Railways. 95% of the volume was produced by Abakan plant, with the remaining 5% in India. Although, the 150,000 TEU were an of out-of-date design and were hardly used for international transportation. In other words, the containers of the Ministry of Railways were just for domestic consumption. This tendency continued to 2007. “When the creation of the Centre for Freight Transportation in Containers started (the Centre later turned into OAO TransContainer), there were about 400 long, 40TEU containers produced by OAO Abakanvagonmash in the park of OAO RZD. The boxes were of out-to-date and not certified to international standards. And it was at a time when the whole world had been using 40-foot long containers of economical type for almost a decade,” highlights Lev Matyushin, Leading Expert on Logistics, OAO TransContainer.

Country Collapse and Market Growth
Meanwhile, in the past 20 years, significant changes happened even in the container market of the former USSR. “In particular, the foreign trade share of freight transportation on former USSR vessels reduced significantly: from 60-70% to 5%. In addition, the container park of two large Soviet shipping companies – the Baltic and the Black Sea shipping companies – disappeared. And three years after 1991, the same thing happened to Latvian and Estonian shipping companies. Simultaneously, the share of foreign trade cargo grew fast,” say analysts from Blackseatrans. As a result, almost all the tactics and strategy of containerised foreign trade cargo transportation for Russia and other former states of the USSR are regulated by foreign ship-owners, who increase the volume of intermodal transportation stage-by-stage. 

Thus, according to the results of 2007, the largest players in the sector of containers for dry cargo in Russia and former USSR countries are Maersk, OOCL, CMA CGM and other foreign carriers. Among Russian transporters participating in the sector there are OAO Far Eastern Shipping Company (FESCO), which manages more than 43,000 units of machinery, and a daughter company of OAO RZD – OAO TransContainer that uses a park of 10,000 40TEU long containers of the economical type. All other Russian players are smaller companies operating 20TEU and 40TEU containers rented from different foreign leasing companies. 

Abakan versus China
Today, OAO Abakanvagonmash continues to manufacture dry cargo containers in Russia and the cost of its production often exceeds average international prices by 20-30%. “The problem with Russian containers is their price. And the plant producing containers is located far from the main loading places. World best practice shows that a customer prefers to use the containers for loading immediately. It was the same case in the USSR, when a significant portion of containers were produced in India,” says Mr Matyushin.

But the manufacturing in Abakan is essential to a degree, considers Mikael Gevorkyan, CEO for the CIS, GESeaCo leasing company. “These containers are produced in Russia and they can be used without certification. This is a way out for domestic transportation, although the boxes produced there are quite expensive and their quality is sometimes not high enough. It is because of a lack of a culture of mass production. It allows doubt to creep in that one container produced in Abakan today is to the same as one manufactured there in a week’s time, and that both of them will be exploited over a designated time period as well as other containers produced somewhere else,” emphasises the expert.

Market players say that today it is much easier to enlarge or renew or organise one’s own park of dry cargo containers by purchasing them in China. Up to 90% of world container manufacture is located in China; the producing capacities are concentrated there. The countries of the Asian and Pacific region such as Indonesia, South Korea, Vietnam, Japan and Taiwan play an important role in the sector too. “I believe the trend will hardly change in the near future, because Chinese manufacturers hardly have any real and global competitors, and they set quality, price and reliability standards trend in the sector,” notes Mr Lazarev.

Mainly, the deliveries are fulfilled according to the “rent under the right-to-buy” scheme. “In 2007, about 12,000 TEU were purchased using this principle. In 2008, approximately 10,000 TEU may be bought using this scheme,” calculate specialists of Blackseatrans. In July 2007, OAO TransContainer concluded a direct contract for container purchase from the manufacturer, a Chinese company called Jindo. According to official data, two types of container will be purchased – high 40TEU and 20TEU containers of increased capacity. The total volume will amount to more than 5,000 TEU. A number of other Russian companies operating in the container transportation market also prefer to buy boxes from a producer. For example, FE Trans company, which uses 40 TEU containers.

Price for Chinese Production 
There are several urgent problems facing any potential new owners of a “Chinese park.” “Firstly, a lot of Russian companies, which would like to buy containers in China, cannot give large orders to local enterprises, since the demand for production there is small. As a result, the production lots they purchase are small and Chinese manufacturers have an opportunity to earn from speculative prices,” explains Mr Gevorkyan. In his words, the cost of such an order may significantly exceed the average market price.

The second problem arises because boxes made in China, as well as elsewhere, are to be certified by different international classification unions. If such a container is used for domestic transportation in Russia, a certificate from the Russian Register may be demanded at regional stations.

The last problem is that Russian companies often have no ability to take the purchased containers from the manufacturer because they have no freight base there for the transportation. “There appears a paradox: there is a finished cheap product, there is cargo that can be transported in the box, but there is no opportunity to take all this. Such containers often idle for a long time, which lessens the value of the profit from their production in China. Sometimes companies find a way out of this situation. They allow other companies to use these boxes for a one-time trip to Russia, and then give them back to the owner,” tells Mr Gevorkyan. In his words, there were only a few such cases, and such relations between sometimes competing structures are not established.

Even after a container is purchased and delivered to Russia, operators have problems with its usage. For example, there is a lack of service capacity to maintain and repair containers. Moreover, there is a big risk that containers may be damaged during exploitation on the railway. For example, the existing lifting capacities operating at stations are often out-of-date. And the safety standards are not always observed during container handling. In the words of market players, different operators, which own container parks, have to solve these problems by themselves.

Viewpoint
Lev Matyushin,
Leading Expert on Logistics, OAO TransContainer:
– One of the actual problems with containers made in China is caused by the fact that unfair suppliers of the goods, together with some Russian forwarders, purchase  second-hand boxes – often in China – and send them loaded to Russia. According to international laws, these containers must not be used for international transportation, since their life-time is exhausted and they are written off from a container owner’s assets. Rules state that the mark-up code must be painted over on such a container, so it turns into a simple box for residential use. Sometimes, however, this does not happen and the mark-up codes are kept, and such boxes are used for freight transportation to different places, including Russia. Their cost is included in the cost of goods, while the boxes cannot be used for transportation any longer.
The authorities should strictly control containers at the border. They should take into account a list of parameters. In particular, they must check the CSC tables (International Convention for Safe Containers, ISO/IMO, 1972), and their requirements are to be compared with the data painted on a container. Also, they must take into account the year the box was manufactured and whether its owner is in the BIC catalogues (International Container Bureau). According to the Customs Convention of 1972, customs bodies must check all this at border crossings, but in fact, it is done neither in ports nor at railway border crossings. 

Mikhail Lazarev, 
Head of Analysis and Sea Liner Services Development Department, FESCO Transport Group:
– The process of purchasing Chinese containers is not a problem for our specialists. As a rule, direct purchase of production, as well as leasing of containers, is used. The difference between customers that are residents and non-residents is customs formalities only.
There are hardly any difficulties and differences in terms of the maintenance of Chinese containers. After-sales services are provided regularly. I cannot help mentioning the lack of service capacity for box repair in Russia. Meanwhile, Russian container owners often face much more serious difficulties. For example, at border crossings, the containers of Russian owners are declared as cargo, and this negatively influences their competitiveness. And plenty of customs formalities slow down the transportation process significantly.

Mikael Gevorkyan, 
CEO for the CIS, GESeaCo:
– Often Russian companies do not understand that the price of containers may vary significantly during a year. There are a lot of factors influencing it. For example, the dynamics of demand and offer, the season, etc. If one does not understand the situation, he can hardly choose the right time to purchase containers.
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            [SECTION_META_DESCRIPTION] => <img src="/ufiles/image/rus/partner/2008/3/25.jpg" border="1" alt=" " hspace="3" vspace="3" width="63" height="160" align="left" />Cargo containerisation in Russia is gathering pace. Experts forecast it will continue to develop actively in the next five to seven years. Meanwhile, containers made in Russia do not always meet the requirements of international charter companies.  For this reason, Russian operators strive to purchase more boxes produced in China but face some intriguing problems.
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            [ELEMENT_META_DESCRIPTION] => <img src="/ufiles/image/rus/partner/2008/3/25.jpg" border="1" alt=" " hspace="3" vspace="3" width="63" height="160" align="left" />Cargo containerisation in Russia is gathering pace. Experts forecast it will continue to develop actively in the next five to seven years. Meanwhile, containers made in Russia do not always meet the requirements of international charter companies.  For this reason, Russian operators strive to purchase more boxes produced in China but face some intriguing problems.
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    [DETAIL_TEXT] => 
Just for domestic consumption
“The total volume of containers produced in the world in 2007 is about 3.9 million TEU. On the whole, the volume of container production is cyclical in the sector, meanwhile, in the last seven years there has been an international tendency to increase container production volumes,” notes Mikhail Lazarev, Head of Analysis and Sea Linear Services Development Department, FESCO Transport Group. 

According to the data of research agency Blackseatrans, about 22 million TEUs are in use in the world now. The share of ship-owners in the volume is 56%, and that of leasing companies is 40-44%. In 25 years of container transportation development, the Soviet park of containers on vessels grew to 140,000 TEU, 90% of which were purchased, using the “rent under the right-to-buy” system. 

The author of the research “Containerisation: the role of rent and leasing”, Blackseatrans company, says that one should take into account the 150,000 TEU which were owned by the RF Ministry of Railways. 95% of the volume was produced by Abakan plant, with the remaining 5% in India. Although, the 150,000 TEU were an of out-of-date design and were hardly used for international transportation. In other words, the containers of the Ministry of Railways were just for domestic consumption. This tendency continued to 2007. “When the creation of the Centre for Freight Transportation in Containers started (the Centre later turned into OAO TransContainer), there were about 400 long, 40TEU containers produced by OAO Abakanvagonmash in the park of OAO RZD. The boxes were of out-to-date and not certified to international standards. And it was at a time when the whole world had been using 40-foot long containers of economical type for almost a decade,” highlights Lev Matyushin, Leading Expert on Logistics, OAO TransContainer.

Country Collapse and Market Growth
Meanwhile, in the past 20 years, significant changes happened even in the container market of the former USSR. “In particular, the foreign trade share of freight transportation on former USSR vessels reduced significantly: from 60-70% to 5%. In addition, the container park of two large Soviet shipping companies – the Baltic and the Black Sea shipping companies – disappeared. And three years after 1991, the same thing happened to Latvian and Estonian shipping companies. Simultaneously, the share of foreign trade cargo grew fast,” say analysts from Blackseatrans. As a result, almost all the tactics and strategy of containerised foreign trade cargo transportation for Russia and other former states of the USSR are regulated by foreign ship-owners, who increase the volume of intermodal transportation stage-by-stage. 

Thus, according to the results of 2007, the largest players in the sector of containers for dry cargo in Russia and former USSR countries are Maersk, OOCL, CMA CGM and other foreign carriers. Among Russian transporters participating in the sector there are OAO Far Eastern Shipping Company (FESCO), which manages more than 43,000 units of machinery, and a daughter company of OAO RZD – OAO TransContainer that uses a park of 10,000 40TEU long containers of the economical type. All other Russian players are smaller companies operating 20TEU and 40TEU containers rented from different foreign leasing companies. 

Abakan versus China
Today, OAO Abakanvagonmash continues to manufacture dry cargo containers in Russia and the cost of its production often exceeds average international prices by 20-30%. “The problem with Russian containers is their price. And the plant producing containers is located far from the main loading places. World best practice shows that a customer prefers to use the containers for loading immediately. It was the same case in the USSR, when a significant portion of containers were produced in India,” says Mr Matyushin.

But the manufacturing in Abakan is essential to a degree, considers Mikael Gevorkyan, CEO for the CIS, GESeaCo leasing company. “These containers are produced in Russia and they can be used without certification. This is a way out for domestic transportation, although the boxes produced there are quite expensive and their quality is sometimes not high enough. It is because of a lack of a culture of mass production. It allows doubt to creep in that one container produced in Abakan today is to the same as one manufactured there in a week’s time, and that both of them will be exploited over a designated time period as well as other containers produced somewhere else,” emphasises the expert.

Market players say that today it is much easier to enlarge or renew or organise one’s own park of dry cargo containers by purchasing them in China. Up to 90% of world container manufacture is located in China; the producing capacities are concentrated there. The countries of the Asian and Pacific region such as Indonesia, South Korea, Vietnam, Japan and Taiwan play an important role in the sector too. “I believe the trend will hardly change in the near future, because Chinese manufacturers hardly have any real and global competitors, and they set quality, price and reliability standards trend in the sector,” notes Mr Lazarev.

Mainly, the deliveries are fulfilled according to the “rent under the right-to-buy” scheme. “In 2007, about 12,000 TEU were purchased using this principle. In 2008, approximately 10,000 TEU may be bought using this scheme,” calculate specialists of Blackseatrans. In July 2007, OAO TransContainer concluded a direct contract for container purchase from the manufacturer, a Chinese company called Jindo. According to official data, two types of container will be purchased – high 40TEU and 20TEU containers of increased capacity. The total volume will amount to more than 5,000 TEU. A number of other Russian companies operating in the container transportation market also prefer to buy boxes from a producer. For example, FE Trans company, which uses 40 TEU containers.

Price for Chinese Production 
There are several urgent problems facing any potential new owners of a “Chinese park.” “Firstly, a lot of Russian companies, which would like to buy containers in China, cannot give large orders to local enterprises, since the demand for production there is small. As a result, the production lots they purchase are small and Chinese manufacturers have an opportunity to earn from speculative prices,” explains Mr Gevorkyan. In his words, the cost of such an order may significantly exceed the average market price.

The second problem arises because boxes made in China, as well as elsewhere, are to be certified by different international classification unions. If such a container is used for domestic transportation in Russia, a certificate from the Russian Register may be demanded at regional stations.

The last problem is that Russian companies often have no ability to take the purchased containers from the manufacturer because they have no freight base there for the transportation. “There appears a paradox: there is a finished cheap product, there is cargo that can be transported in the box, but there is no opportunity to take all this. Such containers often idle for a long time, which lessens the value of the profit from their production in China. Sometimes companies find a way out of this situation. They allow other companies to use these boxes for a one-time trip to Russia, and then give them back to the owner,” tells Mr Gevorkyan. In his words, there were only a few such cases, and such relations between sometimes competing structures are not established.

Even after a container is purchased and delivered to Russia, operators have problems with its usage. For example, there is a lack of service capacity to maintain and repair containers. Moreover, there is a big risk that containers may be damaged during exploitation on the railway. For example, the existing lifting capacities operating at stations are often out-of-date. And the safety standards are not always observed during container handling. In the words of market players, different operators, which own container parks, have to solve these problems by themselves.

Viewpoint
Lev Matyushin,
Leading Expert on Logistics, OAO TransContainer:
– One of the actual problems with containers made in China is caused by the fact that unfair suppliers of the goods, together with some Russian forwarders, purchase  second-hand boxes – often in China – and send them loaded to Russia. According to international laws, these containers must not be used for international transportation, since their life-time is exhausted and they are written off from a container owner’s assets. Rules state that the mark-up code must be painted over on such a container, so it turns into a simple box for residential use. Sometimes, however, this does not happen and the mark-up codes are kept, and such boxes are used for freight transportation to different places, including Russia. Their cost is included in the cost of goods, while the boxes cannot be used for transportation any longer.
The authorities should strictly control containers at the border. They should take into account a list of parameters. In particular, they must check the CSC tables (International Convention for Safe Containers, ISO/IMO, 1972), and their requirements are to be compared with the data painted on a container. Also, they must take into account the year the box was manufactured and whether its owner is in the BIC catalogues (International Container Bureau). According to the Customs Convention of 1972, customs bodies must check all this at border crossings, but in fact, it is done neither in ports nor at railway border crossings. 

Mikhail Lazarev, 
Head of Analysis and Sea Liner Services Development Department, FESCO Transport Group:
– The process of purchasing Chinese containers is not a problem for our specialists. As a rule, direct purchase of production, as well as leasing of containers, is used. The difference between customers that are residents and non-residents is customs formalities only.
There are hardly any difficulties and differences in terms of the maintenance of Chinese containers. After-sales services are provided regularly. I cannot help mentioning the lack of service capacity for box repair in Russia. Meanwhile, Russian container owners often face much more serious difficulties. For example, at border crossings, the containers of Russian owners are declared as cargo, and this negatively influences their competitiveness. And plenty of customs formalities slow down the transportation process significantly.

Mikael Gevorkyan, 
CEO for the CIS, GESeaCo:
– Often Russian companies do not understand that the price of containers may vary significantly during a year. There are a lot of factors influencing it. For example, the dynamics of demand and offer, the season, etc. If one does not understand the situation, he can hardly choose the right time to purchase containers.
    [~DETAIL_TEXT] => 
Just for domestic consumption
“The total volume of containers produced in the world in 2007 is about 3.9 million TEU. On the whole, the volume of container production is cyclical in the sector, meanwhile, in the last seven years there has been an international tendency to increase container production volumes,” notes Mikhail Lazarev, Head of Analysis and Sea Linear Services Development Department, FESCO Transport Group. 

According to the data of research agency Blackseatrans, about 22 million TEUs are in use in the world now. The share of ship-owners in the volume is 56%, and that of leasing companies is 40-44%. In 25 years of container transportation development, the Soviet park of containers on vessels grew to 140,000 TEU, 90% of which were purchased, using the “rent under the right-to-buy” system. 

The author of the research “Containerisation: the role of rent and leasing”, Blackseatrans company, says that one should take into account the 150,000 TEU which were owned by the RF Ministry of Railways. 95% of the volume was produced by Abakan plant, with the remaining 5% in India. Although, the 150,000 TEU were an of out-of-date design and were hardly used for international transportation. In other words, the containers of the Ministry of Railways were just for domestic consumption. This tendency continued to 2007. “When the creation of the Centre for Freight Transportation in Containers started (the Centre later turned into OAO TransContainer), there were about 400 long, 40TEU containers produced by OAO Abakanvagonmash in the park of OAO RZD. The boxes were of out-to-date and not certified to international standards. And it was at a time when the whole world had been using 40-foot long containers of economical type for almost a decade,” highlights Lev Matyushin, Leading Expert on Logistics, OAO TransContainer.

Country Collapse and Market Growth
Meanwhile, in the past 20 years, significant changes happened even in the container market of the former USSR. “In particular, the foreign trade share of freight transportation on former USSR vessels reduced significantly: from 60-70% to 5%. In addition, the container park of two large Soviet shipping companies – the Baltic and the Black Sea shipping companies – disappeared. And three years after 1991, the same thing happened to Latvian and Estonian shipping companies. Simultaneously, the share of foreign trade cargo grew fast,” say analysts from Blackseatrans. As a result, almost all the tactics and strategy of containerised foreign trade cargo transportation for Russia and other former states of the USSR are regulated by foreign ship-owners, who increase the volume of intermodal transportation stage-by-stage. 

Thus, according to the results of 2007, the largest players in the sector of containers for dry cargo in Russia and former USSR countries are Maersk, OOCL, CMA CGM and other foreign carriers. Among Russian transporters participating in the sector there are OAO Far Eastern Shipping Company (FESCO), which manages more than 43,000 units of machinery, and a daughter company of OAO RZD – OAO TransContainer that uses a park of 10,000 40TEU long containers of the economical type. All other Russian players are smaller companies operating 20TEU and 40TEU containers rented from different foreign leasing companies. 

Abakan versus China
Today, OAO Abakanvagonmash continues to manufacture dry cargo containers in Russia and the cost of its production often exceeds average international prices by 20-30%. “The problem with Russian containers is their price. And the plant producing containers is located far from the main loading places. World best practice shows that a customer prefers to use the containers for loading immediately. It was the same case in the USSR, when a significant portion of containers were produced in India,” says Mr Matyushin.

But the manufacturing in Abakan is essential to a degree, considers Mikael Gevorkyan, CEO for the CIS, GESeaCo leasing company. “These containers are produced in Russia and they can be used without certification. This is a way out for domestic transportation, although the boxes produced there are quite expensive and their quality is sometimes not high enough. It is because of a lack of a culture of mass production. It allows doubt to creep in that one container produced in Abakan today is to the same as one manufactured there in a week’s time, and that both of them will be exploited over a designated time period as well as other containers produced somewhere else,” emphasises the expert.

Market players say that today it is much easier to enlarge or renew or organise one’s own park of dry cargo containers by purchasing them in China. Up to 90% of world container manufacture is located in China; the producing capacities are concentrated there. The countries of the Asian and Pacific region such as Indonesia, South Korea, Vietnam, Japan and Taiwan play an important role in the sector too. “I believe the trend will hardly change in the near future, because Chinese manufacturers hardly have any real and global competitors, and they set quality, price and reliability standards trend in the sector,” notes Mr Lazarev.

Mainly, the deliveries are fulfilled according to the “rent under the right-to-buy” scheme. “In 2007, about 12,000 TEU were purchased using this principle. In 2008, approximately 10,000 TEU may be bought using this scheme,” calculate specialists of Blackseatrans. In July 2007, OAO TransContainer concluded a direct contract for container purchase from the manufacturer, a Chinese company called Jindo. According to official data, two types of container will be purchased – high 40TEU and 20TEU containers of increased capacity. The total volume will amount to more than 5,000 TEU. A number of other Russian companies operating in the container transportation market also prefer to buy boxes from a producer. For example, FE Trans company, which uses 40 TEU containers.

Price for Chinese Production 
There are several urgent problems facing any potential new owners of a “Chinese park.” “Firstly, a lot of Russian companies, which would like to buy containers in China, cannot give large orders to local enterprises, since the demand for production there is small. As a result, the production lots they purchase are small and Chinese manufacturers have an opportunity to earn from speculative prices,” explains Mr Gevorkyan. In his words, the cost of such an order may significantly exceed the average market price.

The second problem arises because boxes made in China, as well as elsewhere, are to be certified by different international classification unions. If such a container is used for domestic transportation in Russia, a certificate from the Russian Register may be demanded at regional stations.

The last problem is that Russian companies often have no ability to take the purchased containers from the manufacturer because they have no freight base there for the transportation. “There appears a paradox: there is a finished cheap product, there is cargo that can be transported in the box, but there is no opportunity to take all this. Such containers often idle for a long time, which lessens the value of the profit from their production in China. Sometimes companies find a way out of this situation. They allow other companies to use these boxes for a one-time trip to Russia, and then give them back to the owner,” tells Mr Gevorkyan. In his words, there were only a few such cases, and such relations between sometimes competing structures are not established.

Even after a container is purchased and delivered to Russia, operators have problems with its usage. For example, there is a lack of service capacity to maintain and repair containers. Moreover, there is a big risk that containers may be damaged during exploitation on the railway. For example, the existing lifting capacities operating at stations are often out-of-date. And the safety standards are not always observed during container handling. In the words of market players, different operators, which own container parks, have to solve these problems by themselves.

Viewpoint
Lev Matyushin,
Leading Expert on Logistics, OAO TransContainer:
– One of the actual problems with containers made in China is caused by the fact that unfair suppliers of the goods, together with some Russian forwarders, purchase  second-hand boxes – often in China – and send them loaded to Russia. According to international laws, these containers must not be used for international transportation, since their life-time is exhausted and they are written off from a container owner’s assets. Rules state that the mark-up code must be painted over on such a container, so it turns into a simple box for residential use. Sometimes, however, this does not happen and the mark-up codes are kept, and such boxes are used for freight transportation to different places, including Russia. Their cost is included in the cost of goods, while the boxes cannot be used for transportation any longer.
The authorities should strictly control containers at the border. They should take into account a list of parameters. In particular, they must check the CSC tables (International Convention for Safe Containers, ISO/IMO, 1972), and their requirements are to be compared with the data painted on a container. Also, they must take into account the year the box was manufactured and whether its owner is in the BIC catalogues (International Container Bureau). According to the Customs Convention of 1972, customs bodies must check all this at border crossings, but in fact, it is done neither in ports nor at railway border crossings. 

Mikhail Lazarev, 
Head of Analysis and Sea Liner Services Development Department, FESCO Transport Group:
– The process of purchasing Chinese containers is not a problem for our specialists. As a rule, direct purchase of production, as well as leasing of containers, is used. The difference between customers that are residents and non-residents is customs formalities only.
There are hardly any difficulties and differences in terms of the maintenance of Chinese containers. After-sales services are provided regularly. I cannot help mentioning the lack of service capacity for box repair in Russia. Meanwhile, Russian container owners often face much more serious difficulties. For example, at border crossings, the containers of Russian owners are declared as cargo, and this negatively influences their competitiveness. And plenty of customs formalities slow down the transportation process significantly.

