III КВАРТАЛ 2022Г. - 55 баллов
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Just recently Russian Railways JSC was complaining about a shortage of rolling stock for coal transportations, appealing to private operators for help in organisation of sending this cargo well-known for its large loads. Private companies did not hurry to join in. Coal was a low-profit cargo; its transportation did not recoup itself. Today the share of RZD’s coal-carrying public park has become less than 50%. The crisis has definitely “helped” it.Dit nonse
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Traditionally, coal accounts for a quarter of the cargo loaded by RZD (in January this parameter grew up to almost 30%, but returned to 24% in autumn). The Federal Tariff Service’s figures show that total transport flows in the first half of 2009 fell by 25%, whilst the amount of coal transported decreased by only 16% (or by 12% in terms of cargo turnover). The worst of the recession continued for two months from January to February (22.7%), and from June coal flows started exceeding the previous year’s figures by 5% each month. 23.9 million tons of this cargo was transported via RZD’s network in August 2009 (4.1% more than in August 2008), and 174.6 million tons for the whole eight-month period.
The RZD Centre of Transport Service said that the share of coal transported by public park wagons from January to August was 46% (80.3 million tons). Here we note that this figure was 66% for the same period of the previous year. This means that last year private operators increased the share by as much as 20%. RZD says that the main rolling stock proprietors in coal transportation today are The First Cargo Company (PGK), BranswickRailService and VTB-Leasing and Finance Business Group.
Meanwhile, RZD has estimated that the share of PGK in the whole amount of coal transported was almost 37%, which means that the figure at other private companies is about 17%. Of course, among other reasons for such a development was the transfer of the considerable number of wagons from the public park to The First Cargo Company. Andrey Gromovoy, Head of the PGK Management for Work with Coal and Metallurgical Industries, said that, as a result, coal is currently making up more than 30% of the total company’s cargo turnover and about 65% of all its transportations in gondola wagons. “Coal has become a guaranteed cargo for other operators’ gondola wagons during the fall in volumes. Unlike them, we are the company where coal is, and has always been, among the main cargoes. We are building relations with many cargo owners on the basis of long-term mutual obligations,” says Mr Gromovoy.
Everyone sees growth. The question is what kind of growth
This year operators are not speaking much about the figures in their transportation growth charts. If there are companies where charts have really shown growth, it took place only for a few cargo items, and coal is among them. During the first half of the year PGK transported 33.7 million tons of coal (from 128.1 million tons transported by the whole of the network). This figure is quite strong - almost twice as much as for the same period of past year. However, it is good to remember that transportations of coal by PGK only started in summer 2008. For eight months the company has sent 46.9 million tons of coal (twice as much as a year before).
As was already mentioned, the growth was mainly achieved because the company’s wagon fleet had been increased (wagons were transferred from RZD, and new rolling stock was also purchased). Mr Gromovoy thinks that the main parameter of transport profitability (both on domestic routes and in exports) for operators today is wagon turnover. But existing tariffs allow coal transportations to be profitable only in routed trips. When group sending takes place, or in sending per wagon, the profitability falls considerably, because it depends on the wagons’ round trip time.
Transportations of coal in First Freight’s wagons have been growing constantly for the whole year. A small recession was noticed only from July to August. Transportation volumes fell by 5% in July in comparison with June, and by 2% in August in comparison with July. The company emphasises that exports in the Far East direction were affected first of all (because of problems with movement of trains, which resulted in limited throughput opportunities). But, on the other hand, transportation on Russian domestic routes in PGK’s wagons grew in August by 16% in comparison with July.
Positive tendencies were also available in coal transportation charts of New Transportation Company’s (NPK), which is a part of Gloabaltrans group. Valery Shpakov, General Director of NPK, says that coal transport turnover has grown by 1.5 times, in comparison with the same period of past year (this cargo item’s share is currently about 14% of the whole cargo transported by this company). The increased figures of coal transported (either directly or indirectly connected with the export of metal from domestic enterprises) have facilitated the 5% growth in the total figure of NPK’s transportations.
Insignificant growth is noticed in MMK-Trans, the company where coal is 23% of all cargo transported. The company has released the following figures: in the first half of the year 2.012 million tons of cargo were transported, which is 0.094 million tons more than in the past year (+5%). In the first eight months of 2009 the company transported about 2.882 million tons of coal, which is 7.3% more than in the same period of 2008.
Winter will put everything right
The economic crisis has forced private companies to pay special attention to coal transportation. It happened, first of all, for the simple reason that coal is a guaranteed popular cargo, and because it is usually transported in large quantities, and also because the schemes of its transportation coincide with general schemes used by many large companies. Secondly, operators emphasise that coal is often used also in return trips, for transportation of the metallurgical production (as NPK does).
Cargo senders say that, at least until recently, operators have been suggesting very favourable conditions, putting prices down so much that they were lower than the tariffs in the Tariff Regulation №10-01, because in crisis conditions they were burdened by debts and did not have as much cargo as they were used to before.
Export transportations began to grow in the second half of the year, after the largest companies in the sector, Mechel and Suek, concluded contracts to export Russian coal to Asia-Pacific countries. In spite of the fact that operators complain about an incorrect export tariff formation system and too high a transport component in exports, the Federal Tariff Service says that the situation with coal is now rather good (especially considering certain exclusive tariffs for its transportation).
Victor Kvitko, Head of the Transport Regulation Department of Russian Federal Tariff Service said the level of the transport component for coal transported by domestic routes was from 35% to 38% for the past three years; for coal exported in 2006-2007 it was from 38% to 40%, and in 2008 it reached 22% to 23%.
But in 2009, in the face of a sharp fall in world prices for coal (from $ 180 - $ 190 per ton in the third quarter of 2008 down to $ 60 - $ 70 in 2009), the transport component in exports grew to 35% - 40%, and in some cases up to 47%, depending on the route and $ / RUR exchange rate. Simultaneously, as Mr Kvitko says, this year there has seen considerable differences in the world prices for coal, depending on the region where it is consumed. Thus, the FOB price to the ports of the Far East used to be from three to five dollars higher than FOB prices to Baltic ports, and in 2009 this difference was already $10-15 for ton, which made the export of coal through the ports of Far East much more attractive and therefore caused a strong inflow of coal in that direction (which, as is well-known, created traffic jams on approaches to ports).
But when autumn came, Russian domestic coal transportations also laid the conditions for growth. First of all, they will inevitably grow when the cold season starts. Also, because of the accident at Sayano-Shushenskaya Hydroelectric Power Station, it is possible that from October coal flows will grow in the direction of power enterprises, which are currently replacing the failed power station. In particular, PGK has already reported additional transportation of at least 320,000 tons of coal to thermal power plants in Krasnoyarsk region, Irkutsk area and the Republic of Buryatiya.
Ministry of Energy has estimated that, in this situation, the energy sector of Siberia will need a total of 6.5 million tons of coal in autumn and winter 2009-2010. However, the proposed idea to reduce rates for targeted coal transportation in this direction has not been supported by the Ministry of Energy, despite the rumours that coal companies may put home market prices up by 40% to 50% from October (the rumours are that the price pattern for new contracts will be the wholesale price of August, which reached the index of $ 70 per ton).
Nadezhda Vtorushina
viewpoint
VALERY SHPAKOV,
General Director of New Transportation Company (Globaltrans Group)
– Growth in amounts of coal transported by private operators started from the moment the crisis affected the economy of the country, when a sharp reduction in imports via ports of the Russian Federation (cement, containers, ores and metals among others) caused the need to reduce for the cost of returning wagons to their original loading places. Also, because RZD’s park was replaced, there was an increase in coal deliveries directly to enterprises, instead of the shrinking number of routes to transport scrap and iron ores. Regarding the growth in the amount of coal transported in NPK’s wagons to other customers, here the increase was very small ¬– no more than one or two percent of total cargo turnover.
ANDREY GROMOVOY,
Head of Management for Work with Coal and Metallurgical Industries of The First Cargo Company
– We adhere to the flexible price policy, proceeding from the market situation.
At the beginning of the year, in the unfavourable economic situation, we decided to put our rates down and charged less than the tariffs in the Price-list № 10-01 for the cargo we transported, which affected our financial results of the first half of the year. After that the market situation became more balanced, coal prices grew, its extraction was increased – and we began to correct our prices in order to return them to the pre-crisis level.
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Traditionally, coal accounts for a quarter of the cargo loaded by RZD (in January this parameter grew up to almost 30%, but returned to 24% in autumn). The Federal Tariff Service’s figures show that total transport flows in the first half of 2009 fell by 25%, whilst the amount of coal transported decreased by only 16% (or by 12% in terms of cargo turnover). The worst of the recession continued for two months from January to February (22.7%), and from June coal flows started exceeding the previous year’s figures by 5% each month. 23.9 million tons of this cargo was transported via RZD’s network in August 2009 (4.1% more than in August 2008), and 174.6 million tons for the whole eight-month period.
The RZD Centre of Transport Service said that the share of coal transported by public park wagons from January to August was 46% (80.3 million tons). Here we note that this figure was 66% for the same period of the previous year. This means that last year private operators increased the share by as much as 20%. RZD says that the main rolling stock proprietors in coal transportation today are The First Cargo Company (PGK), BranswickRailService and VTB-Leasing and Finance Business Group.
Meanwhile, RZD has estimated that the share of PGK in the whole amount of coal transported was almost 37%, which means that the figure at other private companies is about 17%. Of course, among other reasons for such a development was the transfer of the considerable number of wagons from the public park to The First Cargo Company. Andrey Gromovoy, Head of the PGK Management for Work with Coal and Metallurgical Industries, said that, as a result, coal is currently making up more than 30% of the total company’s cargo turnover and about 65% of all its transportations in gondola wagons. “Coal has become a guaranteed cargo for other operators’ gondola wagons during the fall in volumes. Unlike them, we are the company where coal is, and has always been, among the main cargoes. We are building relations with many cargo owners on the basis of long-term mutual obligations,” says Mr Gromovoy.
Everyone sees growth. The question is what kind of growth
This year operators are not speaking much about the figures in their transportation growth charts. If there are companies where charts have really shown growth, it took place only for a few cargo items, and coal is among them. During the first half of the year PGK transported 33.7 million tons of coal (from 128.1 million tons transported by the whole of the network). This figure is quite strong - almost twice as much as for the same period of past year. However, it is good to remember that transportations of coal by PGK only started in summer 2008. For eight months the company has sent 46.9 million tons of coal (twice as much as a year before).
As was already mentioned, the growth was mainly achieved because the company’s wagon fleet had been increased (wagons were transferred from RZD, and new rolling stock was also purchased). Mr Gromovoy thinks that the main parameter of transport profitability (both on domestic routes and in exports) for operators today is wagon turnover. But existing tariffs allow coal transportations to be profitable only in routed trips. When group sending takes place, or in sending per wagon, the profitability falls considerably, because it depends on the wagons’ round trip time.
Transportations of coal in First Freight’s wagons have been growing constantly for the whole year. A small recession was noticed only from July to August. Transportation volumes fell by 5% in July in comparison with June, and by 2% in August in comparison with July. The company emphasises that exports in the Far East direction were affected first of all (because of problems with movement of trains, which resulted in limited throughput opportunities). But, on the other hand, transportation on Russian domestic routes in PGK’s wagons grew in August by 16% in comparison with July.
Positive tendencies were also available in coal transportation charts of New Transportation Company’s (NPK), which is a part of Gloabaltrans group. Valery Shpakov, General Director of NPK, says that coal transport turnover has grown by 1.5 times, in comparison with the same period of past year (this cargo item’s share is currently about 14% of the whole cargo transported by this company). The increased figures of coal transported (either directly or indirectly connected with the export of metal from domestic enterprises) have facilitated the 5% growth in the total figure of NPK’s transportations.
Insignificant growth is noticed in MMK-Trans, the company where coal is 23% of all cargo transported. The company has released the following figures: in the first half of the year 2.012 million tons of cargo were transported, which is 0.094 million tons more than in the past year (+5%). In the first eight months of 2009 the company transported about 2.882 million tons of coal, which is 7.3% more than in the same period of 2008.
Winter will put everything right
The economic crisis has forced private companies to pay special attention to coal transportation. It happened, first of all, for the simple reason that coal is a guaranteed popular cargo, and because it is usually transported in large quantities, and also because the schemes of its transportation coincide with general schemes used by many large companies. Secondly, operators emphasise that coal is often used also in return trips, for transportation of the metallurgical production (as NPK does).
Cargo senders say that, at least until recently, operators have been suggesting very favourable conditions, putting prices down so much that they were lower than the tariffs in the Tariff Regulation №10-01, because in crisis conditions they were burdened by debts and did not have as much cargo as they were used to before.
Export transportations began to grow in the second half of the year, after the largest companies in the sector, Mechel and Suek, concluded contracts to export Russian coal to Asia-Pacific countries. In spite of the fact that operators complain about an incorrect export tariff formation system and too high a transport component in exports, the Federal Tariff Service says that the situation with coal is now rather good (especially considering certain exclusive tariffs for its transportation).
Victor Kvitko, Head of the Transport Regulation Department of Russian Federal Tariff Service said the level of the transport component for coal transported by domestic routes was from 35% to 38% for the past three years; for coal exported in 2006-2007 it was from 38% to 40%, and in 2008 it reached 22% to 23%.
But in 2009, in the face of a sharp fall in world prices for coal (from $ 180 - $ 190 per ton in the third quarter of 2008 down to $ 60 - $ 70 in 2009), the transport component in exports grew to 35% - 40%, and in some cases up to 47%, depending on the route and $ / RUR exchange rate. Simultaneously, as Mr Kvitko says, this year there has seen considerable differences in the world prices for coal, depending on the region where it is consumed. Thus, the FOB price to the ports of the Far East used to be from three to five dollars higher than FOB prices to Baltic ports, and in 2009 this difference was already $10-15 for ton, which made the export of coal through the ports of Far East much more attractive and therefore caused a strong inflow of coal in that direction (which, as is well-known, created traffic jams on approaches to ports).
But when autumn came, Russian domestic coal transportations also laid the conditions for growth. First of all, they will inevitably grow when the cold season starts. Also, because of the accident at Sayano-Shushenskaya Hydroelectric Power Station, it is possible that from October coal flows will grow in the direction of power enterprises, which are currently replacing the failed power station. In particular, PGK has already reported additional transportation of at least 320,000 tons of coal to thermal power plants in Krasnoyarsk region, Irkutsk area and the Republic of Buryatiya.
Ministry of Energy has estimated that, in this situation, the energy sector of Siberia will need a total of 6.5 million tons of coal in autumn and winter 2009-2010. However, the proposed idea to reduce rates for targeted coal transportation in this direction has not been supported by the Ministry of Energy, despite the rumours that coal companies may put home market prices up by 40% to 50% from October (the rumours are that the price pattern for new contracts will be the wholesale price of August, which reached the index of $ 70 per ton).
Nadezhda Vtorushina
viewpoint
VALERY SHPAKOV,
General Director of New Transportation Company (Globaltrans Group)
– Growth in amounts of coal transported by private operators started from the moment the crisis affected the economy of the country, when a sharp reduction in imports via ports of the Russian Federation (cement, containers, ores and metals among others) caused the need to reduce for the cost of returning wagons to their original loading places. Also, because RZD’s park was replaced, there was an increase in coal deliveries directly to enterprises, instead of the shrinking number of routes to transport scrap and iron ores. Regarding the growth in the amount of coal transported in NPK’s wagons to other customers, here the increase was very small ¬– no more than one or two percent of total cargo turnover.
ANDREY GROMOVOY,
Head of Management for Work with Coal and Metallurgical Industries of The First Cargo Company
– We adhere to the flexible price policy, proceeding from the market situation.
At the beginning of the year, in the unfavourable economic situation, we decided to put our rates down and charged less than the tariffs in the Price-list № 10-01 for the cargo we transported, which affected our financial results of the first half of the year. After that the market situation became more balanced, coal prices grew, its extraction was increased – and we began to correct our prices in order to return them to the pre-crisis level.
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[SECTION_META_DESCRIPTION] => <img src="/ufiles/image/rus/partner/2009/4/20.jpg" border="1" alt=" " hspace="5" width="200" height="301" align="left" />Just recently Russian Railways JSC was complaining about a shortage of rolling stock for coal transportations, appealing to private operators for help in organisation of sending this cargo well-known for its large loads. Private companies did not hurry to join in. Coal was a low-profit cargo; its transportation did not recoup itself. Today the share of RZD’s coal-carrying public park has become less than 50%. The crisis has definitely “helped” it.Dit nonse
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[ELEMENT_META_DESCRIPTION] => <img src="/ufiles/image/rus/partner/2009/4/20.jpg" border="1" alt=" " hspace="5" width="200" height="301" align="left" />Just recently Russian Railways JSC was complaining about a shortage of rolling stock for coal transportations, appealing to private operators for help in organisation of sending this cargo well-known for its large loads. Private companies did not hurry to join in. Coal was a low-profit cargo; its transportation did not recoup itself. Today the share of RZD’s coal-carrying public park has become less than 50%. The crisis has definitely “helped” it.Dit nonse
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Traditionally, coal accounts for a quarter of the cargo loaded by RZD (in January this parameter grew up to almost 30%, but returned to 24% in autumn). The Federal Tariff Service’s figures show that total transport flows in the first half of 2009 fell by 25%, whilst the amount of coal transported decreased by only 16% (or by 12% in terms of cargo turnover). The worst of the recession continued for two months from January to February (22.7%), and from June coal flows started exceeding the previous year’s figures by 5% each month. 23.9 million tons of this cargo was transported via RZD’s network in August 2009 (4.1% more than in August 2008), and 174.6 million tons for the whole eight-month period.
The RZD Centre of Transport Service said that the share of coal transported by public park wagons from January to August was 46% (80.3 million tons). Here we note that this figure was 66% for the same period of the previous year. This means that last year private operators increased the share by as much as 20%. RZD says that the main rolling stock proprietors in coal transportation today are The First Cargo Company (PGK), BranswickRailService and VTB-Leasing and Finance Business Group.
Meanwhile, RZD has estimated that the share of PGK in the whole amount of coal transported was almost 37%, which means that the figure at other private companies is about 17%. Of course, among other reasons for such a development was the transfer of the considerable number of wagons from the public park to The First Cargo Company. Andrey Gromovoy, Head of the PGK Management for Work with Coal and Metallurgical Industries, said that, as a result, coal is currently making up more than 30% of the total company’s cargo turnover and about 65% of all its transportations in gondola wagons. “Coal has become a guaranteed cargo for other operators’ gondola wagons during the fall in volumes. Unlike them, we are the company where coal is, and has always been, among the main cargoes. We are building relations with many cargo owners on the basis of long-term mutual obligations,” says Mr Gromovoy.
Everyone sees growth. The question is what kind of growth
This year operators are not speaking much about the figures in their transportation growth charts. If there are companies where charts have really shown growth, it took place only for a few cargo items, and coal is among them. During the first half of the year PGK transported 33.7 million tons of coal (from 128.1 million tons transported by the whole of the network). This figure is quite strong - almost twice as much as for the same period of past year. However, it is good to remember that transportations of coal by PGK only started in summer 2008. For eight months the company has sent 46.9 million tons of coal (twice as much as a year before).
As was already mentioned, the growth was mainly achieved because the company’s wagon fleet had been increased (wagons were transferred from RZD, and new rolling stock was also purchased). Mr Gromovoy thinks that the main parameter of transport profitability (both on domestic routes and in exports) for operators today is wagon turnover. But existing tariffs allow coal transportations to be profitable only in routed trips. When group sending takes place, or in sending per wagon, the profitability falls considerably, because it depends on the wagons’ round trip time.
Transportations of coal in First Freight’s wagons have been growing constantly for the whole year. A small recession was noticed only from July to August. Transportation volumes fell by 5% in July in comparison with June, and by 2% in August in comparison with July. The company emphasises that exports in the Far East direction were affected first of all (because of problems with movement of trains, which resulted in limited throughput opportunities). But, on the other hand, transportation on Russian domestic routes in PGK’s wagons grew in August by 16% in comparison with July.
Positive tendencies were also available in coal transportation charts of New Transportation Company’s (NPK), which is a part of Gloabaltrans group. Valery Shpakov, General Director of NPK, says that coal transport turnover has grown by 1.5 times, in comparison with the same period of past year (this cargo item’s share is currently about 14% of the whole cargo transported by this company). The increased figures of coal transported (either directly or indirectly connected with the export of metal from domestic enterprises) have facilitated the 5% growth in the total figure of NPK’s transportations.
Insignificant growth is noticed in MMK-Trans, the company where coal is 23% of all cargo transported. The company has released the following figures: in the first half of the year 2.012 million tons of cargo were transported, which is 0.094 million tons more than in the past year (+5%). In the first eight months of 2009 the company transported about 2.882 million tons of coal, which is 7.3% more than in the same period of 2008.
Winter will put everything right
The economic crisis has forced private companies to pay special attention to coal transportation. It happened, first of all, for the simple reason that coal is a guaranteed popular cargo, and because it is usually transported in large quantities, and also because the schemes of its transportation coincide with general schemes used by many large companies. Secondly, operators emphasise that coal is often used also in return trips, for transportation of the metallurgical production (as NPK does).
Cargo senders say that, at least until recently, operators have been suggesting very favourable conditions, putting prices down so much that they were lower than the tariffs in the Tariff Regulation №10-01, because in crisis conditions they were burdened by debts and did not have as much cargo as they were used to before.
Export transportations began to grow in the second half of the year, after the largest companies in the sector, Mechel and Suek, concluded contracts to export Russian coal to Asia-Pacific countries. In spite of the fact that operators complain about an incorrect export tariff formation system and too high a transport component in exports, the Federal Tariff Service says that the situation with coal is now rather good (especially considering certain exclusive tariffs for its transportation).
Victor Kvitko, Head of the Transport Regulation Department of Russian Federal Tariff Service said the level of the transport component for coal transported by domestic routes was from 35% to 38% for the past three years; for coal exported in 2006-2007 it was from 38% to 40%, and in 2008 it reached 22% to 23%.
But in 2009, in the face of a sharp fall in world prices for coal (from $ 180 - $ 190 per ton in the third quarter of 2008 down to $ 60 - $ 70 in 2009), the transport component in exports grew to 35% - 40%, and in some cases up to 47%, depending on the route and $ / RUR exchange rate. Simultaneously, as Mr Kvitko says, this year there has seen considerable differences in the world prices for coal, depending on the region where it is consumed. Thus, the FOB price to the ports of the Far East used to be from three to five dollars higher than FOB prices to Baltic ports, and in 2009 this difference was already $10-15 for ton, which made the export of coal through the ports of Far East much more attractive and therefore caused a strong inflow of coal in that direction (which, as is well-known, created traffic jams on approaches to ports).
But when autumn came, Russian domestic coal transportations also laid the conditions for growth. First of all, they will inevitably grow when the cold season starts. Also, because of the accident at Sayano-Shushenskaya Hydroelectric Power Station, it is possible that from October coal flows will grow in the direction of power enterprises, which are currently replacing the failed power station. In particular, PGK has already reported additional transportation of at least 320,000 tons of coal to thermal power plants in Krasnoyarsk region, Irkutsk area and the Republic of Buryatiya.
Ministry of Energy has estimated that, in this situation, the energy sector of Siberia will need a total of 6.5 million tons of coal in autumn and winter 2009-2010. However, the proposed idea to reduce rates for targeted coal transportation in this direction has not been supported by the Ministry of Energy, despite the rumours that coal companies may put home market prices up by 40% to 50% from October (the rumours are that the price pattern for new contracts will be the wholesale price of August, which reached the index of $ 70 per ton).
Nadezhda Vtorushina
viewpoint
VALERY SHPAKOV,
General Director of New Transportation Company (Globaltrans Group)
– Growth in amounts of coal transported by private operators started from the moment the crisis affected the economy of the country, when a sharp reduction in imports via ports of the Russian Federation (cement, containers, ores and metals among others) caused the need to reduce for the cost of returning wagons to their original loading places. Also, because RZD’s park was replaced, there was an increase in coal deliveries directly to enterprises, instead of the shrinking number of routes to transport scrap and iron ores. Regarding the growth in the amount of coal transported in NPK’s wagons to other customers, here the increase was very small ¬– no more than one or two percent of total cargo turnover.
ANDREY GROMOVOY,
Head of Management for Work with Coal and Metallurgical Industries of The First Cargo Company
– We adhere to the flexible price policy, proceeding from the market situation.
At the beginning of the year, in the unfavourable economic situation, we decided to put our rates down and charged less than the tariffs in the Price-list № 10-01 for the cargo we transported, which affected our financial results of the first half of the year. After that the market situation became more balanced, coal prices grew, its extraction was increased – and we began to correct our prices in order to return them to the pre-crisis level.
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Traditionally, coal accounts for a quarter of the cargo loaded by RZD (in January this parameter grew up to almost 30%, but returned to 24% in autumn). The Federal Tariff Service’s figures show that total transport flows in the first half of 2009 fell by 25%, whilst the amount of coal transported decreased by only 16% (or by 12% in terms of cargo turnover). The worst of the recession continued for two months from January to February (22.7%), and from June coal flows started exceeding the previous year’s figures by 5% each month. 23.9 million tons of this cargo was transported via RZD’s network in August 2009 (4.1% more than in August 2008), and 174.6 million tons for the whole eight-month period.
The RZD Centre of Transport Service said that the share of coal transported by public park wagons from January to August was 46% (80.3 million tons). Here we note that this figure was 66% for the same period of the previous year. This means that last year private operators increased the share by as much as 20%. RZD says that the main rolling stock proprietors in coal transportation today are The First Cargo Company (PGK), BranswickRailService and VTB-Leasing and Finance Business Group.
Meanwhile, RZD has estimated that the share of PGK in the whole amount of coal transported was almost 37%, which means that the figure at other private companies is about 17%. Of course, among other reasons for such a development was the transfer of the considerable number of wagons from the public park to The First Cargo Company. Andrey Gromovoy, Head of the PGK Management for Work with Coal and Metallurgical Industries, said that, as a result, coal is currently making up more than 30% of the total company’s cargo turnover and about 65% of all its transportations in gondola wagons. “Coal has become a guaranteed cargo for other operators’ gondola wagons during the fall in volumes. Unlike them, we are the company where coal is, and has always been, among the main cargoes. We are building relations with many cargo owners on the basis of long-term mutual obligations,” says Mr Gromovoy.
Everyone sees growth. The question is what kind of growth
This year operators are not speaking much about the figures in their transportation growth charts. If there are companies where charts have really shown growth, it took place only for a few cargo items, and coal is among them. During the first half of the year PGK transported 33.7 million tons of coal (from 128.1 million tons transported by the whole of the network). This figure is quite strong - almost twice as much as for the same period of past year. However, it is good to remember that transportations of coal by PGK only started in summer 2008. For eight months the company has sent 46.9 million tons of coal (twice as much as a year before).
As was already mentioned, the growth was mainly achieved because the company’s wagon fleet had been increased (wagons were transferred from RZD, and new rolling stock was also purchased). Mr Gromovoy thinks that the main parameter of transport profitability (both on domestic routes and in exports) for operators today is wagon turnover. But existing tariffs allow coal transportations to be profitable only in routed trips. When group sending takes place, or in sending per wagon, the profitability falls considerably, because it depends on the wagons’ round trip time.
Transportations of coal in First Freight’s wagons have been growing constantly for the whole year. A small recession was noticed only from July to August. Transportation volumes fell by 5% in July in comparison with June, and by 2% in August in comparison with July. The company emphasises that exports in the Far East direction were affected first of all (because of problems with movement of trains, which resulted in limited throughput opportunities). But, on the other hand, transportation on Russian domestic routes in PGK’s wagons grew in August by 16% in comparison with July.
Positive tendencies were also available in coal transportation charts of New Transportation Company’s (NPK), which is a part of Gloabaltrans group. Valery Shpakov, General Director of NPK, says that coal transport turnover has grown by 1.5 times, in comparison with the same period of past year (this cargo item’s share is currently about 14% of the whole cargo transported by this company). The increased figures of coal transported (either directly or indirectly connected with the export of metal from domestic enterprises) have facilitated the 5% growth in the total figure of NPK’s transportations.
Insignificant growth is noticed in MMK-Trans, the company where coal is 23% of all cargo transported. The company has released the following figures: in the first half of the year 2.012 million tons of cargo were transported, which is 0.094 million tons more than in the past year (+5%). In the first eight months of 2009 the company transported about 2.882 million tons of coal, which is 7.3% more than in the same period of 2008.
Winter will put everything right
The economic crisis has forced private companies to pay special attention to coal transportation. It happened, first of all, for the simple reason that coal is a guaranteed popular cargo, and because it is usually transported in large quantities, and also because the schemes of its transportation coincide with general schemes used by many large companies. Secondly, operators emphasise that coal is often used also in return trips, for transportation of the metallurgical production (as NPK does).
Cargo senders say that, at least until recently, operators have been suggesting very favourable conditions, putting prices down so much that they were lower than the tariffs in the Tariff Regulation №10-01, because in crisis conditions they were burdened by debts and did not have as much cargo as they were used to before.
Export transportations began to grow in the second half of the year, after the largest companies in the sector, Mechel and Suek, concluded contracts to export Russian coal to Asia-Pacific countries. In spite of the fact that operators complain about an incorrect export tariff formation system and too high a transport component in exports, the Federal Tariff Service says that the situation with coal is now rather good (especially considering certain exclusive tariffs for its transportation).
Victor Kvitko, Head of the Transport Regulation Department of Russian Federal Tariff Service said the level of the transport component for coal transported by domestic routes was from 35% to 38% for the past three years; for coal exported in 2006-2007 it was from 38% to 40%, and in 2008 it reached 22% to 23%.
But in 2009, in the face of a sharp fall in world prices for coal (from $ 180 - $ 190 per ton in the third quarter of 2008 down to $ 60 - $ 70 in 2009), the transport component in exports grew to 35% - 40%, and in some cases up to 47%, depending on the route and $ / RUR exchange rate. Simultaneously, as Mr Kvitko says, this year there has seen considerable differences in the world prices for coal, depending on the region where it is consumed. Thus, the FOB price to the ports of the Far East used to be from three to five dollars higher than FOB prices to Baltic ports, and in 2009 this difference was already $10-15 for ton, which made the export of coal through the ports of Far East much more attractive and therefore caused a strong inflow of coal in that direction (which, as is well-known, created traffic jams on approaches to ports).
But when autumn came, Russian domestic coal transportations also laid the conditions for growth. First of all, they will inevitably grow when the cold season starts. Also, because of the accident at Sayano-Shushenskaya Hydroelectric Power Station, it is possible that from October coal flows will grow in the direction of power enterprises, which are currently replacing the failed power station. In particular, PGK has already reported additional transportation of at least 320,000 tons of coal to thermal power plants in Krasnoyarsk region, Irkutsk area and the Republic of Buryatiya.
Ministry of Energy has estimated that, in this situation, the energy sector of Siberia will need a total of 6.5 million tons of coal in autumn and winter 2009-2010. However, the proposed idea to reduce rates for targeted coal transportation in this direction has not been supported by the Ministry of Energy, despite the rumours that coal companies may put home market prices up by 40% to 50% from October (the rumours are that the price pattern for new contracts will be the wholesale price of August, which reached the index of $ 70 per ton).
Nadezhda Vtorushina
viewpoint
VALERY SHPAKOV,
General Director of New Transportation Company (Globaltrans Group)
– Growth in amounts of coal transported by private operators started from the moment the crisis affected the economy of the country, when a sharp reduction in imports via ports of the Russian Federation (cement, containers, ores and metals among others) caused the need to reduce for the cost of returning wagons to their original loading places. Also, because RZD’s park was replaced, there was an increase in coal deliveries directly to enterprises, instead of the shrinking number of routes to transport scrap and iron ores. Regarding the growth in the amount of coal transported in NPK’s wagons to other customers, here the increase was very small ¬– no more than one or two percent of total cargo turnover.
ANDREY GROMOVOY,
Head of Management for Work with Coal and Metallurgical Industries of The First Cargo Company
– We adhere to the flexible price policy, proceeding from the market situation.
At the beginning of the year, in the unfavourable economic situation, we decided to put our rates down and charged less than the tariffs in the Price-list № 10-01 for the cargo we transported, which affected our financial results of the first half of the year. After that the market situation became more balanced, coal prices grew, its extraction was increased – and we began to correct our prices in order to return them to the pre-crisis level.
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[DETAIL_TEXT] => Russia-Belarus: Containers Will Be Delivered Faster
TransContainer and Byelorussian Railway signed an agreement on data exchanging in order to improve the organisation of cargo transportation in containers via the Brest-Terespol border crossing. The agreement was concluded on September 28 at the 18th plenary session of the Coordinating Council on Transsiberian Transportation (CCTT).
According to the agreement, TransContainer will supply the Byelorussian Railway with preliminary information about the volume of transport and accompanying documents received from consignors from European countries in the framework of the “Volkswagen Group Rus” project.
The agreement is aimed at reducing the time spent by container trains on the border crossing.
Information will be transferred from the “Portal TransContainer” automation system to that of Byelorussian Railway. In future, the “Portal TransContainer” system will be used in the company’s other international projects.
24 Russian Ports Have Limits Approved
The work on setting the limits of 24 ports (out of 66) has been completed in Russia, Alexey Klyavin, Director of the RF Ministry of Transport’s Department for State Policy in the River and Sea Transport Sector said at the conference “Beyond the Crisis Outline. New Routes of Water Transport Development”.
According to Mr Klyavin, the limits have been also approved for Novorossiysk, St Petersburg, Primorsk, and Ust-Luga ports. The procedure is almost completed in the ports of Kaliningrad and Murmansk. Active work is being held in the Far East as well.
The limits of the Big Port of St Petersburg were approved by the RF Government in late August after years of negotiations between the Ministry of Transport and other authorities involved, including the Ministry of Defence. The Decree was signed by RF Prime Minister Vladimir Putin.
The Ministry of Transport has also elaborated draft decrees setting limits of ports Azov, (Rostov region), Olya (Krasnodar territory) and three ports in the Sakhalin region.
Rise and Fall
Cargo transportation by railway in the Russian Federation fell by 12.3% to 99.7 million tons in August 2009 in comparison with the same period in 2008, stated the Federal Statistics Service of the Russian Federation (Rosstat).
In August 2009 loading of all kinds of cargoes shrank in comparison with August 2008, except for coal (growth by 4.1%) and ores of non-ferrous metals (growth by 4.9%).
Loading of grain fell sharply in comparison with August 2008, by 29.5%, which was caused by a smaller grain harvest than in 2008.
Loading figures for ferrous metals and construction cargoes were traditionally low, 45% and 28.4% less than in August 2008.
All kinds of cargoes showed better figures in August than in July 2009. Those cargoes which had shown the worst results earlier appeared to fare the best. Thus, coke grew by 7.4%, ferrous metals by 4.4% and chemical fertilisers by 9.8%.
Ukrainian Ministry of Transport to Set Discounts for Transit Cargo Handling in Ports
The Ministry of Transport and Communications of Ukraine prepared a draft decree on the introduction of discounts for transit cargo handling in nine ports by April 1, 2010.
According to the document, a 30% discount is to be set for the handling of bulk grain and cement, pig iron and ferrous metal; and a 40% discount for the handling of transit sulfur in the Illichivsk seaport.
In the port of Mariupol, a 30% discount for pig iron and ferrous metal, and an 18% discount for bulk grain and seeds are to be put into operation.
In Yuzhny port, a 30% discount for pig iron and ferrous metal, and a 25% discount for coal and iron ore are to be set. In the port of Odessa the discount for pig iron and ferrous metal will be 30%. Discounts are also to be set for Kerch, Reni, Ust-Danube, Berdyansk and Kherson sea ports.
Russian Sea Ports: 6.5% Increase in Throughput
In January-August 2009, the throughput of Russian sea ports grew by 6.5% year-on-year to 323.9 million tons and127.9 million tons of dry cargoes (-1.5%) and 196 million tons of liquid bulk (+12.4%) was transshipped.
In this period, the ports handled 250.5 million tons of export cargoes (+8.4%), including 41.9 million tons of coal (+18.7%), 13.2 million tons of grain (a four-fold increase), 3.1 million tons of ore (almost a three-fold increase), 151.5 million tons of liquid bulk (+7.2%), 6.2 million tons of mineral fertilisers (-30.3%), 3.9 million tons of timber (-41.8%), 17.6 million tons of ferrous metals (-2.1%), and 5.4 million tons of containerised freight (-10.1%).
And 17.6 million tons of import cargoes was serviced (-40.2%), including 7.8 million tons of containerised freight (-41.9%), and 4.7 million tons of general cargo (-49.4%).
Some 29.8 million tons of transit cargo was transshipped. Its volume increased by 16.1% year-on-year due to crude oil transportation.
The volume of coastal trade cargo grew by 1.5 times.
The sea ports of the North-Western basin handled 146.4 million tons (+1.9%), including 49.2 million tons of dry cargoes (-15.9%) and 97.2 million tons of liquid bulk (+14.2%). Those of the Southern basin serviced 119.2 million tons (+13.2%), including 41.5 million tons of dry cargoes (+27.1%) and 77.7 million tons of liquid bulk (+6.9%). The ports of the Far Eastern basin handled 58.2 million tons (+5.6%), including 37.1 million tons of dry cargoes (-4%) and 21.1 million tons of liquid bulk (+28.1%).
RZD Makes Plans
RZD predicts the loading volume in 2010 will grow by 0.7% year-on-year, stated Vladimir Yakunin, President of Russian Railways JSC, in mid-September in Sochi.
RZD plans that its loading volume in 2009 would amount to 1.1 billion tons.
In the first eight months of 2009, the company transported 717.7 million tons or 20.5% less freight than in the same period the previous year.
