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Practice shows that the major growth in the number of new clients at RZD network is caused by intermodal transportation development, and the importance of this sector will only increase. Logistic Operator LLC is one of the leaders in this sector.
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[DETAIL_TEXT] => The company works in the Russian transport services market and carries out projects to form packs of services in the complex and contract logistics sector, which is the most prospective part of the transport and logistic services market. At the same time, Logistic Operator is a system operator specialising in dispatch/receipt of cargoes from Europe, South-East Asia, Africa, and America, and those carried in fast container trains to the Central European Russia.
The main target of the company’s activity is provision of logistic services in turn-key and door-to-door schemes, which include port handling, cargo dispatch from ports in fast container trains, servicing the cargo at warehousing terminals, organisation of customs formalities passing, delivery to the client’s warehouse, and optimisation of cargo transportation schemes taking into account all links of the logistic chain. Specialists of the company use railways for land transportation, because this is the most eco-friendly transport mode.
On June 1, 2010, Logistic Operator and Russian Railways signed an agreement on cooperation and interaction in the issues of complex and contract logistics. The subject of the agreement is attraction of additional volume of container freight flow to the Russian railway network and maximum use of RZD holding company’s infrastructure and assets.
In the framework of the obligations it assumed according to the agreement with RZD, Logistic Operator concluded long-term contracts on through transportation of cargo carried to the destination point in containers by railway.
Among the companies that signed the contracts, there are world famous brands and representatives of Russian largest retail trade networks: Adidas, Auchan, IKEA, Leroy Merlin, Samsung, Toshiba, Colgate-Palmolive, Metro Cash&Carry, Tetra Pak, Castorama, Toyota, Procter&Gamble, Mitsubishi, profine RUS, United Confectionary Manufacturers (Babaevsky, Rot-Front, Red October), Centrobuv, and a lot of others. It is worth mentioning that most these companies did not use railway cargo transportation services before.
To fulfill the contracts, Logistic Operator concluded relative agreements with sea container lines (APL, MSC, Maersk etc.) and launched through railway services. Loaded containers are carried from sea ports by fast container block trains – Tallinn (Muuga) – Moscow-Tovarnaya (“Moscow Express”), Riga – Moscow-Tovarnaya (“Riga Express”), St Petersburg – Moscow-Tovarnaya (“St Petersburg Express”) etc., then cargo is transported by road vehicles to the place named by the client (“to door”).
Train traffic is scheduled. Trains go in both directions, when moving backwards, they carry empty boxes to the sea lines’ depots. The company has also started to carry out the project to redirect from road to railways a part of the freight flow destined for AvtoVaz and other clients at the destination railway station Tolyatti of the Kuybyshev Railway. The company is going to launch similar container block trains on the lines Odessa – Moscow, Novorossiysk – Moscow, Klaipeda – Moscow.
The basic components of the company’s service are delivery speed, cargo safety, and customer focus as the basis of the corporate business-philosophy. Taking into account the quality of the service, adopted ecological programmes in the activity of clients, the demand for the services of Logistic Operator grows every quarter (especially that for containers dispatch in the framework of the existing container block trains).
The volume planned for transportation by these cargo owners can hardly be carried by road transport from economic and technological standpoints. Taking into account their striving to reduce the transport constituent in the cost of the goods, and ecological consequences of their activity, they are eager to use more eco-friendly transport (railways), while full transfer to road haulages conflicts with their concept and ideology.
As of November 3, 2011 (from the beginning of the year), just on the basic lines, Logistic Operator company transported 89 container trains from Muuga to Moscow (46 ran back), 12 trains from Riga (15 ran backwards), 61 trains from St Petersburg (Avtovo/Shushary) to Moscow, and 92 fast container trains backwards.
The example of Logistic Operator demonstrates that the real success takes place when new business-ideas are efficiently combined with enormous experience, professionalism, and thorough attention to the smallest details.
Nowadays, when the importance of intermodal transportation is recognised at the highest level, it is possible to say that transport companies and the whole business community have got a guiding landmark for verifying the planned schemes and marketing strategies. Anyway, any remarkable business-project will base on the experience of Logistic Operator company.
By Dmitry Hancevich
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The main target of the company’s activity is provision of logistic services in turn-key and door-to-door schemes, which include port handling, cargo dispatch from ports in fast container trains, servicing the cargo at warehousing terminals, organisation of customs formalities passing, delivery to the client’s warehouse, and optimisation of cargo transportation schemes taking into account all links of the logistic chain. Specialists of the company use railways for land transportation, because this is the most eco-friendly transport mode.
On June 1, 2010, Logistic Operator and Russian Railways signed an agreement on cooperation and interaction in the issues of complex and contract logistics. The subject of the agreement is attraction of additional volume of container freight flow to the Russian railway network and maximum use of RZD holding company’s infrastructure and assets.
In the framework of the obligations it assumed according to the agreement with RZD, Logistic Operator concluded long-term contracts on through transportation of cargo carried to the destination point in containers by railway.
Among the companies that signed the contracts, there are world famous brands and representatives of Russian largest retail trade networks: Adidas, Auchan, IKEA, Leroy Merlin, Samsung, Toshiba, Colgate-Palmolive, Metro Cash&Carry, Tetra Pak, Castorama, Toyota, Procter&Gamble, Mitsubishi, profine RUS, United Confectionary Manufacturers (Babaevsky, Rot-Front, Red October), Centrobuv, and a lot of others. It is worth mentioning that most these companies did not use railway cargo transportation services before.
To fulfill the contracts, Logistic Operator concluded relative agreements with sea container lines (APL, MSC, Maersk etc.) and launched through railway services. Loaded containers are carried from sea ports by fast container block trains – Tallinn (Muuga) – Moscow-Tovarnaya (“Moscow Express”), Riga – Moscow-Tovarnaya (“Riga Express”), St Petersburg – Moscow-Tovarnaya (“St Petersburg Express”) etc., then cargo is transported by road vehicles to the place named by the client (“to door”).
Train traffic is scheduled. Trains go in both directions, when moving backwards, they carry empty boxes to the sea lines’ depots. The company has also started to carry out the project to redirect from road to railways a part of the freight flow destined for AvtoVaz and other clients at the destination railway station Tolyatti of the Kuybyshev Railway. The company is going to launch similar container block trains on the lines Odessa – Moscow, Novorossiysk – Moscow, Klaipeda – Moscow.
The basic components of the company’s service are delivery speed, cargo safety, and customer focus as the basis of the corporate business-philosophy. Taking into account the quality of the service, adopted ecological programmes in the activity of clients, the demand for the services of Logistic Operator grows every quarter (especially that for containers dispatch in the framework of the existing container block trains).
The volume planned for transportation by these cargo owners can hardly be carried by road transport from economic and technological standpoints. Taking into account their striving to reduce the transport constituent in the cost of the goods, and ecological consequences of their activity, they are eager to use more eco-friendly transport (railways), while full transfer to road haulages conflicts with their concept and ideology.
As of November 3, 2011 (from the beginning of the year), just on the basic lines, Logistic Operator company transported 89 container trains from Muuga to Moscow (46 ran back), 12 trains from Riga (15 ran backwards), 61 trains from St Petersburg (Avtovo/Shushary) to Moscow, and 92 fast container trains backwards.
The example of Logistic Operator demonstrates that the real success takes place when new business-ideas are efficiently combined with enormous experience, professionalism, and thorough attention to the smallest details.
Nowadays, when the importance of intermodal transportation is recognised at the highest level, it is possible to say that transport companies and the whole business community have got a guiding landmark for verifying the planned schemes and marketing strategies. Anyway, any remarkable business-project will base on the experience of Logistic Operator company.
By Dmitry Hancevich
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[DETAIL_TEXT] => The company works in the Russian transport services market and carries out projects to form packs of services in the complex and contract logistics sector, which is the most prospective part of the transport and logistic services market. At the same time, Logistic Operator is a system operator specialising in dispatch/receipt of cargoes from Europe, South-East Asia, Africa, and America, and those carried in fast container trains to the Central European Russia.
The main target of the company’s activity is provision of logistic services in turn-key and door-to-door schemes, which include port handling, cargo dispatch from ports in fast container trains, servicing the cargo at warehousing terminals, organisation of customs formalities passing, delivery to the client’s warehouse, and optimisation of cargo transportation schemes taking into account all links of the logistic chain. Specialists of the company use railways for land transportation, because this is the most eco-friendly transport mode.
On June 1, 2010, Logistic Operator and Russian Railways signed an agreement on cooperation and interaction in the issues of complex and contract logistics. The subject of the agreement is attraction of additional volume of container freight flow to the Russian railway network and maximum use of RZD holding company’s infrastructure and assets.
In the framework of the obligations it assumed according to the agreement with RZD, Logistic Operator concluded long-term contracts on through transportation of cargo carried to the destination point in containers by railway.
Among the companies that signed the contracts, there are world famous brands and representatives of Russian largest retail trade networks: Adidas, Auchan, IKEA, Leroy Merlin, Samsung, Toshiba, Colgate-Palmolive, Metro Cash&Carry, Tetra Pak, Castorama, Toyota, Procter&Gamble, Mitsubishi, profine RUS, United Confectionary Manufacturers (Babaevsky, Rot-Front, Red October), Centrobuv, and a lot of others. It is worth mentioning that most these companies did not use railway cargo transportation services before.
To fulfill the contracts, Logistic Operator concluded relative agreements with sea container lines (APL, MSC, Maersk etc.) and launched through railway services. Loaded containers are carried from sea ports by fast container block trains – Tallinn (Muuga) – Moscow-Tovarnaya (“Moscow Express”), Riga – Moscow-Tovarnaya (“Riga Express”), St Petersburg – Moscow-Tovarnaya (“St Petersburg Express”) etc., then cargo is transported by road vehicles to the place named by the client (“to door”).
Train traffic is scheduled. Trains go in both directions, when moving backwards, they carry empty boxes to the sea lines’ depots. The company has also started to carry out the project to redirect from road to railways a part of the freight flow destined for AvtoVaz and other clients at the destination railway station Tolyatti of the Kuybyshev Railway. The company is going to launch similar container block trains on the lines Odessa – Moscow, Novorossiysk – Moscow, Klaipeda – Moscow.
The basic components of the company’s service are delivery speed, cargo safety, and customer focus as the basis of the corporate business-philosophy. Taking into account the quality of the service, adopted ecological programmes in the activity of clients, the demand for the services of Logistic Operator grows every quarter (especially that for containers dispatch in the framework of the existing container block trains).
The volume planned for transportation by these cargo owners can hardly be carried by road transport from economic and technological standpoints. Taking into account their striving to reduce the transport constituent in the cost of the goods, and ecological consequences of their activity, they are eager to use more eco-friendly transport (railways), while full transfer to road haulages conflicts with their concept and ideology.
As of November 3, 2011 (from the beginning of the year), just on the basic lines, Logistic Operator company transported 89 container trains from Muuga to Moscow (46 ran back), 12 trains from Riga (15 ran backwards), 61 trains from St Petersburg (Avtovo/Shushary) to Moscow, and 92 fast container trains backwards.
The example of Logistic Operator demonstrates that the real success takes place when new business-ideas are efficiently combined with enormous experience, professionalism, and thorough attention to the smallest details.
Nowadays, when the importance of intermodal transportation is recognised at the highest level, it is possible to say that transport companies and the whole business community have got a guiding landmark for verifying the planned schemes and marketing strategies. Anyway, any remarkable business-project will base on the experience of Logistic Operator company.
By Dmitry Hancevich
[~DETAIL_TEXT] => The company works in the Russian transport services market and carries out projects to form packs of services in the complex and contract logistics sector, which is the most prospective part of the transport and logistic services market. At the same time, Logistic Operator is a system operator specialising in dispatch/receipt of cargoes from Europe, South-East Asia, Africa, and America, and those carried in fast container trains to the Central European Russia.
The main target of the company’s activity is provision of logistic services in turn-key and door-to-door schemes, which include port handling, cargo dispatch from ports in fast container trains, servicing the cargo at warehousing terminals, organisation of customs formalities passing, delivery to the client’s warehouse, and optimisation of cargo transportation schemes taking into account all links of the logistic chain. Specialists of the company use railways for land transportation, because this is the most eco-friendly transport mode.
On June 1, 2010, Logistic Operator and Russian Railways signed an agreement on cooperation and interaction in the issues of complex and contract logistics. The subject of the agreement is attraction of additional volume of container freight flow to the Russian railway network and maximum use of RZD holding company’s infrastructure and assets.
In the framework of the obligations it assumed according to the agreement with RZD, Logistic Operator concluded long-term contracts on through transportation of cargo carried to the destination point in containers by railway.
Among the companies that signed the contracts, there are world famous brands and representatives of Russian largest retail trade networks: Adidas, Auchan, IKEA, Leroy Merlin, Samsung, Toshiba, Colgate-Palmolive, Metro Cash&Carry, Tetra Pak, Castorama, Toyota, Procter&Gamble, Mitsubishi, profine RUS, United Confectionary Manufacturers (Babaevsky, Rot-Front, Red October), Centrobuv, and a lot of others. It is worth mentioning that most these companies did not use railway cargo transportation services before.
To fulfill the contracts, Logistic Operator concluded relative agreements with sea container lines (APL, MSC, Maersk etc.) and launched through railway services. Loaded containers are carried from sea ports by fast container block trains – Tallinn (Muuga) – Moscow-Tovarnaya (“Moscow Express”), Riga – Moscow-Tovarnaya (“Riga Express”), St Petersburg – Moscow-Tovarnaya (“St Petersburg Express”) etc., then cargo is transported by road vehicles to the place named by the client (“to door”).
Train traffic is scheduled. Trains go in both directions, when moving backwards, they carry empty boxes to the sea lines’ depots. The company has also started to carry out the project to redirect from road to railways a part of the freight flow destined for AvtoVaz and other clients at the destination railway station Tolyatti of the Kuybyshev Railway. The company is going to launch similar container block trains on the lines Odessa – Moscow, Novorossiysk – Moscow, Klaipeda – Moscow.
The basic components of the company’s service are delivery speed, cargo safety, and customer focus as the basis of the corporate business-philosophy. Taking into account the quality of the service, adopted ecological programmes in the activity of clients, the demand for the services of Logistic Operator grows every quarter (especially that for containers dispatch in the framework of the existing container block trains).
The volume planned for transportation by these cargo owners can hardly be carried by road transport from economic and technological standpoints. Taking into account their striving to reduce the transport constituent in the cost of the goods, and ecological consequences of their activity, they are eager to use more eco-friendly transport (railways), while full transfer to road haulages conflicts with their concept and ideology.
As of November 3, 2011 (from the beginning of the year), just on the basic lines, Logistic Operator company transported 89 container trains from Muuga to Moscow (46 ran back), 12 trains from Riga (15 ran backwards), 61 trains from St Petersburg (Avtovo/Shushary) to Moscow, and 92 fast container trains backwards.
The example of Logistic Operator demonstrates that the real success takes place when new business-ideas are efficiently combined with enormous experience, professionalism, and thorough attention to the smallest details.
Nowadays, when the importance of intermodal transportation is recognised at the highest level, it is possible to say that transport companies and the whole business community have got a guiding landmark for verifying the planned schemes and marketing strategies. Anyway, any remarkable business-project will base on the experience of Logistic Operator company.
By Dmitry Hancevich
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The dynamics of 2011 show that the recommencement of container transit via the Transsib that started in the post-crisis period has begun to slow down. Its share has been rather small in the total volume of container cargoes transported on the route lately, and now it is decreasing. Meanwhile, major players in the container transportation market have some suggestions which could help to increase the volume of cargoes carried via the Transsib, and even make the line more competitive in the future.Array
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[DETAIL_TEXT] => Time for A New Strategy
According to the data of RZD announced at the 20th plenary meeting of the International Association “Coordinating Council on Trans-Siberian Transportation” (CCTT), transit of large capacity containers via the Transsib in eight months of 2011 increased by 23% in comparison with the same period the previous year and amounted to 22,380 TEU. However, the growth was more active in the first half of 2011 (+32% year-on-year up to 16,170 TEU); in the same period of 2010 the transit volume on the route increased by 63% and amounted to 12,250 TEU.