Mikael Gevorkyan, 
CEO for the CIS, GESeaCo:
– Often Russian companies do not understand that the price of containers may vary significantly during a year. There are a lot of factors influencing it. For example, the dynamics of demand and offer, the season, etc. If one does not understand the situation, he can hardly choose the right time to purchase containers.
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Surging Prices, Soaring Revenues 
 In 2007, the throughput of Russian ports reached a record of 451 million tons which is higher by 12% than even in the USSR at a peak in 1990. The first half results of 2008 also show growth, the forecast for the current year is 485 million tons. In 2015, according to Ministry of Transport data, the throughput is to increase to 774 million tons which is one- and a half times higher than in 2009.
Geographically, ports are divided into three large regions: North–West with Saint Petersburg, Ust-Luga, Murmansk, Arkhangelsk and Kaliningrad; South with Novorossiysk and many medium-sized and small ports like Tuapse, Eysk, Sochi, Taganrog; Far East with terminals in Nakhodka, Vladivostok and minors such as Yuzhno-Sakhalinks, Petropavlovsk-Kamchatsky, Zarubino. 
Most of the ports have emerged from previously state-owned enterprises which in the Soviet times were parts of shipping companies or assets of governmental bodies such as ministries. For instance, the port of Leningrad (Saint Petersburg now) was part of the Baltic Shipping Company, and OAO Petrolesport belonged to the Ministry of Forestry. In the early 1990s, they were privatised, in many cases by entrepreneurs, who had no experience in the stevedore business. The 1990s were spent establishing technologies, consolidating, forming lobbies, raising funds, gaining experience and searching for clients.
OAO Seaport Spb (a managing company for four stevedoring assets), ZAO Universal Transloading Loading Complex in Ust-Luga, and the port of Tuapse belong to Vladimir Lisin, the owner of the Novolipetsk metallurgical plant. Mr Lisin is reportedly uniting his port assets under the roof of UCL Holding B. V. OAO Novorossiysk Commercial Sea Port which is managing a few specialised terminals belongs to two entrepreneurs Alexander Skorobogatko and Alexander Ponomarenko with minority shares by the guise of the state and RZD. The port of Ust-Luga is developed by a specially formed body OAO Company Ust-Luga, which has private and governmental investors among its stakeholders. There are more investors with less scaled projects. OOO National Container Company (NCC) manages the largest in Russia and the Baltic Sea First Container terminal, NUTEP in Novorossiysk, Ilyichevsk Container Terminal in Ukraine, and one greenfield project in Ust-Luga currently under construction, Baltic Container Terminal. N-Trans Holding incorporates Petrolesport and Moby Dick in Saint Petersburg and Vostochnaya Stevedoring Company in the Far East.
The management system commonly looks like this in Europe, and can be described as a variant of the “Landlord model” accepted in the West. Created finally in 2004, it consists of the Ministry of Transport as the main governing body which carries out functions given to municipalities in most countries; the state-owned federal enterprise Rosmorport collects all harbour dues, leases quays and invests into state infrastructure. Port authorities care about security and safety measures, register ships, supervise the implementing rules and agreements and so on. Stevedoring businesses are run by mostly private companies.

Opportunities: There Are No PPP Projects, Only Shares 
Before describing investment opportunities, it should be mentioned that in the early 2000s till now a consolidation process within the industry was carried out, and the legislation basis for ports was finally created only in late 2007. These two factors led to the fact that such schemes such as operating contracts, build-operate-transfer and other PPP mechanisms don’t work in Russia despite all the best intensions of the Ministry of Transport to draw investors on a concession basis. Experts say those thinking of investing into the Russian port sector must concentrate on two ordinary ways: buying shares in terminals and building their own facilities. Alena Ashurkova, NCC’s president, says that “nowadays the market is emerging, so investments are being made by strategic investors such as transport companies, terminal owners and shipping lines. Though owing to the growth, lots of potential portfolio investors can come, and they can  buy shares through IPO or but equity in ports. 
A survey of Renaissance Capital, an investment company, shows Russian ports are very attractive assets in terms of return on equity (RoE). As said in the survey “We identify ports and rail as the most attractive to investors. Both generate good profit margins (16% and 18% respectively) and strong RoE (11%). In addition, both segments are relatively underleveraged, which represents significant opportunities for further ROE enhancement, and for sourcing additional capital for required capex. Of the two, we regard ports as the more attractive, partially due to the greater clarity of regulations in the segment, and its demonstrated net profitability among international peers (27%)”.
The only company that was turned into a public one in the port sector was Novorossiysk Commercial Sea Port (NMTP). In late 2007, a stake of 19.38% was sold through an IPO. But soon after the issue the shares lost a lot of their value, and the capitalisation fell twice. “Nothing alarming, NMTP was overpriced, so the fall was predictable,” says Alexey Bezborodov, the head of the research agency InfraNews, adding that  the raised  funds were invested into development, and that investors could rely on capitalisation growth. “NMTP demonstrates a high operating margin, – says Marina Irkly from Veles Capital. – But return on capital is the best at the port of Murmansk. Port Vostochny is a bit behind these two, though it has a good location and connection with Asia.” Another problem, Mrs Irkly mentions, is a low level of transparency of the ports. For instance, the port of Murmansk looks attractive in financial terms, but there is too little information on it that is publicly accessible.  
Maybe there will soon be a newcomer to the public part of the market. N-Trans is turning its port assets into one holding company – GlobalPorts, which is reportedly going to an IPO with a USD1 billion issue in 2009, says Mr Bezborodov. The shares of the company will be in demand with  investors, he adds. 
Grain and Containers Top Chart 
Goods imported into Russia includes machinery, equipment, agricultural products and fast-moving consuming goods, exports consist of ore, metals, timber, grain, oil and oil products, gas and other kinds of work materials. Experts say there are just a few sectors in the port industry interesting for those ready to spend money. Alexey Bezborodov talks about containers, grain and coal. Marina Irkly, an analyst with Veles Capital investment company, says attractive sectors are containers and grain.     
Ministry of Transport data shows a change in the structure of cargo handled: in 2006, a growth was in bulk liquids, in 2007, it shifted to grain (rose by 33%), ore (+22%), containers (+18%) and coal (+14%). But ore, oil, coal and metals are handled traditionally by ports incorporated into the producers’ holding companies. For example, almost all big steelmakers in Russia have their own terminals as well as coal, oil and fertilizer producers with only very rare exception. Ro-ro facilities oriented at serving imported new cars are hardly an interesting area despite a boom in sales of vehicle in the country. Exports of timber are believed to have decreased because of the introduction of very high dues on raw materials.
So, only containers and grain are really left. As Mrs Ahurkova from the NCC explains, the throughput of container terminals has been steadily growing by more than 25% a year since 2002. The volume has increased from 950,000 TEU in 2002 to 3.2 million TEU in 2007, while 2008 is going to bring 3.7 million TEU. “Such a rapid growth made major players think of enlarging their businesses, almost all market players have announced plans to build additional capacities. (For a detailed report on new projects read the feature, pp. 46-48). 
The global grain market sees soaring prices for all kinds of corns. Russia is a large supplier of grain to the global market, and the harvests in the recent years were pretty big. These factors caused a significant rise in export volumes: in 2008 about 15 million tons will be exported instead of 12.8 in 2007. In the meanwhile, port capacity is seriously limited, therefore continuing growth in prices and harvests will give rise to the need to build new specialised terminals.  
Race With Barriers 
RF Minister of Transport Igor Levitin says there is a list of difficulties restraining port development and investments into the sector. While one of the biggest legislative barriers have been demolished and stevedores have the right to rent berths for a period of 49 years, many still exist. Maybe the worst of them is a land issue. Registration of rights for land plots creates the need to do land surveys which take a lot out of the federal budget. But without such works it will be impossible to mark the borders of a port which can result in an inability of the state to secure investors’ interests. 
For instance, the port of Olya faced a situation when an investor signed some agreements with the port administration and then learned that the territory to work on has not been duly recognized by one of the federal agencies. They actually belonged to private companies, and the newcomer was forced to buy them out, says Dzhamamuletdin Pashaev, CEO of the port of Olya. 
Another problem is establishing and modernizing border crossings. As Mr Levitin says, the issue refers to the functions of the Federal Security Service (FSS), so the Ministry of Transport has little influence on it as well ports themselves. At the same time, the FSS is not very active in opening new border crossings which sometimes lead to a delay in port operations. In late 2007, in the port of Ust-Luga a new universal transloading terminal was opened but it still stands idle because of the absence of customs and frontier services. 
Resume
The only foreign investors operating in Russia is Dubai Ports World which bought a 25% stake in the OOO Vostochnaya Stevedoring Company with another 75% owned by N-Trans and German Eurogate GmbH with a 20% stake in NCC’s the Baltic Container Terminal. German Hamburger Hafen und Logistik had an option for a 25% stake in Petrolesport, but three years ago decided to leave Russia. Finnish Containerships Oy built a container terminal in Saint Petersburg in 2002, but in 2007 found itself in a conflict with federal and local authorities and sold a 50% stake to N-Trans. French CMA CGM reportedly bought a stake in one of the venture projects in Saint Petersburg, but then sold it. All this means that investing into the Russian port sector is a very complicated business with rules both not yet established and changing fast.
    [~DETAIL_TEXT] => 
Surging Prices, Soaring Revenues 
 In 2007, the throughput of Russian ports reached a record of 451 million tons which is higher by 12% than even in the USSR at a peak in 1990. The first half results of 2008 also show growth, the forecast for the current year is 485 million tons. In 2015, according to Ministry of Transport data, the throughput is to increase to 774 million tons which is one- and a half times higher than in 2009.
Geographically, ports are divided into three large regions: North–West with Saint Petersburg, Ust-Luga, Murmansk, Arkhangelsk and Kaliningrad; South with Novorossiysk and many medium-sized and small ports like Tuapse, Eysk, Sochi, Taganrog; Far East with terminals in Nakhodka, Vladivostok and minors such as Yuzhno-Sakhalinks, Petropavlovsk-Kamchatsky, Zarubino. 
Most of the ports have emerged from previously state-owned enterprises which in the Soviet times were parts of shipping companies or assets of governmental bodies such as ministries. For instance, the port of Leningrad (Saint Petersburg now) was part of the Baltic Shipping Company, and OAO Petrolesport belonged to the Ministry of Forestry. In the early 1990s, they were privatised, in many cases by entrepreneurs, who had no experience in the stevedore business. The 1990s were spent establishing technologies, consolidating, forming lobbies, raising funds, gaining experience and searching for clients.
OAO Seaport Spb (a managing company for four stevedoring assets), ZAO Universal Transloading Loading Complex in Ust-Luga, and the port of Tuapse belong to Vladimir Lisin, the owner of the Novolipetsk metallurgical plant. Mr Lisin is reportedly uniting his port assets under the roof of UCL Holding B. V. OAO Novorossiysk Commercial Sea Port which is managing a few specialised terminals belongs to two entrepreneurs Alexander Skorobogatko and Alexander Ponomarenko with minority shares by the guise of the state and RZD. The port of Ust-Luga is developed by a specially formed body OAO Company Ust-Luga, which has private and governmental investors among its stakeholders. There are more investors with less scaled projects. OOO National Container Company (NCC) manages the largest in Russia and the Baltic Sea First Container terminal, NUTEP in Novorossiysk, Ilyichevsk Container Terminal in Ukraine, and one greenfield project in Ust-Luga currently under construction, Baltic Container Terminal. N-Trans Holding incorporates Petrolesport and Moby Dick in Saint Petersburg and Vostochnaya Stevedoring Company in the Far East.
The management system commonly looks like this in Europe, and can be described as a variant of the “Landlord model” accepted in the West. Created finally in 2004, it consists of the Ministry of Transport as the main governing body which carries out functions given to municipalities in most countries; the state-owned federal enterprise Rosmorport collects all harbour dues, leases quays and invests into state infrastructure. Port authorities care about security and safety measures, register ships, supervise the implementing rules and agreements and so on. Stevedoring businesses are run by mostly private companies.

Opportunities: There Are No PPP Projects, Only Shares 
Before describing investment opportunities, it should be mentioned that in the early 2000s till now a consolidation process within the industry was carried out, and the legislation basis for ports was finally created only in late 2007. These two factors led to the fact that such schemes such as operating contracts, build-operate-transfer and other PPP mechanisms don’t work in Russia despite all the best intensions of the Ministry of Transport to draw investors on a concession basis. Experts say those thinking of investing into the Russian port sector must concentrate on two ordinary ways: buying shares in terminals and building their own facilities. Alena Ashurkova, NCC’s president, says that “nowadays the market is emerging, so investments are being made by strategic investors such as transport companies, terminal owners and shipping lines. Though owing to the growth, lots of potential portfolio investors can come, and they can  buy shares through IPO or but equity in ports. 
A survey of Renaissance Capital, an investment company, shows Russian ports are very attractive assets in terms of return on equity (RoE). As said in the survey “We identify ports and rail as the most attractive to investors. Both generate good profit margins (16% and 18% respectively) and strong RoE (11%). In addition, both segments are relatively underleveraged, which represents significant opportunities for further ROE enhancement, and for sourcing additional capital for required capex. Of the two, we regard ports as the more attractive, partially due to the greater clarity of regulations in the segment, and its demonstrated net profitability among international peers (27%)”.
The only company that was turned into a public one in the port sector was Novorossiysk Commercial Sea Port (NMTP). In late 2007, a stake of 19.38% was sold through an IPO. But soon after the issue the shares lost a lot of their value, and the capitalisation fell twice. “Nothing alarming, NMTP was overpriced, so the fall was predictable,” says Alexey Bezborodov, the head of the research agency InfraNews, adding that  the raised  funds were invested into development, and that investors could rely on capitalisation growth. “NMTP demonstrates a high operating margin, – says Marina Irkly from Veles Capital. – But return on capital is the best at the port of Murmansk. Port Vostochny is a bit behind these two, though it has a good location and connection with Asia.” Another problem, Mrs Irkly mentions, is a low level of transparency of the ports. For instance, the port of Murmansk looks attractive in financial terms, but there is too little information on it that is publicly accessible.  
Maybe there will soon be a newcomer to the public part of the market. N-Trans is turning its port assets into one holding company – GlobalPorts, which is reportedly going to an IPO with a USD1 billion issue in 2009, says Mr Bezborodov. The shares of the company will be in demand with  investors, he adds. 
Grain and Containers Top Chart 
Goods imported into Russia includes machinery, equipment, agricultural products and fast-moving consuming goods, exports consist of ore, metals, timber, grain, oil and oil products, gas and other kinds of work materials. Experts say there are just a few sectors in the port industry interesting for those ready to spend money. Alexey Bezborodov talks about containers, grain and coal. Marina Irkly, an analyst with Veles Capital investment company, says attractive sectors are containers and grain.     
Ministry of Transport data shows a change in the structure of cargo handled: in 2006, a growth was in bulk liquids, in 2007, it shifted to grain (rose by 33%), ore (+22%), containers (+18%) and coal (+14%). But ore, oil, coal and metals are handled traditionally by ports incorporated into the producers’ holding companies. For example, almost all big steelmakers in Russia have their own terminals as well as coal, oil and fertilizer producers with only very rare exception. Ro-ro facilities oriented at serving imported new cars are hardly an interesting area despite a boom in sales of vehicle in the country. Exports of timber are believed to have decreased because of the introduction of very high dues on raw materials.
So, only containers and grain are really left. As Mrs Ahurkova from the NCC explains, the throughput of container terminals has been steadily growing by more than 25% a year since 2002. The volume has increased from 950,000 TEU in 2002 to 3.2 million TEU in 2007, while 2008 is going to bring 3.7 million TEU. “Such a rapid growth made major players think of enlarging their businesses, almost all market players have announced plans to build additional capacities. (For a detailed report on new projects read the feature, pp. 46-48). 
The global grain market sees soaring prices for all kinds of corns. Russia is a large supplier of grain to the global market, and the harvests in the recent years were pretty big. These factors caused a significant rise in export volumes: in 2008 about 15 million tons will be exported instead of 12.8 in 2007. In the meanwhile, port capacity is seriously limited, therefore continuing growth in prices and harvests will give rise to the need to build new specialised terminals.  
Race With Barriers 
RF Minister of Transport Igor Levitin says there is a list of difficulties restraining port development and investments into the sector. While one of the biggest legislative barriers have been demolished and stevedores have the right to rent berths for a period of 49 years, many still exist. Maybe the worst of them is a land issue. Registration of rights for land plots creates the need to do land surveys which take a lot out of the federal budget. But without such works it will be impossible to mark the borders of a port which can result in an inability of the state to secure investors’ interests. 
For instance, the port of Olya faced a situation when an investor signed some agreements with the port administration and then learned that the territory to work on has not been duly recognized by one of the federal agencies. They actually belonged to private companies, and the newcomer was forced to buy them out, says Dzhamamuletdin Pashaev, CEO of the port of Olya. 
Another problem is establishing and modernizing border crossings. As Mr Levitin says, the issue refers to the functions of the Federal Security Service (FSS), so the Ministry of Transport has little influence on it as well ports themselves. At the same time, the FSS is not very active in opening new border crossings which sometimes lead to a delay in port operations. In late 2007, in the port of Ust-Luga a new universal transloading terminal was opened but it still stands idle because of the absence of customs and frontier services. 
Resume
The only foreign investors operating in Russia is Dubai Ports World which bought a 25% stake in the OOO Vostochnaya Stevedoring Company with another 75% owned by N-Trans and German Eurogate GmbH with a 20% stake in NCC’s the Baltic Container Terminal. German Hamburger Hafen und Logistik had an option for a 25% stake in Petrolesport, but three years ago decided to leave Russia. Finnish Containerships Oy built a container terminal in Saint Petersburg in 2002, but in 2007 found itself in a conflict with federal and local authorities and sold a 50% stake to N-Trans. French CMA CGM reportedly bought a stake in one of the venture projects in Saint Petersburg, but then sold it. All this means that investing into the Russian port sector is a very complicated business with rules both not yet established and changing fast.
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Surging Prices, Soaring Revenues 
 In 2007, the throughput of Russian ports reached a record of 451 million tons which is higher by 12% than even in the USSR at a peak in 1990. The first half results of 2008 also show growth, the forecast for the current year is 485 million tons. In 2015, according to Ministry of Transport data, the throughput is to increase to 774 million tons which is one- and a half times higher than in 2009.
Geographically, ports are divided into three large regions: North–West with Saint Petersburg, Ust-Luga, Murmansk, Arkhangelsk and Kaliningrad; South with Novorossiysk and many medium-sized and small ports like Tuapse, Eysk, Sochi, Taganrog; Far East with terminals in Nakhodka, Vladivostok and minors such as Yuzhno-Sakhalinks, Petropavlovsk-Kamchatsky, Zarubino. 
Most of the ports have emerged from previously state-owned enterprises which in the Soviet times were parts of shipping companies or assets of governmental bodies such as ministries. For instance, the port of Leningrad (Saint Petersburg now) was part of the Baltic Shipping Company, and OAO Petrolesport belonged to the Ministry of Forestry. In the early 1990s, they were privatised, in many cases by entrepreneurs, who had no experience in the stevedore business. The 1990s were spent establishing technologies, consolidating, forming lobbies, raising funds, gaining experience and searching for clients.
OAO Seaport Spb (a managing company for four stevedoring assets), ZAO Universal Transloading Loading Complex in Ust-Luga, and the port of Tuapse belong to Vladimir Lisin, the owner of the Novolipetsk metallurgical plant. Mr Lisin is reportedly uniting his port assets under the roof of UCL Holding B. V. OAO Novorossiysk Commercial Sea Port which is managing a few specialised terminals belongs to two entrepreneurs Alexander Skorobogatko and Alexander Ponomarenko with minority shares by the guise of the state and RZD. The port of Ust-Luga is developed by a specially formed body OAO Company Ust-Luga, which has private and governmental investors among its stakeholders. There are more investors with less scaled projects. OOO National Container Company (NCC) manages the largest in Russia and the Baltic Sea First Container terminal, NUTEP in Novorossiysk, Ilyichevsk Container Terminal in Ukraine, and one greenfield project in Ust-Luga currently under construction, Baltic Container Terminal. N-Trans Holding incorporates Petrolesport and Moby Dick in Saint Petersburg and Vostochnaya Stevedoring Company in the Far East.
The management system commonly looks like this in Europe, and can be described as a variant of the “Landlord model” accepted in the West. Created finally in 2004, it consists of the Ministry of Transport as the main governing body which carries out functions given to municipalities in most countries; the state-owned federal enterprise Rosmorport collects all harbour dues, leases quays and invests into state infrastructure. Port authorities care about security and safety measures, register ships, supervise the implementing rules and agreements and so on. Stevedoring businesses are run by mostly private companies.

Opportunities: There Are No PPP Projects, Only Shares 
Before describing investment opportunities, it should be mentioned that in the early 2000s till now a consolidation process within the industry was carried out, and the legislation basis for ports was finally created only in late 2007. These two factors led to the fact that such schemes such as operating contracts, build-operate-transfer and other PPP mechanisms don’t work in Russia despite all the best intensions of the Ministry of Transport to draw investors on a concession basis. Experts say those thinking of investing into the Russian port sector must concentrate on two ordinary ways: buying shares in terminals and building their own facilities. Alena Ashurkova, NCC’s president, says that “nowadays the market is emerging, so investments are being made by strategic investors such as transport companies, terminal owners and shipping lines. Though owing to the growth, lots of potential portfolio investors can come, and they can  buy shares through IPO or but equity in ports. 
A survey of Renaissance Capital, an investment company, shows Russian ports are very attractive assets in terms of return on equity (RoE). As said in the survey “We identify ports and rail as the most attractive to investors. Both generate good profit margins (16% and 18% respectively) and strong RoE (11%). In addition, both segments are relatively underleveraged, which represents significant opportunities for further ROE enhancement, and for sourcing additional capital for required capex. Of the two, we regard ports as the more attractive, partially due to the greater clarity of regulations in the segment, and its demonstrated net profitability among international peers (27%)”.
The only company that was turned into a public one in the port sector was Novorossiysk Commercial Sea Port (NMTP). In late 2007, a stake of 19.38% was sold through an IPO. But soon after the issue the shares lost a lot of their value, and the capitalisation fell twice. “Nothing alarming, NMTP was overpriced, so the fall was predictable,” says Alexey Bezborodov, the head of the research agency InfraNews, adding that  the raised  funds were invested into development, and that investors could rely on capitalisation growth. “NMTP demonstrates a high operating margin, – says Marina Irkly from Veles Capital. – But return on capital is the best at the port of Murmansk. Port Vostochny is a bit behind these two, though it has a good location and connection with Asia.” Another problem, Mrs Irkly mentions, is a low level of transparency of the ports. For instance, the port of Murmansk looks attractive in financial terms, but there is too little information on it that is publicly accessible.  
Maybe there will soon be a newcomer to the public part of the market. N-Trans is turning its port assets into one holding company – GlobalPorts, which is reportedly going to an IPO with a USD1 billion issue in 2009, says Mr Bezborodov. The shares of the company will be in demand with  investors, he adds. 
Grain and Containers Top Chart 
Goods imported into Russia includes machinery, equipment, agricultural products and fast-moving consuming goods, exports consist of ore, metals, timber, grain, oil and oil products, gas and other kinds of work materials. Experts say there are just a few sectors in the port industry interesting for those ready to spend money. Alexey Bezborodov talks about containers, grain and coal. Marina Irkly, an analyst with Veles Capital investment company, says attractive sectors are containers and grain.     
Ministry of Transport data shows a change in the structure of cargo handled: in 2006, a growth was in bulk liquids, in 2007, it shifted to grain (rose by 33%), ore (+22%), containers (+18%) and coal (+14%). But ore, oil, coal and metals are handled traditionally by ports incorporated into the producers’ holding companies. For example, almost all big steelmakers in Russia have their own terminals as well as coal, oil and fertilizer producers with only very rare exception. Ro-ro facilities oriented at serving imported new cars are hardly an interesting area despite a boom in sales of vehicle in the country. Exports of timber are believed to have decreased because of the introduction of very high dues on raw materials.
So, only containers and grain are really left. As Mrs Ahurkova from the NCC explains, the throughput of container terminals has been steadily growing by more than 25% a year since 2002. The volume has increased from 950,000 TEU in 2002 to 3.2 million TEU in 2007, while 2008 is going to bring 3.7 million TEU. “Such a rapid growth made major players think of enlarging their businesses, almost all market players have announced plans to build additional capacities. (For a detailed report on new projects read the feature, pp. 46-48). 
The global grain market sees soaring prices for all kinds of corns. Russia is a large supplier of grain to the global market, and the harvests in the recent years were pretty big. These factors caused a significant rise in export volumes: in 2008 about 15 million tons will be exported instead of 12.8 in 2007. In the meanwhile, port capacity is seriously limited, therefore continuing growth in prices and harvests will give rise to the need to build new specialised terminals.  
Race With Barriers 
RF Minister of Transport Igor Levitin says there is a list of difficulties restraining port development and investments into the sector. While one of the biggest legislative barriers have been demolished and stevedores have the right to rent berths for a period of 49 years, many still exist. Maybe the worst of them is a land issue. Registration of rights for land plots creates the need to do land surveys which take a lot out of the federal budget. But without such works it will be impossible to mark the borders of a port which can result in an inability of the state to secure investors’ interests. 
For instance, the port of Olya faced a situation when an investor signed some agreements with the port administration and then learned that the territory to work on has not been duly recognized by one of the federal agencies. They actually belonged to private companies, and the newcomer was forced to buy them out, says Dzhamamuletdin Pashaev, CEO of the port of Olya. 
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Resume
The only foreign investors operating in Russia is Dubai Ports World which bought a 25% stake in the OOO Vostochnaya Stevedoring Company with another 75% owned by N-Trans and German Eurogate GmbH with a 20% stake in NCC’s the Baltic Container Terminal. German Hamburger Hafen und Logistik had an option for a 25% stake in Petrolesport, but three years ago decided to leave Russia. Finnish Containerships Oy built a container terminal in Saint Petersburg in 2002, but in 2007 found itself in a conflict with federal and local authorities and sold a 50% stake to N-Trans. French CMA CGM reportedly bought a stake in one of the venture projects in Saint Petersburg, but then sold it. All this means that investing into the Russian port sector is a very complicated business with rules both not yet established and changing fast.
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Surging Prices, Soaring Revenues 
 In 2007, the throughput of Russian ports reached a record of 451 million tons which is higher by 12% than even in the USSR at a peak in 1990. The first half results of 2008 also show growth, the forecast for the current year is 485 million tons. In 2015, according to Ministry of Transport data, the throughput is to increase to 774 million tons which is one- and a half times higher than in 2009.
Geographically, ports are divided into three large regions: North–West with Saint Petersburg, Ust-Luga, Murmansk, Arkhangelsk and Kaliningrad; South with Novorossiysk and many medium-sized and small ports like Tuapse, Eysk, Sochi, Taganrog; Far East with terminals in Nakhodka, Vladivostok and minors such as Yuzhno-Sakhalinks, Petropavlovsk-Kamchatsky, Zarubino. 
Most of the ports have emerged from previously state-owned enterprises which in the Soviet times were parts of shipping companies or assets of governmental bodies such as ministries. For instance, the port of Leningrad (Saint Petersburg now) was part of the Baltic Shipping Company, and OAO Petrolesport belonged to the Ministry of Forestry. In the early 1990s, they were privatised, in many cases by entrepreneurs, who had no experience in the stevedore business. The 1990s were spent establishing technologies, consolidating, forming lobbies, raising funds, gaining experience and searching for clients.
OAO Seaport Spb (a managing company for four stevedoring assets), ZAO Universal Transloading Loading Complex in Ust-Luga, and the port of Tuapse belong to Vladimir Lisin, the owner of the Novolipetsk metallurgical plant. Mr Lisin is reportedly uniting his port assets under the roof of UCL Holding B. V. OAO Novorossiysk Commercial Sea Port which is managing a few specialised terminals belongs to two entrepreneurs Alexander Skorobogatko and Alexander Ponomarenko with minority shares by the guise of the state and RZD. The port of Ust-Luga is developed by a specially formed body OAO Company Ust-Luga, which has private and governmental investors among its stakeholders. There are more investors with less scaled projects. OOO National Container Company (NCC) manages the largest in Russia and the Baltic Sea First Container terminal, NUTEP in Novorossiysk, Ilyichevsk Container Terminal in Ukraine, and one greenfield project in Ust-Luga currently under construction, Baltic Container Terminal. N-Trans Holding incorporates Petrolesport and Moby Dick in Saint Petersburg and Vostochnaya Stevedoring Company in the Far East.
The management system commonly looks like this in Europe, and can be described as a variant of the “Landlord model” accepted in the West. Created finally in 2004, it consists of the Ministry of Transport as the main governing body which carries out functions given to municipalities in most countries; the state-owned federal enterprise Rosmorport collects all harbour dues, leases quays and invests into state infrastructure. Port authorities care about security and safety measures, register ships, supervise the implementing rules and agreements and so on. Stevedoring businesses are run by mostly private companies.