At the end of August, the Board of RZD discussed the results of the company’s activities in the first half of 2009. It was reported that the company is going to reach the expected level of loading reduction: 19%. “Perhaps, we will improve on this figure,” said Vladimir Yakunin, President of RZD, at the meeting of the Board.
In 2008, the loading volume was 1.304 billion tons of cargo. Thus, in 2009, the decline may amount to 15.4% instead of 19% as was planned earlier.
In the first half of 2009, the loading volume on RZD’s network was 520.9 million tons, 23.1% down year-on-year. The decline in freight transportation reduced from 33.1% in January to 13.9% in July.
KTZ: export cargo transportation will fall by 15%
Kazakhstan Temir Zholy expects a 15% decline in export cargo transportation in 2009. “The volume of freight transportation in 2009 is 246.3 million tons, including 80.7 million tons of export cargo, which is 15% less compared with the previous year,” said Edil Iskakov, Marketing Director of KTZ, during the round-table discussion “Export Potential Development of Kazakhstan” held in mid-September in Alma-Ata.
In his words, the total volume of production transported via the railway network of Kazakhstan in the first eight months of 2009 decreased by 13.9% compared with the same period of the previous year, to 153.3 million tons.
“Export goods made up 52.8 million tons of this volume, imports 10.13 million tons and transit 9.5 million tons. The volume of domestic transportation was 80.8 million tons,” said Mr Iskakov.
Russian goods go to the Pacific region
The revival of the market in the Asian and Pacific countries during the world recession has made for the growth of freight transportation in the eastern direction via the Transsib, claimed Sergey Kolesnikov, Deputy Director General of RZD’s Centre of Transport Service.
“Nowadays, we observe that freight transportation to Russia’s eastern ports has grown. The markets of the Pacific region and Asia have become very active. We registered a significant increase in transportation of ferrous metals, coke, coal, and oil products,” said Mr Kolesnikov.
He emphasised that in August 2009 transportation of coal via the Russian railway network grew by 85% compared with the same period the previous year. “This is a huge volume, but we managed to cope with it,” he added.
“Meanwhile, freight transportation to Europe has reduced significantly. That is why we now pay special attention to the eastern direction,” highlighted Mr Kolesnikov.
Commenting on the accumulation of cargo wagons and loading delays in the sea ports of Vladivostok in August, Deputy Director General of RZD’s Centre of Transport Service branded them “local, not system problems”, which would be solved by Russian Railways JSC in the near future.
“In particular, a representative of RZD will be present on the port’s territory for arranging that. He will coordinate the arrival of trains at the proper time and their transportation to where they will be loaded or unloaded,” he added.
Eesti Raudtee: a 4% decline
In the first eight months of 2009, the Estonian railway company Eesti Raudtee transported 16.46 million tons of cargo, a 4% decrease year-on-year.
The volume of transit transportation was 13.8 million tons.
Transportation of imports and exports fell to 0.68 million tons (-36%) and 0.28 million tons (-57%) respectively.
Traditionally, the share of oil and oil products in the total transportation volume is the largest – it was 72% or 11.86 million tons (a 2.2% decline year-on-year).
Some 10,945 containers were carried by Eesti Raudtee in January-August 2009.
Customs payments to be made in RUR from October 1, 2009 in Russia
Payment of customs duties, taxes, advance charge payments and bailment in Russia is now done only in rubles. The according amendments to the Customs Code were introduced from October 1, 2009.
The Customs Code previously envisaged the possibility of transmission of the amounts into customs accounts in any currency.
Also, the changes in the regulation provide for the closing of “intermediate” accounts used for the accounting of receipts from customs and other payments made by foreign economic activity participants.
The Federal Treasury Office and FCS signed a schedule under which the “intermediate” accounts for customs fees payment would be gradually closed by June 30, 2010. According to the Ministry of Finance, this procedure will increase budget revenues by RUR 100 billion in the current year alone.
[~DETAIL_TEXT] => Russia-Belarus: Containers Will Be Delivered Faster
TransContainer and Byelorussian Railway signed an agreement on data exchanging in order to improve the organisation of cargo transportation in containers via the Brest-Terespol border crossing. The agreement was concluded on September 28 at the 18th plenary session of the Coordinating Council on Transsiberian Transportation (CCTT).
According to the agreement, TransContainer will supply the Byelorussian Railway with preliminary information about the volume of transport and accompanying documents received from consignors from European countries in the framework of the “Volkswagen Group Rus” project.
The agreement is aimed at reducing the time spent by container trains on the border crossing.
Information will be transferred from the “Portal TransContainer” automation system to that of Byelorussian Railway. In future, the “Portal TransContainer” system will be used in the company’s other international projects.
24 Russian Ports Have Limits Approved
The work on setting the limits of 24 ports (out of 66) has been completed in Russia, Alexey Klyavin, Director of the RF Ministry of Transport’s Department for State Policy in the River and Sea Transport Sector said at the conference “Beyond the Crisis Outline. New Routes of Water Transport Development”.
According to Mr Klyavin, the limits have been also approved for Novorossiysk, St Petersburg, Primorsk, and Ust-Luga ports. The procedure is almost completed in the ports of Kaliningrad and Murmansk. Active work is being held in the Far East as well.
The limits of the Big Port of St Petersburg were approved by the RF Government in late August after years of negotiations between the Ministry of Transport and other authorities involved, including the Ministry of Defence. The Decree was signed by RF Prime Minister Vladimir Putin.
The Ministry of Transport has also elaborated draft decrees setting limits of ports Azov, (Rostov region), Olya (Krasnodar territory) and three ports in the Sakhalin region.
Rise and Fall
Cargo transportation by railway in the Russian Federation fell by 12.3% to 99.7 million tons in August 2009 in comparison with the same period in 2008, stated the Federal Statistics Service of the Russian Federation (Rosstat).
In August 2009 loading of all kinds of cargoes shrank in comparison with August 2008, except for coal (growth by 4.1%) and ores of non-ferrous metals (growth by 4.9%).
Loading of grain fell sharply in comparison with August 2008, by 29.5%, which was caused by a smaller grain harvest than in 2008.
Loading figures for ferrous metals and construction cargoes were traditionally low, 45% and 28.4% less than in August 2008.
All kinds of cargoes showed better figures in August than in July 2009. Those cargoes which had shown the worst results earlier appeared to fare the best. Thus, coke grew by 7.4%, ferrous metals by 4.4% and chemical fertilisers by 9.8%.
Ukrainian Ministry of Transport to Set Discounts for Transit Cargo Handling in Ports
The Ministry of Transport and Communications of Ukraine prepared a draft decree on the introduction of discounts for transit cargo handling in nine ports by April 1, 2010.
According to the document, a 30% discount is to be set for the handling of bulk grain and cement, pig iron and ferrous metal; and a 40% discount for the handling of transit sulfur in the Illichivsk seaport.
In the port of Mariupol, a 30% discount for pig iron and ferrous metal, and an 18% discount for bulk grain and seeds are to be put into operation.
In Yuzhny port, a 30% discount for pig iron and ferrous metal, and a 25% discount for coal and iron ore are to be set. In the port of Odessa the discount for pig iron and ferrous metal will be 30%. Discounts are also to be set for Kerch, Reni, Ust-Danube, Berdyansk and Kherson sea ports.
Russian Sea Ports: 6.5% Increase in Throughput
In January-August 2009, the throughput of Russian sea ports grew by 6.5% year-on-year to 323.9 million tons and127.9 million tons of dry cargoes (-1.5%) and 196 million tons of liquid bulk (+12.4%) was transshipped.
In this period, the ports handled 250.5 million tons of export cargoes (+8.4%), including 41.9 million tons of coal (+18.7%), 13.2 million tons of grain (a four-fold increase), 3.1 million tons of ore (almost a three-fold increase), 151.5 million tons of liquid bulk (+7.2%), 6.2 million tons of mineral fertilisers (-30.3%), 3.9 million tons of timber (-41.8%), 17.6 million tons of ferrous metals (-2.1%), and 5.4 million tons of containerised freight (-10.1%).
And 17.6 million tons of import cargoes was serviced (-40.2%), including 7.8 million tons of containerised freight (-41.9%), and 4.7 million tons of general cargo (-49.4%).
Some 29.8 million tons of transit cargo was transshipped. Its volume increased by 16.1% year-on-year due to crude oil transportation.
The volume of coastal trade cargo grew by 1.5 times.
The sea ports of the North-Western basin handled 146.4 million tons (+1.9%), including 49.2 million tons of dry cargoes (-15.9%) and 97.2 million tons of liquid bulk (+14.2%). Those of the Southern basin serviced 119.2 million tons (+13.2%), including 41.5 million tons of dry cargoes (+27.1%) and 77.7 million tons of liquid bulk (+6.9%). The ports of the Far Eastern basin handled 58.2 million tons (+5.6%), including 37.1 million tons of dry cargoes (-4%) and 21.1 million tons of liquid bulk (+28.1%).
RZD Makes Plans
RZD predicts the loading volume in 2010 will grow by 0.7% year-on-year, stated Vladimir Yakunin, President of Russian Railways JSC, in mid-September in Sochi.
RZD plans that its loading volume in 2009 would amount to 1.1 billion tons.
In the first eight months of 2009, the company transported 717.7 million tons or 20.5% less freight than in the same period the previous year.
At the end of August, the Board of RZD discussed the results of the company’s activities in the first half of 2009. It was reported that the company is going to reach the expected level of loading reduction: 19%. “Perhaps, we will improve on this figure,” said Vladimir Yakunin, President of RZD, at the meeting of the Board.
In 2008, the loading volume was 1.304 billion tons of cargo. Thus, in 2009, the decline may amount to 15.4% instead of 19% as was planned earlier.
In the first half of 2009, the loading volume on RZD’s network was 520.9 million tons, 23.1% down year-on-year. The decline in freight transportation reduced from 33.1% in January to 13.9% in July.
KTZ: export cargo transportation will fall by 15%
Kazakhstan Temir Zholy expects a 15% decline in export cargo transportation in 2009. “The volume of freight transportation in 2009 is 246.3 million tons, including 80.7 million tons of export cargo, which is 15% less compared with the previous year,” said Edil Iskakov, Marketing Director of KTZ, during the round-table discussion “Export Potential Development of Kazakhstan” held in mid-September in Alma-Ata.
In his words, the total volume of production transported via the railway network of Kazakhstan in the first eight months of 2009 decreased by 13.9% compared with the same period of the previous year, to 153.3 million tons.
“Export goods made up 52.8 million tons of this volume, imports 10.13 million tons and transit 9.5 million tons. The volume of domestic transportation was 80.8 million tons,” said Mr Iskakov.
Russian goods go to the Pacific region
The revival of the market in the Asian and Pacific countries during the world recession has made for the growth of freight transportation in the eastern direction via the Transsib, claimed Sergey Kolesnikov, Deputy Director General of RZD’s Centre of Transport Service.
“Nowadays, we observe that freight transportation to Russia’s eastern ports has grown. The markets of the Pacific region and Asia have become very active. We registered a significant increase in transportation of ferrous metals, coke, coal, and oil products,” said Mr Kolesnikov.
He emphasised that in August 2009 transportation of coal via the Russian railway network grew by 85% compared with the same period the previous year. “This is a huge volume, but we managed to cope with it,” he added.
“Meanwhile, freight transportation to Europe has reduced significantly. That is why we now pay special attention to the eastern direction,” highlighted Mr Kolesnikov.
Commenting on the accumulation of cargo wagons and loading delays in the sea ports of Vladivostok in August, Deputy Director General of RZD’s Centre of Transport Service branded them “local, not system problems”, which would be solved by Russian Railways JSC in the near future.
“In particular, a representative of RZD will be present on the port’s territory for arranging that. He will coordinate the arrival of trains at the proper time and their transportation to where they will be loaded or unloaded,” he added.
Eesti Raudtee: a 4% decline
In the first eight months of 2009, the Estonian railway company Eesti Raudtee transported 16.46 million tons of cargo, a 4% decrease year-on-year.
The volume of transit transportation was 13.8 million tons.
Transportation of imports and exports fell to 0.68 million tons (-36%) and 0.28 million tons (-57%) respectively.
Traditionally, the share of oil and oil products in the total transportation volume is the largest – it was 72% or 11.86 million tons (a 2.2% decline year-on-year).
Some 10,945 containers were carried by Eesti Raudtee in January-August 2009.
Customs payments to be made in RUR from October 1, 2009 in Russia
Payment of customs duties, taxes, advance charge payments and bailment in Russia is now done only in rubles. The according amendments to the Customs Code were introduced from October 1, 2009.
The Customs Code previously envisaged the possibility of transmission of the amounts into customs accounts in any currency.
Also, the changes in the regulation provide for the closing of “intermediate” accounts used for the accounting of receipts from customs and other payments made by foreign economic activity participants.
The Federal Treasury Office and FCS signed a schedule under which the “intermediate” accounts for customs fees payment would be gradually closed by June 30, 2010. According to the Ministry of Finance, this procedure will increase budget revenues by RUR 100 billion in the current year alone.
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[DETAIL_TEXT] => Russia-Belarus: Containers Will Be Delivered Faster
TransContainer and Byelorussian Railway signed an agreement on data exchanging in order to improve the organisation of cargo transportation in containers via the Brest-Terespol border crossing. The agreement was concluded on September 28 at the 18th plenary session of the Coordinating Council on Transsiberian Transportation (CCTT).
According to the agreement, TransContainer will supply the Byelorussian Railway with preliminary information about the volume of transport and accompanying documents received from consignors from European countries in the framework of the “Volkswagen Group Rus” project.
The agreement is aimed at reducing the time spent by container trains on the border crossing.
Information will be transferred from the “Portal TransContainer” automation system to that of Byelorussian Railway. In future, the “Portal TransContainer” system will be used in the company’s other international projects.
24 Russian Ports Have Limits Approved
The work on setting the limits of 24 ports (out of 66) has been completed in Russia, Alexey Klyavin, Director of the RF Ministry of Transport’s Department for State Policy in the River and Sea Transport Sector said at the conference “Beyond the Crisis Outline. New Routes of Water Transport Development”.
According to Mr Klyavin, the limits have been also approved for Novorossiysk, St Petersburg, Primorsk, and Ust-Luga ports. The procedure is almost completed in the ports of Kaliningrad and Murmansk. Active work is being held in the Far East as well.
The limits of the Big Port of St Petersburg were approved by the RF Government in late August after years of negotiations between the Ministry of Transport and other authorities involved, including the Ministry of Defence. The Decree was signed by RF Prime Minister Vladimir Putin.
The Ministry of Transport has also elaborated draft decrees setting limits of ports Azov, (Rostov region), Olya (Krasnodar territory) and three ports in the Sakhalin region.
Rise and Fall
Cargo transportation by railway in the Russian Federation fell by 12.3% to 99.7 million tons in August 2009 in comparison with the same period in 2008, stated the Federal Statistics Service of the Russian Federation (Rosstat).
In August 2009 loading of all kinds of cargoes shrank in comparison with August 2008, except for coal (growth by 4.1%) and ores of non-ferrous metals (growth by 4.9%).
Loading of grain fell sharply in comparison with August 2008, by 29.5%, which was caused by a smaller grain harvest than in 2008.
Loading figures for ferrous metals and construction cargoes were traditionally low, 45% and 28.4% less than in August 2008.
All kinds of cargoes showed better figures in August than in July 2009. Those cargoes which had shown the worst results earlier appeared to fare the best. Thus, coke grew by 7.4%, ferrous metals by 4.4% and chemical fertilisers by 9.8%.
Ukrainian Ministry of Transport to Set Discounts for Transit Cargo Handling in Ports
The Ministry of Transport and Communications of Ukraine prepared a draft decree on the introduction of discounts for transit cargo handling in nine ports by April 1, 2010.
According to the document, a 30% discount is to be set for the handling of bulk grain and cement, pig iron and ferrous metal; and a 40% discount for the handling of transit sulfur in the Illichivsk seaport.
In the port of Mariupol, a 30% discount for pig iron and ferrous metal, and an 18% discount for bulk grain and seeds are to be put into operation.
In Yuzhny port, a 30% discount for pig iron and ferrous metal, and a 25% discount for coal and iron ore are to be set. In the port of Odessa the discount for pig iron and ferrous metal will be 30%. Discounts are also to be set for Kerch, Reni, Ust-Danube, Berdyansk and Kherson sea ports.
Russian Sea Ports: 6.5% Increase in Throughput
In January-August 2009, the throughput of Russian sea ports grew by 6.5% year-on-year to 323.9 million tons and127.9 million tons of dry cargoes (-1.5%) and 196 million tons of liquid bulk (+12.4%) was transshipped.
In this period, the ports handled 250.5 million tons of export cargoes (+8.4%), including 41.9 million tons of coal (+18.7%), 13.2 million tons of grain (a four-fold increase), 3.1 million tons of ore (almost a three-fold increase), 151.5 million tons of liquid bulk (+7.2%), 6.2 million tons of mineral fertilisers (-30.3%), 3.9 million tons of timber (-41.8%), 17.6 million tons of ferrous metals (-2.1%), and 5.4 million tons of containerised freight (-10.1%).
And 17.6 million tons of import cargoes was serviced (-40.2%), including 7.8 million tons of containerised freight (-41.9%), and 4.7 million tons of general cargo (-49.4%).
Some 29.8 million tons of transit cargo was transshipped. Its volume increased by 16.1% year-on-year due to crude oil transportation.
The volume of coastal trade cargo grew by 1.5 times.
The sea ports of the North-Western basin handled 146.4 million tons (+1.9%), including 49.2 million tons of dry cargoes (-15.9%) and 97.2 million tons of liquid bulk (+14.2%). Those of the Southern basin serviced 119.2 million tons (+13.2%), including 41.5 million tons of dry cargoes (+27.1%) and 77.7 million tons of liquid bulk (+6.9%). The ports of the Far Eastern basin handled 58.2 million tons (+5.6%), including 37.1 million tons of dry cargoes (-4%) and 21.1 million tons of liquid bulk (+28.1%).
RZD Makes Plans
RZD predicts the loading volume in 2010 will grow by 0.7% year-on-year, stated Vladimir Yakunin, President of Russian Railways JSC, in mid-September in Sochi.
RZD plans that its loading volume in 2009 would amount to 1.1 billion tons.
In the first eight months of 2009, the company transported 717.7 million tons or 20.5% less freight than in the same period the previous year.
At the end of August, the Board of RZD discussed the results of the company’s activities in the first half of 2009. It was reported that the company is going to reach the expected level of loading reduction: 19%. “Perhaps, we will improve on this figure,” said Vladimir Yakunin, President of RZD, at the meeting of the Board.
In 2008, the loading volume was 1.304 billion tons of cargo. Thus, in 2009, the decline may amount to 15.4% instead of 19% as was planned earlier.
In the first half of 2009, the loading volume on RZD’s network was 520.9 million tons, 23.1% down year-on-year. The decline in freight transportation reduced from 33.1% in January to 13.9% in July.
KTZ: export cargo transportation will fall by 15%
Kazakhstan Temir Zholy expects a 15% decline in export cargo transportation in 2009. “The volume of freight transportation in 2009 is 246.3 million tons, including 80.7 million tons of export cargo, which is 15% less compared with the previous year,” said Edil Iskakov, Marketing Director of KTZ, during the round-table discussion “Export Potential Development of Kazakhstan” held in mid-September in Alma-Ata.
In his words, the total volume of production transported via the railway network of Kazakhstan in the first eight months of 2009 decreased by 13.9% compared with the same period of the previous year, to 153.3 million tons.
“Export goods made up 52.8 million tons of this volume, imports 10.13 million tons and transit 9.5 million tons. The volume of domestic transportation was 80.8 million tons,” said Mr Iskakov.
Russian goods go to the Pacific region
The revival of the market in the Asian and Pacific countries during the world recession has made for the growth of freight transportation in the eastern direction via the Transsib, claimed Sergey Kolesnikov, Deputy Director General of RZD’s Centre of Transport Service.
“Nowadays, we observe that freight transportation to Russia’s eastern ports has grown. The markets of the Pacific region and Asia have become very active. We registered a significant increase in transportation of ferrous metals, coke, coal, and oil products,” said Mr Kolesnikov.
He emphasised that in August 2009 transportation of coal via the Russian railway network grew by 85% compared with the same period the previous year. “This is a huge volume, but we managed to cope with it,” he added.
“Meanwhile, freight transportation to Europe has reduced significantly. That is why we now pay special attention to the eastern direction,” highlighted Mr Kolesnikov.
Commenting on the accumulation of cargo wagons and loading delays in the sea ports of Vladivostok in August, Deputy Director General of RZD’s Centre of Transport Service branded them “local, not system problems”, which would be solved by Russian Railways JSC in the near future.
“In particular, a representative of RZD will be present on the port’s territory for arranging that. He will coordinate the arrival of trains at the proper time and their transportation to where they will be loaded or unloaded,” he added.
Eesti Raudtee: a 4% decline
In the first eight months of 2009, the Estonian railway company Eesti Raudtee transported 16.46 million tons of cargo, a 4% decrease year-on-year.
The volume of transit transportation was 13.8 million tons.
Transportation of imports and exports fell to 0.68 million tons (-36%) and 0.28 million tons (-57%) respectively.
Traditionally, the share of oil and oil products in the total transportation volume is the largest – it was 72% or 11.86 million tons (a 2.2% decline year-on-year).
Some 10,945 containers were carried by Eesti Raudtee in January-August 2009.
Customs payments to be made in RUR from October 1, 2009 in Russia
Payment of customs duties, taxes, advance charge payments and bailment in Russia is now done only in rubles. The according amendments to the Customs Code were introduced from October 1, 2009.
The Customs Code previously envisaged the possibility of transmission of the amounts into customs accounts in any currency.
Also, the changes in the regulation provide for the closing of “intermediate” accounts used for the accounting of receipts from customs and other payments made by foreign economic activity participants.
The Federal Treasury Office and FCS signed a schedule under which the “intermediate” accounts for customs fees payment would be gradually closed by June 30, 2010. According to the Ministry of Finance, this procedure will increase budget revenues by RUR 100 billion in the current year alone.
[~DETAIL_TEXT] => Russia-Belarus: Containers Will Be Delivered Faster
TransContainer and Byelorussian Railway signed an agreement on data exchanging in order to improve the organisation of cargo transportation in containers via the Brest-Terespol border crossing. The agreement was concluded on September 28 at the 18th plenary session of the Coordinating Council on Transsiberian Transportation (CCTT).
According to the agreement, TransContainer will supply the Byelorussian Railway with preliminary information about the volume of transport and accompanying documents received from consignors from European countries in the framework of the “Volkswagen Group Rus” project.
The agreement is aimed at reducing the time spent by container trains on the border crossing.
Information will be transferred from the “Portal TransContainer” automation system to that of Byelorussian Railway. In future, the “Portal TransContainer” system will be used in the company’s other international projects.
24 Russian Ports Have Limits Approved
The work on setting the limits of 24 ports (out of 66) has been completed in Russia, Alexey Klyavin, Director of the RF Ministry of Transport’s Department for State Policy in the River and Sea Transport Sector said at the conference “Beyond the Crisis Outline. New Routes of Water Transport Development”.
According to Mr Klyavin, the limits have been also approved for Novorossiysk, St Petersburg, Primorsk, and Ust-Luga ports. The procedure is almost completed in the ports of Kaliningrad and Murmansk. Active work is being held in the Far East as well.
The limits of the Big Port of St Petersburg were approved by the RF Government in late August after years of negotiations between the Ministry of Transport and other authorities involved, including the Ministry of Defence. The Decree was signed by RF Prime Minister Vladimir Putin.
The Ministry of Transport has also elaborated draft decrees setting limits of ports Azov, (Rostov region), Olya (Krasnodar territory) and three ports in the Sakhalin region.
Rise and Fall
Cargo transportation by railway in the Russian Federation fell by 12.3% to 99.7 million tons in August 2009 in comparison with the same period in 2008, stated the Federal Statistics Service of the Russian Federation (Rosstat).
In August 2009 loading of all kinds of cargoes shrank in comparison with August 2008, except for coal (growth by 4.1%) and ores of non-ferrous metals (growth by 4.9%).
Loading of grain fell sharply in comparison with August 2008, by 29.5%, which was caused by a smaller grain harvest than in 2008.
Loading figures for ferrous metals and construction cargoes were traditionally low, 45% and 28.4% less than in August 2008.
All kinds of cargoes showed better figures in August than in July 2009. Those cargoes which had shown the worst results earlier appeared to fare the best. Thus, coke grew by 7.4%, ferrous metals by 4.4% and chemical fertilisers by 9.8%.
Ukrainian Ministry of Transport to Set Discounts for Transit Cargo Handling in Ports
The Ministry of Transport and Communications of Ukraine prepared a draft decree on the introduction of discounts for transit cargo handling in nine ports by April 1, 2010.
According to the document, a 30% discount is to be set for the handling of bulk grain and cement, pig iron and ferrous metal; and a 40% discount for the handling of transit sulfur in the Illichivsk seaport.
In the port of Mariupol, a 30% discount for pig iron and ferrous metal, and an 18% discount for bulk grain and seeds are to be put into operation.
In Yuzhny port, a 30% discount for pig iron and ferrous metal, and a 25% discount for coal and iron ore are to be set. In the port of Odessa the discount for pig iron and ferrous metal will be 30%. Discounts are also to be set for Kerch, Reni, Ust-Danube, Berdyansk and Kherson sea ports.
Russian Sea Ports: 6.5% Increase in Throughput
In January-August 2009, the throughput of Russian sea ports grew by 6.5% year-on-year to 323.9 million tons and127.9 million tons of dry cargoes (-1.5%) and 196 million tons of liquid bulk (+12.4%) was transshipped.
In this period, the ports handled 250.5 million tons of export cargoes (+8.4%), including 41.9 million tons of coal (+18.7%), 13.2 million tons of grain (a four-fold increase), 3.1 million tons of ore (almost a three-fold increase), 151.5 million tons of liquid bulk (+7.2%), 6.2 million tons of mineral fertilisers (-30.3%), 3.9 million tons of timber (-41.8%), 17.6 million tons of ferrous metals (-2.1%), and 5.4 million tons of containerised freight (-10.1%).
And 17.6 million tons of import cargoes was serviced (-40.2%), including 7.8 million tons of containerised freight (-41.9%), and 4.7 million tons of general cargo (-49.4%).
Some 29.8 million tons of transit cargo was transshipped. Its volume increased by 16.1% year-on-year due to crude oil transportation.
The volume of coastal trade cargo grew by 1.5 times.
The sea ports of the North-Western basin handled 146.4 million tons (+1.9%), including 49.2 million tons of dry cargoes (-15.9%) and 97.2 million tons of liquid bulk (+14.2%). Those of the Southern basin serviced 119.2 million tons (+13.2%), including 41.5 million tons of dry cargoes (+27.1%) and 77.7 million tons of liquid bulk (+6.9%). The ports of the Far Eastern basin handled 58.2 million tons (+5.6%), including 37.1 million tons of dry cargoes (-4%) and 21.1 million tons of liquid bulk (+28.1%).
RZD Makes Plans
RZD predicts the loading volume in 2010 will grow by 0.7% year-on-year, stated Vladimir Yakunin, President of Russian Railways JSC, in mid-September in Sochi.
RZD plans that its loading volume in 2009 would amount to 1.1 billion tons.
In the first eight months of 2009, the company transported 717.7 million tons or 20.5% less freight than in the same period the previous year.
At the end of August, the Board of RZD discussed the results of the company’s activities in the first half of 2009. It was reported that the company is going to reach the expected level of loading reduction: 19%. “Perhaps, we will improve on this figure,” said Vladimir Yakunin, President of RZD, at the meeting of the Board.
In 2008, the loading volume was 1.304 billion tons of cargo. Thus, in 2009, the decline may amount to 15.4% instead of 19% as was planned earlier.
In the first half of 2009, the loading volume on RZD’s network was 520.9 million tons, 23.1% down year-on-year. The decline in freight transportation reduced from 33.1% in January to 13.9% in July.
KTZ: export cargo transportation will fall by 15%
Kazakhstan Temir Zholy expects a 15% decline in export cargo transportation in 2009. “The volume of freight transportation in 2009 is 246.3 million tons, including 80.7 million tons of export cargo, which is 15% less compared with the previous year,” said Edil Iskakov, Marketing Director of KTZ, during the round-table discussion “Export Potential Development of Kazakhstan” held in mid-September in Alma-Ata.
In his words, the total volume of production transported via the railway network of Kazakhstan in the first eight months of 2009 decreased by 13.9% compared with the same period of the previous year, to 153.3 million tons.
“Export goods made up 52.8 million tons of this volume, imports 10.13 million tons and transit 9.5 million tons. The volume of domestic transportation was 80.8 million tons,” said Mr Iskakov.
Russian goods go to the Pacific region
The revival of the market in the Asian and Pacific countries during the world recession has made for the growth of freight transportation in the eastern direction via the Transsib, claimed Sergey Kolesnikov, Deputy Director General of RZD’s Centre of Transport Service.
“Nowadays, we observe that freight transportation to Russia’s eastern ports has grown. The markets of the Pacific region and Asia have become very active. We registered a significant increase in transportation of ferrous metals, coke, coal, and oil products,” said Mr Kolesnikov.
He emphasised that in August 2009 transportation of coal via the Russian railway network grew by 85% compared with the same period the previous year. “This is a huge volume, but we managed to cope with it,” he added.
“Meanwhile, freight transportation to Europe has reduced significantly. That is why we now pay special attention to the eastern direction,” highlighted Mr Kolesnikov.
Commenting on the accumulation of cargo wagons and loading delays in the sea ports of Vladivostok in August, Deputy Director General of RZD’s Centre of Transport Service branded them “local, not system problems”, which would be solved by Russian Railways JSC in the near future.
“In particular, a representative of RZD will be present on the port’s territory for arranging that. He will coordinate the arrival of trains at the proper time and their transportation to where they will be loaded or unloaded,” he added.
Eesti Raudtee: a 4% decline
In the first eight months of 2009, the Estonian railway company Eesti Raudtee transported 16.46 million tons of cargo, a 4% decrease year-on-year.
The volume of transit transportation was 13.8 million tons.
Transportation of imports and exports fell to 0.68 million tons (-36%) and 0.28 million tons (-57%) respectively.
Traditionally, the share of oil and oil products in the total transportation volume is the largest – it was 72% or 11.86 million tons (a 2.2% decline year-on-year).
Some 10,945 containers were carried by Eesti Raudtee in January-August 2009.
Customs payments to be made in RUR from October 1, 2009 in Russia
Payment of customs duties, taxes, advance charge payments and bailment in Russia is now done only in rubles. The according amendments to the Customs Code were introduced from October 1, 2009.
The Customs Code previously envisaged the possibility of transmission of the amounts into customs accounts in any currency.
Also, the changes in the regulation provide for the closing of “intermediate” accounts used for the accounting of receipts from customs and other payments made by foreign economic activity participants.
The Federal Treasury Office and FCS signed a schedule under which the “intermediate” accounts for customs fees payment would be gradually closed by June 30, 2010. According to the Ministry of Finance, this procedure will increase budget revenues by RUR 100 billion in the current year alone.
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The active participation of German companies in the Russian railway machine-building sector started several years ago. Since that time, the total sum of investments in the sector made by German parties have exceeded €800 million. However, another tender important for German companies will be held soon – the one on supplying rolling stock for the Olympic Games in Sochi. Also, they are eager to participate in other projects. Russia’s machine-building sector needs modern technologies badly, and Germany is the world leader in this sphere.Array
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[DETAIL_TEXT] => Germany is the main partner
After the agreement on high-speed rolling stock supplies to Russia was concluded, the number of projects developed by Russian railwaymen in cooperation with Siemens increased significantly. In September 2007, it turned out that the German concern is interested in the Russian locomotive-building sector. Then, at the First International Salon of Rolling Stock and Rail Technologies EXPO 1520, Evgeny Kopeyin, former CEO of Sinara-Transport Machines, announced that the main progress at the exhibition was the agreement with Siemens. “The core of the future cooperation is the joint production of diesel locomotives and pulling machines. We can say that Sinara group of companies is on the way to establish a joint venture with the German holding company,” he explained.
Meanwhile, it took Sinara almost two years to finalise the agreement. Thus, the Memorandum on electric locomotives manufacture and supply to RZD was signed by Siemens and Sinara group of companies in May 2009. And only in the middle of last summer the parties agreed on the launch of modern locomotive manufacture in Russia.
According to the contract, Sinara and Siemens are to launch a joint venture at the base of the Urals Railway Machine Building Works (owned by Sinara group of companies). The JV will produce two-unit locomotives. In 2011, the JV will put into operation a production line to build locomotives with an induction motor drive. The capacity of the line will amount to over 100 units per annum. “The cooperation with Siemens will allow the supply to RZD of modern cargo locomotives,” said Dmitry Pumpyansky, President of Sinara group, after the contract was signed. In his words, the new electric locomotive will have standard weight parameters, and at the same time it will be able to pull trains weighing up to 9,000-10,000 tons (30-40% more than the locomotives used nowadays). Also, the cost of servicing the locomotive during its life cycle will be a fraction of today’s expenses.
In the words of representatives of Sinara group of companies, this contract envisages local component manufacture in Russia. In particular, traction converters, propulsion engines and reduction gears will be produced by Siemens or its subsidiary on the territory of the Russian Federation. Before the end of 2010, the parties are to present the concept of how the electric locomotives will be serviced and repaired during their lifetime.
Meanwhile, according to some data, the transfer of modern technologies may make the price of the new machines higher. In particular, specialists of the company recognise that the supposed cost of an electric locomotive produced by Sinara in cooperation with Siemens will be twice as much as that of the 2ES6 electric locomotive manufactured nowadays. However, we should take into consideration the fact that the new unit will have principally new technical and economic characteristics, better power efficiency, and the cost of its service and repair will be much lower. Due to all these factors, the cost over the lifetime of the new electric locomotive will be less than that of existing units. Moreover, employees of the new company are sure that their product will find its place at the market. “The Memorandum is trilateral, RZD is a partner in the project. All participants understand that the locomotive is created to develop Russian railways, and it will be tested in accordance with the customer’s technical requirements at every production stage,” say senior managers at Sinara group of companies.
Not Only Siemens
Several important contracts were concluded at Innotrans exhibition, held in Berlin in September 2008. Vladimir Yakunin, President of RZD, signed two key memorandums of understanding with German companies. The first memorandum was on cooperation in the sphere of automation and optimisation of the sorting work and technical equipment at RZD’s railway yards and was signed by Mr Yakunin and Peter Löscher, President and Chief Executive Officer of Siemens AG. The pilot projects were automation of the railway yards Chernyakhovsk (the Kaliningrad Railway – an affiliate of RZD) and Luzhskaya-Sortirovochnaya (the Oktyabrskaya Railway – an affiliate of RZD). The hump yards are supposed to be equipped with coupling mechanisms controlled by automatic machinery produced by Siemens.
The second document was signed by Heinz Hermann Thiele, Chairman of the Supervisory Board of Knorr-Bremse. The memorandum contains the intention to establish in Russia a JV producing brake equipment. “This document concerns the issues of organisation of brake equipment and accessories manufacture in Russia. Knorr-Bremse has a definite position: if the company works in the market of a country, the production for the market is to be manufactured in that very country, which is profitable from economic and logistical standpoints,” says Vladimir Rutkas, Head of Knorr-Bremse representative office in the RF.
In his opinion, Russian engineers will adapt the developments of Knorr-Bremse to the requirements of RZD, and the manufacturing specialists will provide the production output. The German party will have the majority shareholding in the authorised capital of the new company. It will also have functions of management and production process organisation. In future the capacities of the enterprise will be enlarged to produce automated doors and air-conditioning systems.
In November 2008, when the crisis hit the Russian industry, Giprotyazhmash (the major designer of machine-building manufacturing in Russia) and Pro Konzept company (Germany) concluded an agreement on high-tech equipment supplies to Russian transport machine-building enterprises.
In addition, the document envisages the transfer of technologies to launch new production capacities and modernise existing ones. Torsten Frihels, CEO of Pro Konzept, said that the technologies of the German company will be tested at the Moscow plant for electric rolling stock repair, specialising in modernisation and reconstruction of metro trains. “We are ready to offer projects on upgrading suburban trains and equipping wagon repair and production enterprises with modern facilities. The list of services will be defined during negotiations with RZD and machine-building enterprises, which will be held in the near future,” he added.
Knowledge comes first
The paying of such attention by German partners to all aspects of the machine-building sector in Russia is not surprising. Russia’s market is one of the most capacious and promising in the world. Moreover, it is no secret that Russian wagons and locomotives are deteriorating, and that the technologies in use badly need modernisation. There is an opinion that, in the sphere of technologies and railway rolling stock equipment, Russia falls 10-15 years behind other European countries. That is why Russian producers are making efforts to transfer the basis of manufacture, as well the technologies for rolling stock and facilities development.
“It is very important, because, if Russian engineers have this knowledge, they will be able to develop the machinery of the next generation by themselves,” says Oleg Trudov, Deputy CEO of the Natural Monopolies’ Problems Institute. In his words, the recession will not seriously damage the new projects. “Due to the significant decline in cargo transportation by railway last year, the problem of rolling stock shortage became not so urgent. However, when the economy recovers, and the demand for freight transportation increases, this problem may arise again. The senior management of RZD understand it pretty well and do their best to order the necessary rolling stock from the machine-building enterprises,” he emphasised.
Polina Korela
[~DETAIL_TEXT] => Germany is the main partner
After the agreement on high-speed rolling stock supplies to Russia was concluded, the number of projects developed by Russian railwaymen in cooperation with Siemens increased significantly. In September 2007, it turned out that the German concern is interested in the Russian locomotive-building sector. Then, at the First International Salon of Rolling Stock and Rail Technologies EXPO 1520, Evgeny Kopeyin, former CEO of Sinara-Transport Machines, announced that the main progress at the exhibition was the agreement with Siemens. “The core of the future cooperation is the joint production of diesel locomotives and pulling machines. We can say that Sinara group of companies is on the way to establish a joint venture with the German holding company,” he explained.