The share of transit in foreign economic transportation has also reduced: in January-August 2011 it was 7.2%, in the first half of the year it was 7.3%, and in the first six months of 2010 it was 8.5%. Despite the enlarged carrying capacity of the route, contrary to its key position in the East-West transportation system, the Transsib remains an unused resource in the global cargo transportation system. Naturally, there are some objective reasons for this – more flexible prices for services provided by sea transporters or their minimised customs barriers. “An objective prerequisite that has a dramatic impact on development of transit transportation via the Transsib is the vital difference between business process schemes on the sea and railway lines.
A characteristic of a shipping company’s transport process is flexibility, an ability to react quickly to market changes especially using tariffs. On the other hand, tariff formation on the Transsib is a complicated and slow process because railway tariffs are regulated by the state, which slows down the reaction of the Trans-Siberian transport service to these or those changes in the market situation, emphasised Vladimir Yakunin, the Chairman of the Association and the President of RZD, at the 20th meeting of the CCTT. In the opinion of RZD senior managers, it is high time for the strategic decision – abolition of state regulation in this sector; otherwise the Transsib will lose not only to sea transport, but to road haulage as well.
“It is a paradox, but our serious competitors are sea lines as well as road hauliers. Nowadays, road transporters carry cargoes, including containers, a distance of more than 2,000 km on the through routes Europe-Asia. It is a serious challenge to the Transsib, and we should react to it together,” said Mr Yakunin. Russia’s contribution to the solution of the problem may be deregulation of tariffs on transit transportation via the Transsib, noted the Head of Russian Railways. Anyway, it is the Government who will make the decision.
The logistics of the Transsib’s operation requires new approaches too. “The high level of the through rate on transit transportation via the Trans-Siberian mainline and non-transparency (unpredictability) of the final cost of cargo delivery for a client are caused by a large number of participants in the transport and logistic chain, who have their own commercial interests and, sometimes, oppositely directed business strategies,” stated members of the CCTT. The radical solution to the problem, approved by the Association, is the launch of an international logistics operator in the sector of transit container transportation involving the Transsib.
The new organisation, operating in the framework of the CCTT, is suggested to be formed on the basis of the participants of transportation in the East-West direction. It is not known what status the organisation will have as a market player; however, its property base is supposed to have the status of a capital created by means of share participation (i.e. there is the basis for the commercial activity of the new organisation). “However, the idea of a business organisation consisting of 113 members can hardly be carried out. The operator’s functions will more likely include managing the transport corridor. This variant is quite sustainable, especially if we take into account that the issue of deregulation of tariffs on transit transportation is being actively discussed in Russia,” commented Mr Yakunin.
It is expected that the participants’ contribution to the capital will be their transport capacities or resources and highly skilled personnel. “The international logistics operator will be formed on the basis of full and associated members of the CCTT. Any assignment of shares is possible only if it is approved by the logistic operator’s Board of Directors,” offered the CCTT. The product line of the new company will be optimal through tariff rate, a number of East-West special transit routes with the participation of the Transsib, and a set of transparent and clear for the market criteria for choosing the optimal route. These qualities, in the opinion of the CCTT members, are able to operate in the new key segment for the Transsib – transportation of cargo from China to Europe.
This freight base is developing very fast, and there are several land and combined international transport routes already operating or being formed. Meanwhile, not all of them are direct competitors to the Transsib. “Trans-Siberian and Trans-Chinese lines with an access to the 1520 mm wide gauge via the Dostyk-Alashankou border crossing may develop synchronically, taking into account the intensive development of inner provinces of China and Xinjiang Uyghur Autonomous Region,” run the materials of the 20th plenary meeting of the CCTT.
TransContainer supports the opinion that the balanced work of these two lines is rather promising. “Nowadays, cargoes to/from China are carried via the Zabaikalsk border crossing. 59,000 TEU was transported via this corridor in 2010, and in the first eight months of 2011 over 52,000 TEU was carried there, a 54% increase in comparison with the similar period of the previous year. The Dostyk border crossing is the second prospective point of access from China to the 1520 area, although its potential is hardly used now,” explained Petr Baskakov, CEO of TransContainer. “A lot of people think that lines via the Dostyk compete with those via the Zabaikalsk. It is not so.
Cargoes from eastern and central China are carried via the Zabaikalsk, and it would be more efficient to transport freight from the western provinces of the People’s Republic of China via the Dostyk border crossing. The western regions of China are actively developing nowadays, the potential of the freight base there is 1.5 million TEU per annum. This cargo flow will not be able to be transported via ports because Chinese railway infrastructure is limited. So, we can count on 250,000-300,000 TEU of transit to be carried via Kazakhstan and Russia.”
The development strategy of the line should be based on a search for a specific cargo base natural for railway transport, the top-management of the CCTT is sure. “The importance of railway transport for expensive and value-added cargoes is increasing nowadays,” noticed Mr Yakunin.
“Moreover, the role of railways is growing due to ecology enhancement programmes and improvement of transportation safety. Finally, railways are a link of the infrastructure that helps to achieve a better integration in Eurasia. This is especially important under the conditions of the second wave of the economic recession, which we face today.” The Transsib must orient mainly at cargo owners interested in fast delivery of freight. This is what the Transsib in 7 Days project was created for as well as the new initiative of RZD – the Concept of Container Business Complex Development approved by the holding company on August 30. Its basic constituents are harmonisation of transport legislation in Eurasia (including liquidation of problems in junction points); attraction of resources from interstate investment institutions; logistics market development; transportation processes computerisation. Finally, it is planned to create a system of “railway ports” in industrial and transport centres of Russia and the CIS as well as in China and Western Europe – this goal shows how scaled the programme is.
“After realisation of the Concept, consignors will get an opportunity for efficient diversification of cargo delivery schemes using the RZD transport system and floating capital saving due to faster and more reliable transportation,” stated Mr Yakunin. Nowadays, these statements are partially being put into practice, and, in fact, an example of them is block transportation of brand car components on the line Europe – China. “The services Duisburg – Chongqing, Duisburg – Moscow, Neutraubling – Shenyang are prospective from the standpoint of the target market segment – this is transportation of high-tech expensive goods, which have a limited period of life in the market. What attracted the clients was delivery time and, which was even more important, a stable service with guaranteed deadlines,” marked Mr Baskakov.
Share and win
“Partnership will give more than competition,” the Concept of RZD declares. “The Trans-Siberian railway mainline is just a part of the whole Trans-Siberian line. And the level of the through tariff depends not only on the rates set by RZD, but on sea charter rates, rates of stevedores, and railway tariffs on cargo transportation via the territory of states crossed by the line or which are a part of the route,” said Mr Yakunin.
The complex character of the tariff problem is proved by the dynamics of one of the basic container block trains connecting the East and the West with the help of the Transsib – “Baltika-Transit” (a joint product of railways of Latvia, Lithuania, Estonia, Kazakhstan, Russia, and the operator of the
line – FESCO Integrated Transport). According to the CCTT, the volume of cargoes transported in this direction grew by 63% despite a serious increase in basic rates on transportation of containers destined for Central Asia countries implemented by RZD at the beginning of 2011 (+67% for wagons of the public park, and +44% for private railcars).
Simultaneously, better tariffs on railway transportation of cargoes destined for Afghanistan were put into operation (RZD’s basic rates on transportation in public wagons increased by 17%, and those on transportation in private railcars fell by 35%), but transportation volume on the line cut by 39%. On the whole, since the launch of the “Baltika-Transit” train (May 2003), more than 100,000 TEU has been transported via the line. However, the result of the first half of 2011 (9,400 TEU) made just 46.6% of the total volume of cargo carried there last year. To refill the freight base this year, it was planned to attract transit from Afghanistan via Russia and the Baltic ports destined for Europe and the USA, however, the project is still at an initial stage.
As for direction of transportation as well as container lines, a characteristic of the Transsib is an uneven loading volume. In eight months of 2011, there was a decrease in the cargo volume transported in the most popular directions – Russia – Kazakhstan
(-4% to 107,643 TEU), Russia – Poland (-6% to 148,772 TEU), and Russia – Belarus (-5% to 128,937 TEU). At the same time, there was a growth in container transportation volumes at a number of not so loaded lines –
Russia – Estonia (+56% to 21,658 TEU), Russia – Mongolia (+37% to 4,683 TEU), Russia – Lithuania (+16% to 7,950 TEU), Russia – Finland (+6% to 17,530 TEU).
In January-August 2011, the transportation volume between Europe and China (via the Zabaikalsk border crossing) grew sevenfold to 2,488 TEU; the volume of freight carried via the Nakhodka Vostochnaya – Moscow line increased by 32% (to 30,696 TEU). 4,061 TEU was transported on the Nakhodka Vostochnaya – Cherkessk line (a fivefold increase), and 2,020 TEU was carried on the Nakhodka Vostochnaya – Martsevo line (+80%). Meanwhile, a number of lines that were opened in early 2011 stagnated. Thus, there was only one train that ran via Nakhodka Vostochnaya – Shushary and Chongqing – Cherkessk lines in eight months of 2011. The container transportation volume of the following lines cut: Zabaikalsk – Martsevo (-8% to 1,154 TEU), Nakhodka Vostochnaya – Ablyk (-16% to 5,281 TEU).
In the first eight months of 2011, China – Hungary direction (Zabaikalsk – Chop, Brest line) was loaded by 7% less than in the same period the previous year, only 3,862 TEU was transported there in January-August 2011. The varied dynamics took place amid the active efforts taken by RZD to form the optimal tariff policy at the Transsib. “We are doing, and will do, everything for the Transsib. Tariff rates on transit container transportation along Russian railways via the Far Eastern ports are set at the level that depends on the cost-price only. The new order of calculation of basic tariff rates on transit cargo transportation in the international communication, which was adjusted with all railway administrations and put into operation in 2011, allowed to create equal competition tariff conditions for all transit directions,” said Mr Yakunin.
On a trial basis, RZD formed a special tariff for a container train (at some definite lines). “If the logistic is optimal – the train and its wagons are loaded by 100%, the tariff on the container train (calculated as per one container) is almost similar to its level in 2010, and is even lower for a number of directions,” said the Head of RZD. However, RZD’s resources for this tariff scheme are not endless. “We still consider that an efficient decrease in the through tariff rate must be based on an adequate reduction of tariffs or prices for services by all participants in the transportation process,” declared Mr Yakunin.
Among the recommendations given by the CCTT are observance of the fixed tariff during a charter year; revision of rates of shipping companies on export and import cargo transportation via the sea section of the Trans-Siberian line; those of stevedores on transit and foreign trade cargoes handling in the sea ports; those of the Federal State Enterprise “Departmental Security Service of Railroad Transport of Russian Federation” – on escorting and securing of transit cargo carried in single containers via the Transsib; and rates of port dues set by the Ministry of Transport. The list shows how complicated the problem is, moreover, it does not include transportation via neighbouring and other linked states.
The search for price consensus among the transportation participants becomes even more complicated if we take into account the fact that sea container lines will practically always win the tariff fight with land routes. Clients who have access to sea lines prefer deep-sea services, but the very fact of the dialogue between such consumers and transporters via the Transsib is encouraging. Korail CEO Huh Joon-Young announced at the 20th plenary meeting of the CCTT that the competitiveness of sea transporters should be treated more seriously “because container ports are developing their infrastructure actively, and shipping companies start to use vessels with the capacity of up to 14,000 TEU, the lines may give a significant discount.”
Tadakuni Shiomoto, President of Trans-Siberian Intermodal Operators of Japan/Deputy Chairman of CCTT, said, “If we discuss problems of the Transsib, we should mention tariffs. For example, deep sea transportation from Japan to Moscow costs about $5,500 per container, while transportation to Moscow via the Transsib costs approximately $9,000. The second problem is delays in ports caused by actions of customs bodies. In ports, they last from 10 to 20 days and even longer. And using sea transporters’ services means a stable delivery time, and this is what Chinese services, for example, offer. These problems must be solved to provide the competitiveness of the Transsib as a transport alternative.
Over Barriers
Railwaymen complain that they are not able to provide the fixed transportation time, although, sea lines have a similar problem. This is proved by the latest initiative of Maersk targeted at the liquidation of transit time violations – this autumn the company launched a principally new mechanism of deep sea service work (so-called “Daily Maersk”). However, if the delays at sea lines are caused usually by objective reasons, for example, such as technical order limits, the Transsib is in thrall to the will of controlling authorities.
“Problem issues do not depend on railwaymen. Nowadays, the work of customs and border guards is still a factor restraining cargo transportation speed. It is impossible to calculate the exact transportation time because of the delays in ports, the lack of clear-cut technologies and rules in part of customs clearance and unpredictable actions of the customs. In our opinion, a transit container should not be checked by customs officers. Nowadays, however, a transit container is checked by customs every time it crosses the border,” stated Mr Yakunin. That is why one of the most important transit directions – via Ukraine – is blocked, because problems with customs and borders are especially urgent there.
The experience of Ukrainian container ports proves that such barriers can hardly be destroyed in an evolutionary manner, which is why, in particular, the Ukrainian Ministry of Infrastructure supported the offer of the Odessa port to develop a draft law “On Container Transportation.” In the framework of the CCTT, Russian participants in the container transportation process initiated development of federal draft laws “On Transit of Cargo via the Territory of the Russian Federation” and “On Combined Transportation of Cargoes”.
Projects connected with IT development must play a special role in removing the barriers on the road of transit. One of them is “Electronic Train” (non-commercial innovative project envisaging development and implementation of through information technologies with the use of transport and commercial e-documents). It will be trialed at the container train “Vostochny Veter” (Eastern Wind) to which the “Baltika-Transit” line will be connected (at the second stage of the project realisation). Choosing the “Vostochny Veter” route (a joint logistics product of the railways of Germany, Poland, Belarus, Russia, and Kazakhstan with the participation of TransInvest holding company) will allow work on a number of bottle necks including the joins between different transport legislations (CIM-SMGS transfer at the Malasheviche border crossing), transshipment of cargo from 1435mm rolling stock to 1520mm railcars (Brest reloading district), integration of e-document turnover at railways with 1520 mm wide gauge with UN international standards systems (EDIFACT).
This project is a factor in increasing the competitiveness of the Transsib at the expense of international cargo transportation document turnover optimisation, marked the CCTT. Another project approved by the Committee and promoted by TransContainer is the launch of a preliminary e-declaration system on the basis of the “Volkswagen Rus” container train. The system will be tested on the railways of Russia, Latvia, and Estonia.
In its turn, senior managers at TransContainer developed a number of initiative to offer the ССЕЕ. In fact, they proposed a proclamation containing four key statements targeted at speeding up the growth of transit transportation from continental China to Europe. First of all, the CIM-SMGS invoice must be put into operation in this direction; otherwise it will be difficult to attract significant Chinese cargo flow to the Transsib.
Secondly, tariffs implemented on the routes coinciding with the international transport corridor should not be changed for a long time (at least five years) – this will help create and support the service. Serious attention should be paid to harmonisation of legal norms and standards. Ambivalent interpretation of definitions is the most serious barrier restraining development of cargo transportation and strengthening the subjectivity of controlling authorities. A shining example of it is the attempt by TransContainer to attract a prospective cargo flow – laminated flooring – to the Austria – Ukraine – Russia line. The code of this cargo, used by the customs of the EU and Russia, differs from the coding used at the State Customs Service of Ukraine, and the cargo was detained.
“A criminal case was opened on smuggling. Earlier, this cargo had been transported by road haulage, so the company had not faced such a situation before. The consignor’s rights were asserted in court, however, the cargo flow left the line,” said Petr Baskakov. Another target of the company is to implement preliminary e-declaration. This mechanism, already applied at the terminal of TransContainer in Zabaikalsk, should be moved further west. This will prevent disputes and speed up the processes of cargo clearance at the border (by at least 1.5 days according to the company’s calculations).
Finally, the most important target must be the replenishment of cargo loading resources on the 1520 network. This issue is one of the most fundamental, but until it is solved, it is impossible to speak about the development while the park is ageing and written off. Nowadays, the average age of container flat wagons on the 1520 area is 25 years, and Russia is practically the only representative on the network that renews the park actively (the average age of this rolling stock on RZD’s network is 13 years). In the last decade, the number of flat wagons in Russia increased by 54%, while the park of the neighboring states reduced by 40%. This problem may be solved by setting a wagon constituent, awakening private companies’ interest in investment into rolling stock renewal. The last target is so scaled that it may be put in one line with infrastructure expenditure to be faced by the Transsib (according to RZD’s estimates, over RUR 193 million in 2010 prices till 2015).