Opportunities: There Are No PPP Projects, Only Shares 
Before describing investment opportunities, it should be mentioned that in the early 2000s till now a consolidation process within the industry was carried out, and the legislation basis for ports was finally created only in late 2007. These two factors led to the fact that such schemes such as operating contracts, build-operate-transfer and other PPP mechanisms don’t work in Russia despite all the best intensions of the Ministry of Transport to draw investors on a concession basis. Experts say those thinking of investing into the Russian port sector must concentrate on two ordinary ways: buying shares in terminals and building their own facilities. Alena Ashurkova, NCC’s president, says that “nowadays the market is emerging, so investments are being made by strategic investors such as transport companies, terminal owners and shipping lines. Though owing to the growth, lots of potential portfolio investors can come, and they can  buy shares through IPO or but equity in ports. 
A survey of Renaissance Capital, an investment company, shows Russian ports are very attractive assets in terms of return on equity (RoE). As said in the survey “We identify ports and rail as the most attractive to investors. Both generate good profit margins (16% and 18% respectively) and strong RoE (11%). In addition, both segments are relatively underleveraged, which represents significant opportunities for further ROE enhancement, and for sourcing additional capital for required capex. Of the two, we regard ports as the more attractive, partially due to the greater clarity of regulations in the segment, and its demonstrated net profitability among international peers (27%)”.
The only company that was turned into a public one in the port sector was Novorossiysk Commercial Sea Port (NMTP). In late 2007, a stake of 19.38% was sold through an IPO. But soon after the issue the shares lost a lot of their value, and the capitalisation fell twice. “Nothing alarming, NMTP was overpriced, so the fall was predictable,” says Alexey Bezborodov, the head of the research agency InfraNews, adding that  the raised  funds were invested into development, and that investors could rely on capitalisation growth. “NMTP demonstrates a high operating margin, – says Marina Irkly from Veles Capital. – But return on capital is the best at the port of Murmansk. Port Vostochny is a bit behind these two, though it has a good location and connection with Asia.” Another problem, Mrs Irkly mentions, is a low level of transparency of the ports. For instance, the port of Murmansk looks attractive in financial terms, but there is too little information on it that is publicly accessible.  
Maybe there will soon be a newcomer to the public part of the market. N-Trans is turning its port assets into one holding company – GlobalPorts, which is reportedly going to an IPO with a USD1 billion issue in 2009, says Mr Bezborodov. The shares of the company will be in demand with  investors, he adds. 
Grain and Containers Top Chart 
Goods imported into Russia includes machinery, equipment, agricultural products and fast-moving consuming goods, exports consist of ore, metals, timber, grain, oil and oil products, gas and other kinds of work materials. Experts say there are just a few sectors in the port industry interesting for those ready to spend money. Alexey Bezborodov talks about containers, grain and coal. Marina Irkly, an analyst with Veles Capital investment company, says attractive sectors are containers and grain.     
Ministry of Transport data shows a change in the structure of cargo handled: in 2006, a growth was in bulk liquids, in 2007, it shifted to grain (rose by 33%), ore (+22%), containers (+18%) and coal (+14%). But ore, oil, coal and metals are handled traditionally by ports incorporated into the producers’ holding companies. For example, almost all big steelmakers in Russia have their own terminals as well as coal, oil and fertilizer producers with only very rare exception. Ro-ro facilities oriented at serving imported new cars are hardly an interesting area despite a boom in sales of vehicle in the country. Exports of timber are believed to have decreased because of the introduction of very high dues on raw materials.
So, only containers and grain are really left. As Mrs Ahurkova from the NCC explains, the throughput of container terminals has been steadily growing by more than 25% a year since 2002. The volume has increased from 950,000 TEU in 2002 to 3.2 million TEU in 2007, while 2008 is going to bring 3.7 million TEU. “Such a rapid growth made major players think of enlarging their businesses, almost all market players have announced plans to build additional capacities. (For a detailed report on new projects read the feature, pp. 46-48). 
The global grain market sees soaring prices for all kinds of corns. Russia is a large supplier of grain to the global market, and the harvests in the recent years were pretty big. These factors caused a significant rise in export volumes: in 2008 about 15 million tons will be exported instead of 12.8 in 2007. In the meanwhile, port capacity is seriously limited, therefore continuing growth in prices and harvests will give rise to the need to build new specialised terminals.  
Race With Barriers 
RF Minister of Transport Igor Levitin says there is a list of difficulties restraining port development and investments into the sector. While one of the biggest legislative barriers have been demolished and stevedores have the right to rent berths for a period of 49 years, many still exist. Maybe the worst of them is a land issue. Registration of rights for land plots creates the need to do land surveys which take a lot out of the federal budget. But without such works it will be impossible to mark the borders of a port which can result in an inability of the state to secure investors’ interests. 
For instance, the port of Olya faced a situation when an investor signed some agreements with the port administration and then learned that the territory to work on has not been duly recognized by one of the federal agencies. They actually belonged to private companies, and the newcomer was forced to buy them out, says Dzhamamuletdin Pashaev, CEO of the port of Olya. 
Another problem is establishing and modernizing border crossings. As Mr Levitin says, the issue refers to the functions of the Federal Security Service (FSS), so the Ministry of Transport has little influence on it as well ports themselves. At the same time, the FSS is not very active in opening new border crossings which sometimes lead to a delay in port operations. In late 2007, in the port of Ust-Luga a new universal transloading terminal was opened but it still stands idle because of the absence of customs and frontier services. 
Resume
The only foreign investors operating in Russia is Dubai Ports World which bought a 25% stake in the OOO Vostochnaya Stevedoring Company with another 75% owned by N-Trans and German Eurogate GmbH with a 20% stake in NCC’s the Baltic Container Terminal. German Hamburger Hafen und Logistik had an option for a 25% stake in Petrolesport, but three years ago decided to leave Russia. Finnish Containerships Oy built a container terminal in Saint Petersburg in 2002, but in 2007 found itself in a conflict with federal and local authorities and sold a 50% stake to N-Trans. French CMA CGM reportedly bought a stake in one of the venture projects in Saint Petersburg, but then sold it. All this means that investing into the Russian port sector is a very complicated business with rules both not yet established and changing fast.
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10 years – from project to tender
The idea to build the WHD was born in the mid-1990s when the mayor of the time, Anatoly Sobchak, signed the document “On the Building of WHD”. It was pointed out in the decree that the WHD’s construction was the most important task in the context of preparing Saint Petersburg for the 2004 Olympic Games and developing municipal transport infrastructure. In 1997 a management company to run the project appeared. It was named OAO WHD and initially it handled all the functions of road-building. Saint Petersburg City Property Management Committee (KUGI) became a founder and 100% shareholder.

At the start of the millennium, the approximate route for the road was determined. In February 2001, the municipality gave OAO WHD six spots in the north part of the WHD for toll roads. The profit from that was to be spent on road construction.

2005 became a turning point in the project’s history. At the beginning of the year, responsibilities for the central and northern sectors of the highway were passed to the Committee for Investments and Strategic Projects. Later, a tender was announced. It envisaged project development of a highway from the road interchange on Kanonerskiy island to the intersection with Scandinavia highway. The tender was won by a consortium consisting of ZAO Institute Stroyproject, ZAO NIPI TRTI and ZAO Peterburg-Dorservice.

In July 2005, the RF Ministry of Transport prepared a draft resolution of Russian Federation Government on the financing mechanism for the project. According to the draft, a new shareholding mechanism was anticipated. This resolution envisaged that, after the construction is completed, it would be registered as the property of the state and Saint Petersburg. It gave the reason as the direct financing of the WHD from both federal and municipal budgets. Also, decisions for further development and concluding a contract on shared financing by the RF Government and Saint Petersburg, as well as holding a concession tender and concluding a contract with strategic private partners were made.

In December 2005, construction of the WHD south sector officially began. The tender for the first stage of construction – from the intersection with Skandinaviya highway to the road interchange on Kanonerskiy island – was won by a consortium headed by OAO Mostootryad №19. ZAO Pilon, Mostostroy №6 and ZAO Institute Stroyproject became partners. The 3.3 km road is scheduled to be built before the end of 2008. The south sector of the WHD will connect the big port of Saint Petersburg with the ring road and also with highways to Baltic and Scandinavian states and neighbouring Russian regions.

One year later, in 2006, a concession tender for the building and exploitation of the whole toll road project was announced. Saint Petersburg and Russian authorities acted as co-concessionaires in it. After preliminary selection, four companies were admitted to the open tender for a concession contract for the WHD highway’s design, construction and exploitation in Saint Petersburg:
• MLA Lieferasphalt GmbH (consortium consisting of ALPINE Mayreder Bau GmbH, FCC-Construccion S.A., Deutsche Bank AG);
• OOO WHD Nevskiy Meridian (Strabag A.G., Bouygues Travaux Publics, Hochtief PPP Solutions, Egis Projects, Suri Holdings Limited, an enterprise incorporated into Bazel holding company, ОАО Mostootryad №19). Now Mostootryad №19 has finished building the first (south) sector of WHD; 
• ООО Vincida Grupo de Inversiones 2006, S.L. (Obrascon Huantre Lain, S.A. (OHL), OHL Concesiones S.L.); 
• Saint Petersburg federal road B.V. (Bechtel International Inc, Enka Holding, Intertoll Infrastructure Developments).

Finally, on June 6, 2008, in Smolny in the presence of St Petersburg governor Valentina Matvienko the envelopes with tender offers were opened. Only one consortium – Nevskiy Meridian – sent a tender offer. The consortium consisted of six companies. In particular, Cyprian company Suri Holdings Limited was responsible for financing the project. Austrian Strabag A.G., Bouygues Travaux Publics, German Hochtief PPP Solutions and Russian OAO Mostootryad №19 were engaged to build the toll road. French Egis Projects will act as road operator, responsible for gathering fare charges.

The First in Russia
Designers say the project is important from a number of perspectives. It is the first concession contract in Russia. The federal law “On Concessions”, adopted in 2005, states that concession contracts may be concluded in fourteen sectors. The RF Government has so far ratified only one modification of a typical deal with an investor – in the field of road-building.

Moreover, the WHD is not only the first concession in Russia, it is the first investment project based on public-private partnership principles supported by the state and financed from the RF Investment Fund. The first stage of the WHD will be put into operation in October 2008. Passage will be free until January 2009. The project is to be completed by 2013.

Eight-lane highway will run across the city. It will connect the south and north sectors of Saint Petersburg’s ring road. Cars will be able to drive at a designated speed of 120 kph on the highway. “It’s the largest road-building project in Europe and Russia. It is the first project envisaging construction of unique engineering structures – bridges 35 and 55 metres high above the waterways near the big sea port of Saint Petersburg and 14 traffic interchanges. The total length of the road will be 48.9 km. 55% of it will be on trestles and the rest will be built on road beds. 28 km of the road will lie inside developed districts of the city. The expected number of road users in 2010 is 105,000 cars every 24 hours,” the Committee for Investments and Strategic Projects say.

The approved budget for the project is RUR 212.724 billion (approximately USD 5 billion). According to financing conditions, investors are to give more than half of this sum – RUR 107.9 billion. About RUR 71.3 billion is to come from the RF Investment Fund, which is approximately 34% of the project budget. In conclusion, the last 16%, or RUR 33.6 billion will come from Saint Petersburg’s budget.

Shareholders and a concessionaire
All interviewed concessionaires are staying tight-lipped on their position in this project. For example, Andreas Steiner, from the communication department of German company Hochtief PPP Solutions, said: “Because the project has not reached financial close, yet, we can’t answer your question at this stage.” Bouygues Construction, in turn, agreed that it was too early for comment. ‘The consortium has just been invited to enter into negotiations with the city authorities with a view to signing the contract in several months’ time. In the meantime, the consortium members will finalise the technical specifications so as to precisely determine the total contract amount and arrange the necessary financing. The total contract amount announced (EUR 5 billion) is an estimate. This amount will be calculated once negotiations have been concluded.”

“The overall cost will be precisely determined once negotiations are completed,” emphasised Hugo Engelmann, PR manager of Bouygues Construction.

Austrian construction group Strabag SE, said its share in the EUR 5 billion Western High-Speed Diameter highway project was approximately EUR 1 billion.

Unlike their European colleagues, Russian companies in the consortium are already talking about a whole series of complicated situations to be faced by project participants in the future. “Firstly, the legislation is not worked through properly, especially in terms of distribution of risk between concessionaires. Secondly, current inflation in construction material prices may complicate realisation of the project once the contract is signed. And in the quantities required of these materials are simply tremendous. For example, about 300,000 tons of special steel will be needed to build the bridges. To understand this figure better, it’s enough to say that it’s the equivalent of the annual steel output in Russia. Also, the WHD is one of the most difficult engineering projects. The road will run over navigation canals and in the marshlands. More than a half of the road is to be on a trestle and, in some places (above navigation canals), the road will rise up more than 30 to 50 metres. All these things require application of unique technical solutions – for example, usage of specially clad types of concrete,” says the press service of Bazel holding company.

Summary
So, the very first concession in the toll roads building sector in Russia has turned out to be most complicated. It is necessary to remember that only one out of the four companies which wanted to carry out this project participated in the tender. And, as some branch experts say, the consortium took up the WHD not for its own will: Bazel holding company, which plays the role of “locomotive” for the winning consortium, belongs to well-known businessman Oleg Deripaska, who is close to the Kremlin. Maybe Mr Deripaska couldn’t ignore the Government’s requests to finance the most important infrastructure project in Russia’s second-largest city.
    [~DETAIL_TEXT] => 
10 years – from project to tender
The idea to build the WHD was born in the mid-1990s when the mayor of the time, Anatoly Sobchak, signed the document “On the Building of WHD”. It was pointed out in the decree that the WHD’s construction was the most important task in the context of preparing Saint Petersburg for the 2004 Olympic Games and developing municipal transport infrastructure. In 1997 a management company to run the project appeared. It was named OAO WHD and initially it handled all the functions of road-building. Saint Petersburg City Property Management Committee (KUGI) became a founder and 100% shareholder.

At the start of the millennium, the approximate route for the road was determined. In February 2001, the municipality gave OAO WHD six spots in the north part of the WHD for toll roads. The profit from that was to be spent on road construction.

2005 became a turning point in the project’s history. At the beginning of the year, responsibilities for the central and northern sectors of the highway were passed to the Committee for Investments and Strategic Projects. Later, a tender was announced. It envisaged project development of a highway from the road interchange on Kanonerskiy island to the intersection with Scandinavia highway. The tender was won by a consortium consisting of ZAO Institute Stroyproject, ZAO NIPI TRTI and ZAO Peterburg-Dorservice.

In July 2005, the RF Ministry of Transport prepared a draft resolution of Russian Federation Government on the financing mechanism for the project. According to the draft, a new shareholding mechanism was anticipated. This resolution envisaged that, after the construction is completed, it would be registered as the property of the state and Saint Petersburg. It gave the reason as the direct financing of the WHD from both federal and municipal budgets. Also, decisions for further development and concluding a contract on shared financing by the RF Government and Saint Petersburg, as well as holding a concession tender and concluding a contract with strategic private partners were made.

In December 2005, construction of the WHD south sector officially began. The tender for the first stage of construction – from the intersection with Skandinaviya highway to the road interchange on Kanonerskiy island – was won by a consortium headed by OAO Mostootryad №19. ZAO Pilon, Mostostroy №6 and ZAO Institute Stroyproject became partners. The 3.3 km road is scheduled to be built before the end of 2008. The south sector of the WHD will connect the big port of Saint Petersburg with the ring road and also with highways to Baltic and Scandinavian states and neighbouring Russian regions.

One year later, in 2006, a concession tender for the building and exploitation of the whole toll road project was announced. Saint Petersburg and Russian authorities acted as co-concessionaires in it. After preliminary selection, four companies were admitted to the open tender for a concession contract for the WHD highway’s design, construction and exploitation in Saint Petersburg:
• MLA Lieferasphalt GmbH (consortium consisting of ALPINE Mayreder Bau GmbH, FCC-Construccion S.A., Deutsche Bank AG);
• OOO WHD Nevskiy Meridian (Strabag A.G., Bouygues Travaux Publics, Hochtief PPP Solutions, Egis Projects, Suri Holdings Limited, an enterprise incorporated into Bazel holding company, ОАО Mostootryad №19). Now Mostootryad №19 has finished building the first (south) sector of WHD; 
• ООО Vincida Grupo de Inversiones 2006, S.L. (Obrascon Huantre Lain, S.A. (OHL), OHL Concesiones S.L.); 
• Saint Petersburg federal road B.V. (Bechtel International Inc, Enka Holding, Intertoll Infrastructure Developments).

Finally, on June 6, 2008, in Smolny in the presence of St Petersburg governor Valentina Matvienko the envelopes with tender offers were opened. Only one consortium – Nevskiy Meridian – sent a tender offer. The consortium consisted of six companies. In particular, Cyprian company Suri Holdings Limited was responsible for financing the project. Austrian Strabag A.G., Bouygues Travaux Publics, German Hochtief PPP Solutions and Russian OAO Mostootryad №19 were engaged to build the toll road. French Egis Projects will act as road operator, responsible for gathering fare charges.

The First in Russia
Designers say the project is important from a number of perspectives. It is the first concession contract in Russia. The federal law “On Concessions”, adopted in 2005, states that concession contracts may be concluded in fourteen sectors. The RF Government has so far ratified only one modification of a typical deal with an investor – in the field of road-building.

Moreover, the WHD is not only the first concession in Russia, it is the first investment project based on public-private partnership principles supported by the state and financed from the RF Investment Fund. The first stage of the WHD will be put into operation in October 2008. Passage will be free until January 2009. The project is to be completed by 2013.

Eight-lane highway will run across the city. It will connect the south and north sectors of Saint Petersburg’s ring road. Cars will be able to drive at a designated speed of 120 kph on the highway. “It’s the largest road-building project in Europe and Russia. It is the first project envisaging construction of unique engineering structures – bridges 35 and 55 metres high above the waterways near the big sea port of Saint Petersburg and 14 traffic interchanges. The total length of the road will be 48.9 km. 55% of it will be on trestles and the rest will be built on road beds. 28 km of the road will lie inside developed districts of the city. The expected number of road users in 2010 is 105,000 cars every 24 hours,” the Committee for Investments and Strategic Projects say.

The approved budget for the project is RUR 212.724 billion (approximately USD 5 billion). According to financing conditions, investors are to give more than half of this sum – RUR 107.9 billion. About RUR 71.3 billion is to come from the RF Investment Fund, which is approximately 34% of the project budget. In conclusion, the last 16%, or RUR 33.6 billion will come from Saint Petersburg’s budget.

Shareholders and a concessionaire
All interviewed concessionaires are staying tight-lipped on their position in this project. For example, Andreas Steiner, from the communication department of German company Hochtief PPP Solutions, said: “Because the project has not reached financial close, yet, we can’t answer your question at this stage.” Bouygues Construction, in turn, agreed that it was too early for comment. ‘The consortium has just been invited to enter into negotiations with the city authorities with a view to signing the contract in several months’ time. In the meantime, the consortium members will finalise the technical specifications so as to precisely determine the total contract amount and arrange the necessary financing. The total contract amount announced (EUR 5 billion) is an estimate. This amount will be calculated once negotiations have been concluded.”

“The overall cost will be precisely determined once negotiations are completed,” emphasised Hugo Engelmann, PR manager of Bouygues Construction.

Austrian construction group Strabag SE, said its share in the EUR 5 billion Western High-Speed Diameter highway project was approximately EUR 1 billion.

Unlike their European colleagues, Russian companies in the consortium are already talking about a whole series of complicated situations to be faced by project participants in the future. “Firstly, the legislation is not worked through properly, especially in terms of distribution of risk between concessionaires. Secondly, current inflation in construction material prices may complicate realisation of the project once the contract is signed. And in the quantities required of these materials are simply tremendous. For example, about 300,000 tons of special steel will be needed to build the bridges. To understand this figure better, it’s enough to say that it’s the equivalent of the annual steel output in Russia. Also, the WHD is one of the most difficult engineering projects. The road will run over navigation canals and in the marshlands. More than a half of the road is to be on a trestle and, in some places (above navigation canals), the road will rise up more than 30 to 50 metres. All these things require application of unique technical solutions – for example, usage of specially clad types of concrete,” says the press service of Bazel holding company.

Summary
So, the very first concession in the toll roads building sector in Russia has turned out to be most complicated. It is necessary to remember that only one out of the four companies which wanted to carry out this project participated in the tender. And, as some branch experts say, the consortium took up the WHD not for its own will: Bazel holding company, which plays the role of “locomotive” for the winning consortium, belongs to well-known businessman Oleg Deripaska, who is close to the Kremlin. Maybe Mr Deripaska couldn’t ignore the Government’s requests to finance the most important infrastructure project in Russia’s second-largest city.
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            [SECTION_META_DESCRIPTION] => <img src="/ufiles/image/rus/partner/2008/3/24.jpg" border="1" alt=" " hspace="3" vspace="3" width="120" height="158" align="left" />About 27% of federal highways in Russia are permanently overloaded. The solution to the problem of traffic jams may lie in development of toll roads. The first project in this field started in summer 2008 in Saint Petersburg when the winners of a tender to build the West High-Speed Diameter (WHD) highway (see map). This highway will connect different parts of the city.
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            [ELEMENT_META_DESCRIPTION] => <img src="/ufiles/image/rus/partner/2008/3/24.jpg" border="1" alt=" " hspace="3" vspace="3" width="120" height="158" align="left" />About 27% of federal highways in Russia are permanently overloaded. The solution to the problem of traffic jams may lie in development of toll roads. The first project in this field started in summer 2008 in Saint Petersburg when the winners of a tender to build the West High-Speed Diameter (WHD) highway (see map). This highway will connect different parts of the city.
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    [DETAIL_TEXT] => 
10 years – from project to tender
The idea to build the WHD was born in the mid-1990s when the mayor of the time, Anatoly Sobchak, signed the document “On the Building of WHD”. It was pointed out in the decree that the WHD’s construction was the most important task in the context of preparing Saint Petersburg for the 2004 Olympic Games and developing municipal transport infrastructure. In 1997 a management company to run the project appeared. It was named OAO WHD and initially it handled all the functions of road-building. Saint Petersburg City Property Management Committee (KUGI) became a founder and 100% shareholder.

At the start of the millennium, the approximate route for the road was determined. In February 2001, the municipality gave OAO WHD six spots in the north part of the WHD for toll roads. The profit from that was to be spent on road construction.

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In July 2005, the RF Ministry of Transport prepared a draft resolution of Russian Federation Government on the financing mechanism for the project. According to the draft, a new shareholding mechanism was anticipated. This resolution envisaged that, after the construction is completed, it would be registered as the property of the state and Saint Petersburg. It gave the reason as the direct financing of the WHD from both federal and municipal budgets. Also, decisions for further development and concluding a contract on shared financing by the RF Government and Saint Petersburg, as well as holding a concession tender and concluding a contract with strategic private partners were made.