Meanwhile, it took Sinara almost two years to finalise the agreement. Thus, the Memorandum on electric locomotives manufacture and supply to RZD was signed by Siemens and Sinara group of companies in May 2009. And only in the middle of last summer the parties agreed on the launch of modern locomotive manufacture in Russia.
According to the contract, Sinara and Siemens are to launch a joint venture at the base of the Urals Railway Machine Building Works (owned by Sinara group of companies). The JV will produce two-unit locomotives. In 2011, the JV will put into operation a production line to build locomotives with an induction motor drive. The capacity of the line will amount to over 100 units per annum. “The cooperation with Siemens will allow the supply to RZD of modern cargo locomotives,” said Dmitry Pumpyansky, President of Sinara group, after the contract was signed. In his words, the new electric locomotive will have standard weight parameters, and at the same time it will be able to pull trains weighing up to 9,000-10,000 tons (30-40% more than the locomotives used nowadays). Also, the cost of servicing the locomotive during its life cycle will be a fraction of today’s expenses.
In the words of representatives of Sinara group of companies, this contract envisages local component manufacture in Russia. In particular, traction converters, propulsion engines and reduction gears will be produced by Siemens or its subsidiary on the territory of the Russian Federation. Before the end of 2010, the parties are to present the concept of how the electric locomotives will be serviced and repaired during their lifetime.
Meanwhile, according to some data, the transfer of modern technologies may make the price of the new machines higher. In particular, specialists of the company recognise that the supposed cost of an electric locomotive produced by Sinara in cooperation with Siemens will be twice as much as that of the 2ES6 electric locomotive manufactured nowadays. However, we should take into consideration the fact that the new unit will have principally new technical and economic characteristics, better power efficiency, and the cost of its service and repair will be much lower. Due to all these factors, the cost over the lifetime of the new electric locomotive will be less than that of existing units. Moreover, employees of the new company are sure that their product will find its place at the market. “The Memorandum is trilateral, RZD is a partner in the project. All participants understand that the locomotive is created to develop Russian railways, and it will be tested in accordance with the customer’s technical requirements at every production stage,” say senior managers at Sinara group of companies.
Not Only Siemens
Several important contracts were concluded at Innotrans exhibition, held in Berlin in September 2008. Vladimir Yakunin, President of RZD, signed two key memorandums of understanding with German companies. The first memorandum was on cooperation in the sphere of automation and optimisation of the sorting work and technical equipment at RZD’s railway yards and was signed by Mr Yakunin and Peter Löscher, President and Chief Executive Officer of Siemens AG. The pilot projects were automation of the railway yards Chernyakhovsk (the Kaliningrad Railway – an affiliate of RZD) and Luzhskaya-Sortirovochnaya (the Oktyabrskaya Railway – an affiliate of RZD). The hump yards are supposed to be equipped with coupling mechanisms controlled by automatic machinery produced by Siemens.
The second document was signed by Heinz Hermann Thiele, Chairman of the Supervisory Board of Knorr-Bremse. The memorandum contains the intention to establish in Russia a JV producing brake equipment. “This document concerns the issues of organisation of brake equipment and accessories manufacture in Russia. Knorr-Bremse has a definite position: if the company works in the market of a country, the production for the market is to be manufactured in that very country, which is profitable from economic and logistical standpoints,” says Vladimir Rutkas, Head of Knorr-Bremse representative office in the RF.
In his opinion, Russian engineers will adapt the developments of Knorr-Bremse to the requirements of RZD, and the manufacturing specialists will provide the production output. The German party will have the majority shareholding in the authorised capital of the new company. It will also have functions of management and production process organisation. In future the capacities of the enterprise will be enlarged to produce automated doors and air-conditioning systems.
In November 2008, when the crisis hit the Russian industry, Giprotyazhmash (the major designer of machine-building manufacturing in Russia) and Pro Konzept company (Germany) concluded an agreement on high-tech equipment supplies to Russian transport machine-building enterprises.
In addition, the document envisages the transfer of technologies to launch new production capacities and modernise existing ones. Torsten Frihels, CEO of Pro Konzept, said that the technologies of the German company will be tested at the Moscow plant for electric rolling stock repair, specialising in modernisation and reconstruction of metro trains. “We are ready to offer projects on upgrading suburban trains and equipping wagon repair and production enterprises with modern facilities. The list of services will be defined during negotiations with RZD and machine-building enterprises, which will be held in the near future,” he added.
Knowledge comes first
The paying of such attention by German partners to all aspects of the machine-building sector in Russia is not surprising. Russia’s market is one of the most capacious and promising in the world. Moreover, it is no secret that Russian wagons and locomotives are deteriorating, and that the technologies in use badly need modernisation. There is an opinion that, in the sphere of technologies and railway rolling stock equipment, Russia falls 10-15 years behind other European countries. That is why Russian producers are making efforts to transfer the basis of manufacture, as well the technologies for rolling stock and facilities development.
“It is very important, because, if Russian engineers have this knowledge, they will be able to develop the machinery of the next generation by themselves,” says Oleg Trudov, Deputy CEO of the Natural Monopolies’ Problems Institute. In his words, the recession will not seriously damage the new projects. “Due to the significant decline in cargo transportation by railway last year, the problem of rolling stock shortage became not so urgent. However, when the economy recovers, and the demand for freight transportation increases, this problem may arise again. The senior management of RZD understand it pretty well and do their best to order the necessary rolling stock from the machine-building enterprises,” he emphasised.
Polina Korela
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[SECTION_META_DESCRIPTION] => <img src="/ufiles/image/rus/partner/2009/4/19.jpg" border="1" alt=" " hspace="5" width="300" height="201" align="left" />The active participation of German companies in the Russian railway machine-building sector started several years ago. Since that time, the total sum of investments in the sector made by German parties have exceeded €800 million. However, another tender important for German companies will be held soon – the one on supplying rolling stock for the Olympic Games in Sochi. Also, they are eager to participate in other projects. Russia’s machine-building sector needs modern technologies badly, and Germany is the world leader in this sphere.
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[ELEMENT_META_DESCRIPTION] => <img src="/ufiles/image/rus/partner/2009/4/19.jpg" border="1" alt=" " hspace="5" width="300" height="201" align="left" />The active participation of German companies in the Russian railway machine-building sector started several years ago. Since that time, the total sum of investments in the sector made by German parties have exceeded €800 million. However, another tender important for German companies will be held soon – the one on supplying rolling stock for the Olympic Games in Sochi. Also, they are eager to participate in other projects. Russia’s machine-building sector needs modern technologies badly, and Germany is the world leader in this sphere.
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[DETAIL_TEXT] => Germany is the main partner
After the agreement on high-speed rolling stock supplies to Russia was concluded, the number of projects developed by Russian railwaymen in cooperation with Siemens increased significantly. In September 2007, it turned out that the German concern is interested in the Russian locomotive-building sector. Then, at the First International Salon of Rolling Stock and Rail Technologies EXPO 1520, Evgeny Kopeyin, former CEO of Sinara-Transport Machines, announced that the main progress at the exhibition was the agreement with Siemens. “The core of the future cooperation is the joint production of diesel locomotives and pulling machines. We can say that Sinara group of companies is on the way to establish a joint venture with the German holding company,” he explained.
Meanwhile, it took Sinara almost two years to finalise the agreement. Thus, the Memorandum on electric locomotives manufacture and supply to RZD was signed by Siemens and Sinara group of companies in May 2009. And only in the middle of last summer the parties agreed on the launch of modern locomotive manufacture in Russia.
According to the contract, Sinara and Siemens are to launch a joint venture at the base of the Urals Railway Machine Building Works (owned by Sinara group of companies). The JV will produce two-unit locomotives. In 2011, the JV will put into operation a production line to build locomotives with an induction motor drive. The capacity of the line will amount to over 100 units per annum. “The cooperation with Siemens will allow the supply to RZD of modern cargo locomotives,” said Dmitry Pumpyansky, President of Sinara group, after the contract was signed. In his words, the new electric locomotive will have standard weight parameters, and at the same time it will be able to pull trains weighing up to 9,000-10,000 tons (30-40% more than the locomotives used nowadays). Also, the cost of servicing the locomotive during its life cycle will be a fraction of today’s expenses.
In the words of representatives of Sinara group of companies, this contract envisages local component manufacture in Russia. In particular, traction converters, propulsion engines and reduction gears will be produced by Siemens or its subsidiary on the territory of the Russian Federation. Before the end of 2010, the parties are to present the concept of how the electric locomotives will be serviced and repaired during their lifetime.
Meanwhile, according to some data, the transfer of modern technologies may make the price of the new machines higher. In particular, specialists of the company recognise that the supposed cost of an electric locomotive produced by Sinara in cooperation with Siemens will be twice as much as that of the 2ES6 electric locomotive manufactured nowadays. However, we should take into consideration the fact that the new unit will have principally new technical and economic characteristics, better power efficiency, and the cost of its service and repair will be much lower. Due to all these factors, the cost over the lifetime of the new electric locomotive will be less than that of existing units. Moreover, employees of the new company are sure that their product will find its place at the market. “The Memorandum is trilateral, RZD is a partner in the project. All participants understand that the locomotive is created to develop Russian railways, and it will be tested in accordance with the customer’s technical requirements at every production stage,” say senior managers at Sinara group of companies.
Not Only Siemens
Several important contracts were concluded at Innotrans exhibition, held in Berlin in September 2008. Vladimir Yakunin, President of RZD, signed two key memorandums of understanding with German companies. The first memorandum was on cooperation in the sphere of automation and optimisation of the sorting work and technical equipment at RZD’s railway yards and was signed by Mr Yakunin and Peter Löscher, President and Chief Executive Officer of Siemens AG. The pilot projects were automation of the railway yards Chernyakhovsk (the Kaliningrad Railway – an affiliate of RZD) and Luzhskaya-Sortirovochnaya (the Oktyabrskaya Railway – an affiliate of RZD). The hump yards are supposed to be equipped with coupling mechanisms controlled by automatic machinery produced by Siemens.
The second document was signed by Heinz Hermann Thiele, Chairman of the Supervisory Board of Knorr-Bremse. The memorandum contains the intention to establish in Russia a JV producing brake equipment. “This document concerns the issues of organisation of brake equipment and accessories manufacture in Russia. Knorr-Bremse has a definite position: if the company works in the market of a country, the production for the market is to be manufactured in that very country, which is profitable from economic and logistical standpoints,” says Vladimir Rutkas, Head of Knorr-Bremse representative office in the RF.
In his opinion, Russian engineers will adapt the developments of Knorr-Bremse to the requirements of RZD, and the manufacturing specialists will provide the production output. The German party will have the majority shareholding in the authorised capital of the new company. It will also have functions of management and production process organisation. In future the capacities of the enterprise will be enlarged to produce automated doors and air-conditioning systems.
In November 2008, when the crisis hit the Russian industry, Giprotyazhmash (the major designer of machine-building manufacturing in Russia) and Pro Konzept company (Germany) concluded an agreement on high-tech equipment supplies to Russian transport machine-building enterprises.
In addition, the document envisages the transfer of technologies to launch new production capacities and modernise existing ones. Torsten Frihels, CEO of Pro Konzept, said that the technologies of the German company will be tested at the Moscow plant for electric rolling stock repair, specialising in modernisation and reconstruction of metro trains. “We are ready to offer projects on upgrading suburban trains and equipping wagon repair and production enterprises with modern facilities. The list of services will be defined during negotiations with RZD and machine-building enterprises, which will be held in the near future,” he added.
Knowledge comes first
The paying of such attention by German partners to all aspects of the machine-building sector in Russia is not surprising. Russia’s market is one of the most capacious and promising in the world. Moreover, it is no secret that Russian wagons and locomotives are deteriorating, and that the technologies in use badly need modernisation. There is an opinion that, in the sphere of technologies and railway rolling stock equipment, Russia falls 10-15 years behind other European countries. That is why Russian producers are making efforts to transfer the basis of manufacture, as well the technologies for rolling stock and facilities development.
“It is very important, because, if Russian engineers have this knowledge, they will be able to develop the machinery of the next generation by themselves,” says Oleg Trudov, Deputy CEO of the Natural Monopolies’ Problems Institute. In his words, the recession will not seriously damage the new projects. “Due to the significant decline in cargo transportation by railway last year, the problem of rolling stock shortage became not so urgent. However, when the economy recovers, and the demand for freight transportation increases, this problem may arise again. The senior management of RZD understand it pretty well and do their best to order the necessary rolling stock from the machine-building enterprises,” he emphasised.
Polina Korela
[~DETAIL_TEXT] => Germany is the main partner
After the agreement on high-speed rolling stock supplies to Russia was concluded, the number of projects developed by Russian railwaymen in cooperation with Siemens increased significantly. In September 2007, it turned out that the German concern is interested in the Russian locomotive-building sector. Then, at the First International Salon of Rolling Stock and Rail Technologies EXPO 1520, Evgeny Kopeyin, former CEO of Sinara-Transport Machines, announced that the main progress at the exhibition was the agreement with Siemens. “The core of the future cooperation is the joint production of diesel locomotives and pulling machines. We can say that Sinara group of companies is on the way to establish a joint venture with the German holding company,” he explained.
Meanwhile, it took Sinara almost two years to finalise the agreement. Thus, the Memorandum on electric locomotives manufacture and supply to RZD was signed by Siemens and Sinara group of companies in May 2009. And only in the middle of last summer the parties agreed on the launch of modern locomotive manufacture in Russia.
According to the contract, Sinara and Siemens are to launch a joint venture at the base of the Urals Railway Machine Building Works (owned by Sinara group of companies). The JV will produce two-unit locomotives. In 2011, the JV will put into operation a production line to build locomotives with an induction motor drive. The capacity of the line will amount to over 100 units per annum. “The cooperation with Siemens will allow the supply to RZD of modern cargo locomotives,” said Dmitry Pumpyansky, President of Sinara group, after the contract was signed. In his words, the new electric locomotive will have standard weight parameters, and at the same time it will be able to pull trains weighing up to 9,000-10,000 tons (30-40% more than the locomotives used nowadays). Also, the cost of servicing the locomotive during its life cycle will be a fraction of today’s expenses.
In the words of representatives of Sinara group of companies, this contract envisages local component manufacture in Russia. In particular, traction converters, propulsion engines and reduction gears will be produced by Siemens or its subsidiary on the territory of the Russian Federation. Before the end of 2010, the parties are to present the concept of how the electric locomotives will be serviced and repaired during their lifetime.
Meanwhile, according to some data, the transfer of modern technologies may make the price of the new machines higher. In particular, specialists of the company recognise that the supposed cost of an electric locomotive produced by Sinara in cooperation with Siemens will be twice as much as that of the 2ES6 electric locomotive manufactured nowadays. However, we should take into consideration the fact that the new unit will have principally new technical and economic characteristics, better power efficiency, and the cost of its service and repair will be much lower. Due to all these factors, the cost over the lifetime of the new electric locomotive will be less than that of existing units. Moreover, employees of the new company are sure that their product will find its place at the market. “The Memorandum is trilateral, RZD is a partner in the project. All participants understand that the locomotive is created to develop Russian railways, and it will be tested in accordance with the customer’s technical requirements at every production stage,” say senior managers at Sinara group of companies.
Not Only Siemens
Several important contracts were concluded at Innotrans exhibition, held in Berlin in September 2008. Vladimir Yakunin, President of RZD, signed two key memorandums of understanding with German companies. The first memorandum was on cooperation in the sphere of automation and optimisation of the sorting work and technical equipment at RZD’s railway yards and was signed by Mr Yakunin and Peter Löscher, President and Chief Executive Officer of Siemens AG. The pilot projects were automation of the railway yards Chernyakhovsk (the Kaliningrad Railway – an affiliate of RZD) and Luzhskaya-Sortirovochnaya (the Oktyabrskaya Railway – an affiliate of RZD). The hump yards are supposed to be equipped with coupling mechanisms controlled by automatic machinery produced by Siemens.
The second document was signed by Heinz Hermann Thiele, Chairman of the Supervisory Board of Knorr-Bremse. The memorandum contains the intention to establish in Russia a JV producing brake equipment. “This document concerns the issues of organisation of brake equipment and accessories manufacture in Russia. Knorr-Bremse has a definite position: if the company works in the market of a country, the production for the market is to be manufactured in that very country, which is profitable from economic and logistical standpoints,” says Vladimir Rutkas, Head of Knorr-Bremse representative office in the RF.
In his opinion, Russian engineers will adapt the developments of Knorr-Bremse to the requirements of RZD, and the manufacturing specialists will provide the production output. The German party will have the majority shareholding in the authorised capital of the new company. It will also have functions of management and production process organisation. In future the capacities of the enterprise will be enlarged to produce automated doors and air-conditioning systems.
In November 2008, when the crisis hit the Russian industry, Giprotyazhmash (the major designer of machine-building manufacturing in Russia) and Pro Konzept company (Germany) concluded an agreement on high-tech equipment supplies to Russian transport machine-building enterprises.
In addition, the document envisages the transfer of technologies to launch new production capacities and modernise existing ones. Torsten Frihels, CEO of Pro Konzept, said that the technologies of the German company will be tested at the Moscow plant for electric rolling stock repair, specialising in modernisation and reconstruction of metro trains. “We are ready to offer projects on upgrading suburban trains and equipping wagon repair and production enterprises with modern facilities. The list of services will be defined during negotiations with RZD and machine-building enterprises, which will be held in the near future,” he added.
Knowledge comes first
The paying of such attention by German partners to all aspects of the machine-building sector in Russia is not surprising. Russia’s market is one of the most capacious and promising in the world. Moreover, it is no secret that Russian wagons and locomotives are deteriorating, and that the technologies in use badly need modernisation. There is an opinion that, in the sphere of technologies and railway rolling stock equipment, Russia falls 10-15 years behind other European countries. That is why Russian producers are making efforts to transfer the basis of manufacture, as well the technologies for rolling stock and facilities development.
“It is very important, because, if Russian engineers have this knowledge, they will be able to develop the machinery of the next generation by themselves,” says Oleg Trudov, Deputy CEO of the Natural Monopolies’ Problems Institute. In his words, the recession will not seriously damage the new projects. “Due to the significant decline in cargo transportation by railway last year, the problem of rolling stock shortage became not so urgent. However, when the economy recovers, and the demand for freight transportation increases, this problem may arise again. The senior management of RZD understand it pretty well and do their best to order the necessary rolling stock from the machine-building enterprises,” he emphasised.
Polina Korela
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The Russian-German transport and logistics business is developing more and more actively. Many German companies have had established representative offices for several years now and are actively promoting their logistics concepts in the market. Nevertheless, representatives of this sector do not gloss over the difficulties they face in Russia. Usually they are non-transparent customs legislation and bureaucratic formalities in transportation and cargo registration.Array
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[DETAIL_TEXT] => Lost Billions
The history of how German logistics companies came to the Russian market started in 2000, when they began showing their interest in strategic cooperation. From the very beginning, their attention was attracted to two sectors – energy and infrastructure, such as railways, transport services and container transportations. Thus in 2003 three documents were declared between Russian and German companies. The first was the Memorandum of Mutual Understanding and Cooperation in Passenger Transportation, signed by RZD and German Deutsche Bahn AG; in container navigation it was the creation of Russian-German Swan Container Lines, where the Hamburg company Eurogate participated; and also it was announced that the Port of Hamburg’s largest container operator, Hamburger Hafen und Lagerhaus AG, was planning to acquire a 25% share in Petrolesport, the second-largest Russian stevedore company in the Baltics. Also, the National Container Company was going to start a joint container project with Eurogate in Ust-Luga.
By the beginning of 2007 it became obvious that German logistics companies were the most active among all western participants in the Russian transport market, and in 2006 and 2007 new company names were added to that list. More than 25 German companies worked in the field of cargo transportations, cargo forwarding, warehouse services and express delivery. By that time economists had already concluded that the interest of German companies in Russian transport infrastructure had a very sound basis. Analysts estimated that at the beginning of 2007 our country was ready to make about €120 billion on serving imports-exports and cargo transits because of its geographical position and the fact that its logistics infrastructure was already developed. At that time such a sum could be compared with the incomes Russia was making on sales of oil and gas.
Here we note that, since then, a lot of changes have taken place. Thus some projects which were announced at the beginning of the century were suspended, some of them were altered and some of them still exist. Nevertheless, the German logistics companies are still the most noticeable players among all the foreign players who have come to this business niche. German partners do not just talk about the importance of their presence in the Russian market, their figures speak for themselves. “For Hafen Hamburg Marketing e.V. and our members Russia is a very important market. In 2008 cargo turnover between Hamburg and Russian Federation reached 720 000 TEU. Russia ranks third in terms of volumes for Hamburg – between Hamburg and St Petersburg Port alone container turnover reached 660 000 TEU last year,” said Natalia Kapkayeva, head of Hamburg Hafen Marketing e. V. representative office in Russia. Similar figures are also declared by the company DB Schenker which represents railway logistics. “In 2008, DB Schenker generated a turnover of EUR 166 million in Russia. This is a comparatively small figure in terms of our total transport revenues. We intend to increase that share and are even planning investments despite the economic crisis,” noted Jörg Siedenbiedel, head of the representative office of DB AG in the CIS.
Cargo Supermarket
Here we note that the companies who are present in Russia have quite a wide range of interests. “Together with the subsidiaries of DB Schenker and the TransEurasiaLogistics JV handled in cooperation with RZD, we cover the entire range of logistics requirements across all transportation sectors (rail, ocean, road, air freight, warehousing and distribution). As a leading provider of integrated logistics and the largest rail freight operator in Europe, we regard the Russian market as being of prime importance. We offer our partner companies the opportunity to benefit from DB Schenker’s global transportation network and expertise, so that we can offer our customers optimum transportation services,” Mr Siedenbiedel commented.
An example he made, which clearly illustrated the transportation and logistics services successfully provided by DB Schenker, was the Volkswagen transports in Kaluga. “Together with our Russian partners we have established the first genuine rail-based logistics chain between Western Europe and Russia. We supply the plant in Kaluga from five different European countries based on the “just-in-time production” principle, despite the change of gauge and customs procedures involved. We implement similar customised solutions, although on a smaller scale, for other customers in the sectors of automobiles and chemicals, mechanical engineering and agriculture. Together with our partner companies, we are in a position to offer transportation solutions on different routes, whether via the Sassnitz – Baltijsk – Ust-Luga rail ferry or via various land corridors,” he added.
The representative offices of other German companies also agree that import-export cargo movements are their main source of income. “One of the major aspects is that Russia is importing a lot of cargo out of Germany, such as raw chemical products, agricultural machines, special paper products and laminate. On the other hand, imported goods from Russia to the metropolitan areas are paper products, scrap metal and, of course, Vodka,” said Arkardius Grabietz, Managing Director of AKG Logistics International GmbH. Also, as they emphasise in Kuehne + Nagel Russia, the purpose of this company is the development of domestic distribution networks in order to improve service quality.
“Our current focus projects in Russia aim to develop domestic distribution services, strengthen fashion logistics and expand project cargo logistics for industrial and oil and gas companies as well as extend lead logistics solutions for our customers’ business in Russia,” commented Perry Neumann, Managing Director of Kuehne + Nagel Russia. Generally, in Mr Grabietz’s opinion, one attraction of Russia is that, for this kind of transportation (import and export), there are many ways to move the cargo in and out of the country, which allows for working with all modes of transportation (rail/sea/road) to find the best and safest solution for each client.
An obvious example of German companies’ participation in all key domestic projects is Kuehne + Nagel, which announced the opening of its representative office in Sochi this year. In the opinion of representatives of this holding group’s Russian office, the company is ready to leverage its corporate know-how in logistics and transportation management to international and local companies supplying the Sochi building sites. “Our activities are in no way limited to certain types of commodity. Our mission is to add value to the Sochi projects ensuring on-time and cost efficient cargo deliveries, covering the worldwide supplier base and providing full visibility and control of supply chains,” said Irina Erokhina, Olympic Executive Sochi, Kuehne + Nagel Russia.
Customs and Charges
The opportunity to track deliveries along the way and transparency is becoming a key service offered by logistics managers. But having emphasised the good prospects of the Russian market and its attractiveness to German companies, experts also specify those obvious difficulties they have to face. State organisations usually mention these matters cautiously and rarely. “Foreign business enterprises are always faced with special challenges as a result of the different legal frameworks, freight legislation and customs regulations. However, thanks to our international expertise, the DB Schenker network and the experience of our Russian partners, we are capable of finding an appropriate solution for virtually any transportation task,” representatives from DB Schenker said.
The criticisms were more precise in commercial businesses. “The difficulties for foreign companies are connected mainly with non-transparent, sometimes controversial or unclear Russian legislation (a challenge for customs clearance services), with sometimes insufficient infrastructure in remote regions (a challenge for the domestic distribution services), with high real estate prices in certain locations (a challenge for warehousing services) and with monopoly of RZD in railway transportation,” said Mr Neumann. AKG Logistics International GmbH agreed. “The main problem is the Russian customs regime, which actually does not allow legal DDP deliveries. Customs duties cannot be paid by a foreign company. The consignee needs to do this by himself directly,” emphasised Mr Grabietz.
However, despite the mentioned difficulties, German logistics managers are looking ahead with optimism. “Russia has a higher potential for economic growth than other regions, a feeling we stand by even in crisis times. This remains the strongest driver for attracting new investments into business development here,” concluded Mr Neumann.
Maria Shevchenko
viewpoint
PERRY NEUMANN,
Managing Director of Kuehne + Nagel Russia:
– The most attractive spheres in Russian logistics are sea, air and road transportation, as well as project cargo logistics. It is possible in all these spheres to leverage real competitive advantages for companies if they are true global logistics providers with access to better buying rates via carriers’ headquarters worldwide, with strong IT tools, experience and a knowledge-driven logistics network.
Furthermore, contract logistics could be one more segment of interest but this very much depends on attractive real estate deals and commercial conditions.
ARKARDIUS GRABIETZ, 
Managing Director, AKG Logistics International GmbH:
– There are many nuances in Russian business which make it different from world standards. In general, when doing business in Russia it is very important to know your partners personally. Russians do rely more on personal contacts and recommendations. The price is not the first priority. It is also important to have a local presence.
When doing container transport via short sea routes to or from Russia, the THC from both sides is included by default. By comparison, when we have deep-sea bookings to or from the Far East or the USA, the terms FOB or CFR only include THC at the loading port. Another difference is that every terminal at the port of St. Petersburg has its own tariffs. It is not standardised for all terminals, like in other ports.
NATALIA KAPKAYEVA,
Head of Hamburg Hafen Marketing e. V Representative Office In Russia:
– If we look at the 2009 figures, which of course have been affected by the current economic situation, the Russian market still ranks as the third most important for the Port of Hamburg, after China and Singapore. Every week, 16 container trains go to Russia from the Port of Hamburg and more than 20 feeders connect Hamburg, Lubeck and Kiel with Russian ports on a weekly basis.
Jorg Siedenbiedel,
Head of The Representative Office of Deutsche Bahn AG In The CIS:
– In Western Europe, we generally handle transports with our own locomotives and freight cars. Our activities in the Russian market are based on close cooperation with the Russian Railway and its subsidiaries. Each party contributes its own strengths so that we can jointly offer our customers efficient transportation services which meet the customer’s requirements.
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The history of how German logistics companies came to the Russian market started in 2000, when they began showing their interest in strategic cooperation. From the very beginning, their attention was attracted to two sectors – energy and infrastructure, such as railways, transport services and container transportations. Thus in 2003 three documents were declared between Russian and German companies. The first was the Memorandum of Mutual Understanding and Cooperation in Passenger Transportation, signed by RZD and German Deutsche Bahn AG; in container navigation it was the creation of Russian-German Swan Container Lines, where the Hamburg company Eurogate participated; and also it was announced that the Port of Hamburg’s largest container operator, Hamburger Hafen und Lagerhaus AG, was planning to acquire a 25% share in Petrolesport, the second-largest Russian stevedore company in the Baltics. Also, the National Container Company was going to start a joint container project with Eurogate in Ust-Luga.
By the beginning of 2007 it became obvious that German logistics companies were the most active among all western participants in the Russian transport market, and in 2006 and 2007 new company names were added to that list. More than 25 German companies worked in the field of cargo transportations, cargo forwarding, warehouse services and express delivery. By that time economists had already concluded that the interest of German companies in Russian transport infrastructure had a very sound basis. Analysts estimated that at the beginning of 2007 our country was ready to make about €120 billion on serving imports-exports and cargo transits because of its geographical position and the fact that its logistics infrastructure was already developed. At that time such a sum could be compared with the incomes Russia was making on sales of oil and gas.
Here we note that, since then, a lot of changes have taken place. Thus some projects which were announced at the beginning of the century were suspended, some of them were altered and some of them still exist. Nevertheless, the German logistics companies are still the most noticeable players among all the foreign players who have come to this business niche. German partners do not just talk about the importance of their presence in the Russian market, their figures speak for themselves. “For Hafen Hamburg Marketing e.V. and our members Russia is a very important market. In 2008 cargo turnover between Hamburg and Russian Federation reached 720 000 TEU. Russia ranks third in terms of volumes for Hamburg – between Hamburg and St Petersburg Port alone container turnover reached 660 000 TEU last year,” said Natalia Kapkayeva, head of Hamburg Hafen Marketing e. V. representative office in Russia. Similar figures are also declared by the company DB Schenker which represents railway logistics. “In 2008, DB Schenker generated a turnover of EUR 166 million in Russia. This is a comparatively small figure in terms of our total transport revenues. We intend to increase that share and are even planning investments despite the economic crisis,” noted Jörg Siedenbiedel, head of the representative office of DB AG in the CIS.
Cargo Supermarket
Here we note that the companies who are present in Russia have quite a wide range of interests. “Together with the subsidiaries of DB Schenker and the TransEurasiaLogistics JV handled in cooperation with RZD, we cover the entire range of logistics requirements across all transportation sectors (rail, ocean, road, air freight, warehousing and distribution). As a leading provider of integrated logistics and the largest rail freight operator in Europe, we regard the Russian market as being of prime importance. We offer our partner companies the opportunity to benefit from DB Schenker’s global transportation network and expertise, so that we can offer our customers optimum transportation services,” Mr Siedenbiedel commented.
An example he made, which clearly illustrated the transportation and logistics services successfully provided by DB Schenker, was the Volkswagen transports in Kaluga. “Together with our Russian partners we have established the first genuine rail-based logistics chain between Western Europe and Russia. We supply the plant in Kaluga from five different European countries based on the “just-in-time production” principle, despite the change of gauge and customs procedures involved. We implement similar customised solutions, although on a smaller scale, for other customers in the sectors of automobiles and chemicals, mechanical engineering and agriculture. Together with our partner companies, we are in a position to offer transportation solutions on different routes, whether via the Sassnitz – Baltijsk – Ust-Luga rail ferry or via various land corridors,” he added.
The representative offices of other German companies also agree that import-export cargo movements are their main source of income. “One of the major aspects is that Russia is importing a lot of cargo out of Germany, such as raw chemical products, agricultural machines, special paper products and laminate. On the other hand, imported goods from Russia to the metropolitan areas are paper products, scrap metal and, of course, Vodka,” said Arkardius Grabietz, Managing Director of AKG Logistics International GmbH. Also, as they emphasise in Kuehne + Nagel Russia, the purpose of this company is the development of domestic distribution networks in order to improve service quality.
“Our current focus projects in Russia aim to develop domestic distribution services, strengthen fashion logistics and expand project cargo logistics for industrial and oil and gas companies as well as extend lead logistics solutions for our customers’ business in Russia,” commented Perry Neumann, Managing Director of Kuehne + Nagel Russia. Generally, in Mr Grabietz’s opinion, one attraction of Russia is that, for this kind of transportation (import and export), there are many ways to move the cargo in and out of the country, which allows for working with all modes of transportation (rail/sea/road) to find the best and safest solution for each client.
An obvious example of German companies’ participation in all key domestic projects is Kuehne + Nagel, which announced the opening of its representative office in Sochi this year. In the opinion of representatives of this holding group’s Russian office, the company is ready to leverage its corporate know-how in logistics and transportation management to international and local companies supplying the Sochi building sites. “Our activities are in no way limited to certain types of commodity. Our mission is to add value to the Sochi projects ensuring on-time and cost efficient cargo deliveries, covering the worldwide supplier base and providing full visibility and control of supply chains,” said Irina Erokhina, Olympic Executive Sochi, Kuehne + Nagel Russia.
Customs and Charges
The opportunity to track deliveries along the way and transparency is becoming a key service offered by logistics managers. But having emphasised the good prospects of the Russian market and its attractiveness to German companies, experts also specify those obvious difficulties they have to face. State organisations usually mention these matters cautiously and rarely. “Foreign business enterprises are always faced with special challenges as a result of the different legal frameworks, freight legislation and customs regulations. However, thanks to our international expertise, the DB Schenker network and the experience of our Russian partners, we are capable of finding an appropriate solution for virtually any transportation task,” representatives from DB Schenker said.
The criticisms were more precise in commercial businesses. “The difficulties for foreign companies are connected mainly with non-transparent, sometimes controversial or unclear Russian legislation (a challenge for customs clearance services), with sometimes insufficient infrastructure in remote regions (a challenge for the domestic distribution services), with high real estate prices in certain locations (a challenge for warehousing services) and with monopoly of RZD in railway transportation,” said Mr Neumann. AKG Logistics International GmbH agreed. “The main problem is the Russian customs regime, which actually does not allow legal DDP deliveries. Customs duties cannot be paid by a foreign company. The consignee needs to do this by himself directly,” emphasised Mr Grabietz.
However, despite the mentioned difficulties, German logistics managers are looking ahead with optimism. “Russia has a higher potential for economic growth than other regions, a feeling we stand by even in crisis times. This remains the strongest driver for attracting new investments into business development here,” concluded Mr Neumann.
Maria Shevchenko
viewpoint
PERRY NEUMANN,
Managing Director of Kuehne + Nagel Russia:
– The most attractive spheres in Russian logistics are sea, air and road transportation, as well as project cargo logistics. It is possible in all these spheres to leverage real competitive advantages for companies if they are true global logistics providers with access to better buying rates via carriers’ headquarters worldwide, with strong IT tools, experience and a knowledge-driven logistics network.
Furthermore, contract logistics could be one more segment of interest but this very much depends on attractive real estate deals and commercial conditions.
ARKARDIUS GRABIETZ,
Managing Director, AKG Logistics International GmbH:
– There are many nuances in Russian business which make it different from world standards. In general, when doing business in Russia it is very important to know your partners personally. Russians do rely more on personal contacts and recommendations. The price is not the first priority. It is also important to have a local presence.
When doing container transport via short sea routes to or from Russia, the THC from both sides is included by default. By comparison, when we have deep-sea bookings to or from the Far East or the USA, the terms FOB or CFR only include THC at the loading port. Another difference is that every terminal at the port of St. Petersburg has its own tariffs. It is not standardised for all terminals, like in other ports.
NATALIA KAPKAYEVA,
Head of Hamburg Hafen Marketing e. V Representative Office In Russia:
– If we look at the 2009 figures, which of course have been affected by the current economic situation, the Russian market still ranks as the third most important for the Port of Hamburg, after China and Singapore. Every week, 16 container trains go to Russia from the Port of Hamburg and more than 20 feeders connect Hamburg, Lubeck and Kiel with Russian ports on a weekly basis.
Jorg Siedenbiedel,
Head of The Representative Office of Deutsche Bahn AG In The CIS:
– In Western Europe, we generally handle transports with our own locomotives and freight cars. Our activities in the Russian market are based on close cooperation with the Russian Railway and its subsidiaries. Each party contributes its own strengths so that we can jointly offer our customers efficient transportation services which meet the customer’s requirements.
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[SECTION_META_DESCRIPTION] => <img src="/ufiles/image/rus/partner/2009/4/18.jpg" border="1" alt=" " hspace="5" width="300" height="215" align="left" />The Russian-German transport and logistics business is developing more and more actively. Many German companies have had established representative offices for several years now and are actively promoting their logistics concepts in the market. Nevertheless, representatives of this sector do not gloss over the difficulties they face in Russia. Usually they are non-transparent customs legislation and bureaucratic formalities in transportation and cargo registration.
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[DETAIL_TEXT] => Lost Billions
The history of how German logistics companies came to the Russian market started in 2000, when they began showing their interest in strategic cooperation. From the very beginning, their attention was attracted to two sectors – energy and infrastructure, such as railways, transport services and container transportations. Thus in 2003 three documents were declared between Russian and German companies. The first was the Memorandum of Mutual Understanding and Cooperation in Passenger Transportation, signed by RZD and German Deutsche Bahn AG; in container navigation it was the creation of Russian-German Swan Container Lines, where the Hamburg company Eurogate participated; and also it was announced that the Port of Hamburg’s largest container operator, Hamburger Hafen und Lagerhaus AG, was planning to acquire a 25% share in Petrolesport, the second-largest Russian stevedore company in the Baltics. Also, the National Container Company was going to start a joint container project with Eurogate in Ust-Luga.
By the beginning of 2007 it became obvious that German logistics companies were the most active among all western participants in the Russian transport market, and in 2006 and 2007 new company names were added to that list. More than 25 German companies worked in the field of cargo transportations, cargo forwarding, warehouse services and express delivery. By that time economists had already concluded that the interest of German companies in Russian transport infrastructure had a very sound basis. Analysts estimated that at the beginning of 2007 our country was ready to make about €120 billion on serving imports-exports and cargo transits because of its geographical position and the fact that its logistics infrastructure was already developed. At that time such a sum could be compared with the incomes Russia was making on sales of oil and gas.