By Vladimir Khatkevich
[~DETAIL_TEXT] => Time for A New Strategy
According to the data of RZD announced at the 20th plenary meeting of the International Association “Coordinating Council on Trans-Siberian Transportation” (CCTT), transit of large capacity containers via the Transsib in eight months of 2011 increased by 23% in comparison with the same period the previous year and amounted to 22,380 TEU. However, the growth was more active in the first half of 2011 (+32% year-on-year up to 16,170 TEU); in the same period of 2010 the transit volume on the route increased by 63% and amounted to 12,250 TEU.
The share of transit in foreign economic transportation has also reduced: in January-August 2011 it was 7.2%, in the first half of the year it was 7.3%, and in the first six months of 2010 it was 8.5%. Despite the enlarged carrying capacity of the route, contrary to its key position in the East-West transportation system, the Transsib remains an unused resource in the global cargo transportation system. Naturally, there are some objective reasons for this – more flexible prices for services provided by sea transporters or their minimised customs barriers. “An objective prerequisite that has a dramatic impact on development of transit transportation via the Transsib is the vital difference between business process schemes on the sea and railway lines.
A characteristic of a shipping company’s transport process is flexibility, an ability to react quickly to market changes especially using tariffs. On the other hand, tariff formation on the Transsib is a complicated and slow process because railway tariffs are regulated by the state, which slows down the reaction of the Trans-Siberian transport service to these or those changes in the market situation, emphasised Vladimir Yakunin, the Chairman of the Association and the President of RZD, at the 20th meeting of the CCTT. In the opinion of RZD senior managers, it is high time for the strategic decision – abolition of state regulation in this sector; otherwise the Transsib will lose not only to sea transport, but to road haulage as well.
“It is a paradox, but our serious competitors are sea lines as well as road hauliers. Nowadays, road transporters carry cargoes, including containers, a distance of more than 2,000 km on the through routes Europe-Asia. It is a serious challenge to the Transsib, and we should react to it together,” said Mr Yakunin. Russia’s contribution to the solution of the problem may be deregulation of tariffs on transit transportation via the Transsib, noted the Head of Russian Railways. Anyway, it is the Government who will make the decision.
The logistics of the Transsib’s operation requires new approaches too. “The high level of the through rate on transit transportation via the Trans-Siberian mainline and non-transparency (unpredictability) of the final cost of cargo delivery for a client are caused by a large number of participants in the transport and logistic chain, who have their own commercial interests and, sometimes, oppositely directed business strategies,” stated members of the CCTT. The radical solution to the problem, approved by the Association, is the launch of an international logistics operator in the sector of transit container transportation involving the Transsib.
The new organisation, operating in the framework of the CCTT, is suggested to be formed on the basis of the participants of transportation in the East-West direction. It is not known what status the organisation will have as a market player; however, its property base is supposed to have the status of a capital created by means of share participation (i.e. there is the basis for the commercial activity of the new organisation). “However, the idea of a business organisation consisting of 113 members can hardly be carried out. The operator’s functions will more likely include managing the transport corridor. This variant is quite sustainable, especially if we take into account that the issue of deregulation of tariffs on transit transportation is being actively discussed in Russia,” commented Mr Yakunin.
It is expected that the participants’ contribution to the capital will be their transport capacities or resources and highly skilled personnel. “The international logistics operator will be formed on the basis of full and associated members of the CCTT. Any assignment of shares is possible only if it is approved by the logistic operator’s Board of Directors,” offered the CCTT. The product line of the new company will be optimal through tariff rate, a number of East-West special transit routes with the participation of the Transsib, and a set of transparent and clear for the market criteria for choosing the optimal route. These qualities, in the opinion of the CCTT members, are able to operate in the new key segment for the Transsib – transportation of cargo from China to Europe.
This freight base is developing very fast, and there are several land and combined international transport routes already operating or being formed. Meanwhile, not all of them are direct competitors to the Transsib. “Trans-Siberian and Trans-Chinese lines with an access to the 1520 mm wide gauge via the Dostyk-Alashankou border crossing may develop synchronically, taking into account the intensive development of inner provinces of China and Xinjiang Uyghur Autonomous Region,” run the materials of the 20th plenary meeting of the CCTT.
TransContainer supports the opinion that the balanced work of these two lines is rather promising. “Nowadays, cargoes to/from China are carried via the Zabaikalsk border crossing. 59,000 TEU was transported via this corridor in 2010, and in the first eight months of 2011 over 52,000 TEU was carried there, a 54% increase in comparison with the similar period of the previous year. The Dostyk border crossing is the second prospective point of access from China to the 1520 area, although its potential is hardly used now,” explained Petr Baskakov, CEO of TransContainer. “A lot of people think that lines via the Dostyk compete with those via the Zabaikalsk. It is not so.
Cargoes from eastern and central China are carried via the Zabaikalsk, and it would be more efficient to transport freight from the western provinces of the People’s Republic of China via the Dostyk border crossing. The western regions of China are actively developing nowadays, the potential of the freight base there is 1.5 million TEU per annum. This cargo flow will not be able to be transported via ports because Chinese railway infrastructure is limited. So, we can count on 250,000-300,000 TEU of transit to be carried via Kazakhstan and Russia.”
The development strategy of the line should be based on a search for a specific cargo base natural for railway transport, the top-management of the CCTT is sure. “The importance of railway transport for expensive and value-added cargoes is increasing nowadays,” noticed Mr Yakunin.
“Moreover, the role of railways is growing due to ecology enhancement programmes and improvement of transportation safety. Finally, railways are a link of the infrastructure that helps to achieve a better integration in Eurasia. This is especially important under the conditions of the second wave of the economic recession, which we face today.” The Transsib must orient mainly at cargo owners interested in fast delivery of freight. This is what the Transsib in 7 Days project was created for as well as the new initiative of RZD – the Concept of Container Business Complex Development approved by the holding company on August 30. Its basic constituents are harmonisation of transport legislation in Eurasia (including liquidation of problems in junction points); attraction of resources from interstate investment institutions; logistics market development; transportation processes computerisation. Finally, it is planned to create a system of “railway ports” in industrial and transport centres of Russia and the CIS as well as in China and Western Europe – this goal shows how scaled the programme is.
“After realisation of the Concept, consignors will get an opportunity for efficient diversification of cargo delivery schemes using the RZD transport system and floating capital saving due to faster and more reliable transportation,” stated Mr Yakunin. Nowadays, these statements are partially being put into practice, and, in fact, an example of them is block transportation of brand car components on the line Europe – China. “The services Duisburg – Chongqing, Duisburg – Moscow, Neutraubling – Shenyang are prospective from the standpoint of the target market segment – this is transportation of high-tech expensive goods, which have a limited period of life in the market. What attracted the clients was delivery time and, which was even more important, a stable service with guaranteed deadlines,” marked Mr Baskakov.
Share and win
“Partnership will give more than competition,” the Concept of RZD declares. “The Trans-Siberian railway mainline is just a part of the whole Trans-Siberian line. And the level of the through tariff depends not only on the rates set by RZD, but on sea charter rates, rates of stevedores, and railway tariffs on cargo transportation via the territory of states crossed by the line or which are a part of the route,” said Mr Yakunin.
The complex character of the tariff problem is proved by the dynamics of one of the basic container block trains connecting the East and the West with the help of the Transsib – “Baltika-Transit” (a joint product of railways of Latvia, Lithuania, Estonia, Kazakhstan, Russia, and the operator of the
line – FESCO Integrated Transport). According to the CCTT, the volume of cargoes transported in this direction grew by 63% despite a serious increase in basic rates on transportation of containers destined for Central Asia countries implemented by RZD at the beginning of 2011 (+67% for wagons of the public park, and +44% for private railcars).
Simultaneously, better tariffs on railway transportation of cargoes destined for Afghanistan were put into operation (RZD’s basic rates on transportation in public wagons increased by 17%, and those on transportation in private railcars fell by 35%), but transportation volume on the line cut by 39%. On the whole, since the launch of the “Baltika-Transit” train (May 2003), more than 100,000 TEU has been transported via the line. However, the result of the first half of 2011 (9,400 TEU) made just 46.6% of the total volume of cargo carried there last year. To refill the freight base this year, it was planned to attract transit from Afghanistan via Russia and the Baltic ports destined for Europe and the USA, however, the project is still at an initial stage.
As for direction of transportation as well as container lines, a characteristic of the Transsib is an uneven loading volume. In eight months of 2011, there was a decrease in the cargo volume transported in the most popular directions – Russia – Kazakhstan
(-4% to 107,643 TEU), Russia – Poland (-6% to 148,772 TEU), and Russia – Belarus (-5% to 128,937 TEU). At the same time, there was a growth in container transportation volumes at a number of not so loaded lines –
Russia – Estonia (+56% to 21,658 TEU), Russia – Mongolia (+37% to 4,683 TEU), Russia – Lithuania (+16% to 7,950 TEU), Russia – Finland (+6% to 17,530 TEU).
In January-August 2011, the transportation volume between Europe and China (via the Zabaikalsk border crossing) grew sevenfold to 2,488 TEU; the volume of freight carried via the Nakhodka Vostochnaya – Moscow line increased by 32% (to 30,696 TEU). 4,061 TEU was transported on the Nakhodka Vostochnaya – Cherkessk line (a fivefold increase), and 2,020 TEU was carried on the Nakhodka Vostochnaya – Martsevo line (+80%). Meanwhile, a number of lines that were opened in early 2011 stagnated. Thus, there was only one train that ran via Nakhodka Vostochnaya – Shushary and Chongqing – Cherkessk lines in eight months of 2011. The container transportation volume of the following lines cut: Zabaikalsk – Martsevo (-8% to 1,154 TEU), Nakhodka Vostochnaya – Ablyk (-16% to 5,281 TEU).
In the first eight months of 2011, China – Hungary direction (Zabaikalsk – Chop, Brest line) was loaded by 7% less than in the same period the previous year, only 3,862 TEU was transported there in January-August 2011. The varied dynamics took place amid the active efforts taken by RZD to form the optimal tariff policy at the Transsib. “We are doing, and will do, everything for the Transsib. Tariff rates on transit container transportation along Russian railways via the Far Eastern ports are set at the level that depends on the cost-price only. The new order of calculation of basic tariff rates on transit cargo transportation in the international communication, which was adjusted with all railway administrations and put into operation in 2011, allowed to create equal competition tariff conditions for all transit directions,” said Mr Yakunin.
On a trial basis, RZD formed a special tariff for a container train (at some definite lines). “If the logistic is optimal – the train and its wagons are loaded by 100%, the tariff on the container train (calculated as per one container) is almost similar to its level in 2010, and is even lower for a number of directions,” said the Head of RZD. However, RZD’s resources for this tariff scheme are not endless. “We still consider that an efficient decrease in the through tariff rate must be based on an adequate reduction of tariffs or prices for services by all participants in the transportation process,” declared Mr Yakunin.
Among the recommendations given by the CCTT are observance of the fixed tariff during a charter year; revision of rates of shipping companies on export and import cargo transportation via the sea section of the Trans-Siberian line; those of stevedores on transit and foreign trade cargoes handling in the sea ports; those of the Federal State Enterprise “Departmental Security Service of Railroad Transport of Russian Federation” – on escorting and securing of transit cargo carried in single containers via the Transsib; and rates of port dues set by the Ministry of Transport. The list shows how complicated the problem is, moreover, it does not include transportation via neighbouring and other linked states.
The search for price consensus among the transportation participants becomes even more complicated if we take into account the fact that sea container lines will practically always win the tariff fight with land routes. Clients who have access to sea lines prefer deep-sea services, but the very fact of the dialogue between such consumers and transporters via the Transsib is encouraging. Korail CEO Huh Joon-Young announced at the 20th plenary meeting of the CCTT that the competitiveness of sea transporters should be treated more seriously “because container ports are developing their infrastructure actively, and shipping companies start to use vessels with the capacity of up to 14,000 TEU, the lines may give a significant discount.”
Tadakuni Shiomoto, President of Trans-Siberian Intermodal Operators of Japan/Deputy Chairman of CCTT, said, “If we discuss problems of the Transsib, we should mention tariffs. For example, deep sea transportation from Japan to Moscow costs about $5,500 per container, while transportation to Moscow via the Transsib costs approximately $9,000. The second problem is delays in ports caused by actions of customs bodies. In ports, they last from 10 to 20 days and even longer. And using sea transporters’ services means a stable delivery time, and this is what Chinese services, for example, offer. These problems must be solved to provide the competitiveness of the Transsib as a transport alternative.
Over Barriers
Railwaymen complain that they are not able to provide the fixed transportation time, although, sea lines have a similar problem. This is proved by the latest initiative of Maersk targeted at the liquidation of transit time violations – this autumn the company launched a principally new mechanism of deep sea service work (so-called “Daily Maersk”). However, if the delays at sea lines are caused usually by objective reasons, for example, such as technical order limits, the Transsib is in thrall to the will of controlling authorities.
“Problem issues do not depend on railwaymen. Nowadays, the work of customs and border guards is still a factor restraining cargo transportation speed. It is impossible to calculate the exact transportation time because of the delays in ports, the lack of clear-cut technologies and rules in part of customs clearance and unpredictable actions of the customs. In our opinion, a transit container should not be checked by customs officers. Nowadays, however, a transit container is checked by customs every time it crosses the border,” stated Mr Yakunin. That is why one of the most important transit directions – via Ukraine – is blocked, because problems with customs and borders are especially urgent there.
The experience of Ukrainian container ports proves that such barriers can hardly be destroyed in an evolutionary manner, which is why, in particular, the Ukrainian Ministry of Infrastructure supported the offer of the Odessa port to develop a draft law “On Container Transportation.” In the framework of the CCTT, Russian participants in the container transportation process initiated development of federal draft laws “On Transit of Cargo via the Territory of the Russian Federation” and “On Combined Transportation of Cargoes”.
Projects connected with IT development must play a special role in removing the barriers on the road of transit. One of them is “Electronic Train” (non-commercial innovative project envisaging development and implementation of through information technologies with the use of transport and commercial e-documents). It will be trialed at the container train “Vostochny Veter” (Eastern Wind) to which the “Baltika-Transit” line will be connected (at the second stage of the project realisation). Choosing the “Vostochny Veter” route (a joint logistics product of the railways of Germany, Poland, Belarus, Russia, and Kazakhstan with the participation of TransInvest holding company) will allow work on a number of bottle necks including the joins between different transport legislations (CIM-SMGS transfer at the Malasheviche border crossing), transshipment of cargo from 1435mm rolling stock to 1520mm railcars (Brest reloading district), integration of e-document turnover at railways with 1520 mm wide gauge with UN international standards systems (EDIFACT).
This project is a factor in increasing the competitiveness of the Transsib at the expense of international cargo transportation document turnover optimisation, marked the CCTT. Another project approved by the Committee and promoted by TransContainer is the launch of a preliminary e-declaration system on the basis of the “Volkswagen Rus” container train. The system will be tested on the railways of Russia, Latvia, and Estonia.
In its turn, senior managers at TransContainer developed a number of initiative to offer the ССЕЕ. In fact, they proposed a proclamation containing four key statements targeted at speeding up the growth of transit transportation from continental China to Europe. First of all, the CIM-SMGS invoice must be put into operation in this direction; otherwise it will be difficult to attract significant Chinese cargo flow to the Transsib.
Secondly, tariffs implemented on the routes coinciding with the international transport corridor should not be changed for a long time (at least five years) – this will help create and support the service. Serious attention should be paid to harmonisation of legal norms and standards. Ambivalent interpretation of definitions is the most serious barrier restraining development of cargo transportation and strengthening the subjectivity of controlling authorities. A shining example of it is the attempt by TransContainer to attract a prospective cargo flow – laminated flooring – to the Austria – Ukraine – Russia line. The code of this cargo, used by the customs of the EU and Russia, differs from the coding used at the State Customs Service of Ukraine, and the cargo was detained.