In December 2005, construction of the WHD south sector officially began. The tender for the first stage of construction – from the intersection with Skandinaviya highway to the road interchange on Kanonerskiy island – was won by a consortium headed by OAO Mostootryad №19. ZAO Pilon, Mostostroy №6 and ZAO Institute Stroyproject became partners. The 3.3 km road is scheduled to be built before the end of 2008. The south sector of the WHD will connect the big port of Saint Petersburg with the ring road and also with highways to Baltic and Scandinavian states and neighbouring Russian regions.

One year later, in 2006, a concession tender for the building and exploitation of the whole toll road project was announced. Saint Petersburg and Russian authorities acted as co-concessionaires in it. After preliminary selection, four companies were admitted to the open tender for a concession contract for the WHD highway’s design, construction and exploitation in Saint Petersburg:
• MLA Lieferasphalt GmbH (consortium consisting of ALPINE Mayreder Bau GmbH, FCC-Construccion S.A., Deutsche Bank AG);
• OOO WHD Nevskiy Meridian (Strabag A.G., Bouygues Travaux Publics, Hochtief PPP Solutions, Egis Projects, Suri Holdings Limited, an enterprise incorporated into Bazel holding company, ОАО Mostootryad №19). Now Mostootryad №19 has finished building the first (south) sector of WHD; 
• ООО Vincida Grupo de Inversiones 2006, S.L. (Obrascon Huantre Lain, S.A. (OHL), OHL Concesiones S.L.); 
• Saint Petersburg federal road B.V. (Bechtel International Inc, Enka Holding, Intertoll Infrastructure Developments).

Finally, on June 6, 2008, in Smolny in the presence of St Petersburg governor Valentina Matvienko the envelopes with tender offers were opened. Only one consortium – Nevskiy Meridian – sent a tender offer. The consortium consisted of six companies. In particular, Cyprian company Suri Holdings Limited was responsible for financing the project. Austrian Strabag A.G., Bouygues Travaux Publics, German Hochtief PPP Solutions and Russian OAO Mostootryad №19 were engaged to build the toll road. French Egis Projects will act as road operator, responsible for gathering fare charges.

The First in Russia
Designers say the project is important from a number of perspectives. It is the first concession contract in Russia. The federal law “On Concessions”, adopted in 2005, states that concession contracts may be concluded in fourteen sectors. The RF Government has so far ratified only one modification of a typical deal with an investor – in the field of road-building.

Moreover, the WHD is not only the first concession in Russia, it is the first investment project based on public-private partnership principles supported by the state and financed from the RF Investment Fund. The first stage of the WHD will be put into operation in October 2008. Passage will be free until January 2009. The project is to be completed by 2013.

Eight-lane highway will run across the city. It will connect the south and north sectors of Saint Petersburg’s ring road. Cars will be able to drive at a designated speed of 120 kph on the highway. “It’s the largest road-building project in Europe and Russia. It is the first project envisaging construction of unique engineering structures – bridges 35 and 55 metres high above the waterways near the big sea port of Saint Petersburg and 14 traffic interchanges. The total length of the road will be 48.9 km. 55% of it will be on trestles and the rest will be built on road beds. 28 km of the road will lie inside developed districts of the city. The expected number of road users in 2010 is 105,000 cars every 24 hours,” the Committee for Investments and Strategic Projects say.

The approved budget for the project is RUR 212.724 billion (approximately USD 5 billion). According to financing conditions, investors are to give more than half of this sum – RUR 107.9 billion. About RUR 71.3 billion is to come from the RF Investment Fund, which is approximately 34% of the project budget. In conclusion, the last 16%, or RUR 33.6 billion will come from Saint Petersburg’s budget.

Shareholders and a concessionaire
All interviewed concessionaires are staying tight-lipped on their position in this project. For example, Andreas Steiner, from the communication department of German company Hochtief PPP Solutions, said: “Because the project has not reached financial close, yet, we can’t answer your question at this stage.” Bouygues Construction, in turn, agreed that it was too early for comment. ‘The consortium has just been invited to enter into negotiations with the city authorities with a view to signing the contract in several months’ time. In the meantime, the consortium members will finalise the technical specifications so as to precisely determine the total contract amount and arrange the necessary financing. The total contract amount announced (EUR 5 billion) is an estimate. This amount will be calculated once negotiations have been concluded.”

“The overall cost will be precisely determined once negotiations are completed,” emphasised Hugo Engelmann, PR manager of Bouygues Construction.

Austrian construction group Strabag SE, said its share in the EUR 5 billion Western High-Speed Diameter highway project was approximately EUR 1 billion.

Unlike their European colleagues, Russian companies in the consortium are already talking about a whole series of complicated situations to be faced by project participants in the future. “Firstly, the legislation is not worked through properly, especially in terms of distribution of risk between concessionaires. Secondly, current inflation in construction material prices may complicate realisation of the project once the contract is signed. And in the quantities required of these materials are simply tremendous. For example, about 300,000 tons of special steel will be needed to build the bridges. To understand this figure better, it’s enough to say that it’s the equivalent of the annual steel output in Russia. Also, the WHD is one of the most difficult engineering projects. The road will run over navigation canals and in the marshlands. More than a half of the road is to be on a trestle and, in some places (above navigation canals), the road will rise up more than 30 to 50 metres. All these things require application of unique technical solutions – for example, usage of specially clad types of concrete,” says the press service of Bazel holding company.

Summary
So, the very first concession in the toll roads building sector in Russia has turned out to be most complicated. It is necessary to remember that only one out of the four companies which wanted to carry out this project participated in the tender. And, as some branch experts say, the consortium took up the WHD not for its own will: Bazel holding company, which plays the role of “locomotive” for the winning consortium, belongs to well-known businessman Oleg Deripaska, who is close to the Kremlin. Maybe Mr Deripaska couldn’t ignore the Government’s requests to finance the most important infrastructure project in Russia’s second-largest city.
    [~DETAIL_TEXT] => 
10 years – from project to tender
The idea to build the WHD was born in the mid-1990s when the mayor of the time, Anatoly Sobchak, signed the document “On the Building of WHD”. It was pointed out in the decree that the WHD’s construction was the most important task in the context of preparing Saint Petersburg for the 2004 Olympic Games and developing municipal transport infrastructure. In 1997 a management company to run the project appeared. It was named OAO WHD and initially it handled all the functions of road-building. Saint Petersburg City Property Management Committee (KUGI) became a founder and 100% shareholder.

At the start of the millennium, the approximate route for the road was determined. In February 2001, the municipality gave OAO WHD six spots in the north part of the WHD for toll roads. The profit from that was to be spent on road construction.

2005 became a turning point in the project’s history. At the beginning of the year, responsibilities for the central and northern sectors of the highway were passed to the Committee for Investments and Strategic Projects. Later, a tender was announced. It envisaged project development of a highway from the road interchange on Kanonerskiy island to the intersection with Scandinavia highway. The tender was won by a consortium consisting of ZAO Institute Stroyproject, ZAO NIPI TRTI and ZAO Peterburg-Dorservice.

In July 2005, the RF Ministry of Transport prepared a draft resolution of Russian Federation Government on the financing mechanism for the project. According to the draft, a new shareholding mechanism was anticipated. This resolution envisaged that, after the construction is completed, it would be registered as the property of the state and Saint Petersburg. It gave the reason as the direct financing of the WHD from both federal and municipal budgets. Also, decisions for further development and concluding a contract on shared financing by the RF Government and Saint Petersburg, as well as holding a concession tender and concluding a contract with strategic private partners were made.

In December 2005, construction of the WHD south sector officially began. The tender for the first stage of construction – from the intersection with Skandinaviya highway to the road interchange on Kanonerskiy island – was won by a consortium headed by OAO Mostootryad №19. ZAO Pilon, Mostostroy №6 and ZAO Institute Stroyproject became partners. The 3.3 km road is scheduled to be built before the end of 2008. The south sector of the WHD will connect the big port of Saint Petersburg with the ring road and also with highways to Baltic and Scandinavian states and neighbouring Russian regions.

One year later, in 2006, a concession tender for the building and exploitation of the whole toll road project was announced. Saint Petersburg and Russian authorities acted as co-concessionaires in it. After preliminary selection, four companies were admitted to the open tender for a concession contract for the WHD highway’s design, construction and exploitation in Saint Petersburg:
• MLA Lieferasphalt GmbH (consortium consisting of ALPINE Mayreder Bau GmbH, FCC-Construccion S.A., Deutsche Bank AG);
• OOO WHD Nevskiy Meridian (Strabag A.G., Bouygues Travaux Publics, Hochtief PPP Solutions, Egis Projects, Suri Holdings Limited, an enterprise incorporated into Bazel holding company, ОАО Mostootryad №19). Now Mostootryad №19 has finished building the first (south) sector of WHD; 
• ООО Vincida Grupo de Inversiones 2006, S.L. (Obrascon Huantre Lain, S.A. (OHL), OHL Concesiones S.L.); 
• Saint Petersburg federal road B.V. (Bechtel International Inc, Enka Holding, Intertoll Infrastructure Developments).

Finally, on June 6, 2008, in Smolny in the presence of St Petersburg governor Valentina Matvienko the envelopes with tender offers were opened. Only one consortium – Nevskiy Meridian – sent a tender offer. The consortium consisted of six companies. In particular, Cyprian company Suri Holdings Limited was responsible for financing the project. Austrian Strabag A.G., Bouygues Travaux Publics, German Hochtief PPP Solutions and Russian OAO Mostootryad №19 were engaged to build the toll road. French Egis Projects will act as road operator, responsible for gathering fare charges.

The First in Russia
Designers say the project is important from a number of perspectives. It is the first concession contract in Russia. The federal law “On Concessions”, adopted in 2005, states that concession contracts may be concluded in fourteen sectors. The RF Government has so far ratified only one modification of a typical deal with an investor – in the field of road-building.

Moreover, the WHD is not only the first concession in Russia, it is the first investment project based on public-private partnership principles supported by the state and financed from the RF Investment Fund. The first stage of the WHD will be put into operation in October 2008. Passage will be free until January 2009. The project is to be completed by 2013.

Eight-lane highway will run across the city. It will connect the south and north sectors of Saint Petersburg’s ring road. Cars will be able to drive at a designated speed of 120 kph on the highway. “It’s the largest road-building project in Europe and Russia. It is the first project envisaging construction of unique engineering structures – bridges 35 and 55 metres high above the waterways near the big sea port of Saint Petersburg and 14 traffic interchanges. The total length of the road will be 48.9 km. 55% of it will be on trestles and the rest will be built on road beds. 28 km of the road will lie inside developed districts of the city. The expected number of road users in 2010 is 105,000 cars every 24 hours,” the Committee for Investments and Strategic Projects say.

The approved budget for the project is RUR 212.724 billion (approximately USD 5 billion). According to financing conditions, investors are to give more than half of this sum – RUR 107.9 billion. About RUR 71.3 billion is to come from the RF Investment Fund, which is approximately 34% of the project budget. In conclusion, the last 16%, or RUR 33.6 billion will come from Saint Petersburg’s budget.

Shareholders and a concessionaire
All interviewed concessionaires are staying tight-lipped on their position in this project. For example, Andreas Steiner, from the communication department of German company Hochtief PPP Solutions, said: “Because the project has not reached financial close, yet, we can’t answer your question at this stage.” Bouygues Construction, in turn, agreed that it was too early for comment. ‘The consortium has just been invited to enter into negotiations with the city authorities with a view to signing the contract in several months’ time. In the meantime, the consortium members will finalise the technical specifications so as to precisely determine the total contract amount and arrange the necessary financing. The total contract amount announced (EUR 5 billion) is an estimate. This amount will be calculated once negotiations have been concluded.”

“The overall cost will be precisely determined once negotiations are completed,” emphasised Hugo Engelmann, PR manager of Bouygues Construction.

Austrian construction group Strabag SE, said its share in the EUR 5 billion Western High-Speed Diameter highway project was approximately EUR 1 billion.

Unlike their European colleagues, Russian companies in the consortium are already talking about a whole series of complicated situations to be faced by project participants in the future. “Firstly, the legislation is not worked through properly, especially in terms of distribution of risk between concessionaires. Secondly, current inflation in construction material prices may complicate realisation of the project once the contract is signed. And in the quantities required of these materials are simply tremendous. For example, about 300,000 tons of special steel will be needed to build the bridges. To understand this figure better, it’s enough to say that it’s the equivalent of the annual steel output in Russia. Also, the WHD is one of the most difficult engineering projects. The road will run over navigation canals and in the marshlands. More than a half of the road is to be on a trestle and, in some places (above navigation canals), the road will rise up more than 30 to 50 metres. All these things require application of unique technical solutions – for example, usage of specially clad types of concrete,” says the press service of Bazel holding company.

Summary
So, the very first concession in the toll roads building sector in Russia has turned out to be most complicated. It is necessary to remember that only one out of the four companies which wanted to carry out this project participated in the tender. And, as some branch experts say, the consortium took up the WHD not for its own will: Bazel holding company, which plays the role of “locomotive” for the winning consortium, belongs to well-known businessman Oleg Deripaska, who is close to the Kremlin. Maybe Mr Deripaska couldn’t ignore the Government’s requests to finance the most important infrastructure project in Russia’s second-largest city.
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    [DETAIL_TEXT] => 
Kazakhstan Increases Throughput 
The throughput of transport enterprises in Kazakhstan amounted to 176.39 billion t/km in January-June 2008. The year-on-year growth was 7.6%. The throughput of its railway transport was 105.63 billion t/km (+11.5%).
In the period, the throughput of road transport (taking into account the throughput of non-transport companies and entrepreneurs engaged in commercial transportation) grew to 25.66 billion t/km (+0.1%).
In the first six months of 2008, the throughput of main pipelines was 44.86 billion t/km. In particular, that of oil pipelines increased by 6.6% year-on-year to 22.187 billion t/km. The growth was possible due to an increase in oil deliveries to China and via the Caspian pipeline. The throughput of gas pipelines was 22.67 billion t/km (+0.3%).
Since the beginning of the navigation in 2008, the throughput of river transport in Kazakhstan increased by 9.3% year-on-year to 22.68 million t/km. 
Air transport fell in its throughput by 13.2% to 30.59 million t/km.
Passenger turnover in Kazakhstan was 56.48 billion passenger-kilometres (+2.2%).
In comparison to the results of January-June 2007, the passenger turnover of buses, taxi and air transport grew by 4.1%, 1.7% and 16.8% respectively. The passenger turnover of railway transport, trolleybuses and trams fell by 9.2%, 33.6% and 18% respectively.

LDz Cargo: +9.3%
LDz Cargo, a daughter company of Latvijas dzelzcels (LDz, Latvian Railway), increased freight transportation in January-June 2008 to 27.835 million tons, 9.3% up year-on-year.
Transportation of import cargo grew by 10.3% to 23.244 million tons, that of export and transit freights by 6.2% (to 1.205 million tons) and 8.4% (to 2.621 million tons) respectively. 
In the six-month period, the company serviced 10,309 million tons of oil products (+11.1%), 8.83 million tons of coal (+25.1%), and 1.205 million tons of chemicals (+47.9%).

Freight Transportation in Ukraine grows by 8% in H1 of 2008
Ukrainian transport enterprises carried 462.9 million tons of cargo in January-June 2008, 7.6% up in comparison to the same period in 2007. In the period, the throughput of the companies amounted to 254.2 billion t/km (+5.9%).
Freight transportation by air transport increased by 14.5% to 54.2 thousand tons, and its throughput grew by 22.4% to 199.5 million t/km. 
The railway transport carried 263.7 million tons of cargo (+6.7%). In January-June 2008, the State Railway Transport Administration of Ukraine (Ukrzaliznytsya) increased its throughput by 7% year-on-year to 136.5 billion t/km. In H1 of the 2008, the transit throughput rose to 36.8 billion t/km (+6.1%). 
The Ukrainian sea and river commercial fleet saw freight transportation fall by 11.2% - only 9.5 million tons of cargo was delivered to customers. Handling of export, import and transit freight increased by 4.8%, 38.3% and 0.4% respectively. Handling of domestic cargoes fell by 2.4%.
Cargo transportation by road haulage in the country grew by 16.4% to 86.9 million tons. Simultaneously, the throughput increased by 29.6% to 17 billion t/km due to interregional and international transportation.
102.7 million tons of cargo was transported via main pipelines, 5.3% up in comparison with January-June 2007.

The Russian Market in Freight Road Transportation Set to Increase
The volume of freight transportation by road haulage will amount to 10 billion tons by 2015 in Russia, considers Alexander Solodky, CEO of Research and Project University of Territorial Development and Transport Infrastructure.  
In 2007, approximately 7,020 million tons of cargo was carried by road hauliers; according to preliminary forecasts the figure is to grow to 7,160 million tons in 2008. “Nowadays, the road transport market is one of the most capacious, its capacity exceeds RUR 3.8 trillion. It is equivalent to the sum spent on road transport in Russia. Just the sales volume of vehicles is more than one billion roubles,” told Mr Solodky as the 4th forum “Russian Transport Infrastructure” in June.

Primorsk Gets Second Wind	
The annual volume of liquid bulk handled in the port of Primorsk is to grow from 75 million tons to 120 million tons, said Igor Levitin, Russian Transport Minister, at a ceremony to mark work on  “the North” oil pipeline .
“With the launch of “The North” project, the port of Primorsk gets a second wind. Now it handles not just oil, but oil products too,” said Mr Levitin.
In the words of the RF Minister of Transport, next year the construction of a railway line and a railway terminal will begin. The capacity of the terminal will amount to 10-12 million tons per annum.
Nowadays, in the framework of the “Baltic Pipeline System” project, the port of Primorsk handles 75 million tons of oil annually. The capacity of “the North” project will increase from 8.5 million tons to 24.6 million tons of oil products in the future.

A First for the Russian South
On July 25, the first stage of a car transshipment terminal was put into operation in Novoshakhtinsk (Rostov region). The new complex is the first ro-ro terminal in Russia’s southern region. Experts say the terminal in Novoshakhtinsk will help to unload Moscow Customs and diversify transport flows by avoiding competition with the Baltic automobile delivery sector.  
The project is being implemented by OOO Russian Transport Lines (RTL) in cooperation with OOO Algai.  The capacity of the terminal’s first stage is some 120,000 cars per year. According to Elena Zhdanova, the company’s PR Director, the first phase is a 15-hectare open ground with asphalt-macadam surface capable of storing 6,500 cars. The second stage will be located on a 10-hectare space. It will be put into operation by the end of 2008 and is to raise the terminal’s storage capacity to 10,500 vehicles. The terminal will be able to handle 170,000 automobiles per year. For implementation of this project, RTL established a subsidiary in Novoshakhtinsk – OOO YugTerminalService.
In the words of Elena Zhdanova, the location of the terminal was chosen for a number of reasons. In particular, deepwater seaports (Ilyichevsk, Sevastopol, Odessa, Nikolayev) have good opportunities for servicing ferries transporting ro-ro cargo. Also, Southern Customs is less loaded in comparison to Moscow Customs. “From Novoshakhtinsk, cars will be transported as Russian cargo under a tariff which is 40% lower. Thus, transport costs will be much lower as well,” Mrs Zhdanova explained.
As of today, there is a contract for logistics services in Novoshakhtinsk signed between Algai and General Motors; negotiations with Toyota, Mazda, Nissan manufacturers are in progress. Experts say the terminal is also suitable for transshipment of Renault automobiles in Turkey, which enter Russia in Novorossiysk and are then transported to Moscow for customs clearance before some are returned to the southern region. 
Customs clearance of these automobiles is carried out by RTL Group. Cars will be cleared four kilometres away from Novoshakhtinsk at the Customs Clearance Department. 

Armenian Throughput Down
The volume of freight transportation in Armenia in January-June 2008 fell by 4.2% year-on-year to 4.23 million tons. 
In that period the railway transport carried 1.31 million tons of freight (+0.4%), road haulages transported 2.147 million tons (-8%), and air transport – 4,600 tons (+2.2%).
771.3 thousand tons of gas was delivered to Armenia by the mainline pipeline, 2.8% up in comparison with January-June 2007. 
In the first six months of 2008, the throughput in the Republic increased by 3.9% to 1,47 billion t/km.
Meanwhile, passenger transportation fell by 5.8% year-on-year to 117.35 million people. 245.8 thousand passengers travelled  by railway (-2%), 105.69 million passengers by road (-7.5%), and 620.1 thousand passengers by aircraft (+9.3%). 10.79 million people were carried by electric transport in the country in January-June 2008. The growth was 14.2% in comparison with the same period of 2007. 
Passenger turnover fell by 3.5% to 1,714 million passenger-kilometres.

OAO RZD: Foreign trade shipments by rail up 4.3% in six months
In the first six months of 2008, foreign trade shipments by Russian Railways increased by 4.3% to 265.8 million tons compared to the same period last year. The structure of export and import cargo flows changed, with exports through port stations up by 0.6% to 86.6 million tons, while exports passing through border stations decreased by 4.8% to 105.1 million tons. Imports through port stations increased by 22% to 7 million tons and through border stations by 26.9% to 49.9 million tons. 
In addition, in the first six months of 2008, transit cargo volume rose by 31% to 17.2 million tons, with the main items being oil and grain, as well as ferrous metals and coal. 
The biggest increases in volumes through border stations were recorded at Skangali (up 84.4%), Rudnya (up 24.7%), Posin (up 23.2%) and Buslovskaya (up 35.6%), and through Murmansk port station (up 6.5%) and Vysotsk (up 7%). 
The increase in volumes was due to higher consumption of oil, coal and fertilisers in Europe. 
Increased traffic through the port station of Krabovaya (up 70.5%) and Cape Astafiyeva (up 32.5%) resulted from increased consumption of oil and ferrous metals by countries in the Asia-Pacific region. 

The Baltic Ports: Latvia Goes Ahead
In January-June 2008, the ports of the Baltic States handled 70.639 million tons of freight, 3.7% or 2.732 million tons down year-on-year.
Latvian ports serviced 45.6% of the volume, Lithuanian ports 28.7%, and the share of Estonian ports was 25.7%.
Latvian ports handled 22.199 million tons of cargo (+2.6%). The throughput of Lithuanian ports grew by 31.2% to 20.27 million tons. Meanwhile, the handling volume of Estonian ports declined by 31.5% to 18.17 million tons.
According to throughput, the port of Klaipeda became the leader in the region. It handled 15.815 million tons (+20.5%).
Second position is occupied by Ventspils. Its throughput was 14.947 million tons (-7.1%).
The port of Tallinn is in third place. Its throughput was 14.791 million tons. The decline was 31.9%.
    [~DETAIL_TEXT] => 
Kazakhstan Increases Throughput 
The throughput of transport enterprises in Kazakhstan amounted to 176.39 billion t/km in January-June 2008. The year-on-year growth was 7.6%. The throughput of its railway transport was 105.63 billion t/km (+11.5%).
In the period, the throughput of road transport (taking into account the throughput of non-transport companies and entrepreneurs engaged in commercial transportation) grew to 25.66 billion t/km (+0.1%).
In the first six months of 2008, the throughput of main pipelines was 44.86 billion t/km. In particular, that of oil pipelines increased by 6.6% year-on-year to 22.187 billion t/km. The growth was possible due to an increase in oil deliveries to China and via the Caspian pipeline. The throughput of gas pipelines was 22.67 billion t/km (+0.3%).
Since the beginning of the navigation in 2008, the throughput of river transport in Kazakhstan increased by 9.3% year-on-year to 22.68 million t/km. 
Air transport fell in its throughput by 13.2% to 30.59 million t/km.
Passenger turnover in Kazakhstan was 56.48 billion passenger-kilometres (+2.2%).
In comparison to the results of January-June 2007, the passenger turnover of buses, taxi and air transport grew by 4.1%, 1.7% and 16.8% respectively. The passenger turnover of railway transport, trolleybuses and trams fell by 9.2%, 33.6% and 18% respectively.

LDz Cargo: +9.3%
LDz Cargo, a daughter company of Latvijas dzelzcels (LDz, Latvian Railway), increased freight transportation in January-June 2008 to 27.835 million tons, 9.3% up year-on-year.
Transportation of import cargo grew by 10.3% to 23.244 million tons, that of export and transit freights by 6.2% (to 1.205 million tons) and 8.4% (to 2.621 million tons) respectively. 
In the six-month period, the company serviced 10,309 million tons of oil products (+11.1%), 8.83 million tons of coal (+25.1%), and 1.205 million tons of chemicals (+47.9%).

Freight Transportation in Ukraine grows by 8% in H1 of 2008
Ukrainian transport enterprises carried 462.9 million tons of cargo in January-June 2008, 7.6% up in comparison to the same period in 2007. In the period, the throughput of the companies amounted to 254.2 billion t/km (+5.9%).
Freight transportation by air transport increased by 14.5% to 54.2 thousand tons, and its throughput grew by 22.4% to 199.5 million t/km. 
The railway transport carried 263.7 million tons of cargo (+6.7%). In January-June 2008, the State Railway Transport Administration of Ukraine (Ukrzaliznytsya) increased its throughput by 7% year-on-year to 136.5 billion t/km. In H1 of the 2008, the transit throughput rose to 36.8 billion t/km (+6.1%). 
The Ukrainian sea and river commercial fleet saw freight transportation fall by 11.2% - only 9.5 million tons of cargo was delivered to customers. Handling of export, import and transit freight increased by 4.8%, 38.3% and 0.4% respectively. Handling of domestic cargoes fell by 2.4%.
Cargo transportation by road haulage in the country grew by 16.4% to 86.9 million tons. Simultaneously, the throughput increased by 29.6% to 17 billion t/km due to interregional and international transportation.
102.7 million tons of cargo was transported via main pipelines, 5.3% up in comparison with January-June 2007.