Here we note that, since then, a lot of changes have taken place. Thus some projects which were announced at the beginning of the century were suspended, some of them were altered and some of them still exist. Nevertheless, the German logistics companies are still the most noticeable players among all the foreign players who have come to this business niche. German partners do not just talk about the importance of their presence in the Russian market, their figures speak for themselves. “For Hafen Hamburg Marketing e.V. and our members Russia is a very important market. In 2008 cargo turnover between Hamburg and Russian Federation reached 720 000 TEU. Russia ranks third in terms of volumes for Hamburg – between Hamburg and St Petersburg Port alone container turnover reached 660 000 TEU last year,” said Natalia Kapkayeva, head of Hamburg Hafen Marketing e. V. representative office in Russia. Similar figures are also declared by the company DB Schenker which represents railway logistics. “In 2008, DB Schenker generated a turnover of EUR 166 million in Russia. This is a comparatively small figure in terms of our total transport revenues. We intend to increase that share and are even planning investments despite the economic crisis,” noted Jörg Siedenbiedel, head of the representative office of DB AG in the CIS.
Cargo Supermarket
Here we note that the companies who are present in Russia have quite a wide range of interests. “Together with the subsidiaries of DB Schenker and the TransEurasiaLogistics JV handled in cooperation with RZD, we cover the entire range of logistics requirements across all transportation sectors (rail, ocean, road, air freight, warehousing and distribution). As a leading provider of integrated logistics and the largest rail freight operator in Europe, we regard the Russian market as being of prime importance. We offer our partner companies the opportunity to benefit from DB Schenker’s global transportation network and expertise, so that we can offer our customers optimum transportation services,” Mr Siedenbiedel commented.
An example he made, which clearly illustrated the transportation and logistics services successfully provided by DB Schenker, was the Volkswagen transports in Kaluga. “Together with our Russian partners we have established the first genuine rail-based logistics chain between Western Europe and Russia. We supply the plant in Kaluga from five different European countries based on the “just-in-time production” principle, despite the change of gauge and customs procedures involved. We implement similar customised solutions, although on a smaller scale, for other customers in the sectors of automobiles and chemicals, mechanical engineering and agriculture. Together with our partner companies, we are in a position to offer transportation solutions on different routes, whether via the Sassnitz – Baltijsk – Ust-Luga rail ferry or via various land corridors,” he added.
The representative offices of other German companies also agree that import-export cargo movements are their main source of income. “One of the major aspects is that Russia is importing a lot of cargo out of Germany, such as raw chemical products, agricultural machines, special paper products and laminate. On the other hand, imported goods from Russia to the metropolitan areas are paper products, scrap metal and, of course, Vodka,” said Arkardius Grabietz, Managing Director of AKG Logistics International GmbH. Also, as they emphasise in Kuehne + Nagel Russia, the purpose of this company is the development of domestic distribution networks in order to improve service quality.
“Our current focus projects in Russia aim to develop domestic distribution services, strengthen fashion logistics and expand project cargo logistics for industrial and oil and gas companies as well as extend lead logistics solutions for our customers’ business in Russia,” commented Perry Neumann, Managing Director of Kuehne + Nagel Russia. Generally, in Mr Grabietz’s opinion, one attraction of Russia is that, for this kind of transportation (import and export), there are many ways to move the cargo in and out of the country, which allows for working with all modes of transportation (rail/sea/road) to find the best and safest solution for each client.
An obvious example of German companies’ participation in all key domestic projects is Kuehne + Nagel, which announced the opening of its representative office in Sochi this year. In the opinion of representatives of this holding group’s Russian office, the company is ready to leverage its corporate know-how in logistics and transportation management to international and local companies supplying the Sochi building sites. “Our activities are in no way limited to certain types of commodity. Our mission is to add value to the Sochi projects ensuring on-time and cost efficient cargo deliveries, covering the worldwide supplier base and providing full visibility and control of supply chains,” said Irina Erokhina, Olympic Executive Sochi, Kuehne + Nagel Russia.
Customs and Charges
The opportunity to track deliveries along the way and transparency is becoming a key service offered by logistics managers. But having emphasised the good prospects of the Russian market and its attractiveness to German companies, experts also specify those obvious difficulties they have to face. State organisations usually mention these matters cautiously and rarely. “Foreign business enterprises are always faced with special challenges as a result of the different legal frameworks, freight legislation and customs regulations. However, thanks to our international expertise, the DB Schenker network and the experience of our Russian partners, we are capable of finding an appropriate solution for virtually any transportation task,” representatives from DB Schenker said.
The criticisms were more precise in commercial businesses. “The difficulties for foreign companies are connected mainly with non-transparent, sometimes controversial or unclear Russian legislation (a challenge for customs clearance services), with sometimes insufficient infrastructure in remote regions (a challenge for the domestic distribution services), with high real estate prices in certain locations (a challenge for warehousing services) and with monopoly of RZD in railway transportation,” said Mr Neumann. AKG Logistics International GmbH agreed. “The main problem is the Russian customs regime, which actually does not allow legal DDP deliveries. Customs duties cannot be paid by a foreign company. The consignee needs to do this by himself directly,” emphasised Mr Grabietz.
However, despite the mentioned difficulties, German logistics managers are looking ahead with optimism. “Russia has a higher potential for economic growth than other regions, a feeling we stand by even in crisis times. This remains the strongest driver for attracting new investments into business development here,” concluded Mr Neumann.
Maria Shevchenko
viewpoint
PERRY NEUMANN,
Managing Director of Kuehne + Nagel Russia:
– The most attractive spheres in Russian logistics are sea, air and road transportation, as well as project cargo logistics. It is possible in all these spheres to leverage real competitive advantages for companies if they are true global logistics providers with access to better buying rates via carriers’ headquarters worldwide, with strong IT tools, experience and a knowledge-driven logistics network.
Furthermore, contract logistics could be one more segment of interest but this very much depends on attractive real estate deals and commercial conditions.
ARKARDIUS GRABIETZ,
Managing Director, AKG Logistics International GmbH:
– There are many nuances in Russian business which make it different from world standards. In general, when doing business in Russia it is very important to know your partners personally. Russians do rely more on personal contacts and recommendations. The price is not the first priority. It is also important to have a local presence.
When doing container transport via short sea routes to or from Russia, the THC from both sides is included by default. By comparison, when we have deep-sea bookings to or from the Far East or the USA, the terms FOB or CFR only include THC at the loading port. Another difference is that every terminal at the port of St. Petersburg has its own tariffs. It is not standardised for all terminals, like in other ports.
NATALIA KAPKAYEVA,
Head of Hamburg Hafen Marketing e. V Representative Office In Russia:
– If we look at the 2009 figures, which of course have been affected by the current economic situation, the Russian market still ranks as the third most important for the Port of Hamburg, after China and Singapore. Every week, 16 container trains go to Russia from the Port of Hamburg and more than 20 feeders connect Hamburg, Lubeck and Kiel with Russian ports on a weekly basis.
Jorg Siedenbiedel,
Head of The Representative Office of Deutsche Bahn AG In The CIS:
– In Western Europe, we generally handle transports with our own locomotives and freight cars. Our activities in the Russian market are based on close cooperation with the Russian Railway and its subsidiaries. Each party contributes its own strengths so that we can jointly offer our customers efficient transportation services which meet the customer’s requirements.
[~DETAIL_TEXT] => Lost Billions
The history of how German logistics companies came to the Russian market started in 2000, when they began showing their interest in strategic cooperation. From the very beginning, their attention was attracted to two sectors – energy and infrastructure, such as railways, transport services and container transportations. Thus in 2003 three documents were declared between Russian and German companies. The first was the Memorandum of Mutual Understanding and Cooperation in Passenger Transportation, signed by RZD and German Deutsche Bahn AG; in container navigation it was the creation of Russian-German Swan Container Lines, where the Hamburg company Eurogate participated; and also it was announced that the Port of Hamburg’s largest container operator, Hamburger Hafen und Lagerhaus AG, was planning to acquire a 25% share in Petrolesport, the second-largest Russian stevedore company in the Baltics. Also, the National Container Company was going to start a joint container project with Eurogate in Ust-Luga.
By the beginning of 2007 it became obvious that German logistics companies were the most active among all western participants in the Russian transport market, and in 2006 and 2007 new company names were added to that list. More than 25 German companies worked in the field of cargo transportations, cargo forwarding, warehouse services and express delivery. By that time economists had already concluded that the interest of German companies in Russian transport infrastructure had a very sound basis. Analysts estimated that at the beginning of 2007 our country was ready to make about €120 billion on serving imports-exports and cargo transits because of its geographical position and the fact that its logistics infrastructure was already developed. At that time such a sum could be compared with the incomes Russia was making on sales of oil and gas.
Here we note that, since then, a lot of changes have taken place. Thus some projects which were announced at the beginning of the century were suspended, some of them were altered and some of them still exist. Nevertheless, the German logistics companies are still the most noticeable players among all the foreign players who have come to this business niche. German partners do not just talk about the importance of their presence in the Russian market, their figures speak for themselves. “For Hafen Hamburg Marketing e.V. and our members Russia is a very important market. In 2008 cargo turnover between Hamburg and Russian Federation reached 720 000 TEU. Russia ranks third in terms of volumes for Hamburg – between Hamburg and St Petersburg Port alone container turnover reached 660 000 TEU last year,” said Natalia Kapkayeva, head of Hamburg Hafen Marketing e. V. representative office in Russia. Similar figures are also declared by the company DB Schenker which represents railway logistics. “In 2008, DB Schenker generated a turnover of EUR 166 million in Russia. This is a comparatively small figure in terms of our total transport revenues. We intend to increase that share and are even planning investments despite the economic crisis,” noted Jörg Siedenbiedel, head of the representative office of DB AG in the CIS.
Cargo Supermarket
Here we note that the companies who are present in Russia have quite a wide range of interests. “Together with the subsidiaries of DB Schenker and the TransEurasiaLogistics JV handled in cooperation with RZD, we cover the entire range of logistics requirements across all transportation sectors (rail, ocean, road, air freight, warehousing and distribution). As a leading provider of integrated logistics and the largest rail freight operator in Europe, we regard the Russian market as being of prime importance. We offer our partner companies the opportunity to benefit from DB Schenker’s global transportation network and expertise, so that we can offer our customers optimum transportation services,” Mr Siedenbiedel commented.
An example he made, which clearly illustrated the transportation and logistics services successfully provided by DB Schenker, was the Volkswagen transports in Kaluga. “Together with our Russian partners we have established the first genuine rail-based logistics chain between Western Europe and Russia. We supply the plant in Kaluga from five different European countries based on the “just-in-time production” principle, despite the change of gauge and customs procedures involved. We implement similar customised solutions, although on a smaller scale, for other customers in the sectors of automobiles and chemicals, mechanical engineering and agriculture. Together with our partner companies, we are in a position to offer transportation solutions on different routes, whether via the Sassnitz – Baltijsk – Ust-Luga rail ferry or via various land corridors,” he added.
The representative offices of other German companies also agree that import-export cargo movements are their main source of income. “One of the major aspects is that Russia is importing a lot of cargo out of Germany, such as raw chemical products, agricultural machines, special paper products and laminate. On the other hand, imported goods from Russia to the metropolitan areas are paper products, scrap metal and, of course, Vodka,” said Arkardius Grabietz, Managing Director of AKG Logistics International GmbH. Also, as they emphasise in Kuehne + Nagel Russia, the purpose of this company is the development of domestic distribution networks in order to improve service quality.
“Our current focus projects in Russia aim to develop domestic distribution services, strengthen fashion logistics and expand project cargo logistics for industrial and oil and gas companies as well as extend lead logistics solutions for our customers’ business in Russia,” commented Perry Neumann, Managing Director of Kuehne + Nagel Russia. Generally, in Mr Grabietz’s opinion, one attraction of Russia is that, for this kind of transportation (import and export), there are many ways to move the cargo in and out of the country, which allows for working with all modes of transportation (rail/sea/road) to find the best and safest solution for each client.
An obvious example of German companies’ participation in all key domestic projects is Kuehne + Nagel, which announced the opening of its representative office in Sochi this year. In the opinion of representatives of this holding group’s Russian office, the company is ready to leverage its corporate know-how in logistics and transportation management to international and local companies supplying the Sochi building sites. “Our activities are in no way limited to certain types of commodity. Our mission is to add value to the Sochi projects ensuring on-time and cost efficient cargo deliveries, covering the worldwide supplier base and providing full visibility and control of supply chains,” said Irina Erokhina, Olympic Executive Sochi, Kuehne + Nagel Russia.
Customs and Charges
The opportunity to track deliveries along the way and transparency is becoming a key service offered by logistics managers. But having emphasised the good prospects of the Russian market and its attractiveness to German companies, experts also specify those obvious difficulties they have to face. State organisations usually mention these matters cautiously and rarely. “Foreign business enterprises are always faced with special challenges as a result of the different legal frameworks, freight legislation and customs regulations. However, thanks to our international expertise, the DB Schenker network and the experience of our Russian partners, we are capable of finding an appropriate solution for virtually any transportation task,” representatives from DB Schenker said.
The criticisms were more precise in commercial businesses. “The difficulties for foreign companies are connected mainly with non-transparent, sometimes controversial or unclear Russian legislation (a challenge for customs clearance services), with sometimes insufficient infrastructure in remote regions (a challenge for the domestic distribution services), with high real estate prices in certain locations (a challenge for warehousing services) and with monopoly of RZD in railway transportation,” said Mr Neumann. AKG Logistics International GmbH agreed. “The main problem is the Russian customs regime, which actually does not allow legal DDP deliveries. Customs duties cannot be paid by a foreign company. The consignee needs to do this by himself directly,” emphasised Mr Grabietz.
However, despite the mentioned difficulties, German logistics managers are looking ahead with optimism. “Russia has a higher potential for economic growth than other regions, a feeling we stand by even in crisis times. This remains the strongest driver for attracting new investments into business development here,” concluded Mr Neumann.
Maria Shevchenko
viewpoint
PERRY NEUMANN,
Managing Director of Kuehne + Nagel Russia:
– The most attractive spheres in Russian logistics are sea, air and road transportation, as well as project cargo logistics. It is possible in all these spheres to leverage real competitive advantages for companies if they are true global logistics providers with access to better buying rates via carriers’ headquarters worldwide, with strong IT tools, experience and a knowledge-driven logistics network.
Furthermore, contract logistics could be one more segment of interest but this very much depends on attractive real estate deals and commercial conditions.
ARKARDIUS GRABIETZ,
Managing Director, AKG Logistics International GmbH:
– There are many nuances in Russian business which make it different from world standards. In general, when doing business in Russia it is very important to know your partners personally. Russians do rely more on personal contacts and recommendations. The price is not the first priority. It is also important to have a local presence.
When doing container transport via short sea routes to or from Russia, the THC from both sides is included by default. By comparison, when we have deep-sea bookings to or from the Far East or the USA, the terms FOB or CFR only include THC at the loading port. Another difference is that every terminal at the port of St. Petersburg has its own tariffs. It is not standardised for all terminals, like in other ports.
NATALIA KAPKAYEVA,
Head of Hamburg Hafen Marketing e. V Representative Office In Russia:
– If we look at the 2009 figures, which of course have been affected by the current economic situation, the Russian market still ranks as the third most important for the Port of Hamburg, after China and Singapore. Every week, 16 container trains go to Russia from the Port of Hamburg and more than 20 feeders connect Hamburg, Lubeck and Kiel with Russian ports on a weekly basis.
Jorg Siedenbiedel,
Head of The Representative Office of Deutsche Bahn AG In The CIS:
– In Western Europe, we generally handle transports with our own locomotives and freight cars. Our activities in the Russian market are based on close cooperation with the Russian Railway and its subsidiaries. Each party contributes its own strengths so that we can jointly offer our customers efficient transportation services which meet the customer’s requirements.
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Walter Jürgen Schmid, the Ambassador Extraordinary and Plenipotentiary of the Federal Republic of Germany to Russia, comments on the prospects and the problems of Russian and German businesses’ interaction in the transport sector.Array
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[DETAIL_TEXT] => – Mr Schmid, what is your assessment of the current level of economic cooperation between Russia and Germany?
– The recession hit the international trade relations of all countries hard. It influenced both Russia – a large supplier of raw materials – and Germany, whose economy is export-oriented. The decline in demand has touched the trade partners of the two states as well. Nevertheless, it has changed nothing in terms of the solid structure of our relations: in spite of the recession Germany remains Russia’s most important trade partner. Your country will need industrial goods of high quality in future, and Germany can supply them. Most German companies operating in Russia took the necessary measures to survive during the recession, and they are quite optimistic about the future.
We are going to develop our partnership, the target of which is stable diversification and modernisation of the Russian economy and its close cooperation with German industry. Realisation of long-term strategic investment projects, such as transport infrastructure development and renewal of rolling stock for Russian railways, will be continued.
– Could you comment on the dynamics of interaction in transport and customs spheres?
– As I have already said, Germany is the most important trade partner of Russia. Last year, the commodity turnover in money terms between the two countries amounted to approximately €68 billion. Even if the figures have decreased due to the world economic crisis, significant growth is expected to take place until 2030, and it will lead to a corresponding intensification of transport flows. Logistics is the sector in which we can unite the strong points of our countries for mutual benefit: Russia with its raw materials and significant economic dynamics and Germany with its developed, flexible and effective logistics infrastructure and efficient enterprises providing services in the transport sector. They may complement each other pretty well.
– What are the fundamental prospects for cooperation, in your opinion?
– Our countries have a high level of technical and economic interaction. Germany has modern airports, effective sea ports, a well-developed and flexible system of motorways, one of the most intense railway networks in Europe and fast-developing river ports. Railway companies are one of many examples of successful examples of cooperation. Thus, Deutsche Bahn AG cooperates with RZD to create modern freight-servicing centres. In July 2009, they concluded an agreement on the establishment of International Logistics and Supply Chains Centre at St Petersburg University.
Cooperation in the airport sector is also promising. Within the framework of intergovernmental consultations in Munich in 2009, in the presence of Angela Merkel, Chancellor of Germany, and Dmitry Medvedev, President of the Russian Federation, the Governor of St Petersburg and Fraport AG signed a Memorandum of Understanding. The document envisages the opportunity for Fraport to take responsibility for exploiting the Pulkovo airport (the property of St Petersburg) from 2010. Another milestone in the history of German and Russian relations in the transport sector is the planned enlargement of railway-ferry communication between Sassnitz/Mukran and Ust-Luga.
As for the customs sphere, Germany actively cooperates with Russia in the framework of the EU. Last summer, Germany joined the pilot project EU-Russia, envisaging information exchange to quicken customs procedures at the border. Naturally, beyond the EU framework, we are in extensive contact with Russian customs too. For example, regular events are held in the framework of the bilateral programme.
– What prevents the proper realisation of the transport potential you have mentioned?
– On the whole, our cooperation with Russian is quite effective on all the mentioned levels. Nevertheless, sometimes there appear problems, which should be solved for the benefit of both states. For example, the queues near the customs control points at the border of the EU with Russia and Belarus are a barrier for commodities turnover. To improve the situation, documents unification is needed, and the number and durability of revisions should be reduced. To do this, Russian customs strive for the creation of modern terminals near the borders.
Since February 1, 2009, commercial vehicles are to pay a fee for motorway usage in Russia. This issue became a ground for discussions between Germany and Russia, as well as Russia and the EU. The criteria for taking the fee create unequal competition conditions for German transporters in comparison with those from other EU countries and the CIS.
There is one important area of progress: customs procedures used to take a lot of time in railway transport because of the different cargo transportation legislation in the EU and Russia. After the new combined consignment note was put into operation in 2006, the time spent on the procedure fell. In future, a lot of attention will be paid to the improvement of interoperability, i.e. significant harmonisation of the railway equipment and enlargement of international corridors.
– Germany is the acknowledged leader in the sector of transport innovation in Europe. Do you think there are any barriers in Russia (for example, protectionism, red tape, or gaps in legislation) preventing the effective application of new German technologies in this country?
– There are positive examples, in particular the cooperation of RZD and Siemens Mobility in the high-speed railway transport sector. The planned high-speed communication makes for the modernisation of Russia’s railway system, thus creating the basis for further economic growth.
There are good prospects in other sectors too. Thus, in 2006 the RF Government showed interest in the German satellite system for taking road charges from commercial vehicles. In May 2007, this technology was presented in Moscow. German industrial partners prepared a special practical demonstration on the ring-route near the Lomonosov Moscow State University. So, the public could see the advantages and the flexibility of the technology taking road charges on the basis of satellite and mobile communications. The representatives of the ministries and industrial partners of our countries continue the negotiations about implementation of the e-system.
As for trade policy, we face an increase of customs dues, especially those on cars. I think, protectionism will do nobody any good. It may increase competitiveness in the short-term but, in the long term, such measures contradict the modernisation of the national economy of any state.
– What efforts is the German government making in integrating the transport sectors of new states which have become Russia’s active partners in the transport sphere?
– Between 1991 and 2008, the Government of the Federal Republic of Germany invested approximately €197 billion into transport infrastructure. Some 37% of the sum (about €73 billion) was invested into the new federal states. Taking into account their territory (30%) and their share in the country’s population (20%), this percentage is very high. That is why nowadays the new federal states have a modern transport infrastructure, which provides the best conditions for easily accessing production and services areas. Simultaneously with the enlargement of the European Union, the role of Germany, and especially its new federal states, has become more important as a key junction in the growing sector of international transport communication.
The relations of the RF and enterprises from the new federal states have been actively developing lately. The volume of exported goods from the eastern Germany to the Russian Federation grew from €1.4 billion in 2004 to €3.2 billion in 2008. Meanwhile, the most significant export sectors of the new states are machine building (supplies for the sum of €670 million to the RF in 2008), car construction (€650 million), and the chemical industry (€589 million).
– Due to the recession, the structure of commodities turnover between Germany and Russia has changed. In particular, supplies of German machine-building products to Russia fell, which is bad for Germany, Russia, and transport companies. What measures can the governments and businessmen take to bring the goods flows back to life?
– Machine building is the most important export sector of the German economy, and the most damaged by the crisis.But it remains an innovative sector, necessary for after the post-recession modernisation of the countries’ economies. That is why we are optimistic about the negotiations of the representatives of the German economy and their Russian partners. Both parties have gone through a difficult period, but they have a clear vision of the situation after the recession. The provision of liquidity to enterprises plays a key role. And the cooperation of the Credit Institute for Economic Recovery and Vnesheconombank is a step in the right direction.
Bilateral commerce can become more active if the number of difficulties the enterprises face is reduced, which envisages the enlargement and modernisation of the logistics chain and includes simplification of the customs system and progress in taxation and certification. Legal safety and the availability of well-trained specialists are also important. That is why we are going to support professional education.
Ivan stupachenko
[~DETAIL_TEXT] => – Mr Schmid, what is your assessment of the current level of economic cooperation between Russia and Germany?
– The recession hit the international trade relations of all countries hard. It influenced both Russia – a large supplier of raw materials – and Germany, whose economy is export-oriented. The decline in demand has touched the trade partners of the two states as well. Nevertheless, it has changed nothing in terms of the solid structure of our relations: in spite of the recession Germany remains Russia’s most important trade partner. Your country will need industrial goods of high quality in future, and Germany can supply them. Most German companies operating in Russia took the necessary measures to survive during the recession, and they are quite optimistic about the future.
We are going to develop our partnership, the target of which is stable diversification and modernisation of the Russian economy and its close cooperation with German industry. Realisation of long-term strategic investment projects, such as transport infrastructure development and renewal of rolling stock for Russian railways, will be continued.
– Could you comment on the dynamics of interaction in transport and customs spheres?
– As I have already said, Germany is the most important trade partner of Russia. Last year, the commodity turnover in money terms between the two countries amounted to approximately €68 billion. Even if the figures have decreased due to the world economic crisis, significant growth is expected to take place until 2030, and it will lead to a corresponding intensification of transport flows. Logistics is the sector in which we can unite the strong points of our countries for mutual benefit: Russia with its raw materials and significant economic dynamics and Germany with its developed, flexible and effective logistics infrastructure and efficient enterprises providing services in the transport sector. They may complement each other pretty well.
– What are the fundamental prospects for cooperation, in your opinion?
– Our countries have a high level of technical and economic interaction. Germany has modern airports, effective sea ports, a well-developed and flexible system of motorways, one of the most intense railway networks in Europe and fast-developing river ports. Railway companies are one of many examples of successful examples of cooperation. Thus, Deutsche Bahn AG cooperates with RZD to create modern freight-servicing centres. In July 2009, they concluded an agreement on the establishment of International Logistics and Supply Chains Centre at St Petersburg University.
Cooperation in the airport sector is also promising. Within the framework of intergovernmental consultations in Munich in 2009, in the presence of Angela Merkel, Chancellor of Germany, and Dmitry Medvedev, President of the Russian Federation, the Governor of St Petersburg and Fraport AG signed a Memorandum of Understanding. The document envisages the opportunity for Fraport to take responsibility for exploiting the Pulkovo airport (the property of St Petersburg) from 2010. Another milestone in the history of German and Russian relations in the transport sector is the planned enlargement of railway-ferry communication between Sassnitz/Mukran and Ust-Luga.
As for the customs sphere, Germany actively cooperates with Russia in the framework of the EU. Last summer, Germany joined the pilot project EU-Russia, envisaging information exchange to quicken customs procedures at the border. Naturally, beyond the EU framework, we are in extensive contact with Russian customs too. For example, regular events are held in the framework of the bilateral programme.
– What prevents the proper realisation of the transport potential you have mentioned?
– On the whole, our cooperation with Russian is quite effective on all the mentioned levels. Nevertheless, sometimes there appear problems, which should be solved for the benefit of both states. For example, the queues near the customs control points at the border of the EU with Russia and Belarus are a barrier for commodities turnover. To improve the situation, documents unification is needed, and the number and durability of revisions should be reduced. To do this, Russian customs strive for the creation of modern terminals near the borders.
Since February 1, 2009, commercial vehicles are to pay a fee for motorway usage in Russia. This issue became a ground for discussions between Germany and Russia, as well as Russia and the EU. The criteria for taking the fee create unequal competition conditions for German transporters in comparison with those from other EU countries and the CIS.
There is one important area of progress: customs procedures used to take a lot of time in railway transport because of the different cargo transportation legislation in the EU and Russia. After the new combined consignment note was put into operation in 2006, the time spent on the procedure fell. In future, a lot of attention will be paid to the improvement of interoperability, i.e. significant harmonisation of the railway equipment and enlargement of international corridors.
– Germany is the acknowledged leader in the sector of transport innovation in Europe. Do you think there are any barriers in Russia (for example, protectionism, red tape, or gaps in legislation) preventing the effective application of new German technologies in this country?
– There are positive examples, in particular the cooperation of RZD and Siemens Mobility in the high-speed railway transport sector. The planned high-speed communication makes for the modernisation of Russia’s railway system, thus creating the basis for further economic growth.
There are good prospects in other sectors too. Thus, in 2006 the RF Government showed interest in the German satellite system for taking road charges from commercial vehicles. In May 2007, this technology was presented in Moscow. German industrial partners prepared a special practical demonstration on the ring-route near the Lomonosov Moscow State University. So, the public could see the advantages and the flexibility of the technology taking road charges on the basis of satellite and mobile communications. The representatives of the ministries and industrial partners of our countries continue the negotiations about implementation of the e-system.
As for trade policy, we face an increase of customs dues, especially those on cars. I think, protectionism will do nobody any good. It may increase competitiveness in the short-term but, in the long term, such measures contradict the modernisation of the national economy of any state.
– What efforts is the German government making in integrating the transport sectors of new states which have become Russia’s active partners in the transport sphere?
– Between 1991 and 2008, the Government of the Federal Republic of Germany invested approximately €197 billion into transport infrastructure. Some 37% of the sum (about €73 billion) was invested into the new federal states. Taking into account their territory (30%) and their share in the country’s population (20%), this percentage is very high. That is why nowadays the new federal states have a modern transport infrastructure, which provides the best conditions for easily accessing production and services areas. Simultaneously with the enlargement of the European Union, the role of Germany, and especially its new federal states, has become more important as a key junction in the growing sector of international transport communication.
The relations of the RF and enterprises from the new federal states have been actively developing lately. The volume of exported goods from the eastern Germany to the Russian Federation grew from €1.4 billion in 2004 to €3.2 billion in 2008. Meanwhile, the most significant export sectors of the new states are machine building (supplies for the sum of €670 million to the RF in 2008), car construction (€650 million), and the chemical industry (€589 million).
– Due to the recession, the structure of commodities turnover between Germany and Russia has changed. In particular, supplies of German machine-building products to Russia fell, which is bad for Germany, Russia, and transport companies. What measures can the governments and businessmen take to bring the goods flows back to life?
– Machine building is the most important export sector of the German economy, and the most damaged by the crisis.But it remains an innovative sector, necessary for after the post-recession modernisation of the countries’ economies. That is why we are optimistic about the negotiations of the representatives of the German economy and their Russian partners. Both parties have gone through a difficult period, but they have a clear vision of the situation after the recession. The provision of liquidity to enterprises plays a key role. And the cooperation of the Credit Institute for Economic Recovery and Vnesheconombank is a step in the right direction.
Bilateral commerce can become more active if the number of difficulties the enterprises face is reduced, which envisages the enlargement and modernisation of the logistics chain and includes simplification of the customs system and progress in taxation and certification. Legal safety and the availability of well-trained specialists are also important. That is why we are going to support professional education.
Ivan stupachenko
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[SECTION_META_DESCRIPTION] => <img src="/ufiles/image/rus/partner/2009/4/13.jpg" border="1" alt=" " hspace="5" width="200" height="300" align="left" />Walter Jürgen Schmid, the Ambassador Extraordinary and Plenipotentiary of the Federal Republic of Germany to Russia, comments on the prospects and the problems of Russian and German businesses’ interaction in the transport sector.
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[ELEMENT_META_DESCRIPTION] => <img src="/ufiles/image/rus/partner/2009/4/13.jpg" border="1" alt=" " hspace="5" width="200" height="300" align="left" />Walter Jürgen Schmid, the Ambassador Extraordinary and Plenipotentiary of the Federal Republic of Germany to Russia, comments on the prospects and the problems of Russian and German businesses’ interaction in the transport sector.
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[DETAIL_TEXT] => – Mr Schmid, what is your assessment of the current level of economic cooperation between Russia and Germany?
– The recession hit the international trade relations of all countries hard. It influenced both Russia – a large supplier of raw materials – and Germany, whose economy is export-oriented. The decline in demand has touched the trade partners of the two states as well. Nevertheless, it has changed nothing in terms of the solid structure of our relations: in spite of the recession Germany remains Russia’s most important trade partner. Your country will need industrial goods of high quality in future, and Germany can supply them. Most German companies operating in Russia took the necessary measures to survive during the recession, and they are quite optimistic about the future.
We are going to develop our partnership, the target of which is stable diversification and modernisation of the Russian economy and its close cooperation with German industry. Realisation of long-term strategic investment projects, such as transport infrastructure development and renewal of rolling stock for Russian railways, will be continued.
– Could you comment on the dynamics of interaction in transport and customs spheres?
– As I have already said, Germany is the most important trade partner of Russia. Last year, the commodity turnover in money terms between the two countries amounted to approximately €68 billion. Even if the figures have decreased due to the world economic crisis, significant growth is expected to take place until 2030, and it will lead to a corresponding intensification of transport flows. Logistics is the sector in which we can unite the strong points of our countries for mutual benefit: Russia with its raw materials and significant economic dynamics and Germany with its developed, flexible and effective logistics infrastructure and efficient enterprises providing services in the transport sector. They may complement each other pretty well.
– What are the fundamental prospects for cooperation, in your opinion?
– Our countries have a high level of technical and economic interaction. Germany has modern airports, effective sea ports, a well-developed and flexible system of motorways, one of the most intense railway networks in Europe and fast-developing river ports. Railway companies are one of many examples of successful examples of cooperation. Thus, Deutsche Bahn AG cooperates with RZD to create modern freight-servicing centres. In July 2009, they concluded an agreement on the establishment of International Logistics and Supply Chains Centre at St Petersburg University.
Cooperation in the airport sector is also promising. Within the framework of intergovernmental consultations in Munich in 2009, in the presence of Angela Merkel, Chancellor of Germany, and Dmitry Medvedev, President of the Russian Federation, the Governor of St Petersburg and Fraport AG signed a Memorandum of Understanding. The document envisages the opportunity for Fraport to take responsibility for exploiting the Pulkovo airport (the property of St Petersburg) from 2010. Another milestone in the history of German and Russian relations in the transport sector is the planned enlargement of railway-ferry communication between Sassnitz/Mukran and Ust-Luga.
As for the customs sphere, Germany actively cooperates with Russia in the framework of the EU. Last summer, Germany joined the pilot project EU-Russia, envisaging information exchange to quicken customs procedures at the border. Naturally, beyond the EU framework, we are in extensive contact with Russian customs too. For example, regular events are held in the framework of the bilateral programme.
– What prevents the proper realisation of the transport potential you have mentioned?
– On the whole, our cooperation with Russian is quite effective on all the mentioned levels. Nevertheless, sometimes there appear problems, which should be solved for the benefit of both states. For example, the queues near the customs control points at the border of the EU with Russia and Belarus are a barrier for commodities turnover. To improve the situation, documents unification is needed, and the number and durability of revisions should be reduced. To do this, Russian customs strive for the creation of modern terminals near the borders.
Since February 1, 2009, commercial vehicles are to pay a fee for motorway usage in Russia. This issue became a ground for discussions between Germany and Russia, as well as Russia and the EU. The criteria for taking the fee create unequal competition conditions for German transporters in comparison with those from other EU countries and the CIS.
There is one important area of progress: customs procedures used to take a lot of time in railway transport because of the different cargo transportation legislation in the EU and Russia. After the new combined consignment note was put into operation in 2006, the time spent on the procedure fell. In future, a lot of attention will be paid to the improvement of interoperability, i.e. significant harmonisation of the railway equipment and enlargement of international corridors.
– Germany is the acknowledged leader in the sector of transport innovation in Europe. Do you think there are any barriers in Russia (for example, protectionism, red tape, or gaps in legislation) preventing the effective application of new German technologies in this country?
– There are positive examples, in particular the cooperation of RZD and Siemens Mobility in the high-speed railway transport sector. The planned high-speed communication makes for the modernisation of Russia’s railway system, thus creating the basis for further economic growth.
There are good prospects in other sectors too. Thus, in 2006 the RF Government showed interest in the German satellite system for taking road charges from commercial vehicles. In May 2007, this technology was presented in Moscow. German industrial partners prepared a special practical demonstration on the ring-route near the Lomonosov Moscow State University. So, the public could see the advantages and the flexibility of the technology taking road charges on the basis of satellite and mobile communications. The representatives of the ministries and industrial partners of our countries continue the negotiations about implementation of the e-system.
As for trade policy, we face an increase of customs dues, especially those on cars. I think, protectionism will do nobody any good. It may increase competitiveness in the short-term but, in the long term, such measures contradict the modernisation of the national economy of any state.
– What efforts is the German government making in integrating the transport sectors of new states which have become Russia’s active partners in the transport sphere?
– Between 1991 and 2008, the Government of the Federal Republic of Germany invested approximately €197 billion into transport infrastructure. Some 37% of the sum (about €73 billion) was invested into the new federal states. Taking into account their territory (30%) and their share in the country’s population (20%), this percentage is very high. That is why nowadays the new federal states have a modern transport infrastructure, which provides the best conditions for easily accessing production and services areas. Simultaneously with the enlargement of the European Union, the role of Germany, and especially its new federal states, has become more important as a key junction in the growing sector of international transport communication.
The relations of the RF and enterprises from the new federal states have been actively developing lately. The volume of exported goods from the eastern Germany to the Russian Federation grew from €1.4 billion in 2004 to €3.2 billion in 2008. Meanwhile, the most significant export sectors of the new states are machine building (supplies for the sum of €670 million to the RF in 2008), car construction (€650 million), and the chemical industry (€589 million).
– Due to the recession, the structure of commodities turnover between Germany and Russia has changed. In particular, supplies of German machine-building products to Russia fell, which is bad for Germany, Russia, and transport companies. What measures can the governments and businessmen take to bring the goods flows back to life?
– Machine building is the most important export sector of the German economy, and the most damaged by the crisis.But it remains an innovative sector, necessary for after the post-recession modernisation of the countries’ economies. That is why we are optimistic about the negotiations of the representatives of the German economy and their Russian partners. Both parties have gone through a difficult period, but they have a clear vision of the situation after the recession. The provision of liquidity to enterprises plays a key role. And the cooperation of the Credit Institute for Economic Recovery and Vnesheconombank is a step in the right direction.
Bilateral commerce can become more active if the number of difficulties the enterprises face is reduced, which envisages the enlargement and modernisation of the logistics chain and includes simplification of the customs system and progress in taxation and certification. Legal safety and the availability of well-trained specialists are also important. That is why we are going to support professional education.
Ivan stupachenko
[~DETAIL_TEXT] => – Mr Schmid, what is your assessment of the current level of economic cooperation between Russia and Germany?
– The recession hit the international trade relations of all countries hard. It influenced both Russia – a large supplier of raw materials – and Germany, whose economy is export-oriented. The decline in demand has touched the trade partners of the two states as well. Nevertheless, it has changed nothing in terms of the solid structure of our relations: in spite of the recession Germany remains Russia’s most important trade partner. Your country will need industrial goods of high quality in future, and Germany can supply them. Most German companies operating in Russia took the necessary measures to survive during the recession, and they are quite optimistic about the future.
We are going to develop our partnership, the target of which is stable diversification and modernisation of the Russian economy and its close cooperation with German industry. Realisation of long-term strategic investment projects, such as transport infrastructure development and renewal of rolling stock for Russian railways, will be continued.
– Could you comment on the dynamics of interaction in transport and customs spheres?