“A criminal case was opened on smuggling. Earlier, this cargo had been transported by road haulage, so the company had not faced such a situation before. The consignor’s rights were asserted in court, however, the cargo flow left the line,” said Petr Baskakov. Another target of the company is to implement preliminary e-declaration. This mechanism, already applied at the terminal of TransContainer in Zabaikalsk, should be moved further west. This will prevent disputes and speed up the processes of cargo clearance at the border (by at least 1.5 days according to the company’s calculations).
Finally, the most important target must be the replenishment of cargo loading resources on the 1520 network. This issue is one of the most fundamental, but until it is solved, it is impossible to speak about the development while the park is ageing and written off. Nowadays, the average age of container flat wagons on the 1520 area is 25 years, and Russia is practically the only representative on the network that renews the park actively (the average age of this rolling stock on RZD’s network is 13 years). In the last decade, the number of flat wagons in Russia increased by 54%, while the park of the neighboring states reduced by 40%. This problem may be solved by setting a wagon constituent, awakening private companies’ interest in investment into rolling stock renewal. The last target is so scaled that it may be put in one line with infrastructure expenditure to be faced by the Transsib (according to RZD’s estimates, over RUR 193 million in 2010 prices till 2015).
By Vladimir Khatkevich
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[SECTION_META_DESCRIPTION] => <img src="/ufiles/image/rus/inter/2011/4/11.jpg" border="1" alt=" " hspace="5" width="200" height="300" align="left" />The dynamics of 2011 show that the recommencement of container transit via the Transsib that started in the post-crisis period has begun to slow down. Its share has been rather small in the total volume of container cargoes transported on the route lately, and now it is decreasing. Meanwhile, major players in the container transportation market have some suggestions which could help to increase the volume of cargoes carried via the Transsib, and even make the line more competitive in the future.
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[DETAIL_TEXT] => Time for A New Strategy
According to the data of RZD announced at the 20th plenary meeting of the International Association “Coordinating Council on Trans-Siberian Transportation” (CCTT), transit of large capacity containers via the Transsib in eight months of 2011 increased by 23% in comparison with the same period the previous year and amounted to 22,380 TEU. However, the growth was more active in the first half of 2011 (+32% year-on-year up to 16,170 TEU); in the same period of 2010 the transit volume on the route increased by 63% and amounted to 12,250 TEU.
The share of transit in foreign economic transportation has also reduced: in January-August 2011 it was 7.2%, in the first half of the year it was 7.3%, and in the first six months of 2010 it was 8.5%. Despite the enlarged carrying capacity of the route, contrary to its key position in the East-West transportation system, the Transsib remains an unused resource in the global cargo transportation system. Naturally, there are some objective reasons for this – more flexible prices for services provided by sea transporters or their minimised customs barriers. “An objective prerequisite that has a dramatic impact on development of transit transportation via the Transsib is the vital difference between business process schemes on the sea and railway lines.
A characteristic of a shipping company’s transport process is flexibility, an ability to react quickly to market changes especially using tariffs. On the other hand, tariff formation on the Transsib is a complicated and slow process because railway tariffs are regulated by the state, which slows down the reaction of the Trans-Siberian transport service to these or those changes in the market situation, emphasised Vladimir Yakunin, the Chairman of the Association and the President of RZD, at the 20th meeting of the CCTT. In the opinion of RZD senior managers, it is high time for the strategic decision – abolition of state regulation in this sector; otherwise the Transsib will lose not only to sea transport, but to road haulage as well.
“It is a paradox, but our serious competitors are sea lines as well as road hauliers. Nowadays, road transporters carry cargoes, including containers, a distance of more than 2,000 km on the through routes Europe-Asia. It is a serious challenge to the Transsib, and we should react to it together,” said Mr Yakunin. Russia’s contribution to the solution of the problem may be deregulation of tariffs on transit transportation via the Transsib, noted the Head of Russian Railways. Anyway, it is the Government who will make the decision.
The logistics of the Transsib’s operation requires new approaches too. “The high level of the through rate on transit transportation via the Trans-Siberian mainline and non-transparency (unpredictability) of the final cost of cargo delivery for a client are caused by a large number of participants in the transport and logistic chain, who have their own commercial interests and, sometimes, oppositely directed business strategies,” stated members of the CCTT. The radical solution to the problem, approved by the Association, is the launch of an international logistics operator in the sector of transit container transportation involving the Transsib.
The new organisation, operating in the framework of the CCTT, is suggested to be formed on the basis of the participants of transportation in the East-West direction. It is not known what status the organisation will have as a market player; however, its property base is supposed to have the status of a capital created by means of share participation (i.e. there is the basis for the commercial activity of the new organisation). “However, the idea of a business organisation consisting of 113 members can hardly be carried out. The operator’s functions will more likely include managing the transport corridor. This variant is quite sustainable, especially if we take into account that the issue of deregulation of tariffs on transit transportation is being actively discussed in Russia,” commented Mr Yakunin.
It is expected that the participants’ contribution to the capital will be their transport capacities or resources and highly skilled personnel. “The international logistics operator will be formed on the basis of full and associated members of the CCTT. Any assignment of shares is possible only if it is approved by the logistic operator’s Board of Directors,” offered the CCTT. The product line of the new company will be optimal through tariff rate, a number of East-West special transit routes with the participation of the Transsib, and a set of transparent and clear for the market criteria for choosing the optimal route. These qualities, in the opinion of the CCTT members, are able to operate in the new key segment for the Transsib – transportation of cargo from China to Europe.
This freight base is developing very fast, and there are several land and combined international transport routes already operating or being formed. Meanwhile, not all of them are direct competitors to the Transsib. “Trans-Siberian and Trans-Chinese lines with an access to the 1520 mm wide gauge via the Dostyk-Alashankou border crossing may develop synchronically, taking into account the intensive development of inner provinces of China and Xinjiang Uyghur Autonomous Region,” run the materials of the 20th plenary meeting of the CCTT.
TransContainer supports the opinion that the balanced work of these two lines is rather promising. “Nowadays, cargoes to/from China are carried via the Zabaikalsk border crossing. 59,000 TEU was transported via this corridor in 2010, and in the first eight months of 2011 over 52,000 TEU was carried there, a 54% increase in comparison with the similar period of the previous year. The Dostyk border crossing is the second prospective point of access from China to the 1520 area, although its potential is hardly used now,” explained Petr Baskakov, CEO of TransContainer. “A lot of people think that lines via the Dostyk compete with those via the Zabaikalsk. It is not so.
Cargoes from eastern and central China are carried via the Zabaikalsk, and it would be more efficient to transport freight from the western provinces of the People’s Republic of China via the Dostyk border crossing. The western regions of China are actively developing nowadays, the potential of the freight base there is 1.5 million TEU per annum. This cargo flow will not be able to be transported via ports because Chinese railway infrastructure is limited. So, we can count on 250,000-300,000 TEU of transit to be carried via Kazakhstan and Russia.”
The development strategy of the line should be based on a search for a specific cargo base natural for railway transport, the top-management of the CCTT is sure. “The importance of railway transport for expensive and value-added cargoes is increasing nowadays,” noticed Mr Yakunin.
“Moreover, the role of railways is growing due to ecology enhancement programmes and improvement of transportation safety. Finally, railways are a link of the infrastructure that helps to achieve a better integration in Eurasia. This is especially important under the conditions of the second wave of the economic recession, which we face today.” The Transsib must orient mainly at cargo owners interested in fast delivery of freight. This is what the Transsib in 7 Days project was created for as well as the new initiative of RZD – the Concept of Container Business Complex Development approved by the holding company on August 30. Its basic constituents are harmonisation of transport legislation in Eurasia (including liquidation of problems in junction points); attraction of resources from interstate investment institutions; logistics market development; transportation processes computerisation. Finally, it is planned to create a system of “railway ports” in industrial and transport centres of Russia and the CIS as well as in China and Western Europe – this goal shows how scaled the programme is.
“After realisation of the Concept, consignors will get an opportunity for efficient diversification of cargo delivery schemes using the RZD transport system and floating capital saving due to faster and more reliable transportation,” stated Mr Yakunin. Nowadays, these statements are partially being put into practice, and, in fact, an example of them is block transportation of brand car components on the line Europe – China. “The services Duisburg – Chongqing, Duisburg – Moscow, Neutraubling – Shenyang are prospective from the standpoint of the target market segment – this is transportation of high-tech expensive goods, which have a limited period of life in the market. What attracted the clients was delivery time and, which was even more important, a stable service with guaranteed deadlines,” marked Mr Baskakov.
Share and win
“Partnership will give more than competition,” the Concept of RZD declares. “The Trans-Siberian railway mainline is just a part of the whole Trans-Siberian line. And the level of the through tariff depends not only on the rates set by RZD, but on sea charter rates, rates of stevedores, and railway tariffs on cargo transportation via the territory of states crossed by the line or which are a part of the route,” said Mr Yakunin.
The complex character of the tariff problem is proved by the dynamics of one of the basic container block trains connecting the East and the West with the help of the Transsib – “Baltika-Transit” (a joint product of railways of Latvia, Lithuania, Estonia, Kazakhstan, Russia, and the operator of the
line – FESCO Integrated Transport). According to the CCTT, the volume of cargoes transported in this direction grew by 63% despite a serious increase in basic rates on transportation of containers destined for Central Asia countries implemented by RZD at the beginning of 2011 (+67% for wagons of the public park, and +44% for private railcars).
Simultaneously, better tariffs on railway transportation of cargoes destined for Afghanistan were put into operation (RZD’s basic rates on transportation in public wagons increased by 17%, and those on transportation in private railcars fell by 35%), but transportation volume on the line cut by 39%. On the whole, since the launch of the “Baltika-Transit” train (May 2003), more than 100,000 TEU has been transported via the line. However, the result of the first half of 2011 (9,400 TEU) made just 46.6% of the total volume of cargo carried there last year. To refill the freight base this year, it was planned to attract transit from Afghanistan via Russia and the Baltic ports destined for Europe and the USA, however, the project is still at an initial stage.
As for direction of transportation as well as container lines, a characteristic of the Transsib is an uneven loading volume. In eight months of 2011, there was a decrease in the cargo volume transported in the most popular directions – Russia – Kazakhstan
(-4% to 107,643 TEU), Russia – Poland (-6% to 148,772 TEU), and Russia – Belarus (-5% to 128,937 TEU). At the same time, there was a growth in container transportation volumes at a number of not so loaded lines –
Russia – Estonia (+56% to 21,658 TEU), Russia – Mongolia (+37% to 4,683 TEU), Russia – Lithuania (+16% to 7,950 TEU), Russia – Finland (+6% to 17,530 TEU).
In January-August 2011, the transportation volume between Europe and China (via the Zabaikalsk border crossing) grew sevenfold to 2,488 TEU; the volume of freight carried via the Nakhodka Vostochnaya – Moscow line increased by 32% (to 30,696 TEU). 4,061 TEU was transported on the Nakhodka Vostochnaya – Cherkessk line (a fivefold increase), and 2,020 TEU was carried on the Nakhodka Vostochnaya – Martsevo line (+80%). Meanwhile, a number of lines that were opened in early 2011 stagnated. Thus, there was only one train that ran via Nakhodka Vostochnaya – Shushary and Chongqing – Cherkessk lines in eight months of 2011. The container transportation volume of the following lines cut: Zabaikalsk – Martsevo (-8% to 1,154 TEU), Nakhodka Vostochnaya – Ablyk (-16% to 5,281 TEU).
In the first eight months of 2011, China – Hungary direction (Zabaikalsk – Chop, Brest line) was loaded by 7% less than in the same period the previous year, only 3,862 TEU was transported there in January-August 2011. The varied dynamics took place amid the active efforts taken by RZD to form the optimal tariff policy at the Transsib. “We are doing, and will do, everything for the Transsib. Tariff rates on transit container transportation along Russian railways via the Far Eastern ports are set at the level that depends on the cost-price only. The new order of calculation of basic tariff rates on transit cargo transportation in the international communication, which was adjusted with all railway administrations and put into operation in 2011, allowed to create equal competition tariff conditions for all transit directions,” said Mr Yakunin.
On a trial basis, RZD formed a special tariff for a container train (at some definite lines). “If the logistic is optimal – the train and its wagons are loaded by 100%, the tariff on the container train (calculated as per one container) is almost similar to its level in 2010, and is even lower for a number of directions,” said the Head of RZD. However, RZD’s resources for this tariff scheme are not endless. “We still consider that an efficient decrease in the through tariff rate must be based on an adequate reduction of tariffs or prices for services by all participants in the transportation process,” declared Mr Yakunin.
Among the recommendations given by the CCTT are observance of the fixed tariff during a charter year; revision of rates of shipping companies on export and import cargo transportation via the sea section of the Trans-Siberian line; those of stevedores on transit and foreign trade cargoes handling in the sea ports; those of the Federal State Enterprise “Departmental Security Service of Railroad Transport of Russian Federation” – on escorting and securing of transit cargo carried in single containers via the Transsib; and rates of port dues set by the Ministry of Transport. The list shows how complicated the problem is, moreover, it does not include transportation via neighbouring and other linked states.
The search for price consensus among the transportation participants becomes even more complicated if we take into account the fact that sea container lines will practically always win the tariff fight with land routes. Clients who have access to sea lines prefer deep-sea services, but the very fact of the dialogue between such consumers and transporters via the Transsib is encouraging. Korail CEO Huh Joon-Young announced at the 20th plenary meeting of the CCTT that the competitiveness of sea transporters should be treated more seriously “because container ports are developing their infrastructure actively, and shipping companies start to use vessels with the capacity of up to 14,000 TEU, the lines may give a significant discount.”
Tadakuni Shiomoto, President of Trans-Siberian Intermodal Operators of Japan/Deputy Chairman of CCTT, said, “If we discuss problems of the Transsib, we should mention tariffs. For example, deep sea transportation from Japan to Moscow costs about $5,500 per container, while transportation to Moscow via the Transsib costs approximately $9,000. The second problem is delays in ports caused by actions of customs bodies. In ports, they last from 10 to 20 days and even longer. And using sea transporters’ services means a stable delivery time, and this is what Chinese services, for example, offer. These problems must be solved to provide the competitiveness of the Transsib as a transport alternative.
Over Barriers
Railwaymen complain that they are not able to provide the fixed transportation time, although, sea lines have a similar problem. This is proved by the latest initiative of Maersk targeted at the liquidation of transit time violations – this autumn the company launched a principally new mechanism of deep sea service work (so-called “Daily Maersk”). However, if the delays at sea lines are caused usually by objective reasons, for example, such as technical order limits, the Transsib is in thrall to the will of controlling authorities.
“Problem issues do not depend on railwaymen. Nowadays, the work of customs and border guards is still a factor restraining cargo transportation speed. It is impossible to calculate the exact transportation time because of the delays in ports, the lack of clear-cut technologies and rules in part of customs clearance and unpredictable actions of the customs. In our opinion, a transit container should not be checked by customs officers. Nowadays, however, a transit container is checked by customs every time it crosses the border,” stated Mr Yakunin. That is why one of the most important transit directions – via Ukraine – is blocked, because problems with customs and borders are especially urgent there.
The experience of Ukrainian container ports proves that such barriers can hardly be destroyed in an evolutionary manner, which is why, in particular, the Ukrainian Ministry of Infrastructure supported the offer of the Odessa port to develop a draft law “On Container Transportation.” In the framework of the CCTT, Russian participants in the container transportation process initiated development of federal draft laws “On Transit of Cargo via the Territory of the Russian Federation” and “On Combined Transportation of Cargoes”.
Projects connected with IT development must play a special role in removing the barriers on the road of transit. One of them is “Electronic Train” (non-commercial innovative project envisaging development and implementation of through information technologies with the use of transport and commercial e-documents). It will be trialed at the container train “Vostochny Veter” (Eastern Wind) to which the “Baltika-Transit” line will be connected (at the second stage of the project realisation). Choosing the “Vostochny Veter” route (a joint logistics product of the railways of Germany, Poland, Belarus, Russia, and Kazakhstan with the participation of TransInvest holding company) will allow work on a number of bottle necks including the joins between different transport legislations (CIM-SMGS transfer at the Malasheviche border crossing), transshipment of cargo from 1435mm rolling stock to 1520mm railcars (Brest reloading district), integration of e-document turnover at railways with 1520 mm wide gauge with UN international standards systems (EDIFACT).