The Russian Market in Freight Road Transportation Set to Increase
The volume of freight transportation by road haulage will amount to 10 billion tons by 2015 in Russia, considers Alexander Solodky, CEO of Research and Project University of Territorial Development and Transport Infrastructure.  
In 2007, approximately 7,020 million tons of cargo was carried by road hauliers; according to preliminary forecasts the figure is to grow to 7,160 million tons in 2008. “Nowadays, the road transport market is one of the most capacious, its capacity exceeds RUR 3.8 trillion. It is equivalent to the sum spent on road transport in Russia. Just the sales volume of vehicles is more than one billion roubles,” told Mr Solodky as the 4th forum “Russian Transport Infrastructure” in June.

Primorsk Gets Second Wind	
The annual volume of liquid bulk handled in the port of Primorsk is to grow from 75 million tons to 120 million tons, said Igor Levitin, Russian Transport Minister, at a ceremony to mark work on  “the North” oil pipeline .
“With the launch of “The North” project, the port of Primorsk gets a second wind. Now it handles not just oil, but oil products too,” said Mr Levitin.
In the words of the RF Minister of Transport, next year the construction of a railway line and a railway terminal will begin. The capacity of the terminal will amount to 10-12 million tons per annum.
Nowadays, in the framework of the “Baltic Pipeline System” project, the port of Primorsk handles 75 million tons of oil annually. The capacity of “the North” project will increase from 8.5 million tons to 24.6 million tons of oil products in the future.

A First for the Russian South
On July 25, the first stage of a car transshipment terminal was put into operation in Novoshakhtinsk (Rostov region). The new complex is the first ro-ro terminal in Russia’s southern region. Experts say the terminal in Novoshakhtinsk will help to unload Moscow Customs and diversify transport flows by avoiding competition with the Baltic automobile delivery sector.  
The project is being implemented by OOO Russian Transport Lines (RTL) in cooperation with OOO Algai.  The capacity of the terminal’s first stage is some 120,000 cars per year. According to Elena Zhdanova, the company’s PR Director, the first phase is a 15-hectare open ground with asphalt-macadam surface capable of storing 6,500 cars. The second stage will be located on a 10-hectare space. It will be put into operation by the end of 2008 and is to raise the terminal’s storage capacity to 10,500 vehicles. The terminal will be able to handle 170,000 automobiles per year. For implementation of this project, RTL established a subsidiary in Novoshakhtinsk – OOO YugTerminalService.
In the words of Elena Zhdanova, the location of the terminal was chosen for a number of reasons. In particular, deepwater seaports (Ilyichevsk, Sevastopol, Odessa, Nikolayev) have good opportunities for servicing ferries transporting ro-ro cargo. Also, Southern Customs is less loaded in comparison to Moscow Customs. “From Novoshakhtinsk, cars will be transported as Russian cargo under a tariff which is 40% lower. Thus, transport costs will be much lower as well,” Mrs Zhdanova explained.
As of today, there is a contract for logistics services in Novoshakhtinsk signed between Algai and General Motors; negotiations with Toyota, Mazda, Nissan manufacturers are in progress. Experts say the terminal is also suitable for transshipment of Renault automobiles in Turkey, which enter Russia in Novorossiysk and are then transported to Moscow for customs clearance before some are returned to the southern region. 
Customs clearance of these automobiles is carried out by RTL Group. Cars will be cleared four kilometres away from Novoshakhtinsk at the Customs Clearance Department. 

Armenian Throughput Down
The volume of freight transportation in Armenia in January-June 2008 fell by 4.2% year-on-year to 4.23 million tons. 
In that period the railway transport carried 1.31 million tons of freight (+0.4%), road haulages transported 2.147 million tons (-8%), and air transport – 4,600 tons (+2.2%).
771.3 thousand tons of gas was delivered to Armenia by the mainline pipeline, 2.8% up in comparison with January-June 2007. 
In the first six months of 2008, the throughput in the Republic increased by 3.9% to 1,47 billion t/km.
Meanwhile, passenger transportation fell by 5.8% year-on-year to 117.35 million people. 245.8 thousand passengers travelled  by railway (-2%), 105.69 million passengers by road (-7.5%), and 620.1 thousand passengers by aircraft (+9.3%). 10.79 million people were carried by electric transport in the country in January-June 2008. The growth was 14.2% in comparison with the same period of 2007. 
Passenger turnover fell by 3.5% to 1,714 million passenger-kilometres.

OAO RZD: Foreign trade shipments by rail up 4.3% in six months
In the first six months of 2008, foreign trade shipments by Russian Railways increased by 4.3% to 265.8 million tons compared to the same period last year. The structure of export and import cargo flows changed, with exports through port stations up by 0.6% to 86.6 million tons, while exports passing through border stations decreased by 4.8% to 105.1 million tons. Imports through port stations increased by 22% to 7 million tons and through border stations by 26.9% to 49.9 million tons. 
In addition, in the first six months of 2008, transit cargo volume rose by 31% to 17.2 million tons, with the main items being oil and grain, as well as ferrous metals and coal. 
The biggest increases in volumes through border stations were recorded at Skangali (up 84.4%), Rudnya (up 24.7%), Posin (up 23.2%) and Buslovskaya (up 35.6%), and through Murmansk port station (up 6.5%) and Vysotsk (up 7%). 
The increase in volumes was due to higher consumption of oil, coal and fertilisers in Europe. 
Increased traffic through the port station of Krabovaya (up 70.5%) and Cape Astafiyeva (up 32.5%) resulted from increased consumption of oil and ferrous metals by countries in the Asia-Pacific region. 

The Baltic Ports: Latvia Goes Ahead
In January-June 2008, the ports of the Baltic States handled 70.639 million tons of freight, 3.7% or 2.732 million tons down year-on-year.
Latvian ports serviced 45.6% of the volume, Lithuanian ports 28.7%, and the share of Estonian ports was 25.7%.
Latvian ports handled 22.199 million tons of cargo (+2.6%). The throughput of Lithuanian ports grew by 31.2% to 20.27 million tons. Meanwhile, the handling volume of Estonian ports declined by 31.5% to 18.17 million tons.
According to throughput, the port of Klaipeda became the leader in the region. It handled 15.815 million tons (+20.5%).
Second position is occupied by Ventspils. Its throughput was 14.947 million tons (-7.1%).
The port of Tallinn is in third place. Its throughput was 14.791 million tons. The decline was 31.9%.
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Kazakhstan Increases Throughput 
The throughput of transport enterprises in Kazakhstan amounted to 176.39 billion t/km in January-June 2008. The year-on-year growth was 7.6%. The throughput of its railway transport was 105.63 billion t/km (+11.5%).
In the period, the throughput of road transport (taking into account the throughput of non-transport companies and entrepreneurs engaged in commercial transportation) grew to 25.66 billion t/km (+0.1%).
In the first six months of 2008, the throughput of main pipelines was 44.86 billion t/km. In particular, that of oil pipelines increased by 6.6% year-on-year to 22.187 billion t/km. The growth was possible due to an increase in oil deliveries to China and via the Caspian pipeline. The throughput of gas pipelines was 22.67 billion t/km (+0.3%).
Since the beginning of the navigation in 2008, the throughput of river transport in Kazakhstan increased by 9.3% year-on-year to 22.68 million t/km. 
Air transport fell in its throughput by 13.2% to 30.59 million t/km.
Passenger turnover in Kazakhstan was 56.48 billion passenger-kilometres (+2.2%).
In comparison to the results of January-June 2007, the passenger turnover of buses, taxi and air transport grew by 4.1%, 1.7% and 16.8% respectively. The passenger turnover of railway transport, trolleybuses and trams fell by 9.2%, 33.6% and 18% respectively.

LDz Cargo: +9.3%
LDz Cargo, a daughter company of Latvijas dzelzcels (LDz, Latvian Railway), increased freight transportation in January-June 2008 to 27.835 million tons, 9.3% up year-on-year.
Transportation of import cargo grew by 10.3% to 23.244 million tons, that of export and transit freights by 6.2% (to 1.205 million tons) and 8.4% (to 2.621 million tons) respectively. 
In the six-month period, the company serviced 10,309 million tons of oil products (+11.1%), 8.83 million tons of coal (+25.1%), and 1.205 million tons of chemicals (+47.9%).

Freight Transportation in Ukraine grows by 8% in H1 of 2008
Ukrainian transport enterprises carried 462.9 million tons of cargo in January-June 2008, 7.6% up in comparison to the same period in 2007. In the period, the throughput of the companies amounted to 254.2 billion t/km (+5.9%).
Freight transportation by air transport increased by 14.5% to 54.2 thousand tons, and its throughput grew by 22.4% to 199.5 million t/km. 
The railway transport carried 263.7 million tons of cargo (+6.7%). In January-June 2008, the State Railway Transport Administration of Ukraine (Ukrzaliznytsya) increased its throughput by 7% year-on-year to 136.5 billion t/km. In H1 of the 2008, the transit throughput rose to 36.8 billion t/km (+6.1%). 
The Ukrainian sea and river commercial fleet saw freight transportation fall by 11.2% - only 9.5 million tons of cargo was delivered to customers. Handling of export, import and transit freight increased by 4.8%, 38.3% and 0.4% respectively. Handling of domestic cargoes fell by 2.4%.
Cargo transportation by road haulage in the country grew by 16.4% to 86.9 million tons. Simultaneously, the throughput increased by 29.6% to 17 billion t/km due to interregional and international transportation.
102.7 million tons of cargo was transported via main pipelines, 5.3% up in comparison with January-June 2007.

The Russian Market in Freight Road Transportation Set to Increase
The volume of freight transportation by road haulage will amount to 10 billion tons by 2015 in Russia, considers Alexander Solodky, CEO of Research and Project University of Territorial Development and Transport Infrastructure.  
In 2007, approximately 7,020 million tons of cargo was carried by road hauliers; according to preliminary forecasts the figure is to grow to 7,160 million tons in 2008. “Nowadays, the road transport market is one of the most capacious, its capacity exceeds RUR 3.8 trillion. It is equivalent to the sum spent on road transport in Russia. Just the sales volume of vehicles is more than one billion roubles,” told Mr Solodky as the 4th forum “Russian Transport Infrastructure” in June.

Primorsk Gets Second Wind	
The annual volume of liquid bulk handled in the port of Primorsk is to grow from 75 million tons to 120 million tons, said Igor Levitin, Russian Transport Minister, at a ceremony to mark work on  “the North” oil pipeline .
“With the launch of “The North” project, the port of Primorsk gets a second wind. Now it handles not just oil, but oil products too,” said Mr Levitin.
In the words of the RF Minister of Transport, next year the construction of a railway line and a railway terminal will begin. The capacity of the terminal will amount to 10-12 million tons per annum.
Nowadays, in the framework of the “Baltic Pipeline System” project, the port of Primorsk handles 75 million tons of oil annually. The capacity of “the North” project will increase from 8.5 million tons to 24.6 million tons of oil products in the future.

A First for the Russian South
On July 25, the first stage of a car transshipment terminal was put into operation in Novoshakhtinsk (Rostov region). The new complex is the first ro-ro terminal in Russia’s southern region. Experts say the terminal in Novoshakhtinsk will help to unload Moscow Customs and diversify transport flows by avoiding competition with the Baltic automobile delivery sector.  
The project is being implemented by OOO Russian Transport Lines (RTL) in cooperation with OOO Algai.  The capacity of the terminal’s first stage is some 120,000 cars per year. According to Elena Zhdanova, the company’s PR Director, the first phase is a 15-hectare open ground with asphalt-macadam surface capable of storing 6,500 cars. The second stage will be located on a 10-hectare space. It will be put into operation by the end of 2008 and is to raise the terminal’s storage capacity to 10,500 vehicles. The terminal will be able to handle 170,000 automobiles per year. For implementation of this project, RTL established a subsidiary in Novoshakhtinsk – OOO YugTerminalService.
In the words of Elena Zhdanova, the location of the terminal was chosen for a number of reasons. In particular, deepwater seaports (Ilyichevsk, Sevastopol, Odessa, Nikolayev) have good opportunities for servicing ferries transporting ro-ro cargo. Also, Southern Customs is less loaded in comparison to Moscow Customs. “From Novoshakhtinsk, cars will be transported as Russian cargo under a tariff which is 40% lower. Thus, transport costs will be much lower as well,” Mrs Zhdanova explained.
As of today, there is a contract for logistics services in Novoshakhtinsk signed between Algai and General Motors; negotiations with Toyota, Mazda, Nissan manufacturers are in progress. Experts say the terminal is also suitable for transshipment of Renault automobiles in Turkey, which enter Russia in Novorossiysk and are then transported to Moscow for customs clearance before some are returned to the southern region. 
Customs clearance of these automobiles is carried out by RTL Group. Cars will be cleared four kilometres away from Novoshakhtinsk at the Customs Clearance Department. 

Armenian Throughput Down
The volume of freight transportation in Armenia in January-June 2008 fell by 4.2% year-on-year to 4.23 million tons. 
In that period the railway transport carried 1.31 million tons of freight (+0.4%), road haulages transported 2.147 million tons (-8%), and air transport – 4,600 tons (+2.2%).
771.3 thousand tons of gas was delivered to Armenia by the mainline pipeline, 2.8% up in comparison with January-June 2007. 
In the first six months of 2008, the throughput in the Republic increased by 3.9% to 1,47 billion t/km.
Meanwhile, passenger transportation fell by 5.8% year-on-year to 117.35 million people. 245.8 thousand passengers travelled  by railway (-2%), 105.69 million passengers by road (-7.5%), and 620.1 thousand passengers by aircraft (+9.3%). 10.79 million people were carried by electric transport in the country in January-June 2008. The growth was 14.2% in comparison with the same period of 2007. 
Passenger turnover fell by 3.5% to 1,714 million passenger-kilometres.

OAO RZD: Foreign trade shipments by rail up 4.3% in six months
In the first six months of 2008, foreign trade shipments by Russian Railways increased by 4.3% to 265.8 million tons compared to the same period last year. The structure of export and import cargo flows changed, with exports through port stations up by 0.6% to 86.6 million tons, while exports passing through border stations decreased by 4.8% to 105.1 million tons. Imports through port stations increased by 22% to 7 million tons and through border stations by 26.9% to 49.9 million tons. 
In addition, in the first six months of 2008, transit cargo volume rose by 31% to 17.2 million tons, with the main items being oil and grain, as well as ferrous metals and coal. 
The biggest increases in volumes through border stations were recorded at Skangali (up 84.4%), Rudnya (up 24.7%), Posin (up 23.2%) and Buslovskaya (up 35.6%), and through Murmansk port station (up 6.5%) and Vysotsk (up 7%). 
The increase in volumes was due to higher consumption of oil, coal and fertilisers in Europe. 
Increased traffic through the port station of Krabovaya (up 70.5%) and Cape Astafiyeva (up 32.5%) resulted from increased consumption of oil and ferrous metals by countries in the Asia-Pacific region. 

The Baltic Ports: Latvia Goes Ahead
In January-June 2008, the ports of the Baltic States handled 70.639 million tons of freight, 3.7% or 2.732 million tons down year-on-year.
Latvian ports serviced 45.6% of the volume, Lithuanian ports 28.7%, and the share of Estonian ports was 25.7%.
Latvian ports handled 22.199 million tons of cargo (+2.6%). The throughput of Lithuanian ports grew by 31.2% to 20.27 million tons. Meanwhile, the handling volume of Estonian ports declined by 31.5% to 18.17 million tons.
According to throughput, the port of Klaipeda became the leader in the region. It handled 15.815 million tons (+20.5%).
Second position is occupied by Ventspils. Its throughput was 14.947 million tons (-7.1%).
The port of Tallinn is in third place. Its throughput was 14.791 million tons. The decline was 31.9%.
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Kazakhstan Increases Throughput 
The throughput of transport enterprises in Kazakhstan amounted to 176.39 billion t/km in January-June 2008. The year-on-year growth was 7.6%. The throughput of its railway transport was 105.63 billion t/km (+11.5%).
In the period, the throughput of road transport (taking into account the throughput of non-transport companies and entrepreneurs engaged in commercial transportation) grew to 25.66 billion t/km (+0.1%).
In the first six months of 2008, the throughput of main pipelines was 44.86 billion t/km. In particular, that of oil pipelines increased by 6.6% year-on-year to 22.187 billion t/km. The growth was possible due to an increase in oil deliveries to China and via the Caspian pipeline. The throughput of gas pipelines was 22.67 billion t/km (+0.3%).
Since the beginning of the navigation in 2008, the throughput of river transport in Kazakhstan increased by 9.3% year-on-year to 22.68 million t/km. 
Air transport fell in its throughput by 13.2% to 30.59 million t/km.
Passenger turnover in Kazakhstan was 56.48 billion passenger-kilometres (+2.2%).
In comparison to the results of January-June 2007, the passenger turnover of buses, taxi and air transport grew by 4.1%, 1.7% and 16.8% respectively. The passenger turnover of railway transport, trolleybuses and trams fell by 9.2%, 33.6% and 18% respectively.

LDz Cargo: +9.3%
LDz Cargo, a daughter company of Latvijas dzelzcels (LDz, Latvian Railway), increased freight transportation in January-June 2008 to 27.835 million tons, 9.3% up year-on-year.
Transportation of import cargo grew by 10.3% to 23.244 million tons, that of export and transit freights by 6.2% (to 1.205 million tons) and 8.4% (to 2.621 million tons) respectively. 
In the six-month period, the company serviced 10,309 million tons of oil products (+11.1%), 8.83 million tons of coal (+25.1%), and 1.205 million tons of chemicals (+47.9%).

Freight Transportation in Ukraine grows by 8% in H1 of 2008
Ukrainian transport enterprises carried 462.9 million tons of cargo in January-June 2008, 7.6% up in comparison to the same period in 2007. In the period, the throughput of the companies amounted to 254.2 billion t/km (+5.9%).
Freight transportation by air transport increased by 14.5% to 54.2 thousand tons, and its throughput grew by 22.4% to 199.5 million t/km. 
The railway transport carried 263.7 million tons of cargo (+6.7%). In January-June 2008, the State Railway Transport Administration of Ukraine (Ukrzaliznytsya) increased its throughput by 7% year-on-year to 136.5 billion t/km. In H1 of the 2008, the transit throughput rose to 36.8 billion t/km (+6.1%). 
The Ukrainian sea and river commercial fleet saw freight transportation fall by 11.2% - only 9.5 million tons of cargo was delivered to customers. Handling of export, import and transit freight increased by 4.8%, 38.3% and 0.4% respectively. Handling of domestic cargoes fell by 2.4%.
Cargo transportation by road haulage in the country grew by 16.4% to 86.9 million tons. Simultaneously, the throughput increased by 29.6% to 17 billion t/km due to interregional and international transportation.
102.7 million tons of cargo was transported via main pipelines, 5.3% up in comparison with January-June 2007.

The Russian Market in Freight Road Transportation Set to Increase
The volume of freight transportation by road haulage will amount to 10 billion tons by 2015 in Russia, considers Alexander Solodky, CEO of Research and Project University of Territorial Development and Transport Infrastructure.  
In 2007, approximately 7,020 million tons of cargo was carried by road hauliers; according to preliminary forecasts the figure is to grow to 7,160 million tons in 2008. “Nowadays, the road transport market is one of the most capacious, its capacity exceeds RUR 3.8 trillion. It is equivalent to the sum spent on road transport in Russia. Just the sales volume of vehicles is more than one billion roubles,” told Mr Solodky as the 4th forum “Russian Transport Infrastructure” in June.

Primorsk Gets Second Wind	
The annual volume of liquid bulk handled in the port of Primorsk is to grow from 75 million tons to 120 million tons, said Igor Levitin, Russian Transport Minister, at a ceremony to mark work on  “the North” oil pipeline .
“With the launch of “The North” project, the port of Primorsk gets a second wind. Now it handles not just oil, but oil products too,” said Mr Levitin.
In the words of the RF Minister of Transport, next year the construction of a railway line and a railway terminal will begin. The capacity of the terminal will amount to 10-12 million tons per annum.
Nowadays, in the framework of the “Baltic Pipeline System” project, the port of Primorsk handles 75 million tons of oil annually. The capacity of “the North” project will increase from 8.5 million tons to 24.6 million tons of oil products in the future.

A First for the Russian South
On July 25, the first stage of a car transshipment terminal was put into operation in Novoshakhtinsk (Rostov region). The new complex is the first ro-ro terminal in Russia’s southern region. Experts say the terminal in Novoshakhtinsk will help to unload Moscow Customs and diversify transport flows by avoiding competition with the Baltic automobile delivery sector.  
The project is being implemented by OOO Russian Transport Lines (RTL) in cooperation with OOO Algai.  The capacity of the terminal’s first stage is some 120,000 cars per year. According to Elena Zhdanova, the company’s PR Director, the first phase is a 15-hectare open ground with asphalt-macadam surface capable of storing 6,500 cars. The second stage will be located on a 10-hectare space. It will be put into operation by the end of 2008 and is to raise the terminal’s storage capacity to 10,500 vehicles. The terminal will be able to handle 170,000 automobiles per year. For implementation of this project, RTL established a subsidiary in Novoshakhtinsk – OOO YugTerminalService.
In the words of Elena Zhdanova, the location of the terminal was chosen for a number of reasons. In particular, deepwater seaports (Ilyichevsk, Sevastopol, Odessa, Nikolayev) have good opportunities for servicing ferries transporting ro-ro cargo. Also, Southern Customs is less loaded in comparison to Moscow Customs. “From Novoshakhtinsk, cars will be transported as Russian cargo under a tariff which is 40% lower. Thus, transport costs will be much lower as well,” Mrs Zhdanova explained.
As of today, there is a contract for logistics services in Novoshakhtinsk signed between Algai and General Motors; negotiations with Toyota, Mazda, Nissan manufacturers are in progress. Experts say the terminal is also suitable for transshipment of Renault automobiles in Turkey, which enter Russia in Novorossiysk and are then transported to Moscow for customs clearance before some are returned to the southern region. 
Customs clearance of these automobiles is carried out by RTL Group. Cars will be cleared four kilometres away from Novoshakhtinsk at the Customs Clearance Department. 

Armenian Throughput Down
The volume of freight transportation in Armenia in January-June 2008 fell by 4.2% year-on-year to 4.23 million tons. 
In that period the railway transport carried 1.31 million tons of freight (+0.4%), road haulages transported 2.147 million tons (-8%), and air transport – 4,600 tons (+2.2%).
771.3 thousand tons of gas was delivered to Armenia by the mainline pipeline, 2.8% up in comparison with January-June 2007. 
In the first six months of 2008, the throughput in the Republic increased by 3.9% to 1,47 billion t/km.
Meanwhile, passenger transportation fell by 5.8% year-on-year to 117.35 million people. 245.8 thousand passengers travelled  by railway (-2%), 105.69 million passengers by road (-7.5%), and 620.1 thousand passengers by aircraft (+9.3%). 10.79 million people were carried by electric transport in the country in January-June 2008. The growth was 14.2% in comparison with the same period of 2007. 
Passenger turnover fell by 3.5% to 1,714 million passenger-kilometres.

OAO RZD: Foreign trade shipments by rail up 4.3% in six months
In the first six months of 2008, foreign trade shipments by Russian Railways increased by 4.3% to 265.8 million tons compared to the same period last year. The structure of export and import cargo flows changed, with exports through port stations up by 0.6% to 86.6 million tons, while exports passing through border stations decreased by 4.8% to 105.1 million tons. Imports through port stations increased by 22% to 7 million tons and through border stations by 26.9% to 49.9 million tons. 
In addition, in the first six months of 2008, transit cargo volume rose by 31% to 17.2 million tons, with the main items being oil and grain, as well as ferrous metals and coal. 
The biggest increases in volumes through border stations were recorded at Skangali (up 84.4%), Rudnya (up 24.7%), Posin (up 23.2%) and Buslovskaya (up 35.6%), and through Murmansk port station (up 6.5%) and Vysotsk (up 7%). 
The increase in volumes was due to higher consumption of oil, coal and fertilisers in Europe. 
Increased traffic through the port station of Krabovaya (up 70.5%) and Cape Astafiyeva (up 32.5%) resulted from increased consumption of oil and ferrous metals by countries in the Asia-Pacific region. 