– As I have already said, Germany is the most important trade partner of Russia. Last year, the commodity turnover in money terms between the two countries amounted to approximately €68 billion. Even if the figures have decreased due to the world economic crisis, significant growth is expected to take place until 2030, and it will lead to a corresponding intensification of transport flows. Logistics is the sector in which we can unite the strong points of our countries for mutual benefit: Russia with its raw materials and significant economic dynamics and Germany with its developed, flexible and effective logistics infrastructure and efficient enterprises providing services in the transport sector. They may complement each other pretty well.
– What are the fundamental prospects for cooperation, in your opinion?
– Our countries have a high level of technical and economic interaction. Germany has modern airports, effective sea ports, a well-developed and flexible system of motorways, one of the most intense railway networks in Europe and fast-developing river ports. Railway companies are one of many examples of successful examples of cooperation. Thus, Deutsche Bahn AG cooperates with RZD to create modern freight-servicing centres. In July 2009, they concluded an agreement on the establishment of International Logistics and Supply Chains Centre at St Petersburg University.
Cooperation in the airport sector is also promising. Within the framework of intergovernmental consultations in Munich in 2009, in the presence of Angela Merkel, Chancellor of Germany, and Dmitry Medvedev, President of the Russian Federation, the Governor of St Petersburg and Fraport AG signed a Memorandum of Understanding. The document envisages the opportunity for Fraport to take responsibility for exploiting the Pulkovo airport (the property of St Petersburg) from 2010. Another milestone in the history of German and Russian relations in the transport sector is the planned enlargement of railway-ferry communication between Sassnitz/Mukran and Ust-Luga.
As for the customs sphere, Germany actively cooperates with Russia in the framework of the EU. Last summer, Germany joined the pilot project EU-Russia, envisaging information exchange to quicken customs procedures at the border. Naturally, beyond the EU framework, we are in extensive contact with Russian customs too. For example, regular events are held in the framework of the bilateral programme.
– What prevents the proper realisation of the transport potential you have mentioned?
– On the whole, our cooperation with Russian is quite effective on all the mentioned levels. Nevertheless, sometimes there appear problems, which should be solved for the benefit of both states. For example, the queues near the customs control points at the border of the EU with Russia and Belarus are a barrier for commodities turnover. To improve the situation, documents unification is needed, and the number and durability of revisions should be reduced. To do this, Russian customs strive for the creation of modern terminals near the borders.
Since February 1, 2009, commercial vehicles are to pay a fee for motorway usage in Russia. This issue became a ground for discussions between Germany and Russia, as well as Russia and the EU. The criteria for taking the fee create unequal competition conditions for German transporters in comparison with those from other EU countries and the CIS.
There is one important area of progress: customs procedures used to take a lot of time in railway transport because of the different cargo transportation legislation in the EU and Russia. After the new combined consignment note was put into operation in 2006, the time spent on the procedure fell. In future, a lot of attention will be paid to the improvement of interoperability, i.e. significant harmonisation of the railway equipment and enlargement of international corridors.
– Germany is the acknowledged leader in the sector of transport innovation in Europe. Do you think there are any barriers in Russia (for example, protectionism, red tape, or gaps in legislation) preventing the effective application of new German technologies in this country?
– There are positive examples, in particular the cooperation of RZD and Siemens Mobility in the high-speed railway transport sector. The planned high-speed communication makes for the modernisation of Russia’s railway system, thus creating the basis for further economic growth.
There are good prospects in other sectors too. Thus, in 2006 the RF Government showed interest in the German satellite system for taking road charges from commercial vehicles. In May 2007, this technology was presented in Moscow. German industrial partners prepared a special practical demonstration on the ring-route near the Lomonosov Moscow State University. So, the public could see the advantages and the flexibility of the technology taking road charges on the basis of satellite and mobile communications. The representatives of the ministries and industrial partners of our countries continue the negotiations about implementation of the e-system.
As for trade policy, we face an increase of customs dues, especially those on cars. I think, protectionism will do nobody any good. It may increase competitiveness in the short-term but, in the long term, such measures contradict the modernisation of the national economy of any state.
– What efforts is the German government making in integrating the transport sectors of new states which have become Russia’s active partners in the transport sphere?
– Between 1991 and 2008, the Government of the Federal Republic of Germany invested approximately €197 billion into transport infrastructure. Some 37% of the sum (about €73 billion) was invested into the new federal states. Taking into account their territory (30%) and their share in the country’s population (20%), this percentage is very high. That is why nowadays the new federal states have a modern transport infrastructure, which provides the best conditions for easily accessing production and services areas. Simultaneously with the enlargement of the European Union, the role of Germany, and especially its new federal states, has become more important as a key junction in the growing sector of international transport communication.
The relations of the RF and enterprises from the new federal states have been actively developing lately. The volume of exported goods from the eastern Germany to the Russian Federation grew from €1.4 billion in 2004 to €3.2 billion in 2008. Meanwhile, the most significant export sectors of the new states are machine building (supplies for the sum of €670 million to the RF in 2008), car construction (€650 million), and the chemical industry (€589 million).
– Due to the recession, the structure of commodities turnover between Germany and Russia has changed. In particular, supplies of German machine-building products to Russia fell, which is bad for Germany, Russia, and transport companies. What measures can the governments and businessmen take to bring the goods flows back to life?
– Machine building is the most important export sector of the German economy, and the most damaged by the crisis.But it remains an innovative sector, necessary for after the post-recession modernisation of the countries’ economies. That is why we are optimistic about the negotiations of the representatives of the German economy and their Russian partners. Both parties have gone through a difficult period, but they have a clear vision of the situation after the recession. The provision of liquidity to enterprises plays a key role. And the cooperation of the Credit Institute for Economic Recovery and Vnesheconombank is a step in the right direction.
Bilateral commerce can become more active if the number of difficulties the enterprises face is reduced, which envisages the enlargement and modernisation of the logistics chain and includes simplification of the customs system and progress in taxation and certification. Legal safety and the availability of well-trained specialists are also important. That is why we are going to support professional education.
Ivan stupachenko
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The current level of cooperation between Russian and German authorities, as well as between transport companies, is enabling both sides to handle urgent challenges effectively. Nevertheless, the dialogue needs further reinforcement. Igor Levitin, Minister of Transport of the RF, is sure that both sides have much to offer each other in view of the new technologies available.Array
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[DETAIL_TEXT] => – Mr Levitin, how do you generally assess the level of cooperation between Russia and Germany in the transport field?
– It is very effective. We regularly meet with my counterpart Mr Wolfgang Tiefensee, the Federal Minister for Transport, Building and Urban Development of Germany. The last talks were held on July 15 this year during high-level Russian-German Intergovernmental consultations in Munich.
Nearly 20 documents regulating the relationships between Russia and Germany in the field of transport have been signed and are currently in force. Moreover, in order to cope with specific tasks, working groups were established. A Russian-German interagency working group on the maintenance and implementation of joint infrastructure projects and strategic cooperation in economy and finance as well as a Russian-German joint committee on international road transportation are both very effective.
Our countries have much experience in the field of public-private partnership. Major projects, which we realise in cooperation, include the direct railway-ferry route between the ports of Russia and Germany on the Baltic Sea and the high-speed line between Moscow and St Petersburg. German companies are interested in investing in Russian projects. A number of German companies have already submitted their requests to participate in the construction of Sviyazhsky interregional multimodal logistics centre (the Republic of Tatarstan), the development of a transport hub in Ekaterinburg and the construction of a dry cargo area at the seaport of Taman.
– Which German technologies in the field of transport, logistics and construction of transport infrastructure do you consider the most promising in terms of their use in Russia?
– We constantly study European countries’ experience in the optimisation of transportation. During our talks in Munich, Mr Tiefensee proposed to adopt on the territory of Russia an electronic toll collection system based on the satellite technology GLONASS-GPS, which is now being used in Germany. The Toll Collect system was created at the request of the German government and, unlike traditional systems, charge the fee in proportion to the distance travelled. Moreover, the payment procedure does not require reducing speed or even stopping the vehicle and, in addition, the driving lane is not determined. The implementation of this automated system in Russia is hampered by the lack of corresponding legal documents. In September 15-19, 2009 in Berlin and Munich, Russia and Germany held meetings aimed at creating a constructive framework for bilateral cooperation in view of the practical use of German experience in the application of this electronic system.
Furthermore, we consider it very important to study German technical features and technology, which are used to improve the quality of the roads to reduce noise and enhance safety. We are also interested in studying the technology and know-how of our German partners in port logistics, particularly multimodal port terminals, which will allow our ports to optimise their commodity turnover.
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– We support the development of environmentally-friendly transport modes, which do not adversely impact the environment and do not create congestion in the infrastructure. In particular, railway-ferry routes between the ports of Russia and the European countries will allow us to optimise cargo transportation between eastern and western states.
In our opinion, the practice of piggy-back transportation on the territory of Austria, with a truck loaded on a railway platform, could be used in other European countries as well, including Germany. However, it should be noted that the tariffs for such transportation are still high. Currently this issue is under consideration.
All the domestic procedures necessary for Russia to join the Convention Concerning International Carriage of Goods by Rail (COTIF) have been accomplished. In addition, in 2007 in Berlin, the Agreement on the use of Unified Legal Requirements for the Agreement Concerning the International Carriage of Cargo for freight transportation on the railway-ferry line between the stations of Mukran and Baltiysk was signed, thus establishing a legal basis for the railway-ferry line between ports of Russia and Germany.
In general, the relationship between the two countries in the field of railway transportation can be described as fairly intensive. Russian Railways JSC and Deutsche Bahn AG cooperate on the basis of a bilateral Framework agreement on cooperation in transport and logistics, signed June 21, 2007. Their efforts are mainly focused on the development of transit container transportation between China and Europe and a number of bilateral and multilateral joint ventures have been established in order to reach this goal.
Here we can also recall the active cooperation of RZD with Siemens on the high-speed line between Moscow and St Petersburg regarding the supply of high-speed trains to Russia and their ongoing maintenance. Of course, there are still many areas of Russian and German cooperation in the field of transport that are pending finalisation and agreement between the agencies involved from the two countries. Russia is interested in developing the contact between public and private organisations. In this regard, in October-November 2009, together with the Russian-German Chamber of Foreign Trade, we are planning to organise a round-table meeting to discuss the key areas of bilateral cooperation in transport, as well as identify new promising areas and forms of cooperation.
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– It is very effective. We regularly meet with my counterpart Mr Wolfgang Tiefensee, the Federal Minister for Transport, Building and Urban Development of Germany. The last talks were held on July 15 this year during high-level Russian-German Intergovernmental consultations in Munich.
Nearly 20 documents regulating the relationships between Russia and Germany in the field of transport have been signed and are currently in force. Moreover, in order to cope with specific tasks, working groups were established. A Russian-German interagency working group on the maintenance and implementation of joint infrastructure projects and strategic cooperation in economy and finance as well as a Russian-German joint committee on international road transportation are both very effective.
Our countries have much experience in the field of public-private partnership. Major projects, which we realise in cooperation, include the direct railway-ferry route between the ports of Russia and Germany on the Baltic Sea and the high-speed line between Moscow and St Petersburg. German companies are interested in investing in Russian projects. A number of German companies have already submitted their requests to participate in the construction of Sviyazhsky interregional multimodal logistics centre (the Republic of Tatarstan), the development of a transport hub in Ekaterinburg and the construction of a dry cargo area at the seaport of Taman.
– Which German technologies in the field of transport, logistics and construction of transport infrastructure do you consider the most promising in terms of their use in Russia?
– We constantly study European countries’ experience in the optimisation of transportation. During our talks in Munich, Mr Tiefensee proposed to adopt on the territory of Russia an electronic toll collection system based on the satellite technology GLONASS-GPS, which is now being used in Germany. The Toll Collect system was created at the request of the German government and, unlike traditional systems, charge the fee in proportion to the distance travelled. Moreover, the payment procedure does not require reducing speed or even stopping the vehicle and, in addition, the driving lane is not determined. The implementation of this automated system in Russia is hampered by the lack of corresponding legal documents. In September 15-19, 2009 in Berlin and Munich, Russia and Germany held meetings aimed at creating a constructive framework for bilateral cooperation in view of the practical use of German experience in the application of this electronic system.
Furthermore, we consider it very important to study German technical features and technology, which are used to improve the quality of the roads to reduce noise and enhance safety. We are also interested in studying the technology and know-how of our German partners in port logistics, particularly multimodal port terminals, which will allow our ports to optimise their commodity turnover.
– Nowadays most trade between our countries is serviced by sea or road transport. What should be done to develop railway transportation?
– We support the development of environmentally-friendly transport modes, which do not adversely impact the environment and do not create congestion in the infrastructure. In particular, railway-ferry routes between the ports of Russia and the European countries will allow us to optimise cargo transportation between eastern and western states.
In our opinion, the practice of piggy-back transportation on the territory of Austria, with a truck loaded on a railway platform, could be used in other European countries as well, including Germany. However, it should be noted that the tariffs for such transportation are still high. Currently this issue is under consideration.
All the domestic procedures necessary for Russia to join the Convention Concerning International Carriage of Goods by Rail (COTIF) have been accomplished. In addition, in 2007 in Berlin, the Agreement on the use of Unified Legal Requirements for the Agreement Concerning the International Carriage of Cargo for freight transportation on the railway-ferry line between the stations of Mukran and Baltiysk was signed, thus establishing a legal basis for the railway-ferry line between ports of Russia and Germany.
In general, the relationship between the two countries in the field of railway transportation can be described as fairly intensive. Russian Railways JSC and Deutsche Bahn AG cooperate on the basis of a bilateral Framework agreement on cooperation in transport and logistics, signed June 21, 2007. Their efforts are mainly focused on the development of transit container transportation between China and Europe and a number of bilateral and multilateral joint ventures have been established in order to reach this goal.
Here we can also recall the active cooperation of RZD with Siemens on the high-speed line between Moscow and St Petersburg regarding the supply of high-speed trains to Russia and their ongoing maintenance. Of course, there are still many areas of Russian and German cooperation in the field of transport that are pending finalisation and agreement between the agencies involved from the two countries. Russia is interested in developing the contact between public and private organisations. In this regard, in October-November 2009, together with the Russian-German Chamber of Foreign Trade, we are planning to organise a round-table meeting to discuss the key areas of bilateral cooperation in transport, as well as identify new promising areas and forms of cooperation.
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[DETAIL_TEXT] => – Mr Levitin, how do you generally assess the level of cooperation between Russia and Germany in the transport field?
– It is very effective. We regularly meet with my counterpart Mr Wolfgang Tiefensee, the Federal Minister for Transport, Building and Urban Development of Germany. The last talks were held on July 15 this year during high-level Russian-German Intergovernmental consultations in Munich.
Nearly 20 documents regulating the relationships between Russia and Germany in the field of transport have been signed and are currently in force. Moreover, in order to cope with specific tasks, working groups were established. A Russian-German interagency working group on the maintenance and implementation of joint infrastructure projects and strategic cooperation in economy and finance as well as a Russian-German joint committee on international road transportation are both very effective.
Our countries have much experience in the field of public-private partnership. Major projects, which we realise in cooperation, include the direct railway-ferry route between the ports of Russia and Germany on the Baltic Sea and the high-speed line between Moscow and St Petersburg. German companies are interested in investing in Russian projects. A number of German companies have already submitted their requests to participate in the construction of Sviyazhsky interregional multimodal logistics centre (the Republic of Tatarstan), the development of a transport hub in Ekaterinburg and the construction of a dry cargo area at the seaport of Taman.
– Which German technologies in the field of transport, logistics and construction of transport infrastructure do you consider the most promising in terms of their use in Russia?
– We constantly study European countries’ experience in the optimisation of transportation. During our talks in Munich, Mr Tiefensee proposed to adopt on the territory of Russia an electronic toll collection system based on the satellite technology GLONASS-GPS, which is now being used in Germany. The Toll Collect system was created at the request of the German government and, unlike traditional systems, charge the fee in proportion to the distance travelled. Moreover, the payment procedure does not require reducing speed or even stopping the vehicle and, in addition, the driving lane is not determined. The implementation of this automated system in Russia is hampered by the lack of corresponding legal documents. In September 15-19, 2009 in Berlin and Munich, Russia and Germany held meetings aimed at creating a constructive framework for bilateral cooperation in view of the practical use of German experience in the application of this electronic system.
Furthermore, we consider it very important to study German technical features and technology, which are used to improve the quality of the roads to reduce noise and enhance safety. We are also interested in studying the technology and know-how of our German partners in port logistics, particularly multimodal port terminals, which will allow our ports to optimise their commodity turnover.
– Nowadays most trade between our countries is serviced by sea or road transport. What should be done to develop railway transportation?
– We support the development of environmentally-friendly transport modes, which do not adversely impact the environment and do not create congestion in the infrastructure. In particular, railway-ferry routes between the ports of Russia and the European countries will allow us to optimise cargo transportation between eastern and western states.
In our opinion, the practice of piggy-back transportation on the territory of Austria, with a truck loaded on a railway platform, could be used in other European countries as well, including Germany. However, it should be noted that the tariffs for such transportation are still high. Currently this issue is under consideration.
All the domestic procedures necessary for Russia to join the Convention Concerning International Carriage of Goods by Rail (COTIF) have been accomplished. In addition, in 2007 in Berlin, the Agreement on the use of Unified Legal Requirements for the Agreement Concerning the International Carriage of Cargo for freight transportation on the railway-ferry line between the stations of Mukran and Baltiysk was signed, thus establishing a legal basis for the railway-ferry line between ports of Russia and Germany.
In general, the relationship between the two countries in the field of railway transportation can be described as fairly intensive. Russian Railways JSC and Deutsche Bahn AG cooperate on the basis of a bilateral Framework agreement on cooperation in transport and logistics, signed June 21, 2007. Their efforts are mainly focused on the development of transit container transportation between China and Europe and a number of bilateral and multilateral joint ventures have been established in order to reach this goal.
Here we can also recall the active cooperation of RZD with Siemens on the high-speed line between Moscow and St Petersburg regarding the supply of high-speed trains to Russia and their ongoing maintenance. Of course, there are still many areas of Russian and German cooperation in the field of transport that are pending finalisation and agreement between the agencies involved from the two countries. Russia is interested in developing the contact between public and private organisations. In this regard, in October-November 2009, together with the Russian-German Chamber of Foreign Trade, we are planning to organise a round-table meeting to discuss the key areas of bilateral cooperation in transport, as well as identify new promising areas and forms of cooperation.
[~DETAIL_TEXT] => – Mr Levitin, how do you generally assess the level of cooperation between Russia and Germany in the transport field?
– It is very effective. We regularly meet with my counterpart Mr Wolfgang Tiefensee, the Federal Minister for Transport, Building and Urban Development of Germany. The last talks were held on July 15 this year during high-level Russian-German Intergovernmental consultations in Munich.
Nearly 20 documents regulating the relationships between Russia and Germany in the field of transport have been signed and are currently in force. Moreover, in order to cope with specific tasks, working groups were established. A Russian-German interagency working group on the maintenance and implementation of joint infrastructure projects and strategic cooperation in economy and finance as well as a Russian-German joint committee on international road transportation are both very effective.
Our countries have much experience in the field of public-private partnership. Major projects, which we realise in cooperation, include the direct railway-ferry route between the ports of Russia and Germany on the Baltic Sea and the high-speed line between Moscow and St Petersburg. German companies are interested in investing in Russian projects. A number of German companies have already submitted their requests to participate in the construction of Sviyazhsky interregional multimodal logistics centre (the Republic of Tatarstan), the development of a transport hub in Ekaterinburg and the construction of a dry cargo area at the seaport of Taman.
– Which German technologies in the field of transport, logistics and construction of transport infrastructure do you consider the most promising in terms of their use in Russia?
– We constantly study European countries’ experience in the optimisation of transportation. During our talks in Munich, Mr Tiefensee proposed to adopt on the territory of Russia an electronic toll collection system based on the satellite technology GLONASS-GPS, which is now being used in Germany. The Toll Collect system was created at the request of the German government and, unlike traditional systems, charge the fee in proportion to the distance travelled. Moreover, the payment procedure does not require reducing speed or even stopping the vehicle and, in addition, the driving lane is not determined. The implementation of this automated system in Russia is hampered by the lack of corresponding legal documents. In September 15-19, 2009 in Berlin and Munich, Russia and Germany held meetings aimed at creating a constructive framework for bilateral cooperation in view of the practical use of German experience in the application of this electronic system.
Furthermore, we consider it very important to study German technical features and technology, which are used to improve the quality of the roads to reduce noise and enhance safety. We are also interested in studying the technology and know-how of our German partners in port logistics, particularly multimodal port terminals, which will allow our ports to optimise their commodity turnover.
– Nowadays most trade between our countries is serviced by sea or road transport. What should be done to develop railway transportation?
– We support the development of environmentally-friendly transport modes, which do not adversely impact the environment and do not create congestion in the infrastructure. In particular, railway-ferry routes between the ports of Russia and the European countries will allow us to optimise cargo transportation between eastern and western states.
In our opinion, the practice of piggy-back transportation on the territory of Austria, with a truck loaded on a railway platform, could be used in other European countries as well, including Germany. However, it should be noted that the tariffs for such transportation are still high. Currently this issue is under consideration.
All the domestic procedures necessary for Russia to join the Convention Concerning International Carriage of Goods by Rail (COTIF) have been accomplished. In addition, in 2007 in Berlin, the Agreement on the use of Unified Legal Requirements for the Agreement Concerning the International Carriage of Cargo for freight transportation on the railway-ferry line between the stations of Mukran and Baltiysk was signed, thus establishing a legal basis for the railway-ferry line between ports of Russia and Germany.
In general, the relationship between the two countries in the field of railway transportation can be described as fairly intensive. Russian Railways JSC and Deutsche Bahn AG cooperate on the basis of a bilateral Framework agreement on cooperation in transport and logistics, signed June 21, 2007. Their efforts are mainly focused on the development of transit container transportation between China and Europe and a number of bilateral and multilateral joint ventures have been established in order to reach this goal.
Here we can also recall the active cooperation of RZD with Siemens on the high-speed line between Moscow and St Petersburg regarding the supply of high-speed trains to Russia and their ongoing maintenance. Of course, there are still many areas of Russian and German cooperation in the field of transport that are pending finalisation and agreement between the agencies involved from the two countries. Russia is interested in developing the contact between public and private organisations. In this regard, in October-November 2009, together with the Russian-German Chamber of Foreign Trade, we are planning to organise a round-table meeting to discuss the key areas of bilateral cooperation in transport, as well as identify new promising areas and forms of cooperation.
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[~PREVIEW_TEXT] => The current level of cooperation between Russian and German authorities, as well as between transport companies, is enabling both sides to handle urgent challenges effectively. Nevertheless, the dialogue needs further reinforcement. Igor Levitin, Minister of Transport of the RF, is sure that both sides have much to offer each other in view of the new technologies available.
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[DETAIL_TEXT] => 
The Ministry of Transport of the Russian Federation and the Ministry of Property Relations of the Russian Federation were the founders of Rosmorport.
According to the enterprise statute, approved by order of the Ministry of Transport of the Russian Federation №131 (May 14, 2003) and endorsed by the decision of the State Property Ministry of the Russian Federation №1306-p (April 30, 2003), Rosmorport has been created for providing use, maintenance and development of the assigned federal property, including facilities for navigational safety, construction and reconstruction of port facilities at commercial and specialised seaports and realisation of federal target programmes for sea transport development.
By decree of the President of the Russian Federation №1009 (August 4, 2004), Rosmorport was put on the list of strategic enterprises that produce goods and services strategically important for the defence capacity and security of the state.
In August 2009, by regulation of the Government of the Russian Federation № 1226-r according to article 190 of the Federal law “On Inconsistency (bankruptcy)”, Rosmorport was included on the list of the strategic organisations and also federal executive authorities providing realisation of the united state policy in branches of the economy in which these organisations carry out their activities. Nowadays, Rosmorport consists of a central office and 20 affiliates, located in 15 areas of the Russian Federation. More than 4,500 people work for the enterprise.
The representatives of Rosmorport are members of several government councils, taking an active part in developing optimal suggestions on fulfilling the key industry tasks. Also, Rosmorport is a member of the Association of Commercial Sea Ports, the non-governmental, non-commercial organisation which unites more than 70 companies operating in the sphere of marine transport in Russia.
The General Director of Rosmorport is Igor Rusu.
[~DETAIL_TEXT] => The Ministry of Transport of the Russian Federation and the Ministry of Property Relations of the Russian Federation were the founders of Rosmorport.
According to the enterprise statute, approved by order of the Ministry of Transport of the Russian Federation №131 (May 14, 2003) and endorsed by the decision of the State Property Ministry of the Russian Federation №1306-p (April 30, 2003), Rosmorport has been created for providing use, maintenance and development of the assigned federal property, including facilities for navigational safety, construction and reconstruction of port facilities at commercial and specialised seaports and realisation of federal target programmes for sea transport development.
By decree of the President of the Russian Federation №1009 (August 4, 2004), Rosmorport was put on the list of strategic enterprises that produce goods and services strategically important for the defence capacity and security of the state.
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The representatives of Rosmorport are members of several government councils, taking an active part in developing optimal suggestions on fulfilling the key industry tasks. Also, Rosmorport is a member of the Association of Commercial Sea Ports, the non-governmental, non-commercial organisation which unites more than 70 companies operating in the sphere of marine transport in Russia.
The General Director of Rosmorport is Igor Rusu.
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[DETAIL_TEXT] => The Ministry of Transport of the Russian Federation and the Ministry of Property Relations of the Russian Federation were the founders of Rosmorport.
According to the enterprise statute, approved by order of the Ministry of Transport of the Russian Federation №131 (May 14, 2003) and endorsed by the decision of the State Property Ministry of the Russian Federation №1306-p (April 30, 2003), Rosmorport has been created for providing use, maintenance and development of the assigned federal property, including facilities for navigational safety, construction and reconstruction of port facilities at commercial and specialised seaports and realisation of federal target programmes for sea transport development.
By decree of the President of the Russian Federation №1009 (August 4, 2004), Rosmorport was put on the list of strategic enterprises that produce goods and services strategically important for the defence capacity and security of the state.
In August 2009, by regulation of the Government of the Russian Federation № 1226-r according to article 190 of the Federal law “On Inconsistency (bankruptcy)”, Rosmorport was included on the list of the strategic organisations and also federal executive authorities providing realisation of the united state policy in branches of the economy in which these organisations carry out their activities. Nowadays, Rosmorport consists of a central office and 20 affiliates, located in 15 areas of the Russian Federation. More than 4,500 people work for the enterprise.
The representatives of Rosmorport are members of several government councils, taking an active part in developing optimal suggestions on fulfilling the key industry tasks. Also, Rosmorport is a member of the Association of Commercial Sea Ports, the non-governmental, non-commercial organisation which unites more than 70 companies operating in the sphere of marine transport in Russia.
The General Director of Rosmorport is Igor Rusu.
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According to the enterprise statute, approved by order of the Ministry of Transport of the Russian Federation №131 (May 14, 2003) and endorsed by the decision of the State Property Ministry of the Russian Federation №1306-p (April 30, 2003), Rosmorport has been created for providing use, maintenance and development of the assigned federal property, including facilities for navigational safety, construction and reconstruction of port facilities at commercial and specialised seaports and realisation of federal target programmes for sea transport development.
By decree of the President of the Russian Federation №1009 (August 4, 2004), Rosmorport was put on the list of strategic enterprises that produce goods and services strategically important for the defence capacity and security of the state.
In August 2009, by regulation of the Government of the Russian Federation № 1226-r according to article 190 of the Federal law “On Inconsistency (bankruptcy)”, Rosmorport was included on the list of the strategic organisations and also federal executive authorities providing realisation of the united state policy in branches of the economy in which these organisations carry out their activities. Nowadays, Rosmorport consists of a central office and 20 affiliates, located in 15 areas of the Russian Federation. More than 4,500 people work for the enterprise.
The representatives of Rosmorport are members of several government councils, taking an active part in developing optimal suggestions on fulfilling the key industry tasks. Also, Rosmorport is a member of the Association of Commercial Sea Ports, the non-governmental, non-commercial organisation which unites more than 70 companies operating in the sphere of marine transport in Russia.
The General Director of Rosmorport is Igor Rusu.
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Due to the growth of tariffs on transit transportation via the territory of Lithuania and Belarus, the volume of cargo carried via the Kaliningrad Railway (KZD, an affiliate of RZD) in early 2009 fell by almost 60% year-on-year. After a number of trilateral meetings, where the issue of tariff policy optimisation was discussed, in May-July 2009 the Lithuanian and the Byelorussian railways gave discounts on some cargoes transit transportation to the Kaliningrad region. Were these measures effective? Were they enough to restore freight flow?Array
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[DETAIL_TEXT] => The Economic Aspect
The decline in the volume of cargo carried to the Kaliningrad region appeared in July 2008, before the recession, when the tariff on cargo transportation via the Byelorussian Railway grew by 12% on average. The 11.5% increase in the tariff on transportation via Lithuanian territory, which came into force on August 1, led to a more significant reduction of cargo carried on the route. Finally, in early 2009, after Belarus increased transit tariffs by 14.7%, the situation became almost catastrophic. Thus, in January-February 2009, the transportation volume at KZD made 54% of the volume carried in the same period of the previous year.
After that, as a result of meetings between the top managers of the railways of the three countries and regular negotiations held by specialists, the Lithuanian and Byelorussian parties implemented a decreasing coefficient for transit of some cargoes to Kaliningrad. For example, the Byelorussian Railway gave discounts on the transportation of coal (10%), cast iron and steel (13%), gas condensate (15%), etc. The results appeared immediately. Lately, specialists of KZD have registered a positive dynamic in transportation of some cargoes. Moreover, in July the volume of export and import cargo transportation via the ports and terminals in the Kaliningrad region grew by 13.4% (+61,620 tons) month-on-month. In particular, there was an increase in the transportation of oil products (+10.6% or +43,720 tons), ferrous metals (+49.2% or +12,540 tons).
One of the brightest examples of the tariff reduction efficiency is the growth of soya bean oil transportation at KZD: in the first half of 2009 it rose by 66.5% year-on-year. Such an increase took place due to the tariff preferences given to the cargoes of Sodruzhestvo-Soya, which were implemented by Byelorussian and Lithuanian railways on March 1, 2009.
A similar situation appeared after Lithuania implemented a discount on transportation of cars produced in the Kaliningrad region. According to the calculations of the KZD specialists, the average daily loading of cars was to make 245 tons in July, in practice 341 tons was loaded every day. “Taking into account the profitability of the cargo, the extra charge was a significant one,” said Roman Kosoglyad, Head of the Kaliningrad Railway Centre of Transport Service. “We know that the tariff terms make this production rather competitive, so we have enlarged our loading plans for the next months,” he added.
The increase in export freight transportation was not so significant. For example, there was a slight growth in gas condensate loading. 82,000 tons of it was carried in January, 96,000 in February, and after the Byelorussian and Lithuanian railways gave discounts, its transportation climbed up to 155,000 tons. Unfortunately, the privileged tariffs for transportation of other cargoes have not had the desired effect. “The discounts set by our colleagues for transportation of coal and coke do not allow to return the volume of these cargoes to our direction.
Nowadays, it is carried to other Baltic ports. There are small flows, but they are not as large as we could service,” explains Mr Kosoglyad. Actually, a 10% or a 15% discount, especially during a recession, seems to be a significant one. Transit tariffs are set in foreign currency, and the exchange rate of dollar and euro against rouble has grown since the end of 2008, which is why the discounts have turned out to be inefficient. Also, representatives of KZD note that the discounts were set for some cargoes only, and not all of the discounts were as big as necessary.
Nevertheless, Mr Kosoglyad considers that “the discounts made by Lithuanian and Byelorussian partners are a great achievement.” “This fact proves that there appears to be the understanding that, without proper and reasonable tariffs, there will be neither cargo on the direction to Kaliningrad, nor transit via the territory of Lithuania and Byelorussia,” he says.
This year the situation at the Lithuanian railway is far from perfect. According to statistics, the volume of freight transportation via its network in the first half of 2009 fell by 31.1% year-on-year to 19.7 million tons. All this means that the dialogue about transit tariffs reduction must be continued. Specialists believe there is no other serious alternative to enlarge cargo flows on the Kaliningrad direction.
Political aspect
As usual, the health of the economy goes hand in hand with policy. Recently, Evgeny Timokhin, Head of the Kaliningrad affiliate of the Byelorussian Embassy to Russia, commented on the situation. “There is an opinion that the ports in Kaliningrad found themselves in unfavourable conditions just because the Byelorussian railwaymen increased tariffs and do not want to reduce them. Yes, this year Belarus and Lithuania increased the tariffs on transit transportation to Kaliningrad… But then measures were taken to stimulate freight flows on the Kaliningrad direction and to reduce the cost of transit, step by step. Today, the tariffs of the Byelorussian railway are practically the same as they were in June 2008. Lithuanian partners have reduced tariffs on transit to Kaliningrad either. Meanwhile, in July, RZD raised its inner tariffs by 5.7%, i.e. the delivery of cargoes to Kaliningrad is more expensive because of their transportation via the Russian territory.
Obviously, the measures taken by Lithuanian and Byelorussian railways are not enough. A coordinated policy between all the participants of the transport and logistics chain is needed. Russian tariffs should be changed considering the specific nature of this western region of the RF.” The summary of his speech is as follows: “we reduced our tariffs, while RZD raised its ones.”
In return, specialists cite the following arguments. Firstly, RZD’s tariffs (in roubles) increased by 5.7% since July 1 in all directions, and yet have not influenced transportation volumes. Secondly, the variance of transit tariffs in foreign currency is more noticeable than in Russian roubles. By the way, the 14.7% increase in Byelorussian tariffs, held in early 2009, was in foreign currency.
Nevertheless, representatives of the transport community welcome the Byelorussian Railway top managers’ latest decisions on discounts. Meanwhile, the actions of the Lithuanian side, in which there are underlying political and protectionist trends, do not allow the potential of trilateral relations to be realised at all.
The speculative aspect
The decreasing coefficient for cast iron transit transportation from the Prisady railway station, implemented by Lithuanian Railway on July 1, 2009, was in force for only a month. On August 15, the discount was abolished. A representative from the PR department of KZD said that the Railway received an official letter signed by Albertas Shimenas, Deputy CEO of Lithuanian Railway. According to the letter, the reason for the abolishment was an application by some cargo owners worried “about the implementation of special tariffs for a specific cargo owner.” Moreover, in the opinion of those cargo owners, due to such a “discriminating” measure, the shipment of cast iron to the Kaliningrad region – as well as to the Klaipeda port – may be stopped, and this cargo flow may be re-oriented towards other ports.
Meanwhile, specialists at forwarding companies consider this decision of the Lithuanian Railway as Lithuania’s withdrawal from the trilateral agreement on optimisation of the tariff policy on the Kaliningrad route. Some experts believe that this step is hardly an autonomous decision by Lithuanian railwaymen. Most probably, it is a result of active lobbying for the Klaipeda port’s interests by a group of companies operating in the port (primarily the Achemos Grupе concern, which made significant investments into its modernisation).
This suggestion seems to be even more realistic if we take into consideration that in mid-July the Lithuanian Railway implemented a 70% discount for transportation of iron ore briquettes to Klaipeda port.
It means that the production of Tulachermet (Russia) loaded at Prisady station will be transported to the port of St Petersburg earlier. Simultaneously, the Kaliningrad direction, as well as transit railways, lost about 10,000 tons of cast iron per month, which metallurgists promised to transport via this route.
By Olga Gorbunova
interview
Tariff measures are not enough
Sergey Tugarinov, Deputy Director of State Policy in the Railway Sector Department at the RF Transport Ministry, answered the questions of “The RZD-Partner International” about optimisation
of the tariff policy on the Kaliningrad direction.
– Mr Tugarinov, in May-July 2009, the Byelorussian and the Lithuanian railways reduced tariffs for transportation of some cargoes to the Kaliningrad region. Was such a method effective?
– The trilateral meeting held last May in Palanga and agreements made there had a positive effect. For example, in July, the transportation volume of gas condensate grew by 50% (41,900 tons) compared with January, fuel and black fuel increased by 55% (44,900 tons) and by 13.5 times (from 975 tons in January to 13,200 tons in July) respectively.
Also, 106,300 tons of gas condensate distillate was carried with the help of the Kaliningrad Railway last July. However, there were no radical changes in the transport sector of the Kaliningrad region, and the RF Transport Ministry informed the Byelorussian and Lithuanian parties about this. Thus, the issue of optimal distribution of freight flows between the port of Klaipeda and those in the Kaliningrad region is under discussion.
– In other words, the measures taken are not enough to restore the cargo flow at the Kaliningrad direction?
– At the meeting in Palanga the Russian party made concrete offers to reduce the level of tariffs on cargoes, which historically formed the freight flow in the Kaliningrad region. Unfortunately, only some of them were taken into consideration. Moreover, having announced the decrease of transit tariffs on cast iron transportation from the Prisada railway station to the Kaliningrad region, the administration of the Lithuanian Railway abolished its decision less than two months later, and set higher tariffs on this cargo transportation on August 15. Meanwhile, the reasoning of the Lithuanian side – “the concerns of cast iron consignors caused by implementation of privileged tariffs for a definite consignor” – caused a lot of raised eyebrows.
Last June, under the instruction of the RF Transport Ministry, RZD discussed with Russian metal producers the possible increase of freight transportation to the Kaliningrad region. According to the data of RZD, due to the lack of demand most Russian ferrous metal exporters do not plan to increase transportation of this cargo even if the Byelorussian and Lithuanian railways reduce their tariffs. That is why it is not clear which concerns the Lithuanian side is talking about.
– What other factors are playing an important role? Is Russian Railways considering the possibility of giving decreasing coefficients for freight transportation on the route? Would this be reasonable?