This project is a factor in increasing the competitiveness of the Transsib at the expense of international cargo transportation document turnover optimisation, marked the CCTT. Another project approved by the Committee and promoted by TransContainer is the launch of a preliminary e-declaration system on the basis of the “Volkswagen Rus” container train. The system will be tested on the railways of Russia, Latvia, and Estonia.
In its turn, senior managers at TransContainer developed a number of initiative to offer the ССЕЕ. In fact, they proposed a proclamation containing four key statements targeted at speeding up the growth of transit transportation from continental China to Europe. First of all, the CIM-SMGS invoice must be put into operation in this direction; otherwise it will be difficult to attract significant Chinese cargo flow to the Transsib.
Secondly, tariffs implemented on the routes coinciding with the international transport corridor should not be changed for a long time (at least five years) – this will help create and support the service. Serious attention should be paid to harmonisation of legal norms and standards. Ambivalent interpretation of definitions is the most serious barrier restraining development of cargo transportation and strengthening the subjectivity of controlling authorities. A shining example of it is the attempt by TransContainer to attract a prospective cargo flow – laminated flooring – to the Austria – Ukraine – Russia line. The code of this cargo, used by the customs of the EU and Russia, differs from the coding used at the State Customs Service of Ukraine, and the cargo was detained.
“A criminal case was opened on smuggling. Earlier, this cargo had been transported by road haulage, so the company had not faced such a situation before. The consignor’s rights were asserted in court, however, the cargo flow left the line,” said Petr Baskakov. Another target of the company is to implement preliminary e-declaration. This mechanism, already applied at the terminal of TransContainer in Zabaikalsk, should be moved further west. This will prevent disputes and speed up the processes of cargo clearance at the border (by at least 1.5 days according to the company’s calculations).
Finally, the most important target must be the replenishment of cargo loading resources on the 1520 network. This issue is one of the most fundamental, but until it is solved, it is impossible to speak about the development while the park is ageing and written off. Nowadays, the average age of container flat wagons on the 1520 area is 25 years, and Russia is practically the only representative on the network that renews the park actively (the average age of this rolling stock on RZD’s network is 13 years). In the last decade, the number of flat wagons in Russia increased by 54%, while the park of the neighboring states reduced by 40%. This problem may be solved by setting a wagon constituent, awakening private companies’ interest in investment into rolling stock renewal. The last target is so scaled that it may be put in one line with infrastructure expenditure to be faced by the Transsib (according to RZD’s estimates, over RUR 193 million in 2010 prices till 2015).
By Vladimir Khatkevich
[~DETAIL_TEXT] => Time for A New Strategy
According to the data of RZD announced at the 20th plenary meeting of the International Association “Coordinating Council on Trans-Siberian Transportation” (CCTT), transit of large capacity containers via the Transsib in eight months of 2011 increased by 23% in comparison with the same period the previous year and amounted to 22,380 TEU. However, the growth was more active in the first half of 2011 (+32% year-on-year up to 16,170 TEU); in the same period of 2010 the transit volume on the route increased by 63% and amounted to 12,250 TEU.
The share of transit in foreign economic transportation has also reduced: in January-August 2011 it was 7.2%, in the first half of the year it was 7.3%, and in the first six months of 2010 it was 8.5%. Despite the enlarged carrying capacity of the route, contrary to its key position in the East-West transportation system, the Transsib remains an unused resource in the global cargo transportation system. Naturally, there are some objective reasons for this – more flexible prices for services provided by sea transporters or their minimised customs barriers. “An objective prerequisite that has a dramatic impact on development of transit transportation via the Transsib is the vital difference between business process schemes on the sea and railway lines.
A characteristic of a shipping company’s transport process is flexibility, an ability to react quickly to market changes especially using tariffs. On the other hand, tariff formation on the Transsib is a complicated and slow process because railway tariffs are regulated by the state, which slows down the reaction of the Trans-Siberian transport service to these or those changes in the market situation, emphasised Vladimir Yakunin, the Chairman of the Association and the President of RZD, at the 20th meeting of the CCTT. In the opinion of RZD senior managers, it is high time for the strategic decision – abolition of state regulation in this sector; otherwise the Transsib will lose not only to sea transport, but to road haulage as well.
“It is a paradox, but our serious competitors are sea lines as well as road hauliers. Nowadays, road transporters carry cargoes, including containers, a distance of more than 2,000 km on the through routes Europe-Asia. It is a serious challenge to the Transsib, and we should react to it together,” said Mr Yakunin. Russia’s contribution to the solution of the problem may be deregulation of tariffs on transit transportation via the Transsib, noted the Head of Russian Railways. Anyway, it is the Government who will make the decision.
The logistics of the Transsib’s operation requires new approaches too. “The high level of the through rate on transit transportation via the Trans-Siberian mainline and non-transparency (unpredictability) of the final cost of cargo delivery for a client are caused by a large number of participants in the transport and logistic chain, who have their own commercial interests and, sometimes, oppositely directed business strategies,” stated members of the CCTT. The radical solution to the problem, approved by the Association, is the launch of an international logistics operator in the sector of transit container transportation involving the Transsib.
The new organisation, operating in the framework of the CCTT, is suggested to be formed on the basis of the participants of transportation in the East-West direction. It is not known what status the organisation will have as a market player; however, its property base is supposed to have the status of a capital created by means of share participation (i.e. there is the basis for the commercial activity of the new organisation). “However, the idea of a business organisation consisting of 113 members can hardly be carried out. The operator’s functions will more likely include managing the transport corridor. This variant is quite sustainable, especially if we take into account that the issue of deregulation of tariffs on transit transportation is being actively discussed in Russia,” commented Mr Yakunin.
It is expected that the participants’ contribution to the capital will be their transport capacities or resources and highly skilled personnel. “The international logistics operator will be formed on the basis of full and associated members of the CCTT. Any assignment of shares is possible only if it is approved by the logistic operator’s Board of Directors,” offered the CCTT. The product line of the new company will be optimal through tariff rate, a number of East-West special transit routes with the participation of the Transsib, and a set of transparent and clear for the market criteria for choosing the optimal route. These qualities, in the opinion of the CCTT members, are able to operate in the new key segment for the Transsib – transportation of cargo from China to Europe.
This freight base is developing very fast, and there are several land and combined international transport routes already operating or being formed. Meanwhile, not all of them are direct competitors to the Transsib. “Trans-Siberian and Trans-Chinese lines with an access to the 1520 mm wide gauge via the Dostyk-Alashankou border crossing may develop synchronically, taking into account the intensive development of inner provinces of China and Xinjiang Uyghur Autonomous Region,” run the materials of the 20th plenary meeting of the CCTT.
TransContainer supports the opinion that the balanced work of these two lines is rather promising. “Nowadays, cargoes to/from China are carried via the Zabaikalsk border crossing. 59,000 TEU was transported via this corridor in 2010, and in the first eight months of 2011 over 52,000 TEU was carried there, a 54% increase in comparison with the similar period of the previous year. The Dostyk border crossing is the second prospective point of access from China to the 1520 area, although its potential is hardly used now,” explained Petr Baskakov, CEO of TransContainer. “A lot of people think that lines via the Dostyk compete with those via the Zabaikalsk. It is not so.
Cargoes from eastern and central China are carried via the Zabaikalsk, and it would be more efficient to transport freight from the western provinces of the People’s Republic of China via the Dostyk border crossing. The western regions of China are actively developing nowadays, the potential of the freight base there is 1.5 million TEU per annum. This cargo flow will not be able to be transported via ports because Chinese railway infrastructure is limited. So, we can count on 250,000-300,000 TEU of transit to be carried via Kazakhstan and Russia.”
The development strategy of the line should be based on a search for a specific cargo base natural for railway transport, the top-management of the CCTT is sure. “The importance of railway transport for expensive and value-added cargoes is increasing nowadays,” noticed Mr Yakunin.
“Moreover, the role of railways is growing due to ecology enhancement programmes and improvement of transportation safety. Finally, railways are a link of the infrastructure that helps to achieve a better integration in Eurasia. This is especially important under the conditions of the second wave of the economic recession, which we face today.” The Transsib must orient mainly at cargo owners interested in fast delivery of freight. This is what the Transsib in 7 Days project was created for as well as the new initiative of RZD – the Concept of Container Business Complex Development approved by the holding company on August 30. Its basic constituents are harmonisation of transport legislation in Eurasia (including liquidation of problems in junction points); attraction of resources from interstate investment institutions; logistics market development; transportation processes computerisation. Finally, it is planned to create a system of “railway ports” in industrial and transport centres of Russia and the CIS as well as in China and Western Europe – this goal shows how scaled the programme is.
“After realisation of the Concept, consignors will get an opportunity for efficient diversification of cargo delivery schemes using the RZD transport system and floating capital saving due to faster and more reliable transportation,” stated Mr Yakunin. Nowadays, these statements are partially being put into practice, and, in fact, an example of them is block transportation of brand car components on the line Europe – China. “The services Duisburg – Chongqing, Duisburg – Moscow, Neutraubling – Shenyang are prospective from the standpoint of the target market segment – this is transportation of high-tech expensive goods, which have a limited period of life in the market. What attracted the clients was delivery time and, which was even more important, a stable service with guaranteed deadlines,” marked Mr Baskakov.
Share and win
“Partnership will give more than competition,” the Concept of RZD declares. “The Trans-Siberian railway mainline is just a part of the whole Trans-Siberian line. And the level of the through tariff depends not only on the rates set by RZD, but on sea charter rates, rates of stevedores, and railway tariffs on cargo transportation via the territory of states crossed by the line or which are a part of the route,” said Mr Yakunin.
The complex character of the tariff problem is proved by the dynamics of one of the basic container block trains connecting the East and the West with the help of the Transsib – “Baltika-Transit” (a joint product of railways of Latvia, Lithuania, Estonia, Kazakhstan, Russia, and the operator of the
line – FESCO Integrated Transport). According to the CCTT, the volume of cargoes transported in this direction grew by 63% despite a serious increase in basic rates on transportation of containers destined for Central Asia countries implemented by RZD at the beginning of 2011 (+67% for wagons of the public park, and +44% for private railcars).
Simultaneously, better tariffs on railway transportation of cargoes destined for Afghanistan were put into operation (RZD’s basic rates on transportation in public wagons increased by 17%, and those on transportation in private railcars fell by 35%), but transportation volume on the line cut by 39%. On the whole, since the launch of the “Baltika-Transit” train (May 2003), more than 100,000 TEU has been transported via the line. However, the result of the first half of 2011 (9,400 TEU) made just 46.6% of the total volume of cargo carried there last year. To refill the freight base this year, it was planned to attract transit from Afghanistan via Russia and the Baltic ports destined for Europe and the USA, however, the project is still at an initial stage.
As for direction of transportation as well as container lines, a characteristic of the Transsib is an uneven loading volume. In eight months of 2011, there was a decrease in the cargo volume transported in the most popular directions – Russia – Kazakhstan
(-4% to 107,643 TEU), Russia – Poland (-6% to 148,772 TEU), and Russia – Belarus (-5% to 128,937 TEU). At the same time, there was a growth in container transportation volumes at a number of not so loaded lines –
Russia – Estonia (+56% to 21,658 TEU), Russia – Mongolia (+37% to 4,683 TEU), Russia – Lithuania (+16% to 7,950 TEU), Russia – Finland (+6% to 17,530 TEU).
In January-August 2011, the transportation volume between Europe and China (via the Zabaikalsk border crossing) grew sevenfold to 2,488 TEU; the volume of freight carried via the Nakhodka Vostochnaya – Moscow line increased by 32% (to 30,696 TEU). 4,061 TEU was transported on the Nakhodka Vostochnaya – Cherkessk line (a fivefold increase), and 2,020 TEU was carried on the Nakhodka Vostochnaya – Martsevo line (+80%). Meanwhile, a number of lines that were opened in early 2011 stagnated. Thus, there was only one train that ran via Nakhodka Vostochnaya – Shushary and Chongqing – Cherkessk lines in eight months of 2011. The container transportation volume of the following lines cut: Zabaikalsk – Martsevo (-8% to 1,154 TEU), Nakhodka Vostochnaya – Ablyk (-16% to 5,281 TEU).
In the first eight months of 2011, China – Hungary direction (Zabaikalsk – Chop, Brest line) was loaded by 7% less than in the same period the previous year, only 3,862 TEU was transported there in January-August 2011. The varied dynamics took place amid the active efforts taken by RZD to form the optimal tariff policy at the Transsib. “We are doing, and will do, everything for the Transsib. Tariff rates on transit container transportation along Russian railways via the Far Eastern ports are set at the level that depends on the cost-price only. The new order of calculation of basic tariff rates on transit cargo transportation in the international communication, which was adjusted with all railway administrations and put into operation in 2011, allowed to create equal competition tariff conditions for all transit directions,” said Mr Yakunin.
On a trial basis, RZD formed a special tariff for a container train (at some definite lines). “If the logistic is optimal – the train and its wagons are loaded by 100%, the tariff on the container train (calculated as per one container) is almost similar to its level in 2010, and is even lower for a number of directions,” said the Head of RZD. However, RZD’s resources for this tariff scheme are not endless. “We still consider that an efficient decrease in the through tariff rate must be based on an adequate reduction of tariffs or prices for services by all participants in the transportation process,” declared Mr Yakunin.
Among the recommendations given by the CCTT are observance of the fixed tariff during a charter year; revision of rates of shipping companies on export and import cargo transportation via the sea section of the Trans-Siberian line; those of stevedores on transit and foreign trade cargoes handling in the sea ports; those of the Federal State Enterprise “Departmental Security Service of Railroad Transport of Russian Federation” – on escorting and securing of transit cargo carried in single containers via the Transsib; and rates of port dues set by the Ministry of Transport. The list shows how complicated the problem is, moreover, it does not include transportation via neighbouring and other linked states.
The search for price consensus among the transportation participants becomes even more complicated if we take into account the fact that sea container lines will practically always win the tariff fight with land routes. Clients who have access to sea lines prefer deep-sea services, but the very fact of the dialogue between such consumers and transporters via the Transsib is encouraging. Korail CEO Huh Joon-Young announced at the 20th plenary meeting of the CCTT that the competitiveness of sea transporters should be treated more seriously “because container ports are developing their infrastructure actively, and shipping companies start to use vessels with the capacity of up to 14,000 TEU, the lines may give a significant discount.”
Tadakuni Shiomoto, President of Trans-Siberian Intermodal Operators of Japan/Deputy Chairman of CCTT, said, “If we discuss problems of the Transsib, we should mention tariffs. For example, deep sea transportation from Japan to Moscow costs about $5,500 per container, while transportation to Moscow via the Transsib costs approximately $9,000. The second problem is delays in ports caused by actions of customs bodies. In ports, they last from 10 to 20 days and even longer. And using sea transporters’ services means a stable delivery time, and this is what Chinese services, for example, offer. These problems must be solved to provide the competitiveness of the Transsib as a transport alternative.
Over Barriers
Railwaymen complain that they are not able to provide the fixed transportation time, although, sea lines have a similar problem. This is proved by the latest initiative of Maersk targeted at the liquidation of transit time violations – this autumn the company launched a principally new mechanism of deep sea service work (so-called “Daily Maersk”). However, if the delays at sea lines are caused usually by objective reasons, for example, such as technical order limits, the Transsib is in thrall to the will of controlling authorities.
“Problem issues do not depend on railwaymen. Nowadays, the work of customs and border guards is still a factor restraining cargo transportation speed. It is impossible to calculate the exact transportation time because of the delays in ports, the lack of clear-cut technologies and rules in part of customs clearance and unpredictable actions of the customs. In our opinion, a transit container should not be checked by customs officers. Nowadays, however, a transit container is checked by customs every time it crosses the border,” stated Mr Yakunin. That is why one of the most important transit directions – via Ukraine – is blocked, because problems with customs and borders are especially urgent there.
The experience of Ukrainian container ports proves that such barriers can hardly be destroyed in an evolutionary manner, which is why, in particular, the Ukrainian Ministry of Infrastructure supported the offer of the Odessa port to develop a draft law “On Container Transportation.” In the framework of the CCTT, Russian participants in the container transportation process initiated development of federal draft laws “On Transit of Cargo via the Territory of the Russian Federation” and “On Combined Transportation of Cargoes”.