The Baltic Ports: Latvia Goes Ahead
In January-June 2008, the ports of the Baltic States handled 70.639 million tons of freight, 3.7% or 2.732 million tons down year-on-year.
Latvian ports serviced 45.6% of the volume, Lithuanian ports 28.7%, and the share of Estonian ports was 25.7%.
Latvian ports handled 22.199 million tons of cargo (+2.6%). The throughput of Lithuanian ports grew by 31.2% to 20.27 million tons. Meanwhile, the handling volume of Estonian ports declined by 31.5% to 18.17 million tons.
According to throughput, the port of Klaipeda became the leader in the region. It handled 15.815 million tons (+20.5%).
Second position is occupied by Ventspils. Its throughput was 14.947 million tons (-7.1%).
The port of Tallinn is in third place. Its throughput was 14.791 million tons. The decline was 31.9%.
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    [DETAIL_TEXT] => 
Multi-Functional Ruler for Tracks
Nowadays, only traditional parameters of railway track are used. They are broadening, twists, cross-section and side-cutting sags. Meanwhile, the track structure and condition should be checked to find out whether they correspond to the set traffic speed; and data about the dynamics of the track’s condition and its location in the single system of geodesic coordinates.
High-speed track monitoring stations CNII4MD may be used for different targets. They measure traditional parameters as well as a track’s cross-section and side-cutting position. The diagnostic complex is designed for control of the structure and condition of high-speed (up to 250 kph) railway tracks. It includes contact-free optical measuring instruments and a sensitive navigation system together with a computing complex and a highly precise satellite receiver for geodesic coordinates.
CNII4MD has proved its efficiency and reliability many times. The diagnostic complex was used to repair a section of the Moscow – Saint Petersburg line. The results showed that the parameters of curve, level, incline, long surface irregularities and longitudinal profile all improved (see picture 1, 2).
Nowadays, CNII4MD reaches the following targets automatically:
• Monitoring of track condition and structure parameters;
• Assessment of practical parameters of track condition and the structure’s compliance with the set traffic speed; detection of the recession of the rail gauge from maintenance standards, which would require a reduced train speed limit at the section;
• Shooting real parameters of track cross-section and side-cutting position, including station tracks;
• Evaluation of how the condition of the track’s geometry has changed over time;
• Track certification according to the facility’s parameters such as the plan, profile and the geometry of the gauge;
• Revealing the sections to be repaired, their pre-design characteristics, evaluation of the quality of fulfilled works and compliance of the real parameters of the repaired track with its intended characteristics.
With Pinpoint Accuracy
If a train can run at 250 kph, the line is considered high-speed. Consequently, the requirements for monitoring the track’s geometry changes, their pre-design characteristics, quality evaluation and repair efficiency become stricter.
Tests show that the accuracy of defining the real condition of the track cross-section and side-cutting may be improved a hundred times over. To reduce the number of mistakes made during real-time measuring of the angles of roll, azimuth and pitch – which are the basis for defining the track’s cross-section and side-cutting state – it is possible to use inertial navigation facilities, into which satellite navigation systems are integrated. The reduced risk of a mistake ismade possible due to correction in the global coordinate system according to reference points.
Modern margins of error for defining the track parameters geometry are 0.5 – 1 mm. Developed by ZAO Industrial and Innovation Company Progress, the platform-free inertial navigation system with laser gyroscopes provides accurate measuring. It features an integrated satellite receiver of geodesic coordinates and a distance-measuring sensor.
Comparative tests of CNII4MD, held at the testing ring railway in Scherbinka and on sections of Moscow – Saint-Petersburg line, demonstrated the quality of work of the BINSN integrated system (picture 3). The maximum level of mistakes in the vertical did not exceed 0.01 degree, which meets the requirements for high-speed control. It is significant that, if a more precise satellite receiver is used, the accuracy of the integrated satellite inertial system may improve.
The integrated navigation system in CNII4MD compensates for interruptions arising when a train encounters different physical obstacles (e.g. bridges, tunnels, deep valleys, high buildings, etc.), hiding the antenna from satellites. The received data show that the accuracy of the object’s location, excluding omissions caused by certain physical obstacles, is no more than 1 decimetre. 
Application of the equipment on other railway transport units allows the pinpointing of their location with 5 cm accuracy. It is enough for automated traffic control, interval regulation and safety.
CNII4MD also allows control of 23 parameters of a track, one of which is the railhead full profile that influences the traffic safety. Beforehand, this parameter was measured manually and in profile in several sections. The use of an equipped wagon allows non-stop measurements at high-speed, which reduces expenses on diagnostics and provides more objective data for the work of a rail-grinding train (picture 4).
All-seeing eye of safety
To provide safe traffic and proper track geometry characteristics on high-speed railway sections, it is necessary to control the geometric parameters of a rail used to make the track. The equipment developed by ZAO Industrial and Innovation Company Progress allows control of the straightness in three planes and the “twisting” of rails (picture 5).
To control the parameters of tunnels, ZAO Industrial and Innovation Company Progress created a tunnel-inspecting station, CNII4T, that measures their parameters and estimates oversized places, given wagons’ evolution at different speeds (picture 6).
Solutions to the problem of safety are increasing, especially on high-speed railways and at the sections where heavy wagons run, where complex information about the real condition of tracks and the dynamics of “rolling-stock - track” interaction is required. Nowadays the list of functions fulfilled by CNII4T is being expanded. 
ZAO Industrial and Innovation Company Progress is working to equip it with additional subsystems and software so that it could control parameters for: rail joint runboard, canting, pointworks, idling clamps, track superstructure – such as a ballast section’s cantilever girder – corrupted crossties, splashes, creepage of lengths and tension in continuous welded rails, straightness of rails when a train is running along them.
Simultaneously, a new version of the software for processing the received data is being developed and put into operation. It will solve almost all problems in the sector of controlling the geometry of high-speed railway sections. 

By Petr Kuleshov,
Deputy Director General of ZAO Industrial and Innovation Company Progress
 
    [~DETAIL_TEXT] => 
Multi-Functional Ruler for Tracks
Nowadays, only traditional parameters of railway track are used. They are broadening, twists, cross-section and side-cutting sags. Meanwhile, the track structure and condition should be checked to find out whether they correspond to the set traffic speed; and data about the dynamics of the track’s condition and its location in the single system of geodesic coordinates.
High-speed track monitoring stations CNII4MD may be used for different targets. They measure traditional parameters as well as a track’s cross-section and side-cutting position. The diagnostic complex is designed for control of the structure and condition of high-speed (up to 250 kph) railway tracks. It includes contact-free optical measuring instruments and a sensitive navigation system together with a computing complex and a highly precise satellite receiver for geodesic coordinates.
CNII4MD has proved its efficiency and reliability many times. The diagnostic complex was used to repair a section of the Moscow – Saint Petersburg line. The results showed that the parameters of curve, level, incline, long surface irregularities and longitudinal profile all improved (see picture 1, 2).
Nowadays, CNII4MD reaches the following targets automatically:
• Monitoring of track condition and structure parameters;
• Assessment of practical parameters of track condition and the structure’s compliance with the set traffic speed; detection of the recession of the rail gauge from maintenance standards, which would require a reduced train speed limit at the section;
• Shooting real parameters of track cross-section and side-cutting position, including station tracks;
• Evaluation of how the condition of the track’s geometry has changed over time;
• Track certification according to the facility’s parameters such as the plan, profile and the geometry of the gauge;
• Revealing the sections to be repaired, their pre-design characteristics, evaluation of the quality of fulfilled works and compliance of the real parameters of the repaired track with its intended characteristics.
With Pinpoint Accuracy
If a train can run at 250 kph, the line is considered high-speed. Consequently, the requirements for monitoring the track’s geometry changes, their pre-design characteristics, quality evaluation and repair efficiency become stricter.
Tests show that the accuracy of defining the real condition of the track cross-section and side-cutting may be improved a hundred times over. To reduce the number of mistakes made during real-time measuring of the angles of roll, azimuth and pitch – which are the basis for defining the track’s cross-section and side-cutting state – it is possible to use inertial navigation facilities, into which satellite navigation systems are integrated. The reduced risk of a mistake ismade possible due to correction in the global coordinate system according to reference points.
Modern margins of error for defining the track parameters geometry are 0.5 – 1 mm. Developed by ZAO Industrial and Innovation Company Progress, the platform-free inertial navigation system with laser gyroscopes provides accurate measuring. It features an integrated satellite receiver of geodesic coordinates and a distance-measuring sensor.
Comparative tests of CNII4MD, held at the testing ring railway in Scherbinka and on sections of Moscow – Saint-Petersburg line, demonstrated the quality of work of the BINSN integrated system (picture 3). The maximum level of mistakes in the vertical did not exceed 0.01 degree, which meets the requirements for high-speed control. It is significant that, if a more precise satellite receiver is used, the accuracy of the integrated satellite inertial system may improve.
The integrated navigation system in CNII4MD compensates for interruptions arising when a train encounters different physical obstacles (e.g. bridges, tunnels, deep valleys, high buildings, etc.), hiding the antenna from satellites. The received data show that the accuracy of the object’s location, excluding omissions caused by certain physical obstacles, is no more than 1 decimetre. 
Application of the equipment on other railway transport units allows the pinpointing of their location with 5 cm accuracy. It is enough for automated traffic control, interval regulation and safety.
CNII4MD also allows control of 23 parameters of a track, one of which is the railhead full profile that influences the traffic safety. Beforehand, this parameter was measured manually and in profile in several sections. The use of an equipped wagon allows non-stop measurements at high-speed, which reduces expenses on diagnostics and provides more objective data for the work of a rail-grinding train (picture 4).
All-seeing eye of safety
To provide safe traffic and proper track geometry characteristics on high-speed railway sections, it is necessary to control the geometric parameters of a rail used to make the track. The equipment developed by ZAO Industrial and Innovation Company Progress allows control of the straightness in three planes and the “twisting” of rails (picture 5).
To control the parameters of tunnels, ZAO Industrial and Innovation Company Progress created a tunnel-inspecting station, CNII4T, that measures their parameters and estimates oversized places, given wagons’ evolution at different speeds (picture 6).
Solutions to the problem of safety are increasing, especially on high-speed railways and at the sections where heavy wagons run, where complex information about the real condition of tracks and the dynamics of “rolling-stock - track” interaction is required. Nowadays the list of functions fulfilled by CNII4T is being expanded. 
ZAO Industrial and Innovation Company Progress is working to equip it with additional subsystems and software so that it could control parameters for: rail joint runboard, canting, pointworks, idling clamps, track superstructure – such as a ballast section’s cantilever girder – corrupted crossties, splashes, creepage of lengths and tension in continuous welded rails, straightness of rails when a train is running along them.
Simultaneously, a new version of the software for processing the received data is being developed and put into operation. It will solve almost all problems in the sector of controlling the geometry of high-speed railway sections. 

By Petr Kuleshov,
Deputy Director General of ZAO Industrial and Innovation Company Progress
 
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    [DETAIL_TEXT] => 
Multi-Functional Ruler for Tracks
Nowadays, only traditional parameters of railway track are used. They are broadening, twists, cross-section and side-cutting sags. Meanwhile, the track structure and condition should be checked to find out whether they correspond to the set traffic speed; and data about the dynamics of the track’s condition and its location in the single system of geodesic coordinates.
High-speed track monitoring stations CNII4MD may be used for different targets. They measure traditional parameters as well as a track’s cross-section and side-cutting position. The diagnostic complex is designed for control of the structure and condition of high-speed (up to 250 kph) railway tracks. It includes contact-free optical measuring instruments and a sensitive navigation system together with a computing complex and a highly precise satellite receiver for geodesic coordinates.
CNII4MD has proved its efficiency and reliability many times. The diagnostic complex was used to repair a section of the Moscow – Saint Petersburg line. The results showed that the parameters of curve, level, incline, long surface irregularities and longitudinal profile all improved (see picture 1, 2).
Nowadays, CNII4MD reaches the following targets automatically:
• Monitoring of track condition and structure parameters;
• Assessment of practical parameters of track condition and the structure’s compliance with the set traffic speed; detection of the recession of the rail gauge from maintenance standards, which would require a reduced train speed limit at the section;
• Shooting real parameters of track cross-section and side-cutting position, including station tracks;
• Evaluation of how the condition of the track’s geometry has changed over time;
• Track certification according to the facility’s parameters such as the plan, profile and the geometry of the gauge;
• Revealing the sections to be repaired, their pre-design characteristics, evaluation of the quality of fulfilled works and compliance of the real parameters of the repaired track with its intended characteristics.
With Pinpoint Accuracy
If a train can run at 250 kph, the line is considered high-speed. Consequently, the requirements for monitoring the track’s geometry changes, their pre-design characteristics, quality evaluation and repair efficiency become stricter.
Tests show that the accuracy of defining the real condition of the track cross-section and side-cutting may be improved a hundred times over. To reduce the number of mistakes made during real-time measuring of the angles of roll, azimuth and pitch – which are the basis for defining the track’s cross-section and side-cutting state – it is possible to use inertial navigation facilities, into which satellite navigation systems are integrated. The reduced risk of a mistake ismade possible due to correction in the global coordinate system according to reference points.
Modern margins of error for defining the track parameters geometry are 0.5 – 1 mm. Developed by ZAO Industrial and Innovation Company Progress, the platform-free inertial navigation system with laser gyroscopes provides accurate measuring. It features an integrated satellite receiver of geodesic coordinates and a distance-measuring sensor.
Comparative tests of CNII4MD, held at the testing ring railway in Scherbinka and on sections of Moscow – Saint-Petersburg line, demonstrated the quality of work of the BINSN integrated system (picture 3). The maximum level of mistakes in the vertical did not exceed 0.01 degree, which meets the requirements for high-speed control. It is significant that, if a more precise satellite receiver is used, the accuracy of the integrated satellite inertial system may improve.
The integrated navigation system in CNII4MD compensates for interruptions arising when a train encounters different physical obstacles (e.g. bridges, tunnels, deep valleys, high buildings, etc.), hiding the antenna from satellites. The received data show that the accuracy of the object’s location, excluding omissions caused by certain physical obstacles, is no more than 1 decimetre. 
Application of the equipment on other railway transport units allows the pinpointing of their location with 5 cm accuracy. It is enough for automated traffic control, interval regulation and safety.
CNII4MD also allows control of 23 parameters of a track, one of which is the railhead full profile that influences the traffic safety. Beforehand, this parameter was measured manually and in profile in several sections. The use of an equipped wagon allows non-stop measurements at high-speed, which reduces expenses on diagnostics and provides more objective data for the work of a rail-grinding train (picture 4).
All-seeing eye of safety
To provide safe traffic and proper track geometry characteristics on high-speed railway sections, it is necessary to control the geometric parameters of a rail used to make the track. The equipment developed by ZAO Industrial and Innovation Company Progress allows control of the straightness in three planes and the “twisting” of rails (picture 5).
To control the parameters of tunnels, ZAO Industrial and Innovation Company Progress created a tunnel-inspecting station, CNII4T, that measures their parameters and estimates oversized places, given wagons’ evolution at different speeds (picture 6).
Solutions to the problem of safety are increasing, especially on high-speed railways and at the sections where heavy wagons run, where complex information about the real condition of tracks and the dynamics of “rolling-stock - track” interaction is required. Nowadays the list of functions fulfilled by CNII4T is being expanded. 
ZAO Industrial and Innovation Company Progress is working to equip it with additional subsystems and software so that it could control parameters for: rail joint runboard, canting, pointworks, idling clamps, track superstructure – such as a ballast section’s cantilever girder – corrupted crossties, splashes, creepage of lengths and tension in continuous welded rails, straightness of rails when a train is running along them.
Simultaneously, a new version of the software for processing the received data is being developed and put into operation. It will solve almost all problems in the sector of controlling the geometry of high-speed railway sections. 

By Petr Kuleshov,
Deputy Director General of ZAO Industrial and Innovation Company Progress
 
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Multi-Functional Ruler for Tracks
Nowadays, only traditional parameters of railway track are used. They are broadening, twists, cross-section and side-cutting sags. Meanwhile, the track structure and condition should be checked to find out whether they correspond to the set traffic speed; and data about the dynamics of the track’s condition and its location in the single system of geodesic coordinates.
High-speed track monitoring stations CNII4MD may be used for different targets. They measure traditional parameters as well as a track’s cross-section and side-cutting position. The diagnostic complex is designed for control of the structure and condition of high-speed (up to 250 kph) railway tracks. It includes contact-free optical measuring instruments and a sensitive navigation system together with a computing complex and a highly precise satellite receiver for geodesic coordinates.
CNII4MD has proved its efficiency and reliability many times. The diagnostic complex was used to repair a section of the Moscow – Saint Petersburg line. The results showed that the parameters of curve, level, incline, long surface irregularities and longitudinal profile all improved (see picture 1, 2).
Nowadays, CNII4MD reaches the following targets automatically:
• Monitoring of track condition and structure parameters;
• Assessment of practical parameters of track condition and the structure’s compliance with the set traffic speed; detection of the recession of the rail gauge from maintenance standards, which would require a reduced train speed limit at the section;
• Shooting real parameters of track cross-section and side-cutting position, including station tracks;
• Evaluation of how the condition of the track’s geometry has changed over time;
• Track certification according to the facility’s parameters such as the plan, profile and the geometry of the gauge;
• Revealing the sections to be repaired, their pre-design characteristics, evaluation of the quality of fulfilled works and compliance of the real parameters of the repaired track with its intended characteristics.
With Pinpoint Accuracy
If a train can run at 250 kph, the line is considered high-speed. Consequently, the requirements for monitoring the track’s geometry changes, their pre-design characteristics, quality evaluation and repair efficiency become stricter.
Tests show that the accuracy of defining the real condition of the track cross-section and side-cutting may be improved a hundred times over. To reduce the number of mistakes made during real-time measuring of the angles of roll, azimuth and pitch – which are the basis for defining the track’s cross-section and side-cutting state – it is possible to use inertial navigation facilities, into which satellite navigation systems are integrated. The reduced risk of a mistake ismade possible due to correction in the global coordinate system according to reference points.
Modern margins of error for defining the track parameters geometry are 0.5 – 1 mm. Developed by ZAO Industrial and Innovation Company Progress, the platform-free inertial navigation system with laser gyroscopes provides accurate measuring. It features an integrated satellite receiver of geodesic coordinates and a distance-measuring sensor.
Comparative tests of CNII4MD, held at the testing ring railway in Scherbinka and on sections of Moscow – Saint-Petersburg line, demonstrated the quality of work of the BINSN integrated system (picture 3). The maximum level of mistakes in the vertical did not exceed 0.01 degree, which meets the requirements for high-speed control. It is significant that, if a more precise satellite receiver is used, the accuracy of the integrated satellite inertial system may improve.
The integrated navigation system in CNII4MD compensates for interruptions arising when a train encounters different physical obstacles (e.g. bridges, tunnels, deep valleys, high buildings, etc.), hiding the antenna from satellites. The received data show that the accuracy of the object’s location, excluding omissions caused by certain physical obstacles, is no more than 1 decimetre. 
Application of the equipment on other railway transport units allows the pinpointing of their location with 5 cm accuracy. It is enough for automated traffic control, interval regulation and safety.
CNII4MD also allows control of 23 parameters of a track, one of which is the railhead full profile that influences the traffic safety. Beforehand, this parameter was measured manually and in profile in several sections. The use of an equipped wagon allows non-stop measurements at high-speed, which reduces expenses on diagnostics and provides more objective data for the work of a rail-grinding train (picture 4).
All-seeing eye of safety
To provide safe traffic and proper track geometry characteristics on high-speed railway sections, it is necessary to control the geometric parameters of a rail used to make the track. The equipment developed by ZAO Industrial and Innovation Company Progress allows control of the straightness in three planes and the “twisting” of rails (picture 5).
To control the parameters of tunnels, ZAO Industrial and Innovation Company Progress created a tunnel-inspecting station, CNII4T, that measures their parameters and estimates oversized places, given wagons’ evolution at different speeds (picture 6).
Solutions to the problem of safety are increasing, especially on high-speed railways and at the sections where heavy wagons run, where complex information about the real condition of tracks and the dynamics of “rolling-stock - track” interaction is required. Nowadays the list of functions fulfilled by CNII4T is being expanded. 
ZAO Industrial and Innovation Company Progress is working to equip it with additional subsystems and software so that it could control parameters for: rail joint runboard, canting, pointworks, idling clamps, track superstructure – such as a ballast section’s cantilever girder – corrupted crossties, splashes, creepage of lengths and tension in continuous welded rails, straightness of rails when a train is running along them.
Simultaneously, a new version of the software for processing the received data is being developed and put into operation. It will solve almost all problems in the sector of controlling the geometry of high-speed railway sections. 

By Petr Kuleshov,
Deputy Director General of ZAO Industrial and Innovation Company Progress
 
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Four Olympic Projects 
RZD intends to implement four infrastructure construction projects, and also rebuild an existing railroad between Moscow and Adler for the organisation of high-speed movement. “Sochi Development Program assumes modernisation of the whole transport system in the resort area on the Black Sea coast of Russia, including reconstruction of halls and development of the infrastructure on the way to Olympic venues,” Vice President and Chief Engineer of OAO RZD Valentin Gapanovich states in his forecast. 
First of all, it is necessary to solve the problem of an adequate throughput on the railroad Tuapse – Adler for transportation of cargoes required at the Olympic infrastructure construction sites. On this part of the road the track is more than 102 km long, with 11 single-line sectors in it (in 8 cases there are double-line inserts).  About 85% of the railway goes along the sea coast. Most of the construction there was built at the beginning of the 20th century, and now it is in a state of material deterioration. They predict in RZD that the additional freight traffic during preparations for the 2014 Olympics could amount to100 million tons. It is planned that 50% - 70% of these cargoes will be transported by rail. Estimated costs that transport monopolists will have to bear in order to improve the railway infrastructure on this road section is RUR13.5 billion. Preparation works for building the second main line on this sector and reconstruction of the stations there are ongoing. 
As calculated by the “Hyprotrance Transport and Economy Institute”, it will be enough to provide a necessary throughput for trains. “In fact, today we do these inserts in the most problematic railroad sections, in order to increase throughput accordingly. It is especially important for the period of construction in town, and for increasing cargo turnover,” they note in RZD.
Which Way to Get to the Resort? 
In addition, the list of Olympic projects includes a construction of combined roads (both motorways and railways) from Adler to Krasnaya Polyana resort (this resort is the place where most Olympic competitions will be held), and supplying the railway communication line with electricity. The 50 km-long light railway will deliver 15,000 passengers a day from the sea coast to the mountains in only 35 minutes. “The OAO RZD’s decision to outline and build a new railway from Adler to Krasnaya Polyana as a high-speed suburban railway, which requires special rolling stock, means proper equipment is needed both for the railroad infrastructure and for the rolling stock itself. So, experts of the Institute have been holding consultations with representatives of Italian company Finmeccanica for a year already, coordinating projected and outlined technical solutions regarding safety systems, and harmonising Russian normative documentation with the corresponding European norms for fast and high-speed movement. This project, which takes into account no less than 12 tunnels, is interesting and complicated even for RZD. “It is a motorway and a railroad which will each have their own different lines, but will simultaneously be in a single technical corridor. Now this project is being studied with the purpose of working out a way of building a two-storied highway, where cars will run on the top, and trains on the bottom. There will be some road sections where they will converge, and on some other parts of the road they will go in parallel,” RZD experts explain. 
We should like to remind you that, until recently, it was planned to build a light metro on this road section. The “Basic Element”, which is reconstructing the airport in Sochi decided a year ago that building a railway to it from Krasnaya Polyana was too expensive. The main stumbling block which considerably increased the cost of the project was the need to build tunnels. A key factor was the maximum admissible slope level of the road. A light metro can overcome a 40% slope, but a train only 20%. Exactly in connection with this, “Basel” has decided that the project of a railway is too expensive. Meanwhile, all other circumstances being equal, the cost of building 1 km of railway in complicated conditions can be up to USD 5 million, and the cost of the light metro at least 3 times more than that. 
Here it is necessary to consider that in Russia metro exists in 10 cities, and the average number of city dwellers per 1 km of metro lines is about 120,000 people. The lowest level of this parameter in Moscow is about 38,000 people. Thus, Moscow is exactly the city where the income made by the metro does not cover its costs. The population of Sochi is 500,000. So, counting only the residents, numbers for the projected light metro will be really catastrophic – 3,000 inhabitants to 1 km of railway line. And even if you include health resort visitors, the population per 1 km of ways will hardly exceed 20,000 people. “A light metro was specifically mentioned in the application, but it was mentioned with an enormous projected volume of passenger traffic of up to 31,000 passengers per hour. In fact, that is a projected number for big cities such as Moscow, New York, Paris and Tokyo. As a result, there was a loss of time, and now it is necessary to approve new specifications, this time for the railway mainline,” emphasised RZD. The estimated cost of this project is about RUR 260 billion.  
By Train Instead of By Car
The third large RZD management project is to lay a railroad line between Adler and “Sochi” airport (it is also on the territory of Adler), with tunnels to be built in such a way as to minimise  the need to demolish real estate. Almost 3 km of the line will be stretched along the projected motorway from Sochi to the airport. Company investments into the development of the intermodal transportation project for this sector are RUR 60 million, and the creation of the whole mainline will require 6 billion roubles from RZD. 
As forecasted regarding growth in air transportation volumes, by 2014 2.4 million people will arrive in the airport per year, compared with 1.5 million planned for the year 2007. High-speed electric trains are expected to carry about 250 people per trip. Five high-comfort electric trains are expected to be shuttling between Adler and the airport of Sochi. Today only transportation by car is available on this route.
And lastly, RZD is already working on organisation of cargo yards. Construction of new cargo yards is planned to be completed in 2008. The total costs of two projects will be RUR 2.2 billion. “New logistics centres will be built in the area of Vesely village,” they specify in the company. At the moment, pre-project works are ongoing, including photo topography and studies on all the ground involved. Location maps for new cargo yards, infrastructure and ways to connect them have already been worked out and the necessary coordination done.  
The Night Competitor
There will be another RZD project, which is not an Olympic one, but it is no less significant for the whole Olympic capital infrastructure. It is modernisation of the existing railway, and organisation of high-speed movement on it. Work on this was started in 2004. RZD has chosen a variant of high-speed passenger movement organisation using the Kursk direction. For this purpose it is necessary to start construction works on a number of third mainlines, to modernise existing lines to match the standards of high-speed movement and to build a way around the territory of the Ukraine. 
The main problem with this project is the age of the line itself, which was constructed in this direction more than 140 years ago and was not meant to meet today’s high-speed parameters. The radius of some curves is 500-600 m, also rail switches can be found occasionally in curves at stations. This does not allow for raising the speed. For example, if a train goes at a speed of 140 km per hour, it has to slow it down to 25 km per hour because of the switches in the curves. The total length of the modernised railroad from “Moscow to Adler” is 1,900 km, and RZD intends to reduce the journey time from 25 to 14 hours. It will bring about a situation where specially organised “Moscow – Adler” overnight trains may become a serious competitor to air transport and raise the incomes of the company as a result of attracting passengers that can afford it in large numbers.
“Today this direction is one of the busiest cargo railroads, and it is strategically important for Russia. Operating specifications allow projected speeds of up to 250 km per hour,” said Mr Gapanovich. Russian engineering documentation, as well as European normative requirements, formed a basis for the development of fast and high-speed movement. In The RZD Information Memorandum which was prepared during the launch of OAO RZD’s Bonds Issue №8, Russian Transmashholding, Italian AnsaldoBreda and Canadian Bombardier are mentioned as the “potential manufacturers” of 160 kph electric trains, within the RZD program up to 2020 and  the Sochi Olympics transport service. 
“Commercial, operational and technical requirements have been coordinated” with the mentioned companies. Preliminary forecasts are that the adaptation of existing railroad lines for high-speed train movement from Moscow to the Black Sea resorts will cost more than 400 billion roubles.