– The decreasing coefficients for freight transportation via the Russian railway network with the participation of KZD have been in force for many years and for all types of transportation – domestic, import, export and transit. They help to solve the problem, but only partially. I’d like to emphasise that after the Russian side reduced tariffs on transportation to the Kaliningrad region, Lithuania rose its own, thus creating conditions for re-routing the freight flow to the port of Klaipeda. That is why tariff regulation is not enough.
– What measures should be taken to attract cargo flows to the Kaliningrad transport junction?
– The RF Transport Ministry is paying special attention to the organisation of cargo transportation to the Kaliningrad ports. This issue is often discussed in the framework of the Russian-Lithuanian Intergovernmental Commission for trade, economic, scientific, humanitarian and cultural cooperation.
[~DETAIL_TEXT] => The Economic Aspect
The decline in the volume of cargo carried to the Kaliningrad region appeared in July 2008, before the recession, when the tariff on cargo transportation via the Byelorussian Railway grew by 12% on average. The 11.5% increase in the tariff on transportation via Lithuanian territory, which came into force on August 1, led to a more significant reduction of cargo carried on the route. Finally, in early 2009, after Belarus increased transit tariffs by 14.7%, the situation became almost catastrophic. Thus, in January-February 2009, the transportation volume at KZD made 54% of the volume carried in the same period of the previous year.
After that, as a result of meetings between the top managers of the railways of the three countries and regular negotiations held by specialists, the Lithuanian and Byelorussian parties implemented a decreasing coefficient for transit of some cargoes to Kaliningrad. For example, the Byelorussian Railway gave discounts on the transportation of coal (10%), cast iron and steel (13%), gas condensate (15%), etc. The results appeared immediately. Lately, specialists of KZD have registered a positive dynamic in transportation of some cargoes. Moreover, in July the volume of export and import cargo transportation via the ports and terminals in the Kaliningrad region grew by 13.4% (+61,620 tons) month-on-month. In particular, there was an increase in the transportation of oil products (+10.6% or +43,720 tons), ferrous metals (+49.2% or +12,540 tons).
One of the brightest examples of the tariff reduction efficiency is the growth of soya bean oil transportation at KZD: in the first half of 2009 it rose by 66.5% year-on-year. Such an increase took place due to the tariff preferences given to the cargoes of Sodruzhestvo-Soya, which were implemented by Byelorussian and Lithuanian railways on March 1, 2009.
A similar situation appeared after Lithuania implemented a discount on transportation of cars produced in the Kaliningrad region. According to the calculations of the KZD specialists, the average daily loading of cars was to make 245 tons in July, in practice 341 tons was loaded every day. “Taking into account the profitability of the cargo, the extra charge was a significant one,” said Roman Kosoglyad, Head of the Kaliningrad Railway Centre of Transport Service. “We know that the tariff terms make this production rather competitive, so we have enlarged our loading plans for the next months,” he added.
The increase in export freight transportation was not so significant. For example, there was a slight growth in gas condensate loading. 82,000 tons of it was carried in January, 96,000 in February, and after the Byelorussian and Lithuanian railways gave discounts, its transportation climbed up to 155,000 tons. Unfortunately, the privileged tariffs for transportation of other cargoes have not had the desired effect. “The discounts set by our colleagues for transportation of coal and coke do not allow to return the volume of these cargoes to our direction.
Nowadays, it is carried to other Baltic ports. There are small flows, but they are not as large as we could service,” explains Mr Kosoglyad. Actually, a 10% or a 15% discount, especially during a recession, seems to be a significant one. Transit tariffs are set in foreign currency, and the exchange rate of dollar and euro against rouble has grown since the end of 2008, which is why the discounts have turned out to be inefficient. Also, representatives of KZD note that the discounts were set for some cargoes only, and not all of the discounts were as big as necessary.
Nevertheless, Mr Kosoglyad considers that “the discounts made by Lithuanian and Byelorussian partners are a great achievement.” “This fact proves that there appears to be the understanding that, without proper and reasonable tariffs, there will be neither cargo on the direction to Kaliningrad, nor transit via the territory of Lithuania and Byelorussia,” he says.
This year the situation at the Lithuanian railway is far from perfect. According to statistics, the volume of freight transportation via its network in the first half of 2009 fell by 31.1% year-on-year to 19.7 million tons. All this means that the dialogue about transit tariffs reduction must be continued. Specialists believe there is no other serious alternative to enlarge cargo flows on the Kaliningrad direction.
Political aspect
As usual, the health of the economy goes hand in hand with policy. Recently, Evgeny Timokhin, Head of the Kaliningrad affiliate of the Byelorussian Embassy to Russia, commented on the situation. “There is an opinion that the ports in Kaliningrad found themselves in unfavourable conditions just because the Byelorussian railwaymen increased tariffs and do not want to reduce them. Yes, this year Belarus and Lithuania increased the tariffs on transit transportation to Kaliningrad… But then measures were taken to stimulate freight flows on the Kaliningrad direction and to reduce the cost of transit, step by step. Today, the tariffs of the Byelorussian railway are practically the same as they were in June 2008. Lithuanian partners have reduced tariffs on transit to Kaliningrad either. Meanwhile, in July, RZD raised its inner tariffs by 5.7%, i.e. the delivery of cargoes to Kaliningrad is more expensive because of their transportation via the Russian territory.
Obviously, the measures taken by Lithuanian and Byelorussian railways are not enough. A coordinated policy between all the participants of the transport and logistics chain is needed. Russian tariffs should be changed considering the specific nature of this western region of the RF.” The summary of his speech is as follows: “we reduced our tariffs, while RZD raised its ones.”
In return, specialists cite the following arguments. Firstly, RZD’s tariffs (in roubles) increased by 5.7% since July 1 in all directions, and yet have not influenced transportation volumes. Secondly, the variance of transit tariffs in foreign currency is more noticeable than in Russian roubles. By the way, the 14.7% increase in Byelorussian tariffs, held in early 2009, was in foreign currency.
Nevertheless, representatives of the transport community welcome the Byelorussian Railway top managers’ latest decisions on discounts. Meanwhile, the actions of the Lithuanian side, in which there are underlying political and protectionist trends, do not allow the potential of trilateral relations to be realised at all.
The speculative aspect
The decreasing coefficient for cast iron transit transportation from the Prisady railway station, implemented by Lithuanian Railway on July 1, 2009, was in force for only a month. On August 15, the discount was abolished. A representative from the PR department of KZD said that the Railway received an official letter signed by Albertas Shimenas, Deputy CEO of Lithuanian Railway. According to the letter, the reason for the abolishment was an application by some cargo owners worried “about the implementation of special tariffs for a specific cargo owner.” Moreover, in the opinion of those cargo owners, due to such a “discriminating” measure, the shipment of cast iron to the Kaliningrad region – as well as to the Klaipeda port – may be stopped, and this cargo flow may be re-oriented towards other ports.
Meanwhile, specialists at forwarding companies consider this decision of the Lithuanian Railway as Lithuania’s withdrawal from the trilateral agreement on optimisation of the tariff policy on the Kaliningrad route. Some experts believe that this step is hardly an autonomous decision by Lithuanian railwaymen. Most probably, it is a result of active lobbying for the Klaipeda port’s interests by a group of companies operating in the port (primarily the Achemos Grupе concern, which made significant investments into its modernisation).
This suggestion seems to be even more realistic if we take into consideration that in mid-July the Lithuanian Railway implemented a 70% discount for transportation of iron ore briquettes to Klaipeda port.
It means that the production of Tulachermet (Russia) loaded at Prisady station will be transported to the port of St Petersburg earlier. Simultaneously, the Kaliningrad direction, as well as transit railways, lost about 10,000 tons of cast iron per month, which metallurgists promised to transport via this route.
By Olga Gorbunova
interview
Tariff measures are not enough
Sergey Tugarinov, Deputy Director of State Policy in the Railway Sector Department at the RF Transport Ministry, answered the questions of “The RZD-Partner International” about optimisation
of the tariff policy on the Kaliningrad direction.
– Mr Tugarinov, in May-July 2009, the Byelorussian and the Lithuanian railways reduced tariffs for transportation of some cargoes to the Kaliningrad region. Was such a method effective?
– The trilateral meeting held last May in Palanga and agreements made there had a positive effect. For example, in July, the transportation volume of gas condensate grew by 50% (41,900 tons) compared with January, fuel and black fuel increased by 55% (44,900 tons) and by 13.5 times (from 975 tons in January to 13,200 tons in July) respectively.
Also, 106,300 tons of gas condensate distillate was carried with the help of the Kaliningrad Railway last July. However, there were no radical changes in the transport sector of the Kaliningrad region, and the RF Transport Ministry informed the Byelorussian and Lithuanian parties about this. Thus, the issue of optimal distribution of freight flows between the port of Klaipeda and those in the Kaliningrad region is under discussion.
– In other words, the measures taken are not enough to restore the cargo flow at the Kaliningrad direction?
– At the meeting in Palanga the Russian party made concrete offers to reduce the level of tariffs on cargoes, which historically formed the freight flow in the Kaliningrad region. Unfortunately, only some of them were taken into consideration. Moreover, having announced the decrease of transit tariffs on cast iron transportation from the Prisada railway station to the Kaliningrad region, the administration of the Lithuanian Railway abolished its decision less than two months later, and set higher tariffs on this cargo transportation on August 15. Meanwhile, the reasoning of the Lithuanian side – “the concerns of cast iron consignors caused by implementation of privileged tariffs for a definite consignor” – caused a lot of raised eyebrows.
Last June, under the instruction of the RF Transport Ministry, RZD discussed with Russian metal producers the possible increase of freight transportation to the Kaliningrad region. According to the data of RZD, due to the lack of demand most Russian ferrous metal exporters do not plan to increase transportation of this cargo even if the Byelorussian and Lithuanian railways reduce their tariffs. That is why it is not clear which concerns the Lithuanian side is talking about.
– What other factors are playing an important role? Is Russian Railways considering the possibility of giving decreasing coefficients for freight transportation on the route? Would this be reasonable?
– The decreasing coefficients for freight transportation via the Russian railway network with the participation of KZD have been in force for many years and for all types of transportation – domestic, import, export and transit. They help to solve the problem, but only partially. I’d like to emphasise that after the Russian side reduced tariffs on transportation to the Kaliningrad region, Lithuania rose its own, thus creating conditions for re-routing the freight flow to the port of Klaipeda. That is why tariff regulation is not enough.
– What measures should be taken to attract cargo flows to the Kaliningrad transport junction?
– The RF Transport Ministry is paying special attention to the organisation of cargo transportation to the Kaliningrad ports. This issue is often discussed in the framework of the Russian-Lithuanian Intergovernmental Commission for trade, economic, scientific, humanitarian and cultural cooperation.
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[DETAIL_TEXT] => The Economic Aspect
The decline in the volume of cargo carried to the Kaliningrad region appeared in July 2008, before the recession, when the tariff on cargo transportation via the Byelorussian Railway grew by 12% on average. The 11.5% increase in the tariff on transportation via Lithuanian territory, which came into force on August 1, led to a more significant reduction of cargo carried on the route. Finally, in early 2009, after Belarus increased transit tariffs by 14.7%, the situation became almost catastrophic. Thus, in January-February 2009, the transportation volume at KZD made 54% of the volume carried in the same period of the previous year.
After that, as a result of meetings between the top managers of the railways of the three countries and regular negotiations held by specialists, the Lithuanian and Byelorussian parties implemented a decreasing coefficient for transit of some cargoes to Kaliningrad. For example, the Byelorussian Railway gave discounts on the transportation of coal (10%), cast iron and steel (13%), gas condensate (15%), etc. The results appeared immediately. Lately, specialists of KZD have registered a positive dynamic in transportation of some cargoes. Moreover, in July the volume of export and import cargo transportation via the ports and terminals in the Kaliningrad region grew by 13.4% (+61,620 tons) month-on-month. In particular, there was an increase in the transportation of oil products (+10.6% or +43,720 tons), ferrous metals (+49.2% or +12,540 tons).
One of the brightest examples of the tariff reduction efficiency is the growth of soya bean oil transportation at KZD: in the first half of 2009 it rose by 66.5% year-on-year. Such an increase took place due to the tariff preferences given to the cargoes of Sodruzhestvo-Soya, which were implemented by Byelorussian and Lithuanian railways on March 1, 2009.
A similar situation appeared after Lithuania implemented a discount on transportation of cars produced in the Kaliningrad region. According to the calculations of the KZD specialists, the average daily loading of cars was to make 245 tons in July, in practice 341 tons was loaded every day. “Taking into account the profitability of the cargo, the extra charge was a significant one,” said Roman Kosoglyad, Head of the Kaliningrad Railway Centre of Transport Service. “We know that the tariff terms make this production rather competitive, so we have enlarged our loading plans for the next months,” he added.
The increase in export freight transportation was not so significant. For example, there was a slight growth in gas condensate loading. 82,000 tons of it was carried in January, 96,000 in February, and after the Byelorussian and Lithuanian railways gave discounts, its transportation climbed up to 155,000 tons. Unfortunately, the privileged tariffs for transportation of other cargoes have not had the desired effect. “The discounts set by our colleagues for transportation of coal and coke do not allow to return the volume of these cargoes to our direction.
Nowadays, it is carried to other Baltic ports. There are small flows, but they are not as large as we could service,” explains Mr Kosoglyad. Actually, a 10% or a 15% discount, especially during a recession, seems to be a significant one. Transit tariffs are set in foreign currency, and the exchange rate of dollar and euro against rouble has grown since the end of 2008, which is why the discounts have turned out to be inefficient. Also, representatives of KZD note that the discounts were set for some cargoes only, and not all of the discounts were as big as necessary.
Nevertheless, Mr Kosoglyad considers that “the discounts made by Lithuanian and Byelorussian partners are a great achievement.” “This fact proves that there appears to be the understanding that, without proper and reasonable tariffs, there will be neither cargo on the direction to Kaliningrad, nor transit via the territory of Lithuania and Byelorussia,” he says.
This year the situation at the Lithuanian railway is far from perfect. According to statistics, the volume of freight transportation via its network in the first half of 2009 fell by 31.1% year-on-year to 19.7 million tons. All this means that the dialogue about transit tariffs reduction must be continued. Specialists believe there is no other serious alternative to enlarge cargo flows on the Kaliningrad direction.
Political aspect
As usual, the health of the economy goes hand in hand with policy. Recently, Evgeny Timokhin, Head of the Kaliningrad affiliate of the Byelorussian Embassy to Russia, commented on the situation. “There is an opinion that the ports in Kaliningrad found themselves in unfavourable conditions just because the Byelorussian railwaymen increased tariffs and do not want to reduce them. Yes, this year Belarus and Lithuania increased the tariffs on transit transportation to Kaliningrad… But then measures were taken to stimulate freight flows on the Kaliningrad direction and to reduce the cost of transit, step by step. Today, the tariffs of the Byelorussian railway are practically the same as they were in June 2008. Lithuanian partners have reduced tariffs on transit to Kaliningrad either. Meanwhile, in July, RZD raised its inner tariffs by 5.7%, i.e. the delivery of cargoes to Kaliningrad is more expensive because of their transportation via the Russian territory.
Obviously, the measures taken by Lithuanian and Byelorussian railways are not enough. A coordinated policy between all the participants of the transport and logistics chain is needed. Russian tariffs should be changed considering the specific nature of this western region of the RF.” The summary of his speech is as follows: “we reduced our tariffs, while RZD raised its ones.”
In return, specialists cite the following arguments. Firstly, RZD’s tariffs (in roubles) increased by 5.7% since July 1 in all directions, and yet have not influenced transportation volumes. Secondly, the variance of transit tariffs in foreign currency is more noticeable than in Russian roubles. By the way, the 14.7% increase in Byelorussian tariffs, held in early 2009, was in foreign currency.
Nevertheless, representatives of the transport community welcome the Byelorussian Railway top managers’ latest decisions on discounts. Meanwhile, the actions of the Lithuanian side, in which there are underlying political and protectionist trends, do not allow the potential of trilateral relations to be realised at all.
The speculative aspect
The decreasing coefficient for cast iron transit transportation from the Prisady railway station, implemented by Lithuanian Railway on July 1, 2009, was in force for only a month. On August 15, the discount was abolished. A representative from the PR department of KZD said that the Railway received an official letter signed by Albertas Shimenas, Deputy CEO of Lithuanian Railway. According to the letter, the reason for the abolishment was an application by some cargo owners worried “about the implementation of special tariffs for a specific cargo owner.” Moreover, in the opinion of those cargo owners, due to such a “discriminating” measure, the shipment of cast iron to the Kaliningrad region – as well as to the Klaipeda port – may be stopped, and this cargo flow may be re-oriented towards other ports.
Meanwhile, specialists at forwarding companies consider this decision of the Lithuanian Railway as Lithuania’s withdrawal from the trilateral agreement on optimisation of the tariff policy on the Kaliningrad route. Some experts believe that this step is hardly an autonomous decision by Lithuanian railwaymen. Most probably, it is a result of active lobbying for the Klaipeda port’s interests by a group of companies operating in the port (primarily the Achemos Grupе concern, which made significant investments into its modernisation).
This suggestion seems to be even more realistic if we take into consideration that in mid-July the Lithuanian Railway implemented a 70% discount for transportation of iron ore briquettes to Klaipeda port.
It means that the production of Tulachermet (Russia) loaded at Prisady station will be transported to the port of St Petersburg earlier. Simultaneously, the Kaliningrad direction, as well as transit railways, lost about 10,000 tons of cast iron per month, which metallurgists promised to transport via this route.
By Olga Gorbunova
interview
Tariff measures are not enough
Sergey Tugarinov, Deputy Director of State Policy in the Railway Sector Department at the RF Transport Ministry, answered the questions of “The RZD-Partner International” about optimisation
of the tariff policy on the Kaliningrad direction.
– Mr Tugarinov, in May-July 2009, the Byelorussian and the Lithuanian railways reduced tariffs for transportation of some cargoes to the Kaliningrad region. Was such a method effective?
– The trilateral meeting held last May in Palanga and agreements made there had a positive effect. For example, in July, the transportation volume of gas condensate grew by 50% (41,900 tons) compared with January, fuel and black fuel increased by 55% (44,900 tons) and by 13.5 times (from 975 tons in January to 13,200 tons in July) respectively.
Also, 106,300 tons of gas condensate distillate was carried with the help of the Kaliningrad Railway last July. However, there were no radical changes in the transport sector of the Kaliningrad region, and the RF Transport Ministry informed the Byelorussian and Lithuanian parties about this. Thus, the issue of optimal distribution of freight flows between the port of Klaipeda and those in the Kaliningrad region is under discussion.
– In other words, the measures taken are not enough to restore the cargo flow at the Kaliningrad direction?
– At the meeting in Palanga the Russian party made concrete offers to reduce the level of tariffs on cargoes, which historically formed the freight flow in the Kaliningrad region. Unfortunately, only some of them were taken into consideration. Moreover, having announced the decrease of transit tariffs on cast iron transportation from the Prisada railway station to the Kaliningrad region, the administration of the Lithuanian Railway abolished its decision less than two months later, and set higher tariffs on this cargo transportation on August 15. Meanwhile, the reasoning of the Lithuanian side – “the concerns of cast iron consignors caused by implementation of privileged tariffs for a definite consignor” – caused a lot of raised eyebrows.
Last June, under the instruction of the RF Transport Ministry, RZD discussed with Russian metal producers the possible increase of freight transportation to the Kaliningrad region. According to the data of RZD, due to the lack of demand most Russian ferrous metal exporters do not plan to increase transportation of this cargo even if the Byelorussian and Lithuanian railways reduce their tariffs. That is why it is not clear which concerns the Lithuanian side is talking about.
– What other factors are playing an important role? Is Russian Railways considering the possibility of giving decreasing coefficients for freight transportation on the route? Would this be reasonable?
– The decreasing coefficients for freight transportation via the Russian railway network with the participation of KZD have been in force for many years and for all types of transportation – domestic, import, export and transit. They help to solve the problem, but only partially. I’d like to emphasise that after the Russian side reduced tariffs on transportation to the Kaliningrad region, Lithuania rose its own, thus creating conditions for re-routing the freight flow to the port of Klaipeda. That is why tariff regulation is not enough.
– What measures should be taken to attract cargo flows to the Kaliningrad transport junction?
– The RF Transport Ministry is paying special attention to the organisation of cargo transportation to the Kaliningrad ports. This issue is often discussed in the framework of the Russian-Lithuanian Intergovernmental Commission for trade, economic, scientific, humanitarian and cultural cooperation.
[~DETAIL_TEXT] => The Economic Aspect
The decline in the volume of cargo carried to the Kaliningrad region appeared in July 2008, before the recession, when the tariff on cargo transportation via the Byelorussian Railway grew by 12% on average. The 11.5% increase in the tariff on transportation via Lithuanian territory, which came into force on August 1, led to a more significant reduction of cargo carried on the route. Finally, in early 2009, after Belarus increased transit tariffs by 14.7%, the situation became almost catastrophic. Thus, in January-February 2009, the transportation volume at KZD made 54% of the volume carried in the same period of the previous year.
After that, as a result of meetings between the top managers of the railways of the three countries and regular negotiations held by specialists, the Lithuanian and Byelorussian parties implemented a decreasing coefficient for transit of some cargoes to Kaliningrad. For example, the Byelorussian Railway gave discounts on the transportation of coal (10%), cast iron and steel (13%), gas condensate (15%), etc. The results appeared immediately. Lately, specialists of KZD have registered a positive dynamic in transportation of some cargoes. Moreover, in July the volume of export and import cargo transportation via the ports and terminals in the Kaliningrad region grew by 13.4% (+61,620 tons) month-on-month. In particular, there was an increase in the transportation of oil products (+10.6% or +43,720 tons), ferrous metals (+49.2% or +12,540 tons).
One of the brightest examples of the tariff reduction efficiency is the growth of soya bean oil transportation at KZD: in the first half of 2009 it rose by 66.5% year-on-year. Such an increase took place due to the tariff preferences given to the cargoes of Sodruzhestvo-Soya, which were implemented by Byelorussian and Lithuanian railways on March 1, 2009.
A similar situation appeared after Lithuania implemented a discount on transportation of cars produced in the Kaliningrad region. According to the calculations of the KZD specialists, the average daily loading of cars was to make 245 tons in July, in practice 341 tons was loaded every day. “Taking into account the profitability of the cargo, the extra charge was a significant one,” said Roman Kosoglyad, Head of the Kaliningrad Railway Centre of Transport Service. “We know that the tariff terms make this production rather competitive, so we have enlarged our loading plans for the next months,” he added.
The increase in export freight transportation was not so significant. For example, there was a slight growth in gas condensate loading. 82,000 tons of it was carried in January, 96,000 in February, and after the Byelorussian and Lithuanian railways gave discounts, its transportation climbed up to 155,000 tons. Unfortunately, the privileged tariffs for transportation of other cargoes have not had the desired effect. “The discounts set by our colleagues for transportation of coal and coke do not allow to return the volume of these cargoes to our direction.
Nowadays, it is carried to other Baltic ports. There are small flows, but they are not as large as we could service,” explains Mr Kosoglyad. Actually, a 10% or a 15% discount, especially during a recession, seems to be a significant one. Transit tariffs are set in foreign currency, and the exchange rate of dollar and euro against rouble has grown since the end of 2008, which is why the discounts have turned out to be inefficient. Also, representatives of KZD note that the discounts were set for some cargoes only, and not all of the discounts were as big as necessary.
Nevertheless, Mr Kosoglyad considers that “the discounts made by Lithuanian and Byelorussian partners are a great achievement.” “This fact proves that there appears to be the understanding that, without proper and reasonable tariffs, there will be neither cargo on the direction to Kaliningrad, nor transit via the territory of Lithuania and Byelorussia,” he says.
This year the situation at the Lithuanian railway is far from perfect. According to statistics, the volume of freight transportation via its network in the first half of 2009 fell by 31.1% year-on-year to 19.7 million tons. All this means that the dialogue about transit tariffs reduction must be continued. Specialists believe there is no other serious alternative to enlarge cargo flows on the Kaliningrad direction.
Political aspect
As usual, the health of the economy goes hand in hand with policy. Recently, Evgeny Timokhin, Head of the Kaliningrad affiliate of the Byelorussian Embassy to Russia, commented on the situation. “There is an opinion that the ports in Kaliningrad found themselves in unfavourable conditions just because the Byelorussian railwaymen increased tariffs and do not want to reduce them. Yes, this year Belarus and Lithuania increased the tariffs on transit transportation to Kaliningrad… But then measures were taken to stimulate freight flows on the Kaliningrad direction and to reduce the cost of transit, step by step. Today, the tariffs of the Byelorussian railway are practically the same as they were in June 2008. Lithuanian partners have reduced tariffs on transit to Kaliningrad either. Meanwhile, in July, RZD raised its inner tariffs by 5.7%, i.e. the delivery of cargoes to Kaliningrad is more expensive because of their transportation via the Russian territory.
Obviously, the measures taken by Lithuanian and Byelorussian railways are not enough. A coordinated policy between all the participants of the transport and logistics chain is needed. Russian tariffs should be changed considering the specific nature of this western region of the RF.” The summary of his speech is as follows: “we reduced our tariffs, while RZD raised its ones.”
In return, specialists cite the following arguments. Firstly, RZD’s tariffs (in roubles) increased by 5.7% since July 1 in all directions, and yet have not influenced transportation volumes. Secondly, the variance of transit tariffs in foreign currency is more noticeable than in Russian roubles. By the way, the 14.7% increase in Byelorussian tariffs, held in early 2009, was in foreign currency.
Nevertheless, representatives of the transport community welcome the Byelorussian Railway top managers’ latest decisions on discounts. Meanwhile, the actions of the Lithuanian side, in which there are underlying political and protectionist trends, do not allow the potential of trilateral relations to be realised at all.
The speculative aspect
The decreasing coefficient for cast iron transit transportation from the Prisady railway station, implemented by Lithuanian Railway on July 1, 2009, was in force for only a month. On August 15, the discount was abolished. A representative from the PR department of KZD said that the Railway received an official letter signed by Albertas Shimenas, Deputy CEO of Lithuanian Railway. According to the letter, the reason for the abolishment was an application by some cargo owners worried “about the implementation of special tariffs for a specific cargo owner.” Moreover, in the opinion of those cargo owners, due to such a “discriminating” measure, the shipment of cast iron to the Kaliningrad region – as well as to the Klaipeda port – may be stopped, and this cargo flow may be re-oriented towards other ports.
Meanwhile, specialists at forwarding companies consider this decision of the Lithuanian Railway as Lithuania’s withdrawal from the trilateral agreement on optimisation of the tariff policy on the Kaliningrad route. Some experts believe that this step is hardly an autonomous decision by Lithuanian railwaymen. Most probably, it is a result of active lobbying for the Klaipeda port’s interests by a group of companies operating in the port (primarily the Achemos Grupе concern, which made significant investments into its modernisation).
This suggestion seems to be even more realistic if we take into consideration that in mid-July the Lithuanian Railway implemented a 70% discount for transportation of iron ore briquettes to Klaipeda port.
It means that the production of Tulachermet (Russia) loaded at Prisady station will be transported to the port of St Petersburg earlier. Simultaneously, the Kaliningrad direction, as well as transit railways, lost about 10,000 tons of cast iron per month, which metallurgists promised to transport via this route.
By Olga Gorbunova
interview
Tariff measures are not enough
Sergey Tugarinov, Deputy Director of State Policy in the Railway Sector Department at the RF Transport Ministry, answered the questions of “The RZD-Partner International” about optimisation
of the tariff policy on the Kaliningrad direction.
– Mr Tugarinov, in May-July 2009, the Byelorussian and the Lithuanian railways reduced tariffs for transportation of some cargoes to the Kaliningrad region. Was such a method effective?
– The trilateral meeting held last May in Palanga and agreements made there had a positive effect. For example, in July, the transportation volume of gas condensate grew by 50% (41,900 tons) compared with January, fuel and black fuel increased by 55% (44,900 tons) and by 13.5 times (from 975 tons in January to 13,200 tons in July) respectively.
Also, 106,300 tons of gas condensate distillate was carried with the help of the Kaliningrad Railway last July. However, there were no radical changes in the transport sector of the Kaliningrad region, and the RF Transport Ministry informed the Byelorussian and Lithuanian parties about this. Thus, the issue of optimal distribution of freight flows between the port of Klaipeda and those in the Kaliningrad region is under discussion.
– In other words, the measures taken are not enough to restore the cargo flow at the Kaliningrad direction?
– At the meeting in Palanga the Russian party made concrete offers to reduce the level of tariffs on cargoes, which historically formed the freight flow in the Kaliningrad region. Unfortunately, only some of them were taken into consideration. Moreover, having announced the decrease of transit tariffs on cast iron transportation from the Prisada railway station to the Kaliningrad region, the administration of the Lithuanian Railway abolished its decision less than two months later, and set higher tariffs on this cargo transportation on August 15. Meanwhile, the reasoning of the Lithuanian side – “the concerns of cast iron consignors caused by implementation of privileged tariffs for a definite consignor” – caused a lot of raised eyebrows.
Last June, under the instruction of the RF Transport Ministry, RZD discussed with Russian metal producers the possible increase of freight transportation to the Kaliningrad region. According to the data of RZD, due to the lack of demand most Russian ferrous metal exporters do not plan to increase transportation of this cargo even if the Byelorussian and Lithuanian railways reduce their tariffs. That is why it is not clear which concerns the Lithuanian side is talking about.
– What other factors are playing an important role? Is Russian Railways considering the possibility of giving decreasing coefficients for freight transportation on the route? Would this be reasonable?
– The decreasing coefficients for freight transportation via the Russian railway network with the participation of KZD have been in force for many years and for all types of transportation – domestic, import, export and transit. They help to solve the problem, but only partially. I’d like to emphasise that after the Russian side reduced tariffs on transportation to the Kaliningrad region, Lithuania rose its own, thus creating conditions for re-routing the freight flow to the port of Klaipeda. That is why tariff regulation is not enough.
– What measures should be taken to attract cargo flows to the Kaliningrad transport junction?
– The RF Transport Ministry is paying special attention to the organisation of cargo transportation to the Kaliningrad ports. This issue is often discussed in the framework of the Russian-Lithuanian Intergovernmental Commission for trade, economic, scientific, humanitarian and cultural cooperation.
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[DETAIL_TEXT] => Financing of RF transport industry in 2010 to stay at 2009 levels
Financing of the RF transport industry by the federal budget in 2010 will stay at the level of 2009, RF Transport Minister Igor Levitin said at the II international conference “St Petersburg – the Maritime Capital of Russia. Transport and Transit Potential” held in St Petersburg on September 22.
The sum last year was RUR 560 billion.
According to Mr Levitin, RUR 1.5 trillion of private investment is expected too.
Meanwhile, financing of railway transport will fall to RUR 30 billion in 2010. This year it amounted to RUR 87 billion. “It is because the freight flow has become more or less stable,” explained Mr Levitin.
According to his forecast, the transport flows will reach pre-crisis levels by the end of 2010.
VEB approves $545 million loan to build port infrastructure in Ust-Luga
Supervisory Council of the state corporation “Bank for Development and Foreign Economic Affairs” (VEB, Vnesheconombank) approved a $545 million loan for the creation of port infrastructure in Ust-Luga, said Vladimir Dmitriev, Vnesheconombank Chairman, at the Council’s meeting.
In his words, the loan will be provided for an eight-year period to Rosneftebunker, which is engaged in Ust-Luga’s infrastructure development. The bank head however refused to disclose the rate.
Vladimir Dmitriev highlighted that VEB’s extended participation in the project will drive the increase of crude oil and oil products transshipment in Ust-Luga port to 30 million tons per year with a possibility to raise it even further.
Universal Customs Tariff for Customs Union Member States
Customs Union member states (Russia, Belarus, and Kazakhstan) completed the formation of the universal customs tariff, announced Igor Shuvalov, First Deputy Prime Minister of the Russian Federation, after the Eurasian Economic Community (EurAsEC) integration committee meeting in Alma-Ata on September 25.
Mr Shuvalov said that the participants “discussed the draft Customs Code of the Customs Union, and draft contracts, which will be reviewed and signed by the heads of state in November.”
“The universal customs tariff comes into force on January 1, 2010, and the Customs Code – on July 1, 2010,” noted Andrey Pobyakov, Deputy Chairman of the Belarus Government.
After the universal tariff comes into force, the Customs Union of Russia, Belarus, and Kazakhstan will start its work. By mid-2011, all the procedures necessary for creation of a single customs territory are to be completed.
Meanwhile, on September 29, mass media reported that Kazakhstan has requested a transition period for the introduction of new customs tariffs. Umirzak Shukeyev, Deputy Prime Minister of Kazakhstan, said the Republic had asked for a transition period “on 400 positions,” including pharmaceuticals, petrochemicals and agricultural production. He did not say how long the transition period was expected to last.
Russia Has Register of Vessels, Although an Expensive One
“Nowadays, there are more than 340 ships on the Russian Register of Vessels. Their total deadweight is approximately 1.5 million tons. Thus, we can say that the Register has truly come into being,” stated Alexey Klyavin, Director of the RF Ministry of Transport’s Department for State Policy in the River and Sea Transport Sector at a conference held in the framework of “Neva-2009” international exhibition.
At the same time he recognised that there are some problems in the Register’s functioning. “We are trying to solve them with the help of businessmen. Together with the Russian Ship Owners Union, the Association of Shipping Companies, and other interested organisations we established working groups to adjust the legislation and create the most comfortable conditions for shipping activity,” emphasised Mr Klyavin.
Meanwhile, Sergey Razgulin, Deputy Head of the Tax and Customs-Tariff Policy Department at the RF Finance Ministry, reported that the Department developed amendments to the draft federal law. This law will make amendments to Chapter 25.3 of the Tax Code. “After these amendments come into force, the state duty on almost all actions relevant in law, including ship registration in the Russian International Register of Vessels and annual dues, will double”, explained Mr Razgulin.
St Petersburg-Helsinki High-Speed Rail Line Launch Postponed Until 2011
The RF Government postponed the realisation of the St Petersburg-Helsinki high-speed passenger rail line until 2011. The Decree on it was signed on August 28.
Earlier, it was hoped that the project would be carried out by 2010. The document also brings technical amendments, according to which the final point of the investment project’s realisation is Buslovskaya border station instead of Helsinki.
The amount of financing and its sources remained the same. RUR 27.96 billion will be provided from the Investment Fund, and the share of investors will be RUR 51.71 billion. The payback period is 10 years.
TransContainer and DB Schenker BTT Sign Cooperation Deals
TransContainer and DB Schenker BTT (GmbH) signed a set of agreements on cooperation in organising container transport between Europe and Russia during the 18th plenary session of the Coordinating Council on Transsiberian Transportation (CCTT), held in Munich (Germany).
The sides agreed to set up a container depot in Riga (Latvia), and to increase their shares of the transport and logistics services market in the field of chemical transportation.
The main goal of the companies’ cooperation is to improve the efficiency of container freight from Europe to Russia and vice versa. This will become possible due to the creation of a new depot in Latvia, which will provide access to containers and various types of flat wagon used by TransContainer. As a result, transport companies will no longer have to wait for empty flat wagons to be sent from Russia for loading, which will significantly reduce freight delivery times and the cost of freight services.
Commenting on the agreement, Karl Nutzinger, board chairman of Schenker AG, said: “As this is the first case of cooperation between a German logistics company and a subsidiary of RZD in this region, we would like to achieve maximum results from this new experience in providing more attractive services to freight operators.”
In line with the second agreement – on cooperation in organising container transport of chemical cargo – the sides intend to propose intermodal transport solutions as alternatives to multimodal transport by road and sea. With this in view, the sides have pledged to provide rolling stock, machinery and equipment, to use their most advanced technology, and to share experience. The portfolio of services will also include additional work in terminal processing, storage services and customs documentation.
“The growth in the Russian chemicals industry has created substantial demand for logistical services with the use of rail transport,” said Dr Rudiger Grube, CEO of German national railway Deutsche Bahn. “We have signed a cooperation agreement with a trusted partner, TransContainer, and we are ready to intensively develop new areas of joint work with them.”
Earlier, Boris Lapidus, Senior Vice President of RZD, which owns TransContainer, welcomed the joint efforts of European and Russian companies in improving the competitiveness of rail container transport. In his address, he touched on the issue of the decline in the volume of freight on the global transport market, and called for the Trans-Siberian network’s potential to be more effectively used to overcome this problem. Mr Lapidus also reiterated that all concession tariffs applicable in 2008 will remain in place throughout 2009, despite the economic crisis.
“Tariff regulation in container freight must improve its competitiveness, relative both to alternative forms of transport and to alternative routes,” Mr Lapidus said at the 18th plenary session of the CCTT in Munich.
South Caucasus Railway to invest RUR 1.2 billion in Armenia’s railroad facilities
South Caucasus Railway, a daughter company of RZD, plans to invest a total of RUR 1.2 billion in Armenia’s railroad facilities, with RUR 1 billion to be invested in the infrastructure, Deputy Director General Marat Khakov announced.
He said that the company plans to invest RUR 600 million into the track facilities annually over the next three years. A total of RUR 10 million will be invested in design and survey works. A technical diagnostics centre will be opened at Masis station before next May. Work already done has increased the average speed by 4.2 kph.
More than 27,000 passengers were served by the Yerevan-Batumi train – an increase of 40% compared with the corresponding period last year. Inland passenger traffic reached 465,000 – an increase of 40%. Mr Khakov said that two overhauled locomotives will replenish the company’s locomotive fleet (six locomotives) in October 2009. Railway communication between Gyumri and Vanadzor will resume in a few months.
Branchy Transsib
The Russian Government is going to finance the design of a295 kilometre-long railway section bypassing Omsk (a large industrial town in Siberia). The investments will be made in the framework of the federal target programme of Russian transport system modernisation to 2015. According to analysts, the approximate sum of the investments will reach RUR 25 billion.