Projects connected with IT development must play a special role in removing the barriers on the road of transit. One of them is “Electronic Train” (non-commercial innovative project envisaging development and implementation of through information technologies with the use of transport and commercial e-documents). It will be trialed at the container train “Vostochny Veter” (Eastern Wind) to which the “Baltika-Transit” line will be connected (at the second stage of the project realisation). Choosing the “Vostochny Veter” route (a joint logistics product of the railways of Germany, Poland, Belarus, Russia, and Kazakhstan with the participation of TransInvest holding company) will allow work on a number of bottle necks including the joins between different transport legislations (CIM-SMGS transfer at the Malasheviche border crossing), transshipment of cargo from 1435mm rolling stock to 1520mm railcars (Brest reloading district), integration of e-document turnover at railways with 1520 mm wide gauge with UN international standards systems (EDIFACT).
This project is a factor in increasing the competitiveness of the Transsib at the expense of international cargo transportation document turnover optimisation, marked the CCTT. Another project approved by the Committee and promoted by TransContainer is the launch of a preliminary e-declaration system on the basis of the “Volkswagen Rus” container train. The system will be tested on the railways of Russia, Latvia, and Estonia.
In its turn, senior managers at TransContainer developed a number of initiative to offer the ССЕЕ. In fact, they proposed a proclamation containing four key statements targeted at speeding up the growth of transit transportation from continental China to Europe. First of all, the CIM-SMGS invoice must be put into operation in this direction; otherwise it will be difficult to attract significant Chinese cargo flow to the Transsib.
Secondly, tariffs implemented on the routes coinciding with the international transport corridor should not be changed for a long time (at least five years) – this will help create and support the service. Serious attention should be paid to harmonisation of legal norms and standards. Ambivalent interpretation of definitions is the most serious barrier restraining development of cargo transportation and strengthening the subjectivity of controlling authorities. A shining example of it is the attempt by TransContainer to attract a prospective cargo flow – laminated flooring – to the Austria – Ukraine – Russia line. The code of this cargo, used by the customs of the EU and Russia, differs from the coding used at the State Customs Service of Ukraine, and the cargo was detained.
“A criminal case was opened on smuggling. Earlier, this cargo had been transported by road haulage, so the company had not faced such a situation before. The consignor’s rights were asserted in court, however, the cargo flow left the line,” said Petr Baskakov. Another target of the company is to implement preliminary e-declaration. This mechanism, already applied at the terminal of TransContainer in Zabaikalsk, should be moved further west. This will prevent disputes and speed up the processes of cargo clearance at the border (by at least 1.5 days according to the company’s calculations).
Finally, the most important target must be the replenishment of cargo loading resources on the 1520 network. This issue is one of the most fundamental, but until it is solved, it is impossible to speak about the development while the park is ageing and written off. Nowadays, the average age of container flat wagons on the 1520 area is 25 years, and Russia is practically the only representative on the network that renews the park actively (the average age of this rolling stock on RZD’s network is 13 years). In the last decade, the number of flat wagons in Russia increased by 54%, while the park of the neighboring states reduced by 40%. This problem may be solved by setting a wagon constituent, awakening private companies’ interest in investment into rolling stock renewal. The last target is so scaled that it may be put in one line with infrastructure expenditure to be faced by the Transsib (according to RZD’s estimates, over RUR 193 million in 2010 prices till 2015).
By Vladimir Khatkevich
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At the end of August 2011 the management of Russian Railways JSC discussed and adopted the Concept of integrated development of the container business of the holding. Developers of the document have tried to fix promising avenues of development of this segment of the rail industry within the next few years. Market participants note that the authors of the document should pay more attention to such issues as rate regulation, the organization of intermodal transportation as well as the actions of the holding in the sphere of transit transportation.Array
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[DETAIL_TEXT] => In Pursuit of a World Class Level
According to items of the Concept in the near future the level of containerized transportation turnover on the rail network will increase from 1.6% to 4%. RZD’s ambitious plans to improve quality and to increase the volume of transit containerized cargo connected to the fact that the global transportation market will add 8% per year during next 10 years. Together with this the increase of the volume of combined transportation will be 8% per year, which is well above the predicted increase in road and other kinds of rail shipments. The major increases in container throughput will happen because of the growing trade between the countries of the Asia-Pacific region and Europe, the document says. And most of that traffic can be transit cargo that can go through CIS countries if the necessary technological, legislative, regulatory and tariff conditions are created.
In general, the level of containerization of cargo on the rail network is very low. And, despite its dynamic growth, it will not be able to reach the level of world figures in the short term without creating the necessary infrastructure and new transport products.
There is also a detailed analysis of existing transport products of RZD’s containerized transportation.
Specifically, it is noted that the main types are single container shipments and container trains, as well as related services. At the moment customer satisfaction with the cost of transportation services is average, and satisfaction with quality is estimated as below average. The authors of the Concept say that the main reasons of the problems are relatively low route speed in most directions, the low level of development of the logistic and terminal infrastructure, lack of range and low level of freight forwarding services.
Criticism of “Needlework”
Approving the concept in general, most analysts say that there are many blind spots in the document. “There is nothing fundamentally unrealistic or impossible in it,” says Dmitry Adamidov, expert of Investcafe analytical agency. “On the other hand, in order to achieve our goals, firstly, we should upgrade the system of transportation management and focus directly on its customers. And not only on large but also on medium and small ones. I should say that RZD haven’t been given the proper attention to this question for a long time. Only now the situation is beginning to change for the better”.
According to Mr Adamidov, individual consideration should be given to a set of RZD’s actions in the transit sphere. “Frankly speaking, I still do not completely understand what a competitive pricing policy the Russian Railways JSC will be able to build” says the expert. “The matter is that in this case the basic market is cargo going from countries of Asia-Pacific region to Europe. As I know the management of RZD don’t have any common vision of transit prospects. Even if they create the ideal technology and we are able to deliver cargos faster than sea transport, it isn’t clear, whether client will be ready to pay more and, if yes, than how much more.” According to the expert there are not enough data and exact figures in the document.
“Advantages of the Transsib transit over sea transportation are stated in the document, but I haven’t seen any exact figure,” he says. “There are RZD’s rates for transportation of containers, but there is no understanding of the overall economy for the carrier and therefore it is difficult to draw conclusions as to whether the customer will go to the rail network and in what quantities.” One of the experts says that the Concept is a criticism of “needlework”. According to him, the staff of relevant departments of the Russian Railways JSC started to work without adequate preparation.
Thus, in his opinion, RZD considers that the container market has overcome the consequences of the crisis and it will grow not less than 8% and “for some reason on the basis of this RZD predicts to itself double growth in the next 10 years”, which, of course, gives 8% on average. “But for some reason the authors divided the road and rail container transportation into classes, individually assigning them low growth, and to the mixed rail-road transport – high,” sums up the specialist.
The marketing component has not worked out as well: figures given as prerequisites are controversial. In connection with this all goals mentioned in the document look too ambitious. When first it talks about the average annual growth of 8% in 10 years (which is not something exorbitant), the authors then added to their circulation maximum more than 12 million TEU by 2015, and minimum – about 10 million TEU. This, according to expert estimates, means from a three-to five-fold increase compared with present indicators.
Another point of view has one of the developers of the Concept, Semyon Rezer, the President of the Guild of Freight Forwarders. “Forecasts of growth of container traffic, stated in the document, cannot be called unreal” he says. “If now the world rate is 10%, in Russia it is 20%. By increasing the volume of cargo after the crisis, by the construction of new container terminals (for example, in Tuchkovo), dynamics of purchase of cars and containers is further enhanced. Another thing is that we are so far behind the world level, that even with this rate, we wll have to catch up for a long time.“
Give a Freedom to Tariffs
According to Mr Rezer, a section on the actions of RZD in the transit sphere deserves special attention. “Only with the help of container transportation we can join the global system,” says Mr Rezer. “We need to increase the range of transport products, as well to remake cargo delivery system. How is it made in Europe? You buy a place on the platform for the transportation of container. If you do not have time to load the container, the train leaves empty, but the carrier gets the money. We should adopt this system. The opportunity of its adaptation to Russian realities has already been discussed on a conference. Empirically, it can be implemented in 2012.”
According to the expert, there is a lack of attention to the usage of new products in this segment in the Concept. “I do believe that in the program of modernization of the Russian transport industry a separate section should be dedicated to container transportation,” says Mr Rezer. “It is necessary to foresee the construction of terminals, as well as funding of this construction. The project of this subprogramme has been developed by RZD and now it is under consideration at the Government Commission on Transport.”
All the innovations associated with the introduction of new technologies in container transportation, should be supported at the legislative level. “Carriage rules, standards that form containers should be tailored to carriers, routes should be strictly economically stipulated, the new models of containers should be supplied to market in a short time,” says the expert. “Containers for liquefied gases from Surgut to the Czech Republic are especially popular now, and it is very profitable route. Flexitanks and everything in this sphere should also be actively implemented”. According to Mr Rezer, measures of tariffs regulation of container transportation are also not worked out in the document.
“Container traffic on RZD’s network has only 2.06% of the total volume of this type of transportation,” said the President of the Guild of Freight Forwarders. “Road and sea transportation have the rest. Meanwhile, this is a competitive market segment. This means that we need to give a freedom to tariffs, fixing only a lower limit on the level of payback of infrastructure.” This should be done first in the respect of international transit container transportation, and then in respect of all other types of container transportation.
There isn’t enough attention to intermodal transportation and to interaction with other transport modes – road and sea – in the document, according to the expert. “In addition, there is practically no such component as a “freight forwarder” in the Concept. Container traffic is directly related to forwarding, and yet this word is mentioned in the paper once or twice. There is a definition of the operator, of the logisticians, but not of the freight forwarder,” notices the expert. Speaking about the time needed to implement measures stated in the Concept, Mr Rezer also notices that the technical part is the most costly both in terms of time and money.
“I think that in the next 3–5 years we will reach a level where the terminal for large containers will be in each regional center,” he says.
Container Regulation is Required
The development of container transportation, its tasks and the required regulatory and technological support will not necessarily coincide with the task of transit segment development. Thus, for the latter the creation of terminal and distribution hubs in the country is not necessary, because the faster the cargo passes through the Russian rail network, the better for all parties involved in the organization of the transportation.
Speaking about the prospects of container transportation in Russia, Maxim Munkin, Director of InterRail Services in Russia notices: “From the standpoint of transit development the main plus of the Concept is the program on increasing the speed of container trains. As for the increase of the range of cargo container transportation, particularly through greater usage of tank containers than here, RZD should change its attitude to special containers, which have been widely used around the world for a long time.”
He believes that currently in Russia there is a one-sided approach to them, when, in fact, transportation is carried out without an adequate regulatory framework. “Meanwhile, there is a significant regulatory and infrastructural base all over the world for each shipment in tank containers. And as for us, we risk a lot when order special containers and the interpretation of the regulatory base and tariff conditions by a specific representative of a railroad administration threatens the business of the company, which develops the transportation in tank containers or other specialized containers,“ says the expert.
To change the situation we need to implement strict regulation of transport conditions for containers of various types (ordinary boxes, tank containers, containers for bulk goods), whose parameters do not coincide with the universal parameters. “For a some reason we understand only lengths of 20, 30 or 40 feet as the universal parameters. But as for the container we need to regulate parameters much more. So we often refuse our customers transportation of goods in containers, the characteristics of which differ from what RZD says.
We want to avoid confusion in the form of transportation cost calculations as if it were car shipments, which increases the cost of transportation seriously but technically don’t bring any additional transportation costs to the railroad connected with non-standard containers. At the same time all this exotica complies with ISO, it is characterized by distinctive features of the container and has a BIC registration, but after reaching the Russian Railways JSC it turns into a car shipment, although the container has a frame and fittings that make them able to be processed on a common set of technological principles.
Therefore, the conditions of carriage, loading and securing in place rules for all types of containers that meet the appropriate standards of ISO, as well as developed tariff conditions that encourage the usage of containers should be clearly defined for transportation on RZD’s network,” says Mr Munkin.
To change the situation it is necessary to correct the principles of pricing on shipment of empty containers. “Nobody can explain why the transportation of an 20-foot empty tank container is calculated using 1.4 coefficient. This is nothing else but an additional tax for owners of high-tech rolling stock. The same can be observed if we mention heat-insulated and reefer containers. The position in respect of containers for bulk cargo is completely incomprehensible too. Containers with the standard length of, for example, 30 feet, can have quite different parameters of width and height.
Therefore, the rail net is ready to take some of them as containers, while others are needed to be registered as car shipments. The development of container transportation in Russia can’t be developed only through the universal containers. It is necessary to consider the full range of advanced technologies offered by the container segment,” stressed the Head of InterRail Services.
In general, analyzing the Concept, the experts recognize the need of the existence of such documents. At the same time they say that the Concept supposes a deeper and more detailed analysis of various aspects of the container transportation segment, as well as more attention to exact figures and facts.
by ELENA VELIGZHANINA, ALBINA BULATOVA
[~DETAIL_TEXT] => In Pursuit of a World Class Level
According to items of the Concept in the near future the level of containerized transportation turnover on the rail network will increase from 1.6% to 4%. RZD’s ambitious plans to improve quality and to increase the volume of transit containerized cargo connected to the fact that the global transportation market will add 8% per year during next 10 years. Together with this the increase of the volume of combined transportation will be 8% per year, which is well above the predicted increase in road and other kinds of rail shipments. The major increases in container throughput will happen because of the growing trade between the countries of the Asia-Pacific region and Europe, the document says. And most of that traffic can be transit cargo that can go through CIS countries if the necessary technological, legislative, regulatory and tariff conditions are created.
In general, the level of containerization of cargo on the rail network is very low. And, despite its dynamic growth, it will not be able to reach the level of world figures in the short term without creating the necessary infrastructure and new transport products.
There is also a detailed analysis of existing transport products of RZD’s containerized transportation.
Specifically, it is noted that the main types are single container shipments and container trains, as well as related services. At the moment customer satisfaction with the cost of transportation services is average, and satisfaction with quality is estimated as below average. The authors of the Concept say that the main reasons of the problems are relatively low route speed in most directions, the low level of development of the logistic and terminal infrastructure, lack of range and low level of freight forwarding services.
Criticism of “Needlework”
Approving the concept in general, most analysts say that there are many blind spots in the document. “There is nothing fundamentally unrealistic or impossible in it,” says Dmitry Adamidov, expert of Investcafe analytical agency. “On the other hand, in order to achieve our goals, firstly, we should upgrade the system of transportation management and focus directly on its customers. And not only on large but also on medium and small ones. I should say that RZD haven’t been given the proper attention to this question for a long time. Only now the situation is beginning to change for the better”.
According to Mr Adamidov, individual consideration should be given to a set of RZD’s actions in the transit sphere. “Frankly speaking, I still do not completely understand what a competitive pricing policy the Russian Railways JSC will be able to build” says the expert. “The matter is that in this case the basic market is cargo going from countries of Asia-Pacific region to Europe. As I know the management of RZD don’t have any common vision of transit prospects. Even if they create the ideal technology and we are able to deliver cargos faster than sea transport, it isn’t clear, whether client will be ready to pay more and, if yes, than how much more.” According to the expert there are not enough data and exact figures in the document.
“Advantages of the Transsib transit over sea transportation are stated in the document, but I haven’t seen any exact figure,” he says. “There are RZD’s rates for transportation of containers, but there is no understanding of the overall economy for the carrier and therefore it is difficult to draw conclusions as to whether the customer will go to the rail network and in what quantities.” One of the experts says that the Concept is a criticism of “needlework”. According to him, the staff of relevant departments of the Russian Railways JSC started to work without adequate preparation.
Thus, in his opinion, RZD considers that the container market has overcome the consequences of the crisis and it will grow not less than 8% and “for some reason on the basis of this RZD predicts to itself double growth in the next 10 years”, which, of course, gives 8% on average. “But for some reason the authors divided the road and rail container transportation into classes, individually assigning them low growth, and to the mixed rail-road transport – high,” sums up the specialist.
The marketing component has not worked out as well: figures given as prerequisites are controversial. In connection with this all goals mentioned in the document look too ambitious. When first it talks about the average annual growth of 8% in 10 years (which is not something exorbitant), the authors then added to their circulation maximum more than 12 million TEU by 2015, and minimum – about 10 million TEU. This, according to expert estimates, means from a three-to five-fold increase compared with present indicators.