by Maria Shevchenko
Interview
“We Are Forced to Build in Built-up Areas and Close to Protected Nature Areas” 
In Sochi, new technologies are present practically in each engineering solution. Nikolay Polischuk, Director for Realisation of Special Projects at Engineering and Construction Company Transstroy, answers  The RZD-­Partner International questions.
– Mr Polischuk, tell me please about the peculiarities of the Olympic Sochi Project in terms of transport infrastructure construction. 
– One of the main features that illustrates the complexity of transport projects in that region is its mountainous conditions, with the typical phenomena of landslides. Laying transport lines in this region, no matter if they are motorways or railroads, assumes construction of complicated artificial objects – tunnels, bridges and overpasses. Also, another circumstance makes the transport engineering process on this territory more complicated. It is the fact that very often construction should take place in existing densely populated areas, and very close to unique and protected natural areas.   
– What are the main objects your company is planning to build?
– Speaking about the Olympic sites, it is necessary to mention the construction of a road around the town of Sochi, which had been started long before the IОC decision. But today it is not just about a number of key objects to prepare for the 2014 Olympics, but also a matter of development of the whole transport system in Big Sochi.
Another Transstroy Holding site, which is not registered on the Olympic list, but plays an important role in development of the region in terms of making it popular and available to tourists, is the new airport Gelendzhik now under construction. According to the engineering project, the throughput of this airport will be about 600 passengers per hour. Today, work on this site has already been partly finished. The airport will be put into operation by the beginning of the holiday season next summer.
Within the 2014 Olympics preparation campaign, a great deal of work on building and reconstruction of hydraulic engineering facilities will be carried out in order to realise another project of this kind. It is the sea port reloading complex Imeretinsky, which is assigned to provide building materials and ready-made construction units for Olympic sites. The projected capacity of the Imeretinskaya sea port, which is located in the bay, will be 5 million tons a year. The complex is designed to receive ships with a carrying capacity of 5,500 tons, and about 140 m in length. 
    [~DETAIL_TEXT] => 
Four Olympic Projects 
RZD intends to implement four infrastructure construction projects, and also rebuild an existing railroad between Moscow and Adler for the organisation of high-speed movement. “Sochi Development Program assumes modernisation of the whole transport system in the resort area on the Black Sea coast of Russia, including reconstruction of halls and development of the infrastructure on the way to Olympic venues,” Vice President and Chief Engineer of OAO RZD Valentin Gapanovich states in his forecast. 
First of all, it is necessary to solve the problem of an adequate throughput on the railroad Tuapse – Adler for transportation of cargoes required at the Olympic infrastructure construction sites. On this part of the road the track is more than 102 km long, with 11 single-line sectors in it (in 8 cases there are double-line inserts).  About 85% of the railway goes along the sea coast. Most of the construction there was built at the beginning of the 20th century, and now it is in a state of material deterioration. They predict in RZD that the additional freight traffic during preparations for the 2014 Olympics could amount to100 million tons. It is planned that 50% - 70% of these cargoes will be transported by rail. Estimated costs that transport monopolists will have to bear in order to improve the railway infrastructure on this road section is RUR13.5 billion. Preparation works for building the second main line on this sector and reconstruction of the stations there are ongoing. 
As calculated by the “Hyprotrance Transport and Economy Institute”, it will be enough to provide a necessary throughput for trains. “In fact, today we do these inserts in the most problematic railroad sections, in order to increase throughput accordingly. It is especially important for the period of construction in town, and for increasing cargo turnover,” they note in RZD.
Which Way to Get to the Resort? 
In addition, the list of Olympic projects includes a construction of combined roads (both motorways and railways) from Adler to Krasnaya Polyana resort (this resort is the place where most Olympic competitions will be held), and supplying the railway communication line with electricity. The 50 km-long light railway will deliver 15,000 passengers a day from the sea coast to the mountains in only 35 minutes. “The OAO RZD’s decision to outline and build a new railway from Adler to Krasnaya Polyana as a high-speed suburban railway, which requires special rolling stock, means proper equipment is needed both for the railroad infrastructure and for the rolling stock itself. So, experts of the Institute have been holding consultations with representatives of Italian company Finmeccanica for a year already, coordinating projected and outlined technical solutions regarding safety systems, and harmonising Russian normative documentation with the corresponding European norms for fast and high-speed movement. This project, which takes into account no less than 12 tunnels, is interesting and complicated even for RZD. “It is a motorway and a railroad which will each have their own different lines, but will simultaneously be in a single technical corridor. Now this project is being studied with the purpose of working out a way of building a two-storied highway, where cars will run on the top, and trains on the bottom. There will be some road sections where they will converge, and on some other parts of the road they will go in parallel,” RZD experts explain. 
We should like to remind you that, until recently, it was planned to build a light metro on this road section. The “Basic Element”, which is reconstructing the airport in Sochi decided a year ago that building a railway to it from Krasnaya Polyana was too expensive. The main stumbling block which considerably increased the cost of the project was the need to build tunnels. A key factor was the maximum admissible slope level of the road. A light metro can overcome a 40% slope, but a train only 20%. Exactly in connection with this, “Basel” has decided that the project of a railway is too expensive. Meanwhile, all other circumstances being equal, the cost of building 1 km of railway in complicated conditions can be up to USD 5 million, and the cost of the light metro at least 3 times more than that. 
Here it is necessary to consider that in Russia metro exists in 10 cities, and the average number of city dwellers per 1 km of metro lines is about 120,000 people. The lowest level of this parameter in Moscow is about 38,000 people. Thus, Moscow is exactly the city where the income made by the metro does not cover its costs. The population of Sochi is 500,000. So, counting only the residents, numbers for the projected light metro will be really catastrophic – 3,000 inhabitants to 1 km of railway line. And even if you include health resort visitors, the population per 1 km of ways will hardly exceed 20,000 people. “A light metro was specifically mentioned in the application, but it was mentioned with an enormous projected volume of passenger traffic of up to 31,000 passengers per hour. In fact, that is a projected number for big cities such as Moscow, New York, Paris and Tokyo. As a result, there was a loss of time, and now it is necessary to approve new specifications, this time for the railway mainline,” emphasised RZD. The estimated cost of this project is about RUR 260 billion.  
By Train Instead of By Car
The third large RZD management project is to lay a railroad line between Adler and “Sochi” airport (it is also on the territory of Adler), with tunnels to be built in such a way as to minimise  the need to demolish real estate. Almost 3 km of the line will be stretched along the projected motorway from Sochi to the airport. Company investments into the development of the intermodal transportation project for this sector are RUR 60 million, and the creation of the whole mainline will require 6 billion roubles from RZD. 
As forecasted regarding growth in air transportation volumes, by 2014 2.4 million people will arrive in the airport per year, compared with 1.5 million planned for the year 2007. High-speed electric trains are expected to carry about 250 people per trip. Five high-comfort electric trains are expected to be shuttling between Adler and the airport of Sochi. Today only transportation by car is available on this route.
And lastly, RZD is already working on organisation of cargo yards. Construction of new cargo yards is planned to be completed in 2008. The total costs of two projects will be RUR 2.2 billion. “New logistics centres will be built in the area of Vesely village,” they specify in the company. At the moment, pre-project works are ongoing, including photo topography and studies on all the ground involved. Location maps for new cargo yards, infrastructure and ways to connect them have already been worked out and the necessary coordination done.  
The Night Competitor
There will be another RZD project, which is not an Olympic one, but it is no less significant for the whole Olympic capital infrastructure. It is modernisation of the existing railway, and organisation of high-speed movement on it. Work on this was started in 2004. RZD has chosen a variant of high-speed passenger movement organisation using the Kursk direction. For this purpose it is necessary to start construction works on a number of third mainlines, to modernise existing lines to match the standards of high-speed movement and to build a way around the territory of the Ukraine. 
The main problem with this project is the age of the line itself, which was constructed in this direction more than 140 years ago and was not meant to meet today’s high-speed parameters. The radius of some curves is 500-600 m, also rail switches can be found occasionally in curves at stations. This does not allow for raising the speed. For example, if a train goes at a speed of 140 km per hour, it has to slow it down to 25 km per hour because of the switches in the curves. The total length of the modernised railroad from “Moscow to Adler” is 1,900 km, and RZD intends to reduce the journey time from 25 to 14 hours. It will bring about a situation where specially organised “Moscow – Adler” overnight trains may become a serious competitor to air transport and raise the incomes of the company as a result of attracting passengers that can afford it in large numbers.
“Today this direction is one of the busiest cargo railroads, and it is strategically important for Russia. Operating specifications allow projected speeds of up to 250 km per hour,” said Mr Gapanovich. Russian engineering documentation, as well as European normative requirements, formed a basis for the development of fast and high-speed movement. In The RZD Information Memorandum which was prepared during the launch of OAO RZD’s Bonds Issue №8, Russian Transmashholding, Italian AnsaldoBreda and Canadian Bombardier are mentioned as the “potential manufacturers” of 160 kph electric trains, within the RZD program up to 2020 and  the Sochi Olympics transport service. 
“Commercial, operational and technical requirements have been coordinated” with the mentioned companies. Preliminary forecasts are that the adaptation of existing railroad lines for high-speed train movement from Moscow to the Black Sea resorts will cost more than 400 billion roubles.

by Maria Shevchenko
Interview
“We Are Forced to Build in Built-up Areas and Close to Protected Nature Areas” 
In Sochi, new technologies are present practically in each engineering solution. Nikolay Polischuk, Director for Realisation of Special Projects at Engineering and Construction Company Transstroy, answers  The RZD-­Partner International questions.
– Mr Polischuk, tell me please about the peculiarities of the Olympic Sochi Project in terms of transport infrastructure construction. 
– One of the main features that illustrates the complexity of transport projects in that region is its mountainous conditions, with the typical phenomena of landslides. Laying transport lines in this region, no matter if they are motorways or railroads, assumes construction of complicated artificial objects – tunnels, bridges and overpasses. Also, another circumstance makes the transport engineering process on this territory more complicated. It is the fact that very often construction should take place in existing densely populated areas, and very close to unique and protected natural areas.   
– What are the main objects your company is planning to build?
– Speaking about the Olympic sites, it is necessary to mention the construction of a road around the town of Sochi, which had been started long before the IОC decision. But today it is not just about a number of key objects to prepare for the 2014 Olympics, but also a matter of development of the whole transport system in Big Sochi.
Another Transstroy Holding site, which is not registered on the Olympic list, but plays an important role in development of the region in terms of making it popular and available to tourists, is the new airport Gelendzhik now under construction. According to the engineering project, the throughput of this airport will be about 600 passengers per hour. Today, work on this site has already been partly finished. The airport will be put into operation by the beginning of the holiday season next summer.
Within the 2014 Olympics preparation campaign, a great deal of work on building and reconstruction of hydraulic engineering facilities will be carried out in order to realise another project of this kind. It is the sea port reloading complex Imeretinsky, which is assigned to provide building materials and ready-made construction units for Olympic sites. The projected capacity of the Imeretinskaya sea port, which is located in the bay, will be 5 million tons a year. The complex is designed to receive ships with a carrying capacity of 5,500 tons, and about 140 m in length. 
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    [PREVIEW_TEXT] => The transport infrastructure in Sochi will take up a big part of the funds allocated to preparations for the Winter Olympics in 2014. The management of OAO RZD, in turn, plans to spend almost 300 billion roubles for Olympic projects alone, as well as organise high-speed links between Moscow and Adler. (Adler is an area in Sochi. It will be a base point for Olympics transportation). It is estimated by experts that, as a result of the Sochi Transport Development Program realisation, more than 100 km of new railroad and more than 56 km of secondary routes will be built.
    [~PREVIEW_TEXT] => The transport infrastructure in Sochi will take up a big part of the funds allocated to preparations for the Winter Olympics in 2014. The management of OAO RZD, in turn, plans to spend almost 300 billion roubles for Olympic projects alone, as well as organise high-speed links between Moscow and Adler. (Adler is an area in Sochi. It will be a base point for Olympics transportation). It is estimated by experts that, as a result of the Sochi Transport Development Program realisation, more than 100 km of new railroad and more than 56 km of secondary routes will be built.
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            [SECTION_META_DESCRIPTION] => <img src="/ufiles/image/rus/partner/2008/3/15.jpg" border="1" alt=" " hspace="3" vspace="3" width="160" height="102" align="left" />The transport infrastructure in Sochi will take up a big part of the funds allocated to preparations for the Winter Olympics in 2014. The management of OAO RZD, in turn, plans to spend almost 300 billion roubles for Olympic projects alone, as well as organise high-speed links between Moscow and Adler. (Adler is an area in Sochi. It will be a base point for Olympics transportation). It is estimated by experts that, as a result of the Sochi Transport Development Program realisation, more than 100 km of new railroad and more than 56 km of secondary routes will be built.
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Four Olympic Projects 
RZD intends to implement four infrastructure construction projects, and also rebuild an existing railroad between Moscow and Adler for the organisation of high-speed movement. “Sochi Development Program assumes modernisation of the whole transport system in the resort area on the Black Sea coast of Russia, including reconstruction of halls and development of the infrastructure on the way to Olympic venues,” Vice President and Chief Engineer of OAO RZD Valentin Gapanovich states in his forecast. 
First of all, it is necessary to solve the problem of an adequate throughput on the railroad Tuapse – Adler for transportation of cargoes required at the Olympic infrastructure construction sites. On this part of the road the track is more than 102 km long, with 11 single-line sectors in it (in 8 cases there are double-line inserts).  About 85% of the railway goes along the sea coast. Most of the construction there was built at the beginning of the 20th century, and now it is in a state of material deterioration. They predict in RZD that the additional freight traffic during preparations for the 2014 Olympics could amount to100 million tons. It is planned that 50% - 70% of these cargoes will be transported by rail. Estimated costs that transport monopolists will have to bear in order to improve the railway infrastructure on this road section is RUR13.5 billion. Preparation works for building the second main line on this sector and reconstruction of the stations there are ongoing. 
As calculated by the “Hyprotrance Transport and Economy Institute”, it will be enough to provide a necessary throughput for trains. “In fact, today we do these inserts in the most problematic railroad sections, in order to increase throughput accordingly. It is especially important for the period of construction in town, and for increasing cargo turnover,” they note in RZD.
Which Way to Get to the Resort? 
In addition, the list of Olympic projects includes a construction of combined roads (both motorways and railways) from Adler to Krasnaya Polyana resort (this resort is the place where most Olympic competitions will be held), and supplying the railway communication line with electricity. The 50 km-long light railway will deliver 15,000 passengers a day from the sea coast to the mountains in only 35 minutes. “The OAO RZD’s decision to outline and build a new railway from Adler to Krasnaya Polyana as a high-speed suburban railway, which requires special rolling stock, means proper equipment is needed both for the railroad infrastructure and for the rolling stock itself. So, experts of the Institute have been holding consultations with representatives of Italian company Finmeccanica for a year already, coordinating projected and outlined technical solutions regarding safety systems, and harmonising Russian normative documentation with the corresponding European norms for fast and high-speed movement. This project, which takes into account no less than 12 tunnels, is interesting and complicated even for RZD. “It is a motorway and a railroad which will each have their own different lines, but will simultaneously be in a single technical corridor. Now this project is being studied with the purpose of working out a way of building a two-storied highway, where cars will run on the top, and trains on the bottom. There will be some road sections where they will converge, and on some other parts of the road they will go in parallel,” RZD experts explain. 
We should like to remind you that, until recently, it was planned to build a light metro on this road section. The “Basic Element”, which is reconstructing the airport in Sochi decided a year ago that building a railway to it from Krasnaya Polyana was too expensive. The main stumbling block which considerably increased the cost of the project was the need to build tunnels. A key factor was the maximum admissible slope level of the road. A light metro can overcome a 40% slope, but a train only 20%. Exactly in connection with this, “Basel” has decided that the project of a railway is too expensive. Meanwhile, all other circumstances being equal, the cost of building 1 km of railway in complicated conditions can be up to USD 5 million, and the cost of the light metro at least 3 times more than that. 
Here it is necessary to consider that in Russia metro exists in 10 cities, and the average number of city dwellers per 1 km of metro lines is about 120,000 people. The lowest level of this parameter in Moscow is about 38,000 people. Thus, Moscow is exactly the city where the income made by the metro does not cover its costs. The population of Sochi is 500,000. So, counting only the residents, numbers for the projected light metro will be really catastrophic – 3,000 inhabitants to 1 km of railway line. And even if you include health resort visitors, the population per 1 km of ways will hardly exceed 20,000 people. “A light metro was specifically mentioned in the application, but it was mentioned with an enormous projected volume of passenger traffic of up to 31,000 passengers per hour. In fact, that is a projected number for big cities such as Moscow, New York, Paris and Tokyo. As a result, there was a loss of time, and now it is necessary to approve new specifications, this time for the railway mainline,” emphasised RZD. The estimated cost of this project is about RUR 260 billion.  
By Train Instead of By Car
The third large RZD management project is to lay a railroad line between Adler and “Sochi” airport (it is also on the territory of Adler), with tunnels to be built in such a way as to minimise  the need to demolish real estate. Almost 3 km of the line will be stretched along the projected motorway from Sochi to the airport. Company investments into the development of the intermodal transportation project for this sector are RUR 60 million, and the creation of the whole mainline will require 6 billion roubles from RZD. 
As forecasted regarding growth in air transportation volumes, by 2014 2.4 million people will arrive in the airport per year, compared with 1.5 million planned for the year 2007. High-speed electric trains are expected to carry about 250 people per trip. Five high-comfort electric trains are expected to be shuttling between Adler and the airport of Sochi. Today only transportation by car is available on this route.
And lastly, RZD is already working on organisation of cargo yards. Construction of new cargo yards is planned to be completed in 2008. The total costs of two projects will be RUR 2.2 billion. “New logistics centres will be built in the area of Vesely village,” they specify in the company. At the moment, pre-project works are ongoing, including photo topography and studies on all the ground involved. Location maps for new cargo yards, infrastructure and ways to connect them have already been worked out and the necessary coordination done.  
The Night Competitor
There will be another RZD project, which is not an Olympic one, but it is no less significant for the whole Olympic capital infrastructure. It is modernisation of the existing railway, and organisation of high-speed movement on it. Work on this was started in 2004. RZD has chosen a variant of high-speed passenger movement organisation using the Kursk direction. For this purpose it is necessary to start construction works on a number of third mainlines, to modernise existing lines to match the standards of high-speed movement and to build a way around the territory of the Ukraine. 
The main problem with this project is the age of the line itself, which was constructed in this direction more than 140 years ago and was not meant to meet today’s high-speed parameters. The radius of some curves is 500-600 m, also rail switches can be found occasionally in curves at stations. This does not allow for raising the speed. For example, if a train goes at a speed of 140 km per hour, it has to slow it down to 25 km per hour because of the switches in the curves. The total length of the modernised railroad from “Moscow to Adler” is 1,900 km, and RZD intends to reduce the journey time from 25 to 14 hours. It will bring about a situation where specially organised “Moscow – Adler” overnight trains may become a serious competitor to air transport and raise the incomes of the company as a result of attracting passengers that can afford it in large numbers.
“Today this direction is one of the busiest cargo railroads, and it is strategically important for Russia. Operating specifications allow projected speeds of up to 250 km per hour,” said Mr Gapanovich. Russian engineering documentation, as well as European normative requirements, formed a basis for the development of fast and high-speed movement. In The RZD Information Memorandum which was prepared during the launch of OAO RZD’s Bonds Issue №8, Russian Transmashholding, Italian AnsaldoBreda and Canadian Bombardier are mentioned as the “potential manufacturers” of 160 kph electric trains, within the RZD program up to 2020 and  the Sochi Olympics transport service. 
“Commercial, operational and technical requirements have been coordinated” with the mentioned companies. Preliminary forecasts are that the adaptation of existing railroad lines for high-speed train movement from Moscow to the Black Sea resorts will cost more than 400 billion roubles.