At the start of September, Sergey Ivanov, Deputy Prime Minister of Russia, visited Omsk and said there that “the money has been allotted. As soon as the project is ready, the construction will start.” In his words, the bypass is needed for “transit cargoes to be transported not via the city, where they create noise and ecological problems.”
The first section is to connect Tatarskaya railway station (Novosibirsk region) and Nazyvayevskaya station (Omsk region) on the line to Tyumen. The construction of the Transsib southern bypass was offered either.
Earlier, RZD mentioned it was eager to invest RUR 250 billion in the construction. According to the plans, the project is to be completed in 2015.
[~DETAIL_TEXT] => Financing of RF transport industry in 2010 to stay at 2009 levels
Financing of the RF transport industry by the federal budget in 2010 will stay at the level of 2009, RF Transport Minister Igor Levitin said at the II international conference “St Petersburg – the Maritime Capital of Russia. Transport and Transit Potential” held in St Petersburg on September 22.
The sum last year was RUR 560 billion.
According to Mr Levitin, RUR 1.5 trillion of private investment is expected too.
Meanwhile, financing of railway transport will fall to RUR 30 billion in 2010. This year it amounted to RUR 87 billion. “It is because the freight flow has become more or less stable,” explained Mr Levitin.
According to his forecast, the transport flows will reach pre-crisis levels by the end of 2010.
VEB approves $545 million loan to build port infrastructure in Ust-Luga
Supervisory Council of the state corporation “Bank for Development and Foreign Economic Affairs” (VEB, Vnesheconombank) approved a $545 million loan for the creation of port infrastructure in Ust-Luga, said Vladimir Dmitriev, Vnesheconombank Chairman, at the Council’s meeting.
In his words, the loan will be provided for an eight-year period to Rosneftebunker, which is engaged in Ust-Luga’s infrastructure development. The bank head however refused to disclose the rate.
Vladimir Dmitriev highlighted that VEB’s extended participation in the project will drive the increase of crude oil and oil products transshipment in Ust-Luga port to 30 million tons per year with a possibility to raise it even further.
Universal Customs Tariff for Customs Union Member States
Customs Union member states (Russia, Belarus, and Kazakhstan) completed the formation of the universal customs tariff, announced Igor Shuvalov, First Deputy Prime Minister of the Russian Federation, after the Eurasian Economic Community (EurAsEC) integration committee meeting in Alma-Ata on September 25.
Mr Shuvalov said that the participants “discussed the draft Customs Code of the Customs Union, and draft contracts, which will be reviewed and signed by the heads of state in November.”
“The universal customs tariff comes into force on January 1, 2010, and the Customs Code – on July 1, 2010,” noted Andrey Pobyakov, Deputy Chairman of the Belarus Government.
After the universal tariff comes into force, the Customs Union of Russia, Belarus, and Kazakhstan will start its work. By mid-2011, all the procedures necessary for creation of a single customs territory are to be completed.
Meanwhile, on September 29, mass media reported that Kazakhstan has requested a transition period for the introduction of new customs tariffs. Umirzak Shukeyev, Deputy Prime Minister of Kazakhstan, said the Republic had asked for a transition period “on 400 positions,” including pharmaceuticals, petrochemicals and agricultural production. He did not say how long the transition period was expected to last.
Russia Has Register of Vessels, Although an Expensive One
“Nowadays, there are more than 340 ships on the Russian Register of Vessels. Their total deadweight is approximately 1.5 million tons. Thus, we can say that the Register has truly come into being,” stated Alexey Klyavin, Director of the RF Ministry of Transport’s Department for State Policy in the River and Sea Transport Sector at a conference held in the framework of “Neva-2009” international exhibition.
At the same time he recognised that there are some problems in the Register’s functioning. “We are trying to solve them with the help of businessmen. Together with the Russian Ship Owners Union, the Association of Shipping Companies, and other interested organisations we established working groups to adjust the legislation and create the most comfortable conditions for shipping activity,” emphasised Mr Klyavin.
Meanwhile, Sergey Razgulin, Deputy Head of the Tax and Customs-Tariff Policy Department at the RF Finance Ministry, reported that the Department developed amendments to the draft federal law. This law will make amendments to Chapter 25.3 of the Tax Code. “After these amendments come into force, the state duty on almost all actions relevant in law, including ship registration in the Russian International Register of Vessels and annual dues, will double”, explained Mr Razgulin.
St Petersburg-Helsinki High-Speed Rail Line Launch Postponed Until 2011
The RF Government postponed the realisation of the St Petersburg-Helsinki high-speed passenger rail line until 2011. The Decree on it was signed on August 28.
Earlier, it was hoped that the project would be carried out by 2010. The document also brings technical amendments, according to which the final point of the investment project’s realisation is Buslovskaya border station instead of Helsinki.
The amount of financing and its sources remained the same. RUR 27.96 billion will be provided from the Investment Fund, and the share of investors will be RUR 51.71 billion. The payback period is 10 years.
TransContainer and DB Schenker BTT Sign Cooperation Deals
TransContainer and DB Schenker BTT (GmbH) signed a set of agreements on cooperation in organising container transport between Europe and Russia during the 18th plenary session of the Coordinating Council on Transsiberian Transportation (CCTT), held in Munich (Germany).
The sides agreed to set up a container depot in Riga (Latvia), and to increase their shares of the transport and logistics services market in the field of chemical transportation.
The main goal of the companies’ cooperation is to improve the efficiency of container freight from Europe to Russia and vice versa. This will become possible due to the creation of a new depot in Latvia, which will provide access to containers and various types of flat wagon used by TransContainer. As a result, transport companies will no longer have to wait for empty flat wagons to be sent from Russia for loading, which will significantly reduce freight delivery times and the cost of freight services.
Commenting on the agreement, Karl Nutzinger, board chairman of Schenker AG, said: “As this is the first case of cooperation between a German logistics company and a subsidiary of RZD in this region, we would like to achieve maximum results from this new experience in providing more attractive services to freight operators.”
In line with the second agreement – on cooperation in organising container transport of chemical cargo – the sides intend to propose intermodal transport solutions as alternatives to multimodal transport by road and sea. With this in view, the sides have pledged to provide rolling stock, machinery and equipment, to use their most advanced technology, and to share experience. The portfolio of services will also include additional work in terminal processing, storage services and customs documentation.
“The growth in the Russian chemicals industry has created substantial demand for logistical services with the use of rail transport,” said Dr Rudiger Grube, CEO of German national railway Deutsche Bahn. “We have signed a cooperation agreement with a trusted partner, TransContainer, and we are ready to intensively develop new areas of joint work with them.”
Earlier, Boris Lapidus, Senior Vice President of RZD, which owns TransContainer, welcomed the joint efforts of European and Russian companies in improving the competitiveness of rail container transport. In his address, he touched on the issue of the decline in the volume of freight on the global transport market, and called for the Trans-Siberian network’s potential to be more effectively used to overcome this problem. Mr Lapidus also reiterated that all concession tariffs applicable in 2008 will remain in place throughout 2009, despite the economic crisis.
“Tariff regulation in container freight must improve its competitiveness, relative both to alternative forms of transport and to alternative routes,” Mr Lapidus said at the 18th plenary session of the CCTT in Munich.
South Caucasus Railway to invest RUR 1.2 billion in Armenia’s railroad facilities
South Caucasus Railway, a daughter company of RZD, plans to invest a total of RUR 1.2 billion in Armenia’s railroad facilities, with RUR 1 billion to be invested in the infrastructure, Deputy Director General Marat Khakov announced.
He said that the company plans to invest RUR 600 million into the track facilities annually over the next three years. A total of RUR 10 million will be invested in design and survey works. A technical diagnostics centre will be opened at Masis station before next May. Work already done has increased the average speed by 4.2 kph.
More than 27,000 passengers were served by the Yerevan-Batumi train – an increase of 40% compared with the corresponding period last year. Inland passenger traffic reached 465,000 – an increase of 40%. Mr Khakov said that two overhauled locomotives will replenish the company’s locomotive fleet (six locomotives) in October 2009. Railway communication between Gyumri and Vanadzor will resume in a few months.
Branchy Transsib
The Russian Government is going to finance the design of a295 kilometre-long railway section bypassing Omsk (a large industrial town in Siberia). The investments will be made in the framework of the federal target programme of Russian transport system modernisation to 2015. According to analysts, the approximate sum of the investments will reach RUR 25 billion.
At the start of September, Sergey Ivanov, Deputy Prime Minister of Russia, visited Omsk and said there that “the money has been allotted. As soon as the project is ready, the construction will start.” In his words, the bypass is needed for “transit cargoes to be transported not via the city, where they create noise and ecological problems.”
The first section is to connect Tatarskaya railway station (Novosibirsk region) and Nazyvayevskaya station (Omsk region) on the line to Tyumen. The construction of the Transsib southern bypass was offered either.
Earlier, RZD mentioned it was eager to invest RUR 250 billion in the construction. According to the plans, the project is to be completed in 2015.
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[DETAIL_TEXT] => Financing of RF transport industry in 2010 to stay at 2009 levels
Financing of the RF transport industry by the federal budget in 2010 will stay at the level of 2009, RF Transport Minister Igor Levitin said at the II international conference “St Petersburg – the Maritime Capital of Russia. Transport and Transit Potential” held in St Petersburg on September 22.
The sum last year was RUR 560 billion.
According to Mr Levitin, RUR 1.5 trillion of private investment is expected too.
Meanwhile, financing of railway transport will fall to RUR 30 billion in 2010. This year it amounted to RUR 87 billion. “It is because the freight flow has become more or less stable,” explained Mr Levitin.
According to his forecast, the transport flows will reach pre-crisis levels by the end of 2010.
VEB approves $545 million loan to build port infrastructure in Ust-Luga
Supervisory Council of the state corporation “Bank for Development and Foreign Economic Affairs” (VEB, Vnesheconombank) approved a $545 million loan for the creation of port infrastructure in Ust-Luga, said Vladimir Dmitriev, Vnesheconombank Chairman, at the Council’s meeting.
In his words, the loan will be provided for an eight-year period to Rosneftebunker, which is engaged in Ust-Luga’s infrastructure development. The bank head however refused to disclose the rate.
Vladimir Dmitriev highlighted that VEB’s extended participation in the project will drive the increase of crude oil and oil products transshipment in Ust-Luga port to 30 million tons per year with a possibility to raise it even further.
Universal Customs Tariff for Customs Union Member States
Customs Union member states (Russia, Belarus, and Kazakhstan) completed the formation of the universal customs tariff, announced Igor Shuvalov, First Deputy Prime Minister of the Russian Federation, after the Eurasian Economic Community (EurAsEC) integration committee meeting in Alma-Ata on September 25.
Mr Shuvalov said that the participants “discussed the draft Customs Code of the Customs Union, and draft contracts, which will be reviewed and signed by the heads of state in November.”
“The universal customs tariff comes into force on January 1, 2010, and the Customs Code – on July 1, 2010,” noted Andrey Pobyakov, Deputy Chairman of the Belarus Government.
After the universal tariff comes into force, the Customs Union of Russia, Belarus, and Kazakhstan will start its work. By mid-2011, all the procedures necessary for creation of a single customs territory are to be completed.
Meanwhile, on September 29, mass media reported that Kazakhstan has requested a transition period for the introduction of new customs tariffs. Umirzak Shukeyev, Deputy Prime Minister of Kazakhstan, said the Republic had asked for a transition period “on 400 positions,” including pharmaceuticals, petrochemicals and agricultural production. He did not say how long the transition period was expected to last.
Russia Has Register of Vessels, Although an Expensive One
“Nowadays, there are more than 340 ships on the Russian Register of Vessels. Their total deadweight is approximately 1.5 million tons. Thus, we can say that the Register has truly come into being,” stated Alexey Klyavin, Director of the RF Ministry of Transport’s Department for State Policy in the River and Sea Transport Sector at a conference held in the framework of “Neva-2009” international exhibition.
At the same time he recognised that there are some problems in the Register’s functioning. “We are trying to solve them with the help of businessmen. Together with the Russian Ship Owners Union, the Association of Shipping Companies, and other interested organisations we established working groups to adjust the legislation and create the most comfortable conditions for shipping activity,” emphasised Mr Klyavin.
Meanwhile, Sergey Razgulin, Deputy Head of the Tax and Customs-Tariff Policy Department at the RF Finance Ministry, reported that the Department developed amendments to the draft federal law. This law will make amendments to Chapter 25.3 of the Tax Code. “After these amendments come into force, the state duty on almost all actions relevant in law, including ship registration in the Russian International Register of Vessels and annual dues, will double”, explained Mr Razgulin.
St Petersburg-Helsinki High-Speed Rail Line Launch Postponed Until 2011
The RF Government postponed the realisation of the St Petersburg-Helsinki high-speed passenger rail line until 2011. The Decree on it was signed on August 28.
Earlier, it was hoped that the project would be carried out by 2010. The document also brings technical amendments, according to which the final point of the investment project’s realisation is Buslovskaya border station instead of Helsinki.
The amount of financing and its sources remained the same. RUR 27.96 billion will be provided from the Investment Fund, and the share of investors will be RUR 51.71 billion. The payback period is 10 years.
TransContainer and DB Schenker BTT Sign Cooperation Deals
TransContainer and DB Schenker BTT (GmbH) signed a set of agreements on cooperation in organising container transport between Europe and Russia during the 18th plenary session of the Coordinating Council on Transsiberian Transportation (CCTT), held in Munich (Germany).
The sides agreed to set up a container depot in Riga (Latvia), and to increase their shares of the transport and logistics services market in the field of chemical transportation.
The main goal of the companies’ cooperation is to improve the efficiency of container freight from Europe to Russia and vice versa. This will become possible due to the creation of a new depot in Latvia, which will provide access to containers and various types of flat wagon used by TransContainer. As a result, transport companies will no longer have to wait for empty flat wagons to be sent from Russia for loading, which will significantly reduce freight delivery times and the cost of freight services.
Commenting on the agreement, Karl Nutzinger, board chairman of Schenker AG, said: “As this is the first case of cooperation between a German logistics company and a subsidiary of RZD in this region, we would like to achieve maximum results from this new experience in providing more attractive services to freight operators.”
In line with the second agreement – on cooperation in organising container transport of chemical cargo – the sides intend to propose intermodal transport solutions as alternatives to multimodal transport by road and sea. With this in view, the sides have pledged to provide rolling stock, machinery and equipment, to use their most advanced technology, and to share experience. The portfolio of services will also include additional work in terminal processing, storage services and customs documentation.
“The growth in the Russian chemicals industry has created substantial demand for logistical services with the use of rail transport,” said Dr Rudiger Grube, CEO of German national railway Deutsche Bahn. “We have signed a cooperation agreement with a trusted partner, TransContainer, and we are ready to intensively develop new areas of joint work with them.”
Earlier, Boris Lapidus, Senior Vice President of RZD, which owns TransContainer, welcomed the joint efforts of European and Russian companies in improving the competitiveness of rail container transport. In his address, he touched on the issue of the decline in the volume of freight on the global transport market, and called for the Trans-Siberian network’s potential to be more effectively used to overcome this problem. Mr Lapidus also reiterated that all concession tariffs applicable in 2008 will remain in place throughout 2009, despite the economic crisis.
“Tariff regulation in container freight must improve its competitiveness, relative both to alternative forms of transport and to alternative routes,” Mr Lapidus said at the 18th plenary session of the CCTT in Munich.
South Caucasus Railway to invest RUR 1.2 billion in Armenia’s railroad facilities
South Caucasus Railway, a daughter company of RZD, plans to invest a total of RUR 1.2 billion in Armenia’s railroad facilities, with RUR 1 billion to be invested in the infrastructure, Deputy Director General Marat Khakov announced.
He said that the company plans to invest RUR 600 million into the track facilities annually over the next three years. A total of RUR 10 million will be invested in design and survey works. A technical diagnostics centre will be opened at Masis station before next May. Work already done has increased the average speed by 4.2 kph.
More than 27,000 passengers were served by the Yerevan-Batumi train – an increase of 40% compared with the corresponding period last year. Inland passenger traffic reached 465,000 – an increase of 40%. Mr Khakov said that two overhauled locomotives will replenish the company’s locomotive fleet (six locomotives) in October 2009. Railway communication between Gyumri and Vanadzor will resume in a few months.
Branchy Transsib
The Russian Government is going to finance the design of a295 kilometre-long railway section bypassing Omsk (a large industrial town in Siberia). The investments will be made in the framework of the federal target programme of Russian transport system modernisation to 2015. According to analysts, the approximate sum of the investments will reach RUR 25 billion.
At the start of September, Sergey Ivanov, Deputy Prime Minister of Russia, visited Omsk and said there that “the money has been allotted. As soon as the project is ready, the construction will start.” In his words, the bypass is needed for “transit cargoes to be transported not via the city, where they create noise and ecological problems.”
The first section is to connect Tatarskaya railway station (Novosibirsk region) and Nazyvayevskaya station (Omsk region) on the line to Tyumen. The construction of the Transsib southern bypass was offered either.
Earlier, RZD mentioned it was eager to invest RUR 250 billion in the construction. According to the plans, the project is to be completed in 2015.
[~DETAIL_TEXT] => Financing of RF transport industry in 2010 to stay at 2009 levels
Financing of the RF transport industry by the federal budget in 2010 will stay at the level of 2009, RF Transport Minister Igor Levitin said at the II international conference “St Petersburg – the Maritime Capital of Russia. Transport and Transit Potential” held in St Petersburg on September 22.
The sum last year was RUR 560 billion.
According to Mr Levitin, RUR 1.5 trillion of private investment is expected too.
Meanwhile, financing of railway transport will fall to RUR 30 billion in 2010. This year it amounted to RUR 87 billion. “It is because the freight flow has become more or less stable,” explained Mr Levitin.
According to his forecast, the transport flows will reach pre-crisis levels by the end of 2010.
VEB approves $545 million loan to build port infrastructure in Ust-Luga
Supervisory Council of the state corporation “Bank for Development and Foreign Economic Affairs” (VEB, Vnesheconombank) approved a $545 million loan for the creation of port infrastructure in Ust-Luga, said Vladimir Dmitriev, Vnesheconombank Chairman, at the Council’s meeting.
In his words, the loan will be provided for an eight-year period to Rosneftebunker, which is engaged in Ust-Luga’s infrastructure development. The bank head however refused to disclose the rate.
Vladimir Dmitriev highlighted that VEB’s extended participation in the project will drive the increase of crude oil and oil products transshipment in Ust-Luga port to 30 million tons per year with a possibility to raise it even further.
Universal Customs Tariff for Customs Union Member States
Customs Union member states (Russia, Belarus, and Kazakhstan) completed the formation of the universal customs tariff, announced Igor Shuvalov, First Deputy Prime Minister of the Russian Federation, after the Eurasian Economic Community (EurAsEC) integration committee meeting in Alma-Ata on September 25.
Mr Shuvalov said that the participants “discussed the draft Customs Code of the Customs Union, and draft contracts, which will be reviewed and signed by the heads of state in November.”
“The universal customs tariff comes into force on January 1, 2010, and the Customs Code – on July 1, 2010,” noted Andrey Pobyakov, Deputy Chairman of the Belarus Government.
After the universal tariff comes into force, the Customs Union of Russia, Belarus, and Kazakhstan will start its work. By mid-2011, all the procedures necessary for creation of a single customs territory are to be completed.
Meanwhile, on September 29, mass media reported that Kazakhstan has requested a transition period for the introduction of new customs tariffs. Umirzak Shukeyev, Deputy Prime Minister of Kazakhstan, said the Republic had asked for a transition period “on 400 positions,” including pharmaceuticals, petrochemicals and agricultural production. He did not say how long the transition period was expected to last.
Russia Has Register of Vessels, Although an Expensive One
“Nowadays, there are more than 340 ships on the Russian Register of Vessels. Their total deadweight is approximately 1.5 million tons. Thus, we can say that the Register has truly come into being,” stated Alexey Klyavin, Director of the RF Ministry of Transport’s Department for State Policy in the River and Sea Transport Sector at a conference held in the framework of “Neva-2009” international exhibition.
At the same time he recognised that there are some problems in the Register’s functioning. “We are trying to solve them with the help of businessmen. Together with the Russian Ship Owners Union, the Association of Shipping Companies, and other interested organisations we established working groups to adjust the legislation and create the most comfortable conditions for shipping activity,” emphasised Mr Klyavin.
Meanwhile, Sergey Razgulin, Deputy Head of the Tax and Customs-Tariff Policy Department at the RF Finance Ministry, reported that the Department developed amendments to the draft federal law. This law will make amendments to Chapter 25.3 of the Tax Code. “After these amendments come into force, the state duty on almost all actions relevant in law, including ship registration in the Russian International Register of Vessels and annual dues, will double”, explained Mr Razgulin.
St Petersburg-Helsinki High-Speed Rail Line Launch Postponed Until 2011
The RF Government postponed the realisation of the St Petersburg-Helsinki high-speed passenger rail line until 2011. The Decree on it was signed on August 28.
Earlier, it was hoped that the project would be carried out by 2010. The document also brings technical amendments, according to which the final point of the investment project’s realisation is Buslovskaya border station instead of Helsinki.
The amount of financing and its sources remained the same. RUR 27.96 billion will be provided from the Investment Fund, and the share of investors will be RUR 51.71 billion. The payback period is 10 years.
TransContainer and DB Schenker BTT Sign Cooperation Deals
TransContainer and DB Schenker BTT (GmbH) signed a set of agreements on cooperation in organising container transport between Europe and Russia during the 18th plenary session of the Coordinating Council on Transsiberian Transportation (CCTT), held in Munich (Germany).
The sides agreed to set up a container depot in Riga (Latvia), and to increase their shares of the transport and logistics services market in the field of chemical transportation.
The main goal of the companies’ cooperation is to improve the efficiency of container freight from Europe to Russia and vice versa. This will become possible due to the creation of a new depot in Latvia, which will provide access to containers and various types of flat wagon used by TransContainer. As a result, transport companies will no longer have to wait for empty flat wagons to be sent from Russia for loading, which will significantly reduce freight delivery times and the cost of freight services.
Commenting on the agreement, Karl Nutzinger, board chairman of Schenker AG, said: “As this is the first case of cooperation between a German logistics company and a subsidiary of RZD in this region, we would like to achieve maximum results from this new experience in providing more attractive services to freight operators.”
In line with the second agreement – on cooperation in organising container transport of chemical cargo – the sides intend to propose intermodal transport solutions as alternatives to multimodal transport by road and sea. With this in view, the sides have pledged to provide rolling stock, machinery and equipment, to use their most advanced technology, and to share experience. The portfolio of services will also include additional work in terminal processing, storage services and customs documentation.
“The growth in the Russian chemicals industry has created substantial demand for logistical services with the use of rail transport,” said Dr Rudiger Grube, CEO of German national railway Deutsche Bahn. “We have signed a cooperation agreement with a trusted partner, TransContainer, and we are ready to intensively develop new areas of joint work with them.”
Earlier, Boris Lapidus, Senior Vice President of RZD, which owns TransContainer, welcomed the joint efforts of European and Russian companies in improving the competitiveness of rail container transport. In his address, he touched on the issue of the decline in the volume of freight on the global transport market, and called for the Trans-Siberian network’s potential to be more effectively used to overcome this problem. Mr Lapidus also reiterated that all concession tariffs applicable in 2008 will remain in place throughout 2009, despite the economic crisis.
“Tariff regulation in container freight must improve its competitiveness, relative both to alternative forms of transport and to alternative routes,” Mr Lapidus said at the 18th plenary session of the CCTT in Munich.
South Caucasus Railway to invest RUR 1.2 billion in Armenia’s railroad facilities
South Caucasus Railway, a daughter company of RZD, plans to invest a total of RUR 1.2 billion in Armenia’s railroad facilities, with RUR 1 billion to be invested in the infrastructure, Deputy Director General Marat Khakov announced.
He said that the company plans to invest RUR 600 million into the track facilities annually over the next three years. A total of RUR 10 million will be invested in design and survey works. A technical diagnostics centre will be opened at Masis station before next May. Work already done has increased the average speed by 4.2 kph.
More than 27,000 passengers were served by the Yerevan-Batumi train – an increase of 40% compared with the corresponding period last year. Inland passenger traffic reached 465,000 – an increase of 40%. Mr Khakov said that two overhauled locomotives will replenish the company’s locomotive fleet (six locomotives) in October 2009. Railway communication between Gyumri and Vanadzor will resume in a few months.
Branchy Transsib
The Russian Government is going to finance the design of a295 kilometre-long railway section bypassing Omsk (a large industrial town in Siberia). The investments will be made in the framework of the federal target programme of Russian transport system modernisation to 2015. According to analysts, the approximate sum of the investments will reach RUR 25 billion.
At the start of September, Sergey Ivanov, Deputy Prime Minister of Russia, visited Omsk and said there that “the money has been allotted. As soon as the project is ready, the construction will start.” In his words, the bypass is needed for “transit cargoes to be transported not via the city, where they create noise and ecological problems.”
The first section is to connect Tatarskaya railway station (Novosibirsk region) and Nazyvayevskaya station (Omsk region) on the line to Tyumen. The construction of the Transsib southern bypass was offered either.
Earlier, RZD mentioned it was eager to invest RUR 250 billion in the construction. According to the plans, the project is to be completed in 2015.
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[SECTION_META_DESCRIPTION] => Financing of the RF transport industry by the federal budget in 2010 will stay at the level of 2009, RF Transport Minister Igor Levitin said at the II international conference “St Petersburg – the Maritime Capital of Russia. Transport and Transit Potential” held in St Petersburg on September 22.
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[ELEMENT_META_DESCRIPTION] => Financing of the RF transport industry by the federal budget in 2010 will stay at the level of 2009, RF Transport Minister Igor Levitin said at the II international conference “St Petersburg – the Maritime Capital of Russia. Transport and Transit Potential” held in St Petersburg on September 22.
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The government of the RF adopted a resolution on the state regulation and control of tariffs, fees, charges and natural monopolies work on rail transport, which forms the framework for the entire system of tariff regulation. Among the innovations is the new six-component structure of the tariff, marginal price fixing, and the opportunity to set the price for services within selected market segments or on particular directions. The industry’s experts believe that the quality of debate surrounding the statutory acts, which will determine the mechanisms of how these new ideas will be implemented, could ensure the success of these regulations.Array
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[DETAIL_TEXT] => The limits of what is possible
This document, according to Sergey Novikov, Head of Federal Tariff Service of Russia, is “institutional” by its nature and lays the foundation for the whole “architecture” of pricing on railway transport. The resolution outlines the contours for the other documents which will, in turn, set the tariffs and the order of their application (see the interview with Vitaly Evdokimenko, Deputy Head of the Federal Tariffs Service).
Among the significant innovations it is worth noting, in the first place, the allocation of the six components of the tariff. The locomotive, terminal, transportation and railway station components were added to the wagon (container) and infrastructure components.
It should be emphasised that the resolution only allows these components to be within the tariff structure but it does not make them mandatory. Time will tell whether these components are necessary for market participants or if the latter deem it necessary to leave everything as it is now, i.e. infrastructure and wagon components alone.
Another interesting issue of the new resolution is the marginal pricing. Such a mechanism would allow the regulating body to reduce rates, if necessary, and thus respond flexibly to the changing market climate. However, as the representatives of the Federal Tariff Service specify, this measure can be applied only in those segments where competition exists. In those sectors where monopoly prevails, prices will remain fixed.
Finally, the third fundamental innovation offers the possibility to establish “exclusive” rates, operating either in a particular market segment or on a particular direction, in contrast to the existing system of tariffs, based on the average network costs.
It is still not clear how these special rates will be calculated and approved, but these will obviously become a matter of heated discussion for the all interested parties.
Is six better than three?
Market participants and industry experts agree that the extent and the effectiveness of the innovations will depend entirely on their specific configuration, as embodied in legal acts which still need to be enacted. Obviously, this process may take several years. And this is not due to the possible mismatch in the positions of the players involved, but due to the need to collect large amounts of information and elaborate the methodology.
However, market participants are already discussing their perspectives, bearing in mind the regulations of the resolution.
One RZD expert, who had been engaged in working out the resolution for many years, said that the allocation of terminal, railway station and transport components was not justified. “We consider them as a part of the infrastructure, as a part of the whole. Now a single transportation process is split up, and the subject of regulation has to determine what, for example, a transportation component is. This notion appeared in this resolution for the first time,” added the company representative.
Evgeny Drachev, Director for Economics and Finance of Transles, who was in charge of the tariff policy for the monopolies in the Ministry of Economic Development and Commerce (now Ministry of Economic Development), recalls: “The concept of the new Tariff regulation № 10-01 included only three components: wagon, infrastructural and locomotive, which implied that the services were divided into monopoly (infrastructure), natural monopoly (locomotive) and competitive (wagon) sectors. The resolution suggests another three components that were not considered previously within the respective ministries and departments. Time will tell if it is valid to choose these segments. It is not clear what will be understood by the terminal and transportation components.” However, he noted: “Of course, this decision will make the tariff policy more flexible.
It is certainly interesting to see how all the components of the tariff will be distributed in percentage terms. The sooner this issue is clarified, the sooner the carriers, rail operators, logistics companies and other investors can assess the investment expediency in freight terminals, railway stations and businesses related to transportation.
Taking into account that, as the Federal Tariff Service promises, the total transportation costs will not be increased as a result of the new resolution and the components will be allocated from the existing rate, it becomes apparent that the weight of each component will be calculated based on the costs which it incurs.
It is worth recalling that the Federal Tariffs Service did not abandon a cost-based method for calculating the tariffs, which is formed basing on the costs of the subject of regulation, depreciation and rate of return.
Hence, as Mr Drachev points out, it is quite possible to use the form №6-zel (a corporate statistical report of RZD), where the entire prime cost for the company’s transportations is divided into the components according both to the departments and the elements of cost. “There still remains a question as to what the developers of the new concept of the Tariff regulation № 10-01 will be guided by. The final result depends on this,” says the representative of Transles.
He adds that, in general, a division of the shares may be as follows: locomotive component - 20%, wagon/container component - 15%, infrastructure/terminal component - 60% and transportation services - 5%.
Anyway, regardless of the debate around what is meant by the transportation and terminal components of the tariff, the division of the locomotive component alone will have a major impact on the industry.
For example, the head of a railway operator said that his company would be interested to have their own locomotives and hence become a fully-fledged carrier, if not on the whole network than at least on a number of routes. However, he noted that this issue required careful consideration in terms of operation and maintenance of locomotives.
Experts at leasing companies claim that there are about 170 private locomotives on the railway network in Russia.
Before the crisis, the independent operators avoided acquiring locomotives because the lack of a corresponding component made it difficult to calculate the economic consequences of this purchase. Through the analogy with the allocation of the wagon component, which dramatically increased the private operators’ demand for wagons, the tariff innovations will inevitably cause the situation where the acquisition of the locomotives will be a much more clear operation in terms of costs, revenues and payback period of the investments.
Igor Ahpolov, the Leading Economic Expert of the Association of the Owners of Rolling Stock, draws attention to the following issue: “The tariff is calculated basing on the network-wide
highly averaged costs of RZD, while the tariffs for the use of funds (wagons, rail infrastructure, locomotives and etc.) are local and should be calculated basing on the economically justified costs in relation to the functioning of a specific object in a specific context (as stated in section 7 of the resolution).
Aggregated rate and so-called tariff components are two different things (both in their ideology and economic content).
To a certain extent the term “tariff components” can be applied only to the tariffs for RZD, as there is a redistribution of financial resources for the regional participants of the transportation process. These average rates and the term “tariff components” are thus not applicable to the rest of the owners.”
In this respect, warns the expert, there will be a lot of information and methodology issues to address in order to settle such an ambitious tariff affair. It is worth noting another crucial methodological aspect of the “fund” tariffs’ formation on the example of the current practice in calculating tariffs for the use of private owners’ wagons.
“In my opinion, it is wrong that the tariff for the use of the wagons is charged only if the rolling stock is on the move (it is a piece-rate tariff which is calculated on the basis of wagon per km). During the day the wagon is idle, on average, 75-80% of the time for various reasons. So, for three-quarters of the time, when the wagons are used, the rate is not charged, while depreciation is added. If RZD paid all the owners of the park for every hour when their wagons were at the company’s disposal, this would prevent such a disastrous state of affairs. A fund tariff should be formed on the “time” basis, taking into account the intensity of use during this time,” Mr Ahpolov adds.
Investors are welcome!
The resolution provides a number of mechanisms to stimulate investment in railway transportation facilities and the transportation process.
It basically means that if the subject of regulation reduces its costs while an investment project is being realised, the regulating agency does not cut its rates. Let us recall that the cost-based approach, as described above, means that if the cost is lower, the tariff is also lower, which demotivates the companies to reduce their costs.
In addition, this will allow the setting of tariffs not only for the whole railway network but also for certain directions or segments.
Dovran Garagozov, Advisor to Director General of Renova-Building-Group, is sure that the discussed measures would increase the volume of investments in railway infrastructure. Currently, a private company that wants to build its own branch line, say, to a deposit, can not expect any special tariff conditions, which often makes such projects meaningless.
“It may take 10-15 years to cover the costs of the railway line construction, so a range of available tariff options would be good for long-term projects. Both private companies and RZD will benefit from these opportunities. Due to the crisis, RZD is now facing a difficult situation where the income from the freight transportation is falling while the investment program is still extensive. As the result, a budget deficit occurs, which the government has to compensate for by using various measures. A more flexible tariff policy on certain directions may serve as another way to make up for falling revenues,” states Mr Garagozov.
It should be noted that RZD often faces the problem of an imbalance in infrastructure loading when some parts of the network are congested while others, on the contrary, are underloaded.
Exclusive tariffs do not help. This was proved a few years ago, when the monopoly granted exclusive rates for the transportation of metallurgical products to the Far Eastern ports, but the cargo owners still preferred the Baltic and Black Sea ports instead. Now the company, with the approval of the the Federal Tariff Service, will have the tools required to encourage cargo owners to choose certain directions for the mutual benefit of both sides.
Moreover, we might expect that the monopoly, in cooperation with stevedoring and shipping companies, will be able to offer a through rate to some groups of cargo owners, and thus put into practice the use of fully-fledged transport corridors, which have been under discussion for many years.
A heated discussion ahead
Further discussions about the specific methods to form the tariffs will be, in fact, a debate over the appropriate approaches to each specific aspect of the problem. “The future of the resolution depends on the quality of this debate and the principles which we are going to use,” said an RZD representative. “Today the legislation on natural monopolies clearly states which activities on the railways are monopolies, but does not explain why they belong to this category. This is also a matter of point of view.”
Ivan Stupachenko
interview
RZD-Partner asked Vitaly Evdokimenko, the Deputy Head of the Federal Tariffs Service, to comment on the new resolution on the pricing in the railway transport industry.
– Mr Evdokimenko, what does the document, which has been awaited for so long, give in terms of state policy on tariff regulation?
– Having taken this decision, the government of the RF has completed the formation of the legal framework for the state regulation of tariffs for services of natural monopolies.
This document allows us to create a sufficiently flexible system of state tariff regulation, depending on the objectives for the further implementation of structural reform which will be determined in 2010.
The resolution ensures the conditions for sustainable operation of the railway industry and its profitability. The basic method of control is to determine the economically justified costs. If a decision to limit the level of tariffs, fees and charges to ensure their availability to the population and the competitiveness of the country’s economy is taken, the appropriate measures of state support are to be implemented in order to compensate for the loss of income caused by the new tariff regulation.
In accordance with the resolution the formation of the economically sound tariffs, fees and charges will be based on separate accounting of the expenditures and revenues divided by the types of activities, tariff components and aggregated types of works. Let me recall that RZD introduced separate accounting in January 2008. However, while determining the economically justified costs, the regulatory agency has the right not to consider the costs of the inefficient activities of natural monopolies. In other words, in future tariff rates will be reduced at the amount of these costs, which are adopted as a source of compensation.
– Will the tariff include the investment component?
– It is not planned to include the investment component directly in the regulated tariff. The new resolution allows the formation of tariffs on the basis of economically justified costs and regulatory return, taking into account the needs for investment resources. Based on the methodology, which is to be adopted by Federal Tariff Service, normative profit will be determined by the regulatory agency, considering the cost of fixed assets and other assets, as well as the rate of return on capital. Initially the government of the RF used to examine and adopt the investment programs of the major subjects of natural monopolies. We determined the net profit, which the company required in order to implement the government-approved investment program, and calculated the tariff rate. The resolution allows attracting investments and enhancing the internal efficiency of natural monopolies.
It is planned not to take into consideration a decrease in the subject’s expenditures caused by the realisation of the investment project within the time when the gross receipt is calculated and two years after this.
Originally, as soon as the realisation of the investment projects, such as those related to the resource saving, were finished, we took into account the economic effect, reflected in a reduction of the expenditures, and reduced the tariffs. The subject of natural monopoly was discouraged in terms of implementation of the activities aimed at improving the efficiency of its business.
In order to attract investment in infrastructure modernisation and development of rail transport in certain segments related to the implementation of various projects and construction of production facilities, local tariffs are preferable, which will include some of the investment component aimed at the compensation for the costs of the infrastructure owners.
For example, if the investors are interested in developing their own railway infrastructure project, it is possible that the infrastructure owner - namely RZD - will finance the project in a specific market segment, while the state will set a separate tariff system, allowing the owner to ensure a payback on its investments.
– Will the new system of regulation promote competition in the transport market?
– The resolution provides an opportunity to establish not only a fixed value of tariffs, fees and charges, but also the marginal rates. This will allow the infrastructure company to respond flexibly to the market conditions during the transition period. Natural monopolies will be granted the right to set their own tariffs. However, this mechanism is necessary only in those market segments which are being transformed from a natural monopoly to a competitive market. Otherwise there is no need to transfer from fixed rates to marginal rates.