Another point of view has one of the developers of the Concept, Semyon Rezer, the President of the Guild of Freight Forwarders. “Forecasts of growth of container traffic, stated in the document, cannot be called unreal” he says. “If now the world rate is 10%, in Russia it is 20%. By increasing the volume of cargo after the crisis, by the construction of new container terminals (for example, in Tuchkovo), dynamics of purchase of cars and containers is further enhanced. Another thing is that we are so far behind the world level, that even with this rate, we wll have to catch up for a long time.“
Give a Freedom to Tariffs
According to Mr Rezer, a section on the actions of RZD in the transit sphere deserves special attention. “Only with the help of container transportation we can join the global system,” says Mr Rezer. “We need to increase the range of transport products, as well to remake cargo delivery system. How is it made in Europe? You buy a place on the platform for the transportation of container. If you do not have time to load the container, the train leaves empty, but the carrier gets the money. We should adopt this system. The opportunity of its adaptation to Russian realities has already been discussed on a conference. Empirically, it can be implemented in 2012.”
According to the expert, there is a lack of attention to the usage of new products in this segment in the Concept. “I do believe that in the program of modernization of the Russian transport industry a separate section should be dedicated to container transportation,” says Mr Rezer. “It is necessary to foresee the construction of terminals, as well as funding of this construction. The project of this subprogramme has been developed by RZD and now it is under consideration at the Government Commission on Transport.”
All the innovations associated with the introduction of new technologies in container transportation, should be supported at the legislative level. “Carriage rules, standards that form containers should be tailored to carriers, routes should be strictly economically stipulated, the new models of containers should be supplied to market in a short time,” says the expert. “Containers for liquefied gases from Surgut to the Czech Republic are especially popular now, and it is very profitable route. Flexitanks and everything in this sphere should also be actively implemented”. According to Mr Rezer, measures of tariffs regulation of container transportation are also not worked out in the document.
“Container traffic on RZD’s network has only 2.06% of the total volume of this type of transportation,” said the President of the Guild of Freight Forwarders. “Road and sea transportation have the rest. Meanwhile, this is a competitive market segment. This means that we need to give a freedom to tariffs, fixing only a lower limit on the level of payback of infrastructure.” This should be done first in the respect of international transit container transportation, and then in respect of all other types of container transportation.
There isn’t enough attention to intermodal transportation and to interaction with other transport modes – road and sea – in the document, according to the expert. “In addition, there is practically no such component as a “freight forwarder” in the Concept. Container traffic is directly related to forwarding, and yet this word is mentioned in the paper once or twice. There is a definition of the operator, of the logisticians, but not of the freight forwarder,” notices the expert. Speaking about the time needed to implement measures stated in the Concept, Mr Rezer also notices that the technical part is the most costly both in terms of time and money.
“I think that in the next 3–5 years we will reach a level where the terminal for large containers will be in each regional center,” he says.
Container Regulation is Required
The development of container transportation, its tasks and the required regulatory and technological support will not necessarily coincide with the task of transit segment development. Thus, for the latter the creation of terminal and distribution hubs in the country is not necessary, because the faster the cargo passes through the Russian rail network, the better for all parties involved in the organization of the transportation.
Speaking about the prospects of container transportation in Russia, Maxim Munkin, Director of InterRail Services in Russia notices: “From the standpoint of transit development the main plus of the Concept is the program on increasing the speed of container trains. As for the increase of the range of cargo container transportation, particularly through greater usage of tank containers than here, RZD should change its attitude to special containers, which have been widely used around the world for a long time.”
He believes that currently in Russia there is a one-sided approach to them, when, in fact, transportation is carried out without an adequate regulatory framework. “Meanwhile, there is a significant regulatory and infrastructural base all over the world for each shipment in tank containers. And as for us, we risk a lot when order special containers and the interpretation of the regulatory base and tariff conditions by a specific representative of a railroad administration threatens the business of the company, which develops the transportation in tank containers or other specialized containers,“ says the expert.
To change the situation we need to implement strict regulation of transport conditions for containers of various types (ordinary boxes, tank containers, containers for bulk goods), whose parameters do not coincide with the universal parameters. “For a some reason we understand only lengths of 20, 30 or 40 feet as the universal parameters. But as for the container we need to regulate parameters much more. So we often refuse our customers transportation of goods in containers, the characteristics of which differ from what RZD says.
We want to avoid confusion in the form of transportation cost calculations as if it were car shipments, which increases the cost of transportation seriously but technically don’t bring any additional transportation costs to the railroad connected with non-standard containers. At the same time all this exotica complies with ISO, it is characterized by distinctive features of the container and has a BIC registration, but after reaching the Russian Railways JSC it turns into a car shipment, although the container has a frame and fittings that make them able to be processed on a common set of technological principles.
Therefore, the conditions of carriage, loading and securing in place rules for all types of containers that meet the appropriate standards of ISO, as well as developed tariff conditions that encourage the usage of containers should be clearly defined for transportation on RZD’s network,” says Mr Munkin.
To change the situation it is necessary to correct the principles of pricing on shipment of empty containers. “Nobody can explain why the transportation of an 20-foot empty tank container is calculated using 1.4 coefficient. This is nothing else but an additional tax for owners of high-tech rolling stock. The same can be observed if we mention heat-insulated and reefer containers. The position in respect of containers for bulk cargo is completely incomprehensible too. Containers with the standard length of, for example, 30 feet, can have quite different parameters of width and height.
Therefore, the rail net is ready to take some of them as containers, while others are needed to be registered as car shipments. The development of container transportation in Russia can’t be developed only through the universal containers. It is necessary to consider the full range of advanced technologies offered by the container segment,” stressed the Head of InterRail Services.
In general, analyzing the Concept, the experts recognize the need of the existence of such documents. At the same time they say that the Concept supposes a deeper and more detailed analysis of various aspects of the container transportation segment, as well as more attention to exact figures and facts.
by ELENA VELIGZHANINA, ALBINA BULATOVA
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[~PREVIEW_TEXT] => At the end of August 2011 the management of Russian Railways JSC discussed and adopted the Concept of integrated development of the container business of the holding. Developers of the document have tried to fix promising avenues of development of this segment of the rail industry within the next few years. Market participants note that the authors of the document should pay more attention to such issues as rate regulation, the organization of intermodal transportation as well as the actions of the holding in the sphere of transit transportation.
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[DETAIL_TEXT] => In Pursuit of a World Class Level
According to items of the Concept in the near future the level of containerized transportation turnover on the rail network will increase from 1.6% to 4%. RZD’s ambitious plans to improve quality and to increase the volume of transit containerized cargo connected to the fact that the global transportation market will add 8% per year during next 10 years. Together with this the increase of the volume of combined transportation will be 8% per year, which is well above the predicted increase in road and other kinds of rail shipments. The major increases in container throughput will happen because of the growing trade between the countries of the Asia-Pacific region and Europe, the document says. And most of that traffic can be transit cargo that can go through CIS countries if the necessary technological, legislative, regulatory and tariff conditions are created.
In general, the level of containerization of cargo on the rail network is very low. And, despite its dynamic growth, it will not be able to reach the level of world figures in the short term without creating the necessary infrastructure and new transport products.
There is also a detailed analysis of existing transport products of RZD’s containerized transportation.
Specifically, it is noted that the main types are single container shipments and container trains, as well as related services. At the moment customer satisfaction with the cost of transportation services is average, and satisfaction with quality is estimated as below average. The authors of the Concept say that the main reasons of the problems are relatively low route speed in most directions, the low level of development of the logistic and terminal infrastructure, lack of range and low level of freight forwarding services.
Criticism of “Needlework”
Approving the concept in general, most analysts say that there are many blind spots in the document. “There is nothing fundamentally unrealistic or impossible in it,” says Dmitry Adamidov, expert of Investcafe analytical agency. “On the other hand, in order to achieve our goals, firstly, we should upgrade the system of transportation management and focus directly on its customers. And not only on large but also on medium and small ones. I should say that RZD haven’t been given the proper attention to this question for a long time. Only now the situation is beginning to change for the better”.
According to Mr Adamidov, individual consideration should be given to a set of RZD’s actions in the transit sphere. “Frankly speaking, I still do not completely understand what a competitive pricing policy the Russian Railways JSC will be able to build” says the expert. “The matter is that in this case the basic market is cargo going from countries of Asia-Pacific region to Europe. As I know the management of RZD don’t have any common vision of transit prospects. Even if they create the ideal technology and we are able to deliver cargos faster than sea transport, it isn’t clear, whether client will be ready to pay more and, if yes, than how much more.” According to the expert there are not enough data and exact figures in the document.
“Advantages of the Transsib transit over sea transportation are stated in the document, but I haven’t seen any exact figure,” he says. “There are RZD’s rates for transportation of containers, but there is no understanding of the overall economy for the carrier and therefore it is difficult to draw conclusions as to whether the customer will go to the rail network and in what quantities.” One of the experts says that the Concept is a criticism of “needlework”. According to him, the staff of relevant departments of the Russian Railways JSC started to work without adequate preparation.
Thus, in his opinion, RZD considers that the container market has overcome the consequences of the crisis and it will grow not less than 8% and “for some reason on the basis of this RZD predicts to itself double growth in the next 10 years”, which, of course, gives 8% on average. “But for some reason the authors divided the road and rail container transportation into classes, individually assigning them low growth, and to the mixed rail-road transport – high,” sums up the specialist.
The marketing component has not worked out as well: figures given as prerequisites are controversial. In connection with this all goals mentioned in the document look too ambitious. When first it talks about the average annual growth of 8% in 10 years (which is not something exorbitant), the authors then added to their circulation maximum more than 12 million TEU by 2015, and minimum – about 10 million TEU. This, according to expert estimates, means from a three-to five-fold increase compared with present indicators.
Another point of view has one of the developers of the Concept, Semyon Rezer, the President of the Guild of Freight Forwarders. “Forecasts of growth of container traffic, stated in the document, cannot be called unreal” he says. “If now the world rate is 10%, in Russia it is 20%. By increasing the volume of cargo after the crisis, by the construction of new container terminals (for example, in Tuchkovo), dynamics of purchase of cars and containers is further enhanced. Another thing is that we are so far behind the world level, that even with this rate, we wll have to catch up for a long time.“
Give a Freedom to Tariffs
According to Mr Rezer, a section on the actions of RZD in the transit sphere deserves special attention. “Only with the help of container transportation we can join the global system,” says Mr Rezer. “We need to increase the range of transport products, as well to remake cargo delivery system. How is it made in Europe? You buy a place on the platform for the transportation of container. If you do not have time to load the container, the train leaves empty, but the carrier gets the money. We should adopt this system. The opportunity of its adaptation to Russian realities has already been discussed on a conference. Empirically, it can be implemented in 2012.”
According to the expert, there is a lack of attention to the usage of new products in this segment in the Concept. “I do believe that in the program of modernization of the Russian transport industry a separate section should be dedicated to container transportation,” says Mr Rezer. “It is necessary to foresee the construction of terminals, as well as funding of this construction. The project of this subprogramme has been developed by RZD and now it is under consideration at the Government Commission on Transport.”
All the innovations associated with the introduction of new technologies in container transportation, should be supported at the legislative level. “Carriage rules, standards that form containers should be tailored to carriers, routes should be strictly economically stipulated, the new models of containers should be supplied to market in a short time,” says the expert. “Containers for liquefied gases from Surgut to the Czech Republic are especially popular now, and it is very profitable route. Flexitanks and everything in this sphere should also be actively implemented”. According to Mr Rezer, measures of tariffs regulation of container transportation are also not worked out in the document.
“Container traffic on RZD’s network has only 2.06% of the total volume of this type of transportation,” said the President of the Guild of Freight Forwarders. “Road and sea transportation have the rest. Meanwhile, this is a competitive market segment. This means that we need to give a freedom to tariffs, fixing only a lower limit on the level of payback of infrastructure.” This should be done first in the respect of international transit container transportation, and then in respect of all other types of container transportation.
There isn’t enough attention to intermodal transportation and to interaction with other transport modes – road and sea – in the document, according to the expert. “In addition, there is practically no such component as a “freight forwarder” in the Concept. Container traffic is directly related to forwarding, and yet this word is mentioned in the paper once or twice. There is a definition of the operator, of the logisticians, but not of the freight forwarder,” notices the expert. Speaking about the time needed to implement measures stated in the Concept, Mr Rezer also notices that the technical part is the most costly both in terms of time and money.
“I think that in the next 3–5 years we will reach a level where the terminal for large containers will be in each regional center,” he says.
Container Regulation is Required
The development of container transportation, its tasks and the required regulatory and technological support will not necessarily coincide with the task of transit segment development. Thus, for the latter the creation of terminal and distribution hubs in the country is not necessary, because the faster the cargo passes through the Russian rail network, the better for all parties involved in the organization of the transportation.
Speaking about the prospects of container transportation in Russia, Maxim Munkin, Director of InterRail Services in Russia notices: “From the standpoint of transit development the main plus of the Concept is the program on increasing the speed of container trains. As for the increase of the range of cargo container transportation, particularly through greater usage of tank containers than here, RZD should change its attitude to special containers, which have been widely used around the world for a long time.”
He believes that currently in Russia there is a one-sided approach to them, when, in fact, transportation is carried out without an adequate regulatory framework. “Meanwhile, there is a significant regulatory and infrastructural base all over the world for each shipment in tank containers. And as for us, we risk a lot when order special containers and the interpretation of the regulatory base and tariff conditions by a specific representative of a railroad administration threatens the business of the company, which develops the transportation in tank containers or other specialized containers,“ says the expert.
To change the situation we need to implement strict regulation of transport conditions for containers of various types (ordinary boxes, tank containers, containers for bulk goods), whose parameters do not coincide with the universal parameters. “For a some reason we understand only lengths of 20, 30 or 40 feet as the universal parameters. But as for the container we need to regulate parameters much more. So we often refuse our customers transportation of goods in containers, the characteristics of which differ from what RZD says.
We want to avoid confusion in the form of transportation cost calculations as if it were car shipments, which increases the cost of transportation seriously but technically don’t bring any additional transportation costs to the railroad connected with non-standard containers. At the same time all this exotica complies with ISO, it is characterized by distinctive features of the container and has a BIC registration, but after reaching the Russian Railways JSC it turns into a car shipment, although the container has a frame and fittings that make them able to be processed on a common set of technological principles.
Therefore, the conditions of carriage, loading and securing in place rules for all types of containers that meet the appropriate standards of ISO, as well as developed tariff conditions that encourage the usage of containers should be clearly defined for transportation on RZD’s network,” says Mr Munkin.
To change the situation it is necessary to correct the principles of pricing on shipment of empty containers. “Nobody can explain why the transportation of an 20-foot empty tank container is calculated using 1.4 coefficient. This is nothing else but an additional tax for owners of high-tech rolling stock. The same can be observed if we mention heat-insulated and reefer containers. The position in respect of containers for bulk cargo is completely incomprehensible too. Containers with the standard length of, for example, 30 feet, can have quite different parameters of width and height.
Therefore, the rail net is ready to take some of them as containers, while others are needed to be registered as car shipments. The development of container transportation in Russia can’t be developed only through the universal containers. It is necessary to consider the full range of advanced technologies offered by the container segment,” stressed the Head of InterRail Services.
In general, analyzing the Concept, the experts recognize the need of the existence of such documents. At the same time they say that the Concept supposes a deeper and more detailed analysis of various aspects of the container transportation segment, as well as more attention to exact figures and facts.
by ELENA VELIGZHANINA, ALBINA BULATOVA
[~DETAIL_TEXT] => In Pursuit of a World Class Level
According to items of the Concept in the near future the level of containerized transportation turnover on the rail network will increase from 1.6% to 4%. RZD’s ambitious plans to improve quality and to increase the volume of transit containerized cargo connected to the fact that the global transportation market will add 8% per year during next 10 years. Together with this the increase of the volume of combined transportation will be 8% per year, which is well above the predicted increase in road and other kinds of rail shipments. The major increases in container throughput will happen because of the growing trade between the countries of the Asia-Pacific region and Europe, the document says. And most of that traffic can be transit cargo that can go through CIS countries if the necessary technological, legislative, regulatory and tariff conditions are created.