by Maria Shevchenko
Interview
“We Are Forced to Build in Built-up Areas and Close to Protected Nature Areas” 
In Sochi, new technologies are present practically in each engineering solution. Nikolay Polischuk, Director for Realisation of Special Projects at Engineering and Construction Company Transstroy, answers  The RZD-­Partner International questions.
– Mr Polischuk, tell me please about the peculiarities of the Olympic Sochi Project in terms of transport infrastructure construction. 
– One of the main features that illustrates the complexity of transport projects in that region is its mountainous conditions, with the typical phenomena of landslides. Laying transport lines in this region, no matter if they are motorways or railroads, assumes construction of complicated artificial objects – tunnels, bridges and overpasses. Also, another circumstance makes the transport engineering process on this territory more complicated. It is the fact that very often construction should take place in existing densely populated areas, and very close to unique and protected natural areas.   
– What are the main objects your company is planning to build?
– Speaking about the Olympic sites, it is necessary to mention the construction of a road around the town of Sochi, which had been started long before the IОC decision. But today it is not just about a number of key objects to prepare for the 2014 Olympics, but also a matter of development of the whole transport system in Big Sochi.
Another Transstroy Holding site, which is not registered on the Olympic list, but plays an important role in development of the region in terms of making it popular and available to tourists, is the new airport Gelendzhik now under construction. According to the engineering project, the throughput of this airport will be about 600 passengers per hour. Today, work on this site has already been partly finished. The airport will be put into operation by the beginning of the holiday season next summer.
Within the 2014 Olympics preparation campaign, a great deal of work on building and reconstruction of hydraulic engineering facilities will be carried out in order to realise another project of this kind. It is the sea port reloading complex Imeretinsky, which is assigned to provide building materials and ready-made construction units for Olympic sites. The projected capacity of the Imeretinskaya sea port, which is located in the bay, will be 5 million tons a year. The complex is designed to receive ships with a carrying capacity of 5,500 tons, and about 140 m in length. 
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Four Olympic Projects 
RZD intends to implement four infrastructure construction projects, and also rebuild an existing railroad between Moscow and Adler for the organisation of high-speed movement. “Sochi Development Program assumes modernisation of the whole transport system in the resort area on the Black Sea coast of Russia, including reconstruction of halls and development of the infrastructure on the way to Olympic venues,” Vice President and Chief Engineer of OAO RZD Valentin Gapanovich states in his forecast. 
First of all, it is necessary to solve the problem of an adequate throughput on the railroad Tuapse – Adler for transportation of cargoes required at the Olympic infrastructure construction sites. On this part of the road the track is more than 102 km long, with 11 single-line sectors in it (in 8 cases there are double-line inserts).  About 85% of the railway goes along the sea coast. Most of the construction there was built at the beginning of the 20th century, and now it is in a state of material deterioration. They predict in RZD that the additional freight traffic during preparations for the 2014 Olympics could amount to100 million tons. It is planned that 50% - 70% of these cargoes will be transported by rail. Estimated costs that transport monopolists will have to bear in order to improve the railway infrastructure on this road section is RUR13.5 billion. Preparation works for building the second main line on this sector and reconstruction of the stations there are ongoing. 
As calculated by the “Hyprotrance Transport and Economy Institute”, it will be enough to provide a necessary throughput for trains. “In fact, today we do these inserts in the most problematic railroad sections, in order to increase throughput accordingly. It is especially important for the period of construction in town, and for increasing cargo turnover,” they note in RZD.
Which Way to Get to the Resort? 
In addition, the list of Olympic projects includes a construction of combined roads (both motorways and railways) from Adler to Krasnaya Polyana resort (this resort is the place where most Olympic competitions will be held), and supplying the railway communication line with electricity. The 50 km-long light railway will deliver 15,000 passengers a day from the sea coast to the mountains in only 35 minutes. “The OAO RZD’s decision to outline and build a new railway from Adler to Krasnaya Polyana as a high-speed suburban railway, which requires special rolling stock, means proper equipment is needed both for the railroad infrastructure and for the rolling stock itself. So, experts of the Institute have been holding consultations with representatives of Italian company Finmeccanica for a year already, coordinating projected and outlined technical solutions regarding safety systems, and harmonising Russian normative documentation with the corresponding European norms for fast and high-speed movement. This project, which takes into account no less than 12 tunnels, is interesting and complicated even for RZD. “It is a motorway and a railroad which will each have their own different lines, but will simultaneously be in a single technical corridor. Now this project is being studied with the purpose of working out a way of building a two-storied highway, where cars will run on the top, and trains on the bottom. There will be some road sections where they will converge, and on some other parts of the road they will go in parallel,” RZD experts explain. 
We should like to remind you that, until recently, it was planned to build a light metro on this road section. The “Basic Element”, which is reconstructing the airport in Sochi decided a year ago that building a railway to it from Krasnaya Polyana was too expensive. The main stumbling block which considerably increased the cost of the project was the need to build tunnels. A key factor was the maximum admissible slope level of the road. A light metro can overcome a 40% slope, but a train only 20%. Exactly in connection with this, “Basel” has decided that the project of a railway is too expensive. Meanwhile, all other circumstances being equal, the cost of building 1 km of railway in complicated conditions can be up to USD 5 million, and the cost of the light metro at least 3 times more than that. 
Here it is necessary to consider that in Russia metro exists in 10 cities, and the average number of city dwellers per 1 km of metro lines is about 120,000 people. The lowest level of this parameter in Moscow is about 38,000 people. Thus, Moscow is exactly the city where the income made by the metro does not cover its costs. The population of Sochi is 500,000. So, counting only the residents, numbers for the projected light metro will be really catastrophic – 3,000 inhabitants to 1 km of railway line. And even if you include health resort visitors, the population per 1 km of ways will hardly exceed 20,000 people. “A light metro was specifically mentioned in the application, but it was mentioned with an enormous projected volume of passenger traffic of up to 31,000 passengers per hour. In fact, that is a projected number for big cities such as Moscow, New York, Paris and Tokyo. As a result, there was a loss of time, and now it is necessary to approve new specifications, this time for the railway mainline,” emphasised RZD. The estimated cost of this project is about RUR 260 billion.  
By Train Instead of By Car
The third large RZD management project is to lay a railroad line between Adler and “Sochi” airport (it is also on the territory of Adler), with tunnels to be built in such a way as to minimise  the need to demolish real estate. Almost 3 km of the line will be stretched along the projected motorway from Sochi to the airport. Company investments into the development of the intermodal transportation project for this sector are RUR 60 million, and the creation of the whole mainline will require 6 billion roubles from RZD. 
As forecasted regarding growth in air transportation volumes, by 2014 2.4 million people will arrive in the airport per year, compared with 1.5 million planned for the year 2007. High-speed electric trains are expected to carry about 250 people per trip. Five high-comfort electric trains are expected to be shuttling between Adler and the airport of Sochi. Today only transportation by car is available on this route.
And lastly, RZD is already working on organisation of cargo yards. Construction of new cargo yards is planned to be completed in 2008. The total costs of two projects will be RUR 2.2 billion. “New logistics centres will be built in the area of Vesely village,” they specify in the company. At the moment, pre-project works are ongoing, including photo topography and studies on all the ground involved. Location maps for new cargo yards, infrastructure and ways to connect them have already been worked out and the necessary coordination done.  
The Night Competitor
There will be another RZD project, which is not an Olympic one, but it is no less significant for the whole Olympic capital infrastructure. It is modernisation of the existing railway, and organisation of high-speed movement on it. Work on this was started in 2004. RZD has chosen a variant of high-speed passenger movement organisation using the Kursk direction. For this purpose it is necessary to start construction works on a number of third mainlines, to modernise existing lines to match the standards of high-speed movement and to build a way around the territory of the Ukraine. 
The main problem with this project is the age of the line itself, which was constructed in this direction more than 140 years ago and was not meant to meet today’s high-speed parameters. The radius of some curves is 500-600 m, also rail switches can be found occasionally in curves at stations. This does not allow for raising the speed. For example, if a train goes at a speed of 140 km per hour, it has to slow it down to 25 km per hour because of the switches in the curves. The total length of the modernised railroad from “Moscow to Adler” is 1,900 km, and RZD intends to reduce the journey time from 25 to 14 hours. It will bring about a situation where specially organised “Moscow – Adler” overnight trains may become a serious competitor to air transport and raise the incomes of the company as a result of attracting passengers that can afford it in large numbers.
“Today this direction is one of the busiest cargo railroads, and it is strategically important for Russia. Operating specifications allow projected speeds of up to 250 km per hour,” said Mr Gapanovich. Russian engineering documentation, as well as European normative requirements, formed a basis for the development of fast and high-speed movement. In The RZD Information Memorandum which was prepared during the launch of OAO RZD’s Bonds Issue №8, Russian Transmashholding, Italian AnsaldoBreda and Canadian Bombardier are mentioned as the “potential manufacturers” of 160 kph electric trains, within the RZD program up to 2020 and  the Sochi Olympics transport service. 
“Commercial, operational and technical requirements have been coordinated” with the mentioned companies. Preliminary forecasts are that the adaptation of existing railroad lines for high-speed train movement from Moscow to the Black Sea resorts will cost more than 400 billion roubles.

by Maria Shevchenko
Interview
“We Are Forced to Build in Built-up Areas and Close to Protected Nature Areas” 
In Sochi, new technologies are present practically in each engineering solution. Nikolay Polischuk, Director for Realisation of Special Projects at Engineering and Construction Company Transstroy, answers  The RZD-­Partner International questions.
– Mr Polischuk, tell me please about the peculiarities of the Olympic Sochi Project in terms of transport infrastructure construction. 
– One of the main features that illustrates the complexity of transport projects in that region is its mountainous conditions, with the typical phenomena of landslides. Laying transport lines in this region, no matter if they are motorways or railroads, assumes construction of complicated artificial objects – tunnels, bridges and overpasses. Also, another circumstance makes the transport engineering process on this territory more complicated. It is the fact that very often construction should take place in existing densely populated areas, and very close to unique and protected natural areas.   
– What are the main objects your company is planning to build?
– Speaking about the Olympic sites, it is necessary to mention the construction of a road around the town of Sochi, which had been started long before the IОC decision. But today it is not just about a number of key objects to prepare for the 2014 Olympics, but also a matter of development of the whole transport system in Big Sochi.
Another Transstroy Holding site, which is not registered on the Olympic list, but plays an important role in development of the region in terms of making it popular and available to tourists, is the new airport Gelendzhik now under construction. According to the engineering project, the throughput of this airport will be about 600 passengers per hour. Today, work on this site has already been partly finished. The airport will be put into operation by the beginning of the holiday season next summer.
Within the 2014 Olympics preparation campaign, a great deal of work on building and reconstruction of hydraulic engineering facilities will be carried out in order to realise another project of this kind. It is the sea port reloading complex Imeretinsky, which is assigned to provide building materials and ready-made construction units for Olympic sites. The projected capacity of the Imeretinskaya sea port, which is located in the bay, will be 5 million tons a year. The complex is designed to receive ships with a carrying capacity of 5,500 tons, and about 140 m in length. 
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Location of Vital Importance
In 2007, the first “research and workshop” conference “Satellite Technologies and Digital Communication Systems for Railways” was held. First of all, priority directions for satellite technology development and implementation were formulated. They were united for development of a complex scientific and technical project “Creation of Modern Train Traffic Control and Safety Systems in 2007-2009”.
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The development of a basic technological solution for the mentioned problems was defined as a target for 2007-2008. The solution was to be optimised in accordance with a “cost/effectiveness” criterion, approved and put into operation on the Chelyabinsk – Rybnoe line.
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The most accessible system of the GSM/GPRS standard is being used as the communications system. Its operators on the chosen railway sectors guarantee connection and message delivery. In railway dispatching and traffic control centres, special hardware and software complexes for satellite data collection and processing are being formed. Their telematic servers receive coordinate, timing and telemetric data coming from locomotives and the SSRS, and provide processing and storage as well as directing it to users’ workstations.
Special software tools used on these servers define the location using three-dimensional geographical coordinates linking them to special electronic maps and digital railway models which work within the bounds of GIS RZD. Satellite linked GLONASS/GPS terminal complexes, which were suggested to be installed in locomotives and SSRS and have a high level of technical and climate durability, including protection from contact wires failing, air discharges, etc. They meet OAO RZD’s requirements for equipment installation on rolling stock and the corresponding safety standards. 
The transmission devices of the complexes allow it to operate autonomously as well as work together with complex locomotive safety devices – CLSD-U on locomotives and CLSD-UP on SSRS. It allows achievement of all the targets for developing and using the national GLONASS system on the railway as well as meeting operational demands during data transfer from the moving objects by open communication channels. The last requirement is fulfilled due to usage of special software tools built into the complexes. These tools convert satellite navigation data from geocentric coordinates to kilometres and plots them in a railway coordinates system. Such a technical solution satisfies the requirements envisaged by operating standards and greatly lowers expenses on cryptography, information security in communication channels and encryption systems support.
6,000 Vehicles Equipped With GPS
At the same time in 2007-2008, regular equipping of locomotives and special self-propelled rolling stock (SSRS) of OAO RZD with complex safety devices CLSD-U and CLSD-UP continued. Izhevsky radio plant produced these devices for the line. Since 2006 they have been equipped with Russian GLONASS/GPS receivers.
Nowadays, approximately 2,800 mainline locomotives, 910 electric trains and 2,000 special self-propelled rolling stock (SSRS) function on the Russian Railways’ network, including heavy track machines with satellite devices onboard at railroads which are affiliates of OAO RZD. Together with rolling-stock equipping, NIIAS continues installing navigation devices on special track-measurement cars; flaw detector cars and other moving track-measuring devices (such as track-measuring trolleys). Nowadays, approximately 200 satellite devices are installed on these units. Work on equipping passenger trains with satellite safety systems and mobile satellite communication INMARSAT also goes on. These systems are to be implemented on 600 more in 2008-2009.
In 2008, OAO RZD worked out technologies to monitor the work of heavy repair machines in “gaps” via satellite. The technical solution developed controls online the processes of moving machines to the sectors where repair is needed. The most important thing is the ability to control compliance with technical requirements while the machines are operating in “gaps” in real-time. This monitoring helps keep traffic dispatchers abreast of scheduling variances and possible extension of the time gaps. So they can perform the measures needed to organise train services.
Also, technological control of emergency trains and moving them to emergency sectors was worked out. Satellite technologies provide online data transfer from such sectors. Satellite technologies applied to perfect rail lubrication are a useful contribution into OAO RZD’s resource-saving program. In 2008, technology is to be designed and onboard hardware and software complexes are to be developed. Theу will be installed on moving rail-lubricators, which control automatically the process of rail lubrication and therefore lower “wheel-rail” ageing. 

by S.E. Adadurov, Doctorate in Technical Science, Professor, Director General of OAO NIIAS
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Location of Vital Importance
In 2007, the first “research and workshop” conference “Satellite Technologies and Digital Communication Systems for Railways” was held. First of all, priority directions for satellite technology development and implementation were formulated. They were united for development of a complex scientific and technical project “Creation of Modern Train Traffic Control and Safety Systems in 2007-2009”.
Location and control of rolling stock traffic using coordinates and time data from worldwide satellite navigation systems GLONASS/GPS were chosen as the priorities to be carried out in 2007-2008. In particular, the list of railcars to be controlled included special self-propelled rolling-stock (SSRS), heavy repair machines and wreck trains. Today, the location and status of moving objects is defined with the help of existing systems – dispatcher’s control and manual data gathering (telegrams, telephone messages, verbal reports). In fact, the object’s real condition, including its working effectiveness, isn’t controlled automatically and its reliability is low. Human factors greatly affect the data’s adequacy. 
A target was set: to automate this process and provide a set reliability level based on satellite navigation technologies, mobile digital communication systems and geoinformation technology GIS RZD, applied in the framework of a system-wide solution.
The development of a basic technological solution for the mentioned problems was defined as a target for 2007-2008. The solution was to be optimised in accordance with a “cost/effectiveness” criterion, approved and put into operation on the Chelyabinsk – Rybnoe line.
The suggested technical decision is based on using a satellite board navigationally linked to GLONASS/GPS in terminal complexes. These complexes are installed on locomotives and SSRS and integrated into the datacom network (DCN) of OAO RZD with the help of a mobile digital communication system. Information about the object’s location and moving parameters is received and processed by the GIS RZD software and then inputted into an electronic map of OAO RZD’s railroads.
The most accessible system of the GSM/GPRS standard is being used as the communications system. Its operators on the chosen railway sectors guarantee connection and message delivery. In railway dispatching and traffic control centres, special hardware and software complexes for satellite data collection and processing are being formed. Their telematic servers receive coordinate, timing and telemetric data coming from locomotives and the SSRS, and provide processing and storage as well as directing it to users’ workstations.
Special software tools used on these servers define the location using three-dimensional geographical coordinates linking them to special electronic maps and digital railway models which work within the bounds of GIS RZD. Satellite linked GLONASS/GPS terminal complexes, which were suggested to be installed in locomotives and SSRS and have a high level of technical and climate durability, including protection from contact wires failing, air discharges, etc. They meet OAO RZD’s requirements for equipment installation on rolling stock and the corresponding safety standards. 
The transmission devices of the complexes allow it to operate autonomously as well as work together with complex locomotive safety devices – CLSD-U on locomotives and CLSD-UP on SSRS. It allows achievement of all the targets for developing and using the national GLONASS system on the railway as well as meeting operational demands during data transfer from the moving objects by open communication channels. The last requirement is fulfilled due to usage of special software tools built into the complexes. These tools convert satellite navigation data from geocentric coordinates to kilometres and plots them in a railway coordinates system. Such a technical solution satisfies the requirements envisaged by operating standards and greatly lowers expenses on cryptography, information security in communication channels and encryption systems support.
6,000 Vehicles Equipped With GPS
At the same time in 2007-2008, regular equipping of locomotives and special self-propelled rolling stock (SSRS) of OAO RZD with complex safety devices CLSD-U and CLSD-UP continued. Izhevsky radio plant produced these devices for the line. Since 2006 they have been equipped with Russian GLONASS/GPS receivers.
Nowadays, approximately 2,800 mainline locomotives, 910 electric trains and 2,000 special self-propelled rolling stock (SSRS) function on the Russian Railways’ network, including heavy track machines with satellite devices onboard at railroads which are affiliates of OAO RZD. Together with rolling-stock equipping, NIIAS continues installing navigation devices on special track-measurement cars; flaw detector cars and other moving track-measuring devices (such as track-measuring trolleys). Nowadays, approximately 200 satellite devices are installed on these units. Work on equipping passenger trains with satellite safety systems and mobile satellite communication INMARSAT also goes on. These systems are to be implemented on 600 more in 2008-2009.
In 2008, OAO RZD worked out technologies to monitor the work of heavy repair machines in “gaps” via satellite. The technical solution developed controls online the processes of moving machines to the sectors where repair is needed. The most important thing is the ability to control compliance with technical requirements while the machines are operating in “gaps” in real-time. This monitoring helps keep traffic dispatchers abreast of scheduling variances and possible extension of the time gaps. So they can perform the measures needed to organise train services.
Also, technological control of emergency trains and moving them to emergency sectors was worked out. Satellite technologies provide online data transfer from such sectors. Satellite technologies applied to perfect rail lubrication are a useful contribution into OAO RZD’s resource-saving program. In 2008, technology is to be designed and onboard hardware and software complexes are to be developed. Theу will be installed on moving rail-lubricators, which control automatically the process of rail lubrication and therefore lower “wheel-rail” ageing. 

by S.E. Adadurov, Doctorate in Technical Science, Professor, Director General of OAO NIIAS
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Location of Vital Importance
In 2007, the first “research and workshop” conference “Satellite Technologies and Digital Communication Systems for Railways” was held. First of all, priority directions for satellite technology development and implementation were formulated. They were united for development of a complex scientific and technical project “Creation of Modern Train Traffic Control and Safety Systems in 2007-2009”.
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A target was set: to automate this process and provide a set reliability level based on satellite navigation technologies, mobile digital communication systems and geoinformation technology GIS RZD, applied in the framework of a system-wide solution.
The development of a basic technological solution for the mentioned problems was defined as a target for 2007-2008. The solution was to be optimised in accordance with a “cost/effectiveness” criterion, approved and put into operation on the Chelyabinsk – Rybnoe line.
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The most accessible system of the GSM/GPRS standard is being used as the communications system. Its operators on the chosen railway sectors guarantee connection and message delivery. In railway dispatching and traffic control centres, special hardware and software complexes for satellite data collection and processing are being formed. Their telematic servers receive coordinate, timing and telemetric data coming from locomotives and the SSRS, and provide processing and storage as well as directing it to users’ workstations.
Special software tools used on these servers define the location using three-dimensional geographical coordinates linking them to special electronic maps and digital railway models which work within the bounds of GIS RZD. Satellite linked GLONASS/GPS terminal complexes, which were suggested to be installed in locomotives and SSRS and have a high level of technical and climate durability, including protection from contact wires failing, air discharges, etc. They meet OAO RZD’s requirements for equipment installation on rolling stock and the corresponding safety standards. 
The transmission devices of the complexes allow it to operate autonomously as well as work together with complex locomotive safety devices – CLSD-U on locomotives and CLSD-UP on SSRS. It allows achievement of all the targets for developing and using the national GLONASS system on the railway as well as meeting operational demands during data transfer from the moving objects by open communication channels. The last requirement is fulfilled due to usage of special software tools built into the complexes. These tools convert satellite navigation data from geocentric coordinates to kilometres and plots them in a railway coordinates system. Such a technical solution satisfies the requirements envisaged by operating standards and greatly lowers expenses on cryptography, information security in communication channels and encryption systems support.
6,000 Vehicles Equipped With GPS
At the same time in 2007-2008, regular equipping of locomotives and special self-propelled rolling stock (SSRS) of OAO RZD with complex safety devices CLSD-U and CLSD-UP continued. Izhevsky radio plant produced these devices for the line. Since 2006 they have been equipped with Russian GLONASS/GPS receivers.
Nowadays, approximately 2,800 mainline locomotives, 910 electric trains and 2,000 special self-propelled rolling stock (SSRS) function on the Russian Railways’ network, including heavy track machines with satellite devices onboard at railroads which are affiliates of OAO RZD. Together with rolling-stock equipping, NIIAS continues installing navigation devices on special track-measurement cars; flaw detector cars and other moving track-measuring devices (such as track-measuring trolleys). Nowadays, approximately 200 satellite devices are installed on these units. Work on equipping passenger trains with satellite safety systems and mobile satellite communication INMARSAT also goes on. These systems are to be implemented on 600 more in 2008-2009.
In 2008, OAO RZD worked out technologies to monitor the work of heavy repair machines in “gaps” via satellite. The technical solution developed controls online the processes of moving machines to the sectors where repair is needed. The most important thing is the ability to control compliance with technical requirements while the machines are operating in “gaps” in real-time. This monitoring helps keep traffic dispatchers abreast of scheduling variances and possible extension of the time gaps. So they can perform the measures needed to organise train services.
Also, technological control of emergency trains and moving them to emergency sectors was worked out. Satellite technologies provide online data transfer from such sectors. Satellite technologies applied to perfect rail lubrication are a useful contribution into OAO RZD’s resource-saving program. In 2008, technology is to be designed and onboard hardware and software complexes are to be developed. Theу will be installed on moving rail-lubricators, which control automatically the process of rail lubrication and therefore lower “wheel-rail” ageing. 

by S.E. Adadurov, Doctorate in Technical Science, Professor, Director General of OAO NIIAS
    [~DETAIL_TEXT] => 
Location of Vital Importance
In 2007, the first “research and workshop” conference “Satellite Technologies and Digital Communication Systems for Railways” was held. First of all, priority directions for satellite technology development and implementation were formulated. They were united for development of a complex scientific and technical project “Creation of Modern Train Traffic Control and Safety Systems in 2007-2009”.
Location and control of rolling stock traffic using coordinates and time data from worldwide satellite navigation systems GLONASS/GPS were chosen as the priorities to be carried out in 2007-2008. In particular, the list of railcars to be controlled included special self-propelled rolling-stock (SSRS), heavy repair machines and wreck trains. Today, the location and status of moving objects is defined with the help of existing systems – dispatcher’s control and manual data gathering (telegrams, telephone messages, verbal reports). In fact, the object’s real condition, including its working effectiveness, isn’t controlled automatically and its reliability is low. Human factors greatly affect the data’s adequacy. 
A target was set: to automate this process and provide a set reliability level based on satellite navigation technologies, mobile digital communication systems and geoinformation technology GIS RZD, applied in the framework of a system-wide solution.
The development of a basic technological solution for the mentioned problems was defined as a target for 2007-2008. The solution was to be optimised in accordance with a “cost/effectiveness” criterion, approved and put into operation on the Chelyabinsk – Rybnoe line.
The suggested technical decision is based on using a satellite board navigationally linked to GLONASS/GPS in terminal complexes. These complexes are installed on locomotives and SSRS and integrated into the datacom network (DCN) of OAO RZD with the help of a mobile digital communication system. Information about the object’s location and moving parameters is received and processed by the GIS RZD software and then inputted into an electronic map of OAO RZD’s railroads.
The most accessible system of the GSM/GPRS standard is being used as the communications system. Its operators on the chosen railway sectors guarantee connection and message delivery. In railway dispatching and traffic control centres, special hardware and software complexes for satellite data collection and processing are being formed. Their telematic servers receive coordinate, timing and telemetric data coming from locomotives and the SSRS, and provide processing and storage as well as directing it to users’ workstations.
Special software tools used on these servers define the location using three-dimensional geographical coordinates linking them to special electronic maps and digital railway models which work within the bounds of GIS RZD. Satellite linked GLONASS/GPS terminal complexes, which were suggested to be installed in locomotives and SSRS and have a high level of technical and climate durability, including protection from contact wires failing, air discharges, etc. They meet OAO RZD’s requirements for equipment installation on rolling stock and the corresponding safety standards. 
The transmission devices of the complexes allow it to operate autonomously as well as work together with complex locomotive safety devices – CLSD-U on locomotives and CLSD-UP on SSRS. It allows achievement of all the targets for developing and using the national GLONASS system on the railway as well as meeting operational demands during data transfer from the moving objects by open communication channels. The last requirement is fulfilled due to usage of special software tools built into the complexes. These tools convert satellite navigation data from geocentric coordinates to kilometres and plots them in a railway coordinates system. Such a technical solution satisfies the requirements envisaged by operating standards and greatly lowers expenses on cryptography, information security in communication channels and encryption systems support.
6,000 Vehicles Equipped With GPS
At the same time in 2007-2008, regular equipping of locomotives and special self-propelled rolling stock (SSRS) of OAO RZD with complex safety devices CLSD-U and CLSD-UP continued. Izhevsky radio plant produced these devices for the line. Since 2006 they have been equipped with Russian GLONASS/GPS receivers.
Nowadays, approximately 2,800 mainline locomotives, 910 electric trains and 2,000 special self-propelled rolling stock (SSRS) function on the Russian Railways’ network, including heavy track machines with satellite devices onboard at railroads which are affiliates of OAO RZD. Together with rolling-stock equipping, NIIAS continues installing navigation devices on special track-measurement cars; flaw detector cars and other moving track-measuring devices (such as track-measuring trolleys). Nowadays, approximately 200 satellite devices are installed on these units. Work on equipping passenger trains with satellite safety systems and mobile satellite communication INMARSAT also goes on. These systems are to be implemented on 600 more in 2008-2009.
In 2008, OAO RZD worked out technologies to monitor the work of heavy repair machines in “gaps” via satellite. The technical solution developed controls online the processes of moving machines to the sectors where repair is needed. The most important thing is the ability to control compliance with technical requirements while the machines are operating in “gaps” in real-time. This monitoring helps keep traffic dispatchers abreast of scheduling variances and possible extension of the time gaps. So they can perform the measures needed to organise train services.
Also, technological control of emergency trains and moving them to emergency sectors was worked out. Satellite technologies provide online data transfer from such sectors. Satellite technologies applied to perfect rail lubrication are a useful contribution into OAO RZD’s resource-saving program. In 2008, technology is to be designed and onboard hardware and software complexes are to be developed. Theу will be installed on moving rail-lubricators, which control automatically the process of rail lubrication and therefore lower “wheel-rail” ageing. 

by S.E. Adadurov, Doctorate in Technical Science, Professor, Director General of OAO NIIAS
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            [ELEMENT_META_TITLE] => Satellite Technologies for Railway Traffic Control
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            [ELEMENT_META_DESCRIPTION] => <img src="/ufiles/image/rus/partner/2008/3/14.jpg" border="1" alt="S.E. Adadurov" title="S.E. Adadurov" hspace="3" vspace="3" width="120" height="171" align="left" />The Russian railway sector is carrying out programs of great national importance. Their targets are formulated in The Strategy of Railway Transport of Russian Federation Development to 2030 (Strategy-2030). Implementation of complex train traffic control systems, infrastructure and dynamic rolling-stock monitoring using satellite technologies is defined as one direction for breakthrough innovations.
            [SECTION_PICTURE_FILE_ALT] => Satellite Technologies for Railway Traffic Control
            [SECTION_PICTURE_FILE_TITLE] => Satellite Technologies for Railway Traffic Control
            [SECTION_DETAIL_PICTURE_FILE_ALT] => Satellite Technologies for Railway Traffic Control
            [SECTION_DETAIL_PICTURE_FILE_TITLE] => Satellite Technologies for Railway Traffic Control
            [ELEMENT_PREVIEW_PICTURE_FILE_ALT] => Satellite Technologies for Railway Traffic Control
            [ELEMENT_PREVIEW_PICTURE_FILE_TITLE] => Satellite Technologies for Railway Traffic Control
            [ELEMENT_DETAIL_PICTURE_FILE_ALT] => Satellite Technologies for Railway Traffic Control
            [ELEMENT_DETAIL_PICTURE_FILE_TITLE] => Satellite Technologies for Railway Traffic Control
        )

)