– When will the resolution fully come into effect?
– The appropriate legislation is still required for this resolution. In particular, it is necessary to amend the existing decree of the Ministry of Transport on approving the separate accounting of revenues, expenditures and financial results divided by the types of activities, tariff components and aggregated types of works.
Furthermore the government has to adopt the rules granting exclusive rates by the government decree. Federal Tariff Service has to develop and adopt the method of calculation of economically justified costs and regulatory returns. We plan to accomplish this mission by July 1, 2010.
[~DETAIL_TEXT] => The limits of what is possible
This document, according to Sergey Novikov, Head of Federal Tariff Service of Russia, is “institutional” by its nature and lays the foundation for the whole “architecture” of pricing on railway transport. The resolution outlines the contours for the other documents which will, in turn, set the tariffs and the order of their application (see the interview with Vitaly Evdokimenko, Deputy Head of the Federal Tariffs Service).
Among the significant innovations it is worth noting, in the first place, the allocation of the six components of the tariff. The locomotive, terminal, transportation and railway station components were added to the wagon (container) and infrastructure components.
It should be emphasised that the resolution only allows these components to be within the tariff structure but it does not make them mandatory. Time will tell whether these components are necessary for market participants or if the latter deem it necessary to leave everything as it is now, i.e. infrastructure and wagon components alone.
Another interesting issue of the new resolution is the marginal pricing. Such a mechanism would allow the regulating body to reduce rates, if necessary, and thus respond flexibly to the changing market climate. However, as the representatives of the Federal Tariff Service specify, this measure can be applied only in those segments where competition exists. In those sectors where monopoly prevails, prices will remain fixed.
Finally, the third fundamental innovation offers the possibility to establish “exclusive” rates, operating either in a particular market segment or on a particular direction, in contrast to the existing system of tariffs, based on the average network costs.
It is still not clear how these special rates will be calculated and approved, but these will obviously become a matter of heated discussion for the all interested parties.
Is six better than three?
Market participants and industry experts agree that the extent and the effectiveness of the innovations will depend entirely on their specific configuration, as embodied in legal acts which still need to be enacted. Obviously, this process may take several years. And this is not due to the possible mismatch in the positions of the players involved, but due to the need to collect large amounts of information and elaborate the methodology.
However, market participants are already discussing their perspectives, bearing in mind the regulations of the resolution.
One RZD expert, who had been engaged in working out the resolution for many years, said that the allocation of terminal, railway station and transport components was not justified. “We consider them as a part of the infrastructure, as a part of the whole. Now a single transportation process is split up, and the subject of regulation has to determine what, for example, a transportation component is. This notion appeared in this resolution for the first time,” added the company representative.
Evgeny Drachev, Director for Economics and Finance of Transles, who was in charge of the tariff policy for the monopolies in the Ministry of Economic Development and Commerce (now Ministry of Economic Development), recalls: “The concept of the new Tariff regulation № 10-01 included only three components: wagon, infrastructural and locomotive, which implied that the services were divided into monopoly (infrastructure), natural monopoly (locomotive) and competitive (wagon) sectors. The resolution suggests another three components that were not considered previously within the respective ministries and departments. Time will tell if it is valid to choose these segments. It is not clear what will be understood by the terminal and transportation components.” However, he noted: “Of course, this decision will make the tariff policy more flexible.
It is certainly interesting to see how all the components of the tariff will be distributed in percentage terms. The sooner this issue is clarified, the sooner the carriers, rail operators, logistics companies and other investors can assess the investment expediency in freight terminals, railway stations and businesses related to transportation.
Taking into account that, as the Federal Tariff Service promises, the total transportation costs will not be increased as a result of the new resolution and the components will be allocated from the existing rate, it becomes apparent that the weight of each component will be calculated based on the costs which it incurs.
It is worth recalling that the Federal Tariffs Service did not abandon a cost-based method for calculating the tariffs, which is formed basing on the costs of the subject of regulation, depreciation and rate of return.
Hence, as Mr Drachev points out, it is quite possible to use the form №6-zel (a corporate statistical report of RZD), where the entire prime cost for the company’s transportations is divided into the components according both to the departments and the elements of cost. “There still remains a question as to what the developers of the new concept of the Tariff regulation № 10-01 will be guided by. The final result depends on this,” says the representative of Transles.
He adds that, in general, a division of the shares may be as follows: locomotive component - 20%, wagon/container component - 15%, infrastructure/terminal component - 60% and transportation services - 5%.
Anyway, regardless of the debate around what is meant by the transportation and terminal components of the tariff, the division of the locomotive component alone will have a major impact on the industry.
For example, the head of a railway operator said that his company would be interested to have their own locomotives and hence become a fully-fledged carrier, if not on the whole network than at least on a number of routes. However, he noted that this issue required careful consideration in terms of operation and maintenance of locomotives.
Experts at leasing companies claim that there are about 170 private locomotives on the railway network in Russia.
Before the crisis, the independent operators avoided acquiring locomotives because the lack of a corresponding component made it difficult to calculate the economic consequences of this purchase. Through the analogy with the allocation of the wagon component, which dramatically increased the private operators’ demand for wagons, the tariff innovations will inevitably cause the situation where the acquisition of the locomotives will be a much more clear operation in terms of costs, revenues and payback period of the investments.
Igor Ahpolov, the Leading Economic Expert of the Association of the Owners of Rolling Stock, draws attention to the following issue: “The tariff is calculated basing on the network-wide
highly averaged costs of RZD, while the tariffs for the use of funds (wagons, rail infrastructure, locomotives and etc.) are local and should be calculated basing on the economically justified costs in relation to the functioning of a specific object in a specific context (as stated in section 7 of the resolution).
Aggregated rate and so-called tariff components are two different things (both in their ideology and economic content).
To a certain extent the term “tariff components” can be applied only to the tariffs for RZD, as there is a redistribution of financial resources for the regional participants of the transportation process. These average rates and the term “tariff components” are thus not applicable to the rest of the owners.”
In this respect, warns the expert, there will be a lot of information and methodology issues to address in order to settle such an ambitious tariff affair. It is worth noting another crucial methodological aspect of the “fund” tariffs’ formation on the example of the current practice in calculating tariffs for the use of private owners’ wagons.
“In my opinion, it is wrong that the tariff for the use of the wagons is charged only if the rolling stock is on the move (it is a piece-rate tariff which is calculated on the basis of wagon per km). During the day the wagon is idle, on average, 75-80% of the time for various reasons. So, for three-quarters of the time, when the wagons are used, the rate is not charged, while depreciation is added. If RZD paid all the owners of the park for every hour when their wagons were at the company’s disposal, this would prevent such a disastrous state of affairs. A fund tariff should be formed on the “time” basis, taking into account the intensity of use during this time,” Mr Ahpolov adds.
Investors are welcome!
The resolution provides a number of mechanisms to stimulate investment in railway transportation facilities and the transportation process.
It basically means that if the subject of regulation reduces its costs while an investment project is being realised, the regulating agency does not cut its rates. Let us recall that the cost-based approach, as described above, means that if the cost is lower, the tariff is also lower, which demotivates the companies to reduce their costs.
In addition, this will allow the setting of tariffs not only for the whole railway network but also for certain directions or segments.
Dovran Garagozov, Advisor to Director General of Renova-Building-Group, is sure that the discussed measures would increase the volume of investments in railway infrastructure. Currently, a private company that wants to build its own branch line, say, to a deposit, can not expect any special tariff conditions, which often makes such projects meaningless.
“It may take 10-15 years to cover the costs of the railway line construction, so a range of available tariff options would be good for long-term projects. Both private companies and RZD will benefit from these opportunities. Due to the crisis, RZD is now facing a difficult situation where the income from the freight transportation is falling while the investment program is still extensive. As the result, a budget deficit occurs, which the government has to compensate for by using various measures. A more flexible tariff policy on certain directions may serve as another way to make up for falling revenues,” states Mr Garagozov.
It should be noted that RZD often faces the problem of an imbalance in infrastructure loading when some parts of the network are congested while others, on the contrary, are underloaded.
Exclusive tariffs do not help. This was proved a few years ago, when the monopoly granted exclusive rates for the transportation of metallurgical products to the Far Eastern ports, but the cargo owners still preferred the Baltic and Black Sea ports instead. Now the company, with the approval of the the Federal Tariff Service, will have the tools required to encourage cargo owners to choose certain directions for the mutual benefit of both sides.
Moreover, we might expect that the monopoly, in cooperation with stevedoring and shipping companies, will be able to offer a through rate to some groups of cargo owners, and thus put into practice the use of fully-fledged transport corridors, which have been under discussion for many years.
A heated discussion ahead
Further discussions about the specific methods to form the tariffs will be, in fact, a debate over the appropriate approaches to each specific aspect of the problem. “The future of the resolution depends on the quality of this debate and the principles which we are going to use,” said an RZD representative. “Today the legislation on natural monopolies clearly states which activities on the railways are monopolies, but does not explain why they belong to this category. This is also a matter of point of view.”
Ivan Stupachenko
interview
RZD-Partner asked Vitaly Evdokimenko, the Deputy Head of the Federal Tariffs Service, to comment on the new resolution on the pricing in the railway transport industry.
– Mr Evdokimenko, what does the document, which has been awaited for so long, give in terms of state policy on tariff regulation?
– Having taken this decision, the government of the RF has completed the formation of the legal framework for the state regulation of tariffs for services of natural monopolies.
This document allows us to create a sufficiently flexible system of state tariff regulation, depending on the objectives for the further implementation of structural reform which will be determined in 2010.
The resolution ensures the conditions for sustainable operation of the railway industry and its profitability. The basic method of control is to determine the economically justified costs. If a decision to limit the level of tariffs, fees and charges to ensure their availability to the population and the competitiveness of the country’s economy is taken, the appropriate measures of state support are to be implemented in order to compensate for the loss of income caused by the new tariff regulation.
In accordance with the resolution the formation of the economically sound tariffs, fees and charges will be based on separate accounting of the expenditures and revenues divided by the types of activities, tariff components and aggregated types of works. Let me recall that RZD introduced separate accounting in January 2008. However, while determining the economically justified costs, the regulatory agency has the right not to consider the costs of the inefficient activities of natural monopolies. In other words, in future tariff rates will be reduced at the amount of these costs, which are adopted as a source of compensation.
– Will the tariff include the investment component?
– It is not planned to include the investment component directly in the regulated tariff. The new resolution allows the formation of tariffs on the basis of economically justified costs and regulatory return, taking into account the needs for investment resources. Based on the methodology, which is to be adopted by Federal Tariff Service, normative profit will be determined by the regulatory agency, considering the cost of fixed assets and other assets, as well as the rate of return on capital. Initially the government of the RF used to examine and adopt the investment programs of the major subjects of natural monopolies. We determined the net profit, which the company required in order to implement the government-approved investment program, and calculated the tariff rate. The resolution allows attracting investments and enhancing the internal efficiency of natural monopolies.
It is planned not to take into consideration a decrease in the subject’s expenditures caused by the realisation of the investment project within the time when the gross receipt is calculated and two years after this.
Originally, as soon as the realisation of the investment projects, such as those related to the resource saving, were finished, we took into account the economic effect, reflected in a reduction of the expenditures, and reduced the tariffs. The subject of natural monopoly was discouraged in terms of implementation of the activities aimed at improving the efficiency of its business.
In order to attract investment in infrastructure modernisation and development of rail transport in certain segments related to the implementation of various projects and construction of production facilities, local tariffs are preferable, which will include some of the investment component aimed at the compensation for the costs of the infrastructure owners.
For example, if the investors are interested in developing their own railway infrastructure project, it is possible that the infrastructure owner - namely RZD - will finance the project in a specific market segment, while the state will set a separate tariff system, allowing the owner to ensure a payback on its investments.
– Will the new system of regulation promote competition in the transport market?
– The resolution provides an opportunity to establish not only a fixed value of tariffs, fees and charges, but also the marginal rates. This will allow the infrastructure company to respond flexibly to the market conditions during the transition period. Natural monopolies will be granted the right to set their own tariffs. However, this mechanism is necessary only in those market segments which are being transformed from a natural monopoly to a competitive market. Otherwise there is no need to transfer from fixed rates to marginal rates.
– When will the resolution fully come into effect?
– The appropriate legislation is still required for this resolution. In particular, it is necessary to amend the existing decree of the Ministry of Transport on approving the separate accounting of revenues, expenditures and financial results divided by the types of activities, tariff components and aggregated types of works.
Furthermore the government has to adopt the rules granting exclusive rates by the government decree. Federal Tariff Service has to develop and adopt the method of calculation of economically justified costs and regulatory returns. We plan to accomplish this mission by July 1, 2010.
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[SECTION_META_DESCRIPTION] => <img src="/ufiles/image/rus/partner/2009/4/7.jpg" border="1" alt=" " hspace="5" width="200" height="300" align="left" />The government of the RF adopted a resolution on the state regulation and control of tariffs, fees, charges and natural monopolies work on rail transport, which forms the framework for the entire system of tariff regulation. Among the innovations is the new six-component structure of the tariff, marginal price fixing, and the opportunity to set the price for services within selected market segments or on particular directions. The industry’s experts believe that the quality of debate surrounding the statutory acts, which will determine the mechanisms of how these new ideas will be implemented, could ensure the success of these regulations.
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[DETAIL_TEXT] => The limits of what is possible
This document, according to Sergey Novikov, Head of Federal Tariff Service of Russia, is “institutional” by its nature and lays the foundation for the whole “architecture” of pricing on railway transport. The resolution outlines the contours for the other documents which will, in turn, set the tariffs and the order of their application (see the interview with Vitaly Evdokimenko, Deputy Head of the Federal Tariffs Service).
Among the significant innovations it is worth noting, in the first place, the allocation of the six components of the tariff. The locomotive, terminal, transportation and railway station components were added to the wagon (container) and infrastructure components.
It should be emphasised that the resolution only allows these components to be within the tariff structure but it does not make them mandatory. Time will tell whether these components are necessary for market participants or if the latter deem it necessary to leave everything as it is now, i.e. infrastructure and wagon components alone.
Another interesting issue of the new resolution is the marginal pricing. Such a mechanism would allow the regulating body to reduce rates, if necessary, and thus respond flexibly to the changing market climate. However, as the representatives of the Federal Tariff Service specify, this measure can be applied only in those segments where competition exists. In those sectors where monopoly prevails, prices will remain fixed.
Finally, the third fundamental innovation offers the possibility to establish “exclusive” rates, operating either in a particular market segment or on a particular direction, in contrast to the existing system of tariffs, based on the average network costs.
It is still not clear how these special rates will be calculated and approved, but these will obviously become a matter of heated discussion for the all interested parties.
Is six better than three?
Market participants and industry experts agree that the extent and the effectiveness of the innovations will depend entirely on their specific configuration, as embodied in legal acts which still need to be enacted. Obviously, this process may take several years. And this is not due to the possible mismatch in the positions of the players involved, but due to the need to collect large amounts of information and elaborate the methodology.
However, market participants are already discussing their perspectives, bearing in mind the regulations of the resolution.
One RZD expert, who had been engaged in working out the resolution for many years, said that the allocation of terminal, railway station and transport components was not justified. “We consider them as a part of the infrastructure, as a part of the whole. Now a single transportation process is split up, and the subject of regulation has to determine what, for example, a transportation component is. This notion appeared in this resolution for the first time,” added the company representative.
Evgeny Drachev, Director for Economics and Finance of Transles, who was in charge of the tariff policy for the monopolies in the Ministry of Economic Development and Commerce (now Ministry of Economic Development), recalls: “The concept of the new Tariff regulation № 10-01 included only three components: wagon, infrastructural and locomotive, which implied that the services were divided into monopoly (infrastructure), natural monopoly (locomotive) and competitive (wagon) sectors. The resolution suggests another three components that were not considered previously within the respective ministries and departments. Time will tell if it is valid to choose these segments. It is not clear what will be understood by the terminal and transportation components.” However, he noted: “Of course, this decision will make the tariff policy more flexible.
It is certainly interesting to see how all the components of the tariff will be distributed in percentage terms. The sooner this issue is clarified, the sooner the carriers, rail operators, logistics companies and other investors can assess the investment expediency in freight terminals, railway stations and businesses related to transportation.
Taking into account that, as the Federal Tariff Service promises, the total transportation costs will not be increased as a result of the new resolution and the components will be allocated from the existing rate, it becomes apparent that the weight of each component will be calculated based on the costs which it incurs.
It is worth recalling that the Federal Tariffs Service did not abandon a cost-based method for calculating the tariffs, which is formed basing on the costs of the subject of regulation, depreciation and rate of return.
Hence, as Mr Drachev points out, it is quite possible to use the form №6-zel (a corporate statistical report of RZD), where the entire prime cost for the company’s transportations is divided into the components according both to the departments and the elements of cost. “There still remains a question as to what the developers of the new concept of the Tariff regulation № 10-01 will be guided by. The final result depends on this,” says the representative of Transles.
He adds that, in general, a division of the shares may be as follows: locomotive component - 20%, wagon/container component - 15%, infrastructure/terminal component - 60% and transportation services - 5%.
Anyway, regardless of the debate around what is meant by the transportation and terminal components of the tariff, the division of the locomotive component alone will have a major impact on the industry.
For example, the head of a railway operator said that his company would be interested to have their own locomotives and hence become a fully-fledged carrier, if not on the whole network than at least on a number of routes. However, he noted that this issue required careful consideration in terms of operation and maintenance of locomotives.
Experts at leasing companies claim that there are about 170 private locomotives on the railway network in Russia.
Before the crisis, the independent operators avoided acquiring locomotives because the lack of a corresponding component made it difficult to calculate the economic consequences of this purchase. Through the analogy with the allocation of the wagon component, which dramatically increased the private operators’ demand for wagons, the tariff innovations will inevitably cause the situation where the acquisition of the locomotives will be a much more clear operation in terms of costs, revenues and payback period of the investments.
Igor Ahpolov, the Leading Economic Expert of the Association of the Owners of Rolling Stock, draws attention to the following issue: “The tariff is calculated basing on the network-wide
highly averaged costs of RZD, while the tariffs for the use of funds (wagons, rail infrastructure, locomotives and etc.) are local and should be calculated basing on the economically justified costs in relation to the functioning of a specific object in a specific context (as stated in section 7 of the resolution).
Aggregated rate and so-called tariff components are two different things (both in their ideology and economic content).
To a certain extent the term “tariff components” can be applied only to the tariffs for RZD, as there is a redistribution of financial resources for the regional participants of the transportation process. These average rates and the term “tariff components” are thus not applicable to the rest of the owners.”
In this respect, warns the expert, there will be a lot of information and methodology issues to address in order to settle such an ambitious tariff affair. It is worth noting another crucial methodological aspect of the “fund” tariffs’ formation on the example of the current practice in calculating tariffs for the use of private owners’ wagons.
“In my opinion, it is wrong that the tariff for the use of the wagons is charged only if the rolling stock is on the move (it is a piece-rate tariff which is calculated on the basis of wagon per km). During the day the wagon is idle, on average, 75-80% of the time for various reasons. So, for three-quarters of the time, when the wagons are used, the rate is not charged, while depreciation is added. If RZD paid all the owners of the park for every hour when their wagons were at the company’s disposal, this would prevent such a disastrous state of affairs. A fund tariff should be formed on the “time” basis, taking into account the intensity of use during this time,” Mr Ahpolov adds.
Investors are welcome!
The resolution provides a number of mechanisms to stimulate investment in railway transportation facilities and the transportation process.
It basically means that if the subject of regulation reduces its costs while an investment project is being realised, the regulating agency does not cut its rates. Let us recall that the cost-based approach, as described above, means that if the cost is lower, the tariff is also lower, which demotivates the companies to reduce their costs.
In addition, this will allow the setting of tariffs not only for the whole railway network but also for certain directions or segments.
Dovran Garagozov, Advisor to Director General of Renova-Building-Group, is sure that the discussed measures would increase the volume of investments in railway infrastructure. Currently, a private company that wants to build its own branch line, say, to a deposit, can not expect any special tariff conditions, which often makes such projects meaningless.
“It may take 10-15 years to cover the costs of the railway line construction, so a range of available tariff options would be good for long-term projects. Both private companies and RZD will benefit from these opportunities. Due to the crisis, RZD is now facing a difficult situation where the income from the freight transportation is falling while the investment program is still extensive. As the result, a budget deficit occurs, which the government has to compensate for by using various measures. A more flexible tariff policy on certain directions may serve as another way to make up for falling revenues,” states Mr Garagozov.
It should be noted that RZD often faces the problem of an imbalance in infrastructure loading when some parts of the network are congested while others, on the contrary, are underloaded.
Exclusive tariffs do not help. This was proved a few years ago, when the monopoly granted exclusive rates for the transportation of metallurgical products to the Far Eastern ports, but the cargo owners still preferred the Baltic and Black Sea ports instead. Now the company, with the approval of the the Federal Tariff Service, will have the tools required to encourage cargo owners to choose certain directions for the mutual benefit of both sides.
Moreover, we might expect that the monopoly, in cooperation with stevedoring and shipping companies, will be able to offer a through rate to some groups of cargo owners, and thus put into practice the use of fully-fledged transport corridors, which have been under discussion for many years.
A heated discussion ahead
Further discussions about the specific methods to form the tariffs will be, in fact, a debate over the appropriate approaches to each specific aspect of the problem. “The future of the resolution depends on the quality of this debate and the principles which we are going to use,” said an RZD representative. “Today the legislation on natural monopolies clearly states which activities on the railways are monopolies, but does not explain why they belong to this category. This is also a matter of point of view.”
Ivan Stupachenko
interview
RZD-Partner asked Vitaly Evdokimenko, the Deputy Head of the Federal Tariffs Service, to comment on the new resolution on the pricing in the railway transport industry.
– Mr Evdokimenko, what does the document, which has been awaited for so long, give in terms of state policy on tariff regulation?
– Having taken this decision, the government of the RF has completed the formation of the legal framework for the state regulation of tariffs for services of natural monopolies.
This document allows us to create a sufficiently flexible system of state tariff regulation, depending on the objectives for the further implementation of structural reform which will be determined in 2010.
The resolution ensures the conditions for sustainable operation of the railway industry and its profitability. The basic method of control is to determine the economically justified costs. If a decision to limit the level of tariffs, fees and charges to ensure their availability to the population and the competitiveness of the country’s economy is taken, the appropriate measures of state support are to be implemented in order to compensate for the loss of income caused by the new tariff regulation.
In accordance with the resolution the formation of the economically sound tariffs, fees and charges will be based on separate accounting of the expenditures and revenues divided by the types of activities, tariff components and aggregated types of works. Let me recall that RZD introduced separate accounting in January 2008. However, while determining the economically justified costs, the regulatory agency has the right not to consider the costs of the inefficient activities of natural monopolies. In other words, in future tariff rates will be reduced at the amount of these costs, which are adopted as a source of compensation.
– Will the tariff include the investment component?
– It is not planned to include the investment component directly in the regulated tariff. The new resolution allows the formation of tariffs on the basis of economically justified costs and regulatory return, taking into account the needs for investment resources. Based on the methodology, which is to be adopted by Federal Tariff Service, normative profit will be determined by the regulatory agency, considering the cost of fixed assets and other assets, as well as the rate of return on capital. Initially the government of the RF used to examine and adopt the investment programs of the major subjects of natural monopolies. We determined the net profit, which the company required in order to implement the government-approved investment program, and calculated the tariff rate. The resolution allows attracting investments and enhancing the internal efficiency of natural monopolies.
It is planned not to take into consideration a decrease in the subject’s expenditures caused by the realisation of the investment project within the time when the gross receipt is calculated and two years after this.
Originally, as soon as the realisation of the investment projects, such as those related to the resource saving, were finished, we took into account the economic effect, reflected in a reduction of the expenditures, and reduced the tariffs. The subject of natural monopoly was discouraged in terms of implementation of the activities aimed at improving the efficiency of its business.
In order to attract investment in infrastructure modernisation and development of rail transport in certain segments related to the implementation of various projects and construction of production facilities, local tariffs are preferable, which will include some of the investment component aimed at the compensation for the costs of the infrastructure owners.
For example, if the investors are interested in developing their own railway infrastructure project, it is possible that the infrastructure owner - namely RZD - will finance the project in a specific market segment, while the state will set a separate tariff system, allowing the owner to ensure a payback on its investments.
– Will the new system of regulation promote competition in the transport market?
– The resolution provides an opportunity to establish not only a fixed value of tariffs, fees and charges, but also the marginal rates. This will allow the infrastructure company to respond flexibly to the market conditions during the transition period. Natural monopolies will be granted the right to set their own tariffs. However, this mechanism is necessary only in those market segments which are being transformed from a natural monopoly to a competitive market. Otherwise there is no need to transfer from fixed rates to marginal rates.
– When will the resolution fully come into effect?
– The appropriate legislation is still required for this resolution. In particular, it is necessary to amend the existing decree of the Ministry of Transport on approving the separate accounting of revenues, expenditures and financial results divided by the types of activities, tariff components and aggregated types of works.
Furthermore the government has to adopt the rules granting exclusive rates by the government decree. Federal Tariff Service has to develop and adopt the method of calculation of economically justified costs and regulatory returns. We plan to accomplish this mission by July 1, 2010.
[~DETAIL_TEXT] => The limits of what is possible
This document, according to Sergey Novikov, Head of Federal Tariff Service of Russia, is “institutional” by its nature and lays the foundation for the whole “architecture” of pricing on railway transport. The resolution outlines the contours for the other documents which will, in turn, set the tariffs and the order of their application (see the interview with Vitaly Evdokimenko, Deputy Head of the Federal Tariffs Service).
Among the significant innovations it is worth noting, in the first place, the allocation of the six components of the tariff. The locomotive, terminal, transportation and railway station components were added to the wagon (container) and infrastructure components.
It should be emphasised that the resolution only allows these components to be within the tariff structure but it does not make them mandatory. Time will tell whether these components are necessary for market participants or if the latter deem it necessary to leave everything as it is now, i.e. infrastructure and wagon components alone.
Another interesting issue of the new resolution is the marginal pricing. Such a mechanism would allow the regulating body to reduce rates, if necessary, and thus respond flexibly to the changing market climate. However, as the representatives of the Federal Tariff Service specify, this measure can be applied only in those segments where competition exists. In those sectors where monopoly prevails, prices will remain fixed.
Finally, the third fundamental innovation offers the possibility to establish “exclusive” rates, operating either in a particular market segment or on a particular direction, in contrast to the existing system of tariffs, based on the average network costs.
It is still not clear how these special rates will be calculated and approved, but these will obviously become a matter of heated discussion for the all interested parties.
Is six better than three?
Market participants and industry experts agree that the extent and the effectiveness of the innovations will depend entirely on their specific configuration, as embodied in legal acts which still need to be enacted. Obviously, this process may take several years. And this is not due to the possible mismatch in the positions of the players involved, but due to the need to collect large amounts of information and elaborate the methodology.
However, market participants are already discussing their perspectives, bearing in mind the regulations of the resolution.
One RZD expert, who had been engaged in working out the resolution for many years, said that the allocation of terminal, railway station and transport components was not justified. “We consider them as a part of the infrastructure, as a part of the whole. Now a single transportation process is split up, and the subject of regulation has to determine what, for example, a transportation component is. This notion appeared in this resolution for the first time,” added the company representative.
Evgeny Drachev, Director for Economics and Finance of Transles, who was in charge of the tariff policy for the monopolies in the Ministry of Economic Development and Commerce (now Ministry of Economic Development), recalls: “The concept of the new Tariff regulation № 10-01 included only three components: wagon, infrastructural and locomotive, which implied that the services were divided into monopoly (infrastructure), natural monopoly (locomotive) and competitive (wagon) sectors. The resolution suggests another three components that were not considered previously within the respective ministries and departments. Time will tell if it is valid to choose these segments. It is not clear what will be understood by the terminal and transportation components.” However, he noted: “Of course, this decision will make the tariff policy more flexible.
It is certainly interesting to see how all the components of the tariff will be distributed in percentage terms. The sooner this issue is clarified, the sooner the carriers, rail operators, logistics companies and other investors can assess the investment expediency in freight terminals, railway stations and businesses related to transportation.
Taking into account that, as the Federal Tariff Service promises, the total transportation costs will not be increased as a result of the new resolution and the components will be allocated from the existing rate, it becomes apparent that the weight of each component will be calculated based on the costs which it incurs.
It is worth recalling that the Federal Tariffs Service did not abandon a cost-based method for calculating the tariffs, which is formed basing on the costs of the subject of regulation, depreciation and rate of return.
Hence, as Mr Drachev points out, it is quite possible to use the form №6-zel (a corporate statistical report of RZD), where the entire prime cost for the company’s transportations is divided into the components according both to the departments and the elements of cost. “There still remains a question as to what the developers of the new concept of the Tariff regulation № 10-01 will be guided by. The final result depends on this,” says the representative of Transles.
He adds that, in general, a division of the shares may be as follows: locomotive component - 20%, wagon/container component - 15%, infrastructure/terminal component - 60% and transportation services - 5%.
Anyway, regardless of the debate around what is meant by the transportation and terminal components of the tariff, the division of the locomotive component alone will have a major impact on the industry.
For example, the head of a railway operator said that his company would be interested to have their own locomotives and hence become a fully-fledged carrier, if not on the whole network than at least on a number of routes. However, he noted that this issue required careful consideration in terms of operation and maintenance of locomotives.
Experts at leasing companies claim that there are about 170 private locomotives on the railway network in Russia.
Before the crisis, the independent operators avoided acquiring locomotives because the lack of a corresponding component made it difficult to calculate the economic consequences of this purchase. Through the analogy with the allocation of the wagon component, which dramatically increased the private operators’ demand for wagons, the tariff innovations will inevitably cause the situation where the acquisition of the locomotives will be a much more clear operation in terms of costs, revenues and payback period of the investments.
Igor Ahpolov, the Leading Economic Expert of the Association of the Owners of Rolling Stock, draws attention to the following issue: “The tariff is calculated basing on the network-wide
highly averaged costs of RZD, while the tariffs for the use of funds (wagons, rail infrastructure, locomotives and etc.) are local and should be calculated basing on the economically justified costs in relation to the functioning of a specific object in a specific context (as stated in section 7 of the resolution).
Aggregated rate and so-called tariff components are two different things (both in their ideology and economic content).
To a certain extent the term “tariff components” can be applied only to the tariffs for RZD, as there is a redistribution of financial resources for the regional participants of the transportation process. These average rates and the term “tariff components” are thus not applicable to the rest of the owners.”
In this respect, warns the expert, there will be a lot of information and methodology issues to address in order to settle such an ambitious tariff affair. It is worth noting another crucial methodological aspect of the “fund” tariffs’ formation on the example of the current practice in calculating tariffs for the use of private owners’ wagons.
“In my opinion, it is wrong that the tariff for the use of the wagons is charged only if the rolling stock is on the move (it is a piece-rate tariff which is calculated on the basis of wagon per km). During the day the wagon is idle, on average, 75-80% of the time for various reasons. So, for three-quarters of the time, when the wagons are used, the rate is not charged, while depreciation is added. If RZD paid all the owners of the park for every hour when their wagons were at the company’s disposal, this would prevent such a disastrous state of affairs. A fund tariff should be formed on the “time” basis, taking into account the intensity of use during this time,” Mr Ahpolov adds.
Investors are welcome!
The resolution provides a number of mechanisms to stimulate investment in railway transportation facilities and the transportation process.
It basically means that if the subject of regulation reduces its costs while an investment project is being realised, the regulating agency does not cut its rates. Let us recall that the cost-based approach, as described above, means that if the cost is lower, the tariff is also lower, which demotivates the companies to reduce their costs.
In addition, this will allow the setting of tariffs not only for the whole railway network but also for certain directions or segments.
Dovran Garagozov, Advisor to Director General of Renova-Building-Group, is sure that the discussed measures would increase the volume of investments in railway infrastructure. Currently, a private company that wants to build its own branch line, say, to a deposit, can not expect any special tariff conditions, which often makes such projects meaningless.
“It may take 10-15 years to cover the costs of the railway line construction, so a range of available tariff options would be good for long-term projects. Both private companies and RZD will benefit from these opportunities. Due to the crisis, RZD is now facing a difficult situation where the income from the freight transportation is falling while the investment program is still extensive. As the result, a budget deficit occurs, which the government has to compensate for by using various measures. A more flexible tariff policy on certain directions may serve as another way to make up for falling revenues,” states Mr Garagozov.
It should be noted that RZD often faces the problem of an imbalance in infrastructure loading when some parts of the network are congested while others, on the contrary, are underloaded.
Exclusive tariffs do not help. This was proved a few years ago, when the monopoly granted exclusive rates for the transportation of metallurgical products to the Far Eastern ports, but the cargo owners still preferred the Baltic and Black Sea ports instead. Now the company, with the approval of the the Federal Tariff Service, will have the tools required to encourage cargo owners to choose certain directions for the mutual benefit of both sides.
Moreover, we might expect that the monopoly, in cooperation with stevedoring and shipping companies, will be able to offer a through rate to some groups of cargo owners, and thus put into practice the use of fully-fledged transport corridors, which have been under discussion for many years.
A heated discussion ahead
Further discussions about the specific methods to form the tariffs will be, in fact, a debate over the appropriate approaches to each specific aspect of the problem. “The future of the resolution depends on the quality of this debate and the principles which we are going to use,” said an RZD representative. “Today the legislation on natural monopolies clearly states which activities on the railways are monopolies, but does not explain why they belong to this category. This is also a matter of point of view.”
Ivan Stupachenko
interview
RZD-Partner asked Vitaly Evdokimenko, the Deputy Head of the Federal Tariffs Service, to comment on the new resolution on the pricing in the railway transport industry.
– Mr Evdokimenko, what does the document, which has been awaited for so long, give in terms of state policy on tariff regulation?
– Having taken this decision, the government of the RF has completed the formation of the legal framework for the state regulation of tariffs for services of natural monopolies.
This document allows us to create a sufficiently flexible system of state tariff regulation, depending on the objectives for the further implementation of structural reform which will be determined in 2010.
The resolution ensures the conditions for sustainable operation of the railway industry and its profitability. The basic method of control is to determine the economically justified costs. If a decision to limit the level of tariffs, fees and charges to ensure their availability to the population and the competitiveness of the country’s economy is taken, the appropriate measures of state support are to be implemented in order to compensate for the loss of income caused by the new tariff regulation.
In accordance with the resolution the formation of the economically sound tariffs, fees and charges will be based on separate accounting of the expenditures and revenues divided by the types of activities, tariff components and aggregated types of works. Let me recall that RZD introduced separate accounting in January 2008. However, while determining the economically justified costs, the regulatory agency has the right not to consider the costs of the inefficient activities of natural monopolies. In other words, in future tariff rates will be reduced at the amount of these costs, which are adopted as a source of compensation.
– Will the tariff include the investment component?
– It is not planned to include the investment component directly in the regulated tariff. The new resolution allows the formation of tariffs on the basis of economically justified costs and regulatory return, taking into account the needs for investment resources. Based on the methodology, which is to be adopted by Federal Tariff Service, normative profit will be determined by the regulatory agency, considering the cost of fixed assets and other assets, as well as the rate of return on capital. Initially the government of the RF used to examine and adopt the investment programs of the major subjects of natural monopolies. We determined the net profit, which the company required in order to implement the government-approved investment program, and calculated the tariff rate. The resolution allows attracting investments and enhancing the internal efficiency of natural monopolies.
It is planned not to take into consideration a decrease in the subject’s expenditures caused by the realisation of the investment project within the time when the gross receipt is calculated and two years after this.
Originally, as soon as the realisation of the investment projects, such as those related to the resource saving, were finished, we took into account the economic effect, reflected in a reduction of the expenditures, and reduced the tariffs. The subject of natural monopoly was discouraged in terms of implementation of the activities aimed at improving the efficiency of its business.
In order to attract investment in infrastructure modernisation and development of rail transport in certain segments related to the implementation of various projects and construction of production facilities, local tariffs are preferable, which will include some of the investment component aimed at the compensation for the costs of the infrastructure owners.
For example, if the investors are interested in developing their own railway infrastructure project, it is possible that the infrastructure owner - namely RZD - will finance the project in a specific market segment, while the state will set a separate tariff system, allowing the owner to ensure a payback on its investments.
– Will the new system of regulation promote competition in the transport market?
– The resolution provides an opportunity to establish not only a fixed value of tariffs, fees and charges, but also the marginal rates. This will allow the infrastructure company to respond flexibly to the market conditions during the transition period. Natural monopolies will be granted the right to set their own tariffs. However, this mechanism is necessary only in those market segments which are being transformed from a natural monopoly to a competitive market. Otherwise there is no need to transfer from fixed rates to marginal rates.
– When will the resolution fully come into effect?
– The appropriate legislation is still required for this resolution. In particular, it is necessary to amend the existing decree of the Ministry of Transport on approving the separate accounting of revenues, expenditures and financial results divided by the types of activities, tariff components and aggregated types of works.
Furthermore the government has to adopt the rules granting exclusive rates by the government decree. Federal Tariff Service has to develop and adopt the method of calculation of economically justified costs and regulatory returns. We plan to accomplish this mission by July 1, 2010.
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[ELEMENT_META_DESCRIPTION] => <img src="/ufiles/image/rus/partner/2009/4/7.jpg" border="1" alt=" " hspace="5" width="200" height="300" align="left" />The government of the RF adopted a resolution on the state regulation and control of tariffs, fees, charges and natural monopolies work on rail transport, which forms the framework for the entire system of tariff regulation. Among the innovations is the new six-component structure of the tariff, marginal price fixing, and the opportunity to set the price for services within selected market segments or on particular directions. The industry’s experts believe that the quality of debate surrounding the statutory acts, which will determine the mechanisms of how these new ideas will be implemented, could ensure the success of these regulations.
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