In general, the level of containerization of cargo on the rail network is very low. And, despite its dynamic growth, it will not be able to reach the level of world figures in the short term without creating the necessary infrastructure and new transport products.
There is also a detailed analysis of existing transport products of RZD’s containerized transportation.
Specifically, it is noted that the main types are single container shipments and container trains, as well as related services. At the moment customer satisfaction with the cost of transportation services is average, and satisfaction with quality is estimated as below average. The authors of the Concept say that the main reasons of the problems are relatively low route speed in most directions, the low level of development of the logistic and terminal infrastructure, lack of range and low level of freight forwarding services.
Criticism of “Needlework”
Approving the concept in general, most analysts say that there are many blind spots in the document. “There is nothing fundamentally unrealistic or impossible in it,” says Dmitry Adamidov, expert of Investcafe analytical agency. “On the other hand, in order to achieve our goals, firstly, we should upgrade the system of transportation management and focus directly on its customers. And not only on large but also on medium and small ones. I should say that RZD haven’t been given the proper attention to this question for a long time. Only now the situation is beginning to change for the better”.
According to Mr Adamidov, individual consideration should be given to a set of RZD’s actions in the transit sphere. “Frankly speaking, I still do not completely understand what a competitive pricing policy the Russian Railways JSC will be able to build” says the expert. “The matter is that in this case the basic market is cargo going from countries of Asia-Pacific region to Europe. As I know the management of RZD don’t have any common vision of transit prospects. Even if they create the ideal technology and we are able to deliver cargos faster than sea transport, it isn’t clear, whether client will be ready to pay more and, if yes, than how much more.” According to the expert there are not enough data and exact figures in the document.
“Advantages of the Transsib transit over sea transportation are stated in the document, but I haven’t seen any exact figure,” he says. “There are RZD’s rates for transportation of containers, but there is no understanding of the overall economy for the carrier and therefore it is difficult to draw conclusions as to whether the customer will go to the rail network and in what quantities.” One of the experts says that the Concept is a criticism of “needlework”. According to him, the staff of relevant departments of the Russian Railways JSC started to work without adequate preparation.
Thus, in his opinion, RZD considers that the container market has overcome the consequences of the crisis and it will grow not less than 8% and “for some reason on the basis of this RZD predicts to itself double growth in the next 10 years”, which, of course, gives 8% on average. “But for some reason the authors divided the road and rail container transportation into classes, individually assigning them low growth, and to the mixed rail-road transport – high,” sums up the specialist.
The marketing component has not worked out as well: figures given as prerequisites are controversial. In connection with this all goals mentioned in the document look too ambitious. When first it talks about the average annual growth of 8% in 10 years (which is not something exorbitant), the authors then added to their circulation maximum more than 12 million TEU by 2015, and minimum – about 10 million TEU. This, according to expert estimates, means from a three-to five-fold increase compared with present indicators.
Another point of view has one of the developers of the Concept, Semyon Rezer, the President of the Guild of Freight Forwarders. “Forecasts of growth of container traffic, stated in the document, cannot be called unreal” he says. “If now the world rate is 10%, in Russia it is 20%. By increasing the volume of cargo after the crisis, by the construction of new container terminals (for example, in Tuchkovo), dynamics of purchase of cars and containers is further enhanced. Another thing is that we are so far behind the world level, that even with this rate, we wll have to catch up for a long time.“
Give a Freedom to Tariffs
According to Mr Rezer, a section on the actions of RZD in the transit sphere deserves special attention. “Only with the help of container transportation we can join the global system,” says Mr Rezer. “We need to increase the range of transport products, as well to remake cargo delivery system. How is it made in Europe? You buy a place on the platform for the transportation of container. If you do not have time to load the container, the train leaves empty, but the carrier gets the money. We should adopt this system. The opportunity of its adaptation to Russian realities has already been discussed on a conference. Empirically, it can be implemented in 2012.”
According to the expert, there is a lack of attention to the usage of new products in this segment in the Concept. “I do believe that in the program of modernization of the Russian transport industry a separate section should be dedicated to container transportation,” says Mr Rezer. “It is necessary to foresee the construction of terminals, as well as funding of this construction. The project of this subprogramme has been developed by RZD and now it is under consideration at the Government Commission on Transport.”
All the innovations associated with the introduction of new technologies in container transportation, should be supported at the legislative level. “Carriage rules, standards that form containers should be tailored to carriers, routes should be strictly economically stipulated, the new models of containers should be supplied to market in a short time,” says the expert. “Containers for liquefied gases from Surgut to the Czech Republic are especially popular now, and it is very profitable route. Flexitanks and everything in this sphere should also be actively implemented”. According to Mr Rezer, measures of tariffs regulation of container transportation are also not worked out in the document.
“Container traffic on RZD’s network has only 2.06% of the total volume of this type of transportation,” said the President of the Guild of Freight Forwarders. “Road and sea transportation have the rest. Meanwhile, this is a competitive market segment. This means that we need to give a freedom to tariffs, fixing only a lower limit on the level of payback of infrastructure.” This should be done first in the respect of international transit container transportation, and then in respect of all other types of container transportation.
There isn’t enough attention to intermodal transportation and to interaction with other transport modes – road and sea – in the document, according to the expert. “In addition, there is practically no such component as a “freight forwarder” in the Concept. Container traffic is directly related to forwarding, and yet this word is mentioned in the paper once or twice. There is a definition of the operator, of the logisticians, but not of the freight forwarder,” notices the expert. Speaking about the time needed to implement measures stated in the Concept, Mr Rezer also notices that the technical part is the most costly both in terms of time and money.
“I think that in the next 3–5 years we will reach a level where the terminal for large containers will be in each regional center,” he says.
Container Regulation is Required
The development of container transportation, its tasks and the required regulatory and technological support will not necessarily coincide with the task of transit segment development. Thus, for the latter the creation of terminal and distribution hubs in the country is not necessary, because the faster the cargo passes through the Russian rail network, the better for all parties involved in the organization of the transportation.
Speaking about the prospects of container transportation in Russia, Maxim Munkin, Director of InterRail Services in Russia notices: “From the standpoint of transit development the main plus of the Concept is the program on increasing the speed of container trains. As for the increase of the range of cargo container transportation, particularly through greater usage of tank containers than here, RZD should change its attitude to special containers, which have been widely used around the world for a long time.”
He believes that currently in Russia there is a one-sided approach to them, when, in fact, transportation is carried out without an adequate regulatory framework. “Meanwhile, there is a significant regulatory and infrastructural base all over the world for each shipment in tank containers. And as for us, we risk a lot when order special containers and the interpretation of the regulatory base and tariff conditions by a specific representative of a railroad administration threatens the business of the company, which develops the transportation in tank containers or other specialized containers,“ says the expert.
To change the situation we need to implement strict regulation of transport conditions for containers of various types (ordinary boxes, tank containers, containers for bulk goods), whose parameters do not coincide with the universal parameters. “For a some reason we understand only lengths of 20, 30 or 40 feet as the universal parameters. But as for the container we need to regulate parameters much more. So we often refuse our customers transportation of goods in containers, the characteristics of which differ from what RZD says.
We want to avoid confusion in the form of transportation cost calculations as if it were car shipments, which increases the cost of transportation seriously but technically don’t bring any additional transportation costs to the railroad connected with non-standard containers. At the same time all this exotica complies with ISO, it is characterized by distinctive features of the container and has a BIC registration, but after reaching the Russian Railways JSC it turns into a car shipment, although the container has a frame and fittings that make them able to be processed on a common set of technological principles.
Therefore, the conditions of carriage, loading and securing in place rules for all types of containers that meet the appropriate standards of ISO, as well as developed tariff conditions that encourage the usage of containers should be clearly defined for transportation on RZD’s network,” says Mr Munkin.
To change the situation it is necessary to correct the principles of pricing on shipment of empty containers. “Nobody can explain why the transportation of an 20-foot empty tank container is calculated using 1.4 coefficient. This is nothing else but an additional tax for owners of high-tech rolling stock. The same can be observed if we mention heat-insulated and reefer containers. The position in respect of containers for bulk cargo is completely incomprehensible too. Containers with the standard length of, for example, 30 feet, can have quite different parameters of width and height.
Therefore, the rail net is ready to take some of them as containers, while others are needed to be registered as car shipments. The development of container transportation in Russia can’t be developed only through the universal containers. It is necessary to consider the full range of advanced technologies offered by the container segment,” stressed the Head of InterRail Services.
In general, analyzing the Concept, the experts recognize the need of the existence of such documents. At the same time they say that the Concept supposes a deeper and more detailed analysis of various aspects of the container transportation segment, as well as more attention to exact figures and facts.
by ELENA VELIGZHANINA, ALBINA BULATOVA
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[SECTION_META_DESCRIPTION] => <img src="/ufiles/image/rus/inter/2011/4/10.jpg" border="1" alt=" " hspace="5" width="200" height="264" align="left" />At the end of August 2011 the management of Russian Railways JSC discussed and adopted the Concept of integrated development of the container business of the holding. Developers of the document have tried to fix promising avenues of development of this segment of the rail industry within the next few years. Market participants note that the authors of the document should pay more attention to such issues as rate regulation, the organization of intermodal transportation as well as the actions of the holding in the sphere of transit transportation.
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[DETAIL_TEXT] => Russia – Baltic Countries: Freight Shipments Increase
Between January and September 2011, the volu¬me of international railway freight traffic bet-ween Russia and the Baltic countries rose to 49.3 million tons, an increase of 5.5%. Export shipments amounted to 42.6 million tons, an increase of 2.2%, import shipments to 2.7 million tons, up 78.9%, and transit goods to 4 million tons, a rise of 14.3%.
The volume of international railway container traffic between Russia and the Baltic states from January to September 2011 amounted to 1,093,000 tons, up 21.3% on the same period last year.
The amount of freight exported by container increased by 130% to 65,900 tons, while the imported container shipments rose 64.4% to 322,300 tons. Transit freight sent by container was up 4.1% and amounted to 705,100 tons.
By Car or by Train?
The share of freight and passenger transportation by road transport will grow, that of railway transport will reduce. This forecast was made by Vadim Vorobyov, Vice President of Lukoil.
“On the one hand, this will be caused by the increase in the automobilisation of the population, since Russia falls behind developed countries according to the number of cars per head of population. On the other hand, the speed of passenger trains grows, and this may lead to cargo trains being forced out, as happened on the Moscow – St Petersburg line,” explained Mr Vorobyov.
Demonstration train makes run between Rajin and Khasan
A demonstration train made a run between Rajin in North Korea to Khasan in Russia on October 13, 2011. The run marked the end of the first stage of reconstructing the railway line between Rajin and Khasan. A meeting was held in the “House of Friendship between Russia and North Korea” near the border railway station of Tumangan in North Korea to celebrate. Taking part in the celebration were Valery Reshetnikov, Senior Vice President of Russian Railways, Mikhail Zaichenko, Head of the Far Eastern Railway, Ju Jae Dok, North Korea’s Deputy Minister of Railways and other officials.
“This stretch of railway line is a part of a pilot project to restore the entire Trans-Korean Main Line for its integration into the Trans-Siberian Railway. This includes developing a major transit hub at the port of Rajin,” said Mr Reshetnikov.
In the last three years, experts from Russian and Korean railways and the builders have completed a considerable amount of work. To date, a new 32-km combined-gauge track for handling trains using both the 1520mm broad-gauge track and the narrower 1435mm track has been laid on the stretch between Rajin and Tumangan on the border with Russia and major track repairs carried out on 20 kilometres –
work on replacing the track superstructure continued even after the demonstration train’s run.
The next step will be the construction of a modern cargo terminal at the port of Rajin. Russian coal for export will be the first commodity to be shipped along the reconstructed line. The capacity of the new infrastructure is designed to handle up to 5 million tons of coal.
At the same time, a study is also being carried out to assess the feasibility of using the newly-built infrastructure for the transshipment of containerised cargo from South Korea and other countries in the Asia-Pacific region with access to the Russian railway network, as originally planned.
The total cost of the project to reconstruct the Khasan – Rajin railway line and the construction of the container terminal at the port of Rajin is estimated at 8.3 billion roubles.
New Border Crossings to China Will Be Put into Operation
RZD is going to put into operation new border crossings with China, said Valery Reshetnikov, Russian Railways’ Senior Vice President, at the VII Baikal Economic Forum which was held in Irkutsk on September 12-14, 2011.
The company plans to recommence the work of the Malakhino – Hunchun (China), and to put into operation a new railway border crossing Nizhneleninskoye – Tongjiang (China).
Since June 2011, the company has been the owner of the railway infrastructure of the Makhalino – Hunchun border crossing that stopped its work. According to the results of the negotiations with the Chinese, the border crossing is supposed to open for foreign trade cargo transportation in the near future, said Mr Reshetnikov. He explained that RZD developed the investment feasibility study for the construction and exploitation of the bridge crossing Nizhneleninskoye – Tongjiang and the reconstruction of the Birobidzhan –
Leninsk line.
New Moscow – Berlin – Paris service begins on 12 December
The new Moscow – Berlin – Paris railway service is scheduled to begin on December, 12, 2011. The service will be run by the First Passenger Company, a subsidiary of Russian Railways.
Tickets for the service are now on sale.
Train No. 23/24 Moscow – Berlin – Paris will pass through five countries: Russia, Belarus, Poland, Germany and France via Vyazma, Smolensk, Krasnoe, Orsha, Minsk, Brest, Terespol, Warsaw, Poznan, Rzepin, Oderburk, Frankfurt (Oder), Berlin, Hanover, Fulda, Frankfurt am Main, Saarbrucken, Forbach and Metz-Ville. The Moscow – Berlin – Paris route is 3,177 km, making it the second-longest trans-European route plied by Russian trains after the Moscow – Nice run.
The trains on the new service can reach a maximum speed of around 200 kph.
Moscow – Berlin – Paris is the second service which links Russia and France following the launch of train No. 17/18 Moscow–Nice in September 2010.
RZD Logistics and TransContainer Launch a Fast Container Train
A fast container train Yekaterinburg – St Petersburg is a joint project of two subsidiaries of RZD – RZD Logistics and TransContainer.
The first fast container train ¹1213 Yekaterinburg – St Petersburg formed by RZD Logistics was dispatched from Yekaterinburg-Tovarnaya railway station at 16:20 (Moscow time) on September 9, 2011, and arrived at the Avtovo-Export railway station at 12:20 on September 12, 2011. Thus, it took the train 68 hours to run 2,300 kilometres. The launch of the train is an important stage in the framework of through transport and logistic services formation.
In the words of Vladimir Yakunin, President of RZD, a priority of the company’s work in this direction is the increase in competitiveness of railway transport in the container transportation market. The work of railway stations, freight yards, railcar owners, customs brokers, and traffic block should be integrated to provide a complex transport service. RZD Logistics must make a serious contribution to organisation of this work. In the opinion of the Board of RZD, one of the most important decisions for container railway transportation development will be the organisation of scheduled container trains traffic between the largest cities such as Moscow, St Petersburg, Yekaterinburg, Novosibirsk, Nizhny Novgorod, and Rostov-on-Don. In the words of Pavel Sokolov, CEO of RZD Logistics, a fast container train on the Yekaterinburg – St Petersburg line will be a comfortable and reliable service provided to exporters at Ural.
From Something in Mind to Something in Kind
In the next 3-5 years, there will be a terminal for large capacity containers in each regional centre of Russia, said Semyon Rezer, President of the Guild of Russian Forwarders, in his interview with “The RZD-Partner.ru.”
At the end of August, the Board of RZD discussed and approved “The Concept of Container Business Complex Development in the Holding Company”. Commenting on the adopted document, Mr Rezer noted that the technical part of realisation of projects envisaged by the Concept was the most costly. In his opinion, special attention should be paid to the section devoted to the actions of RZD in the transit sector.
“Only container transportation will help us to join the global system. That is why we should switch from something in mind to something in kind. We need to enlarge the range of transport products and to reform the system of cargo delivery. How do they do it in Europe? To transport a container you purchase a place on the flat wagon. If you failed to load the container on time, the train runs empty, but the transporter has the money. The same system should be put into operation in Russia. Its possible adaptation to Russian conditions we have already discussed. It may be put into operation in a test mode in 2012,” thinks the expert.
Russia and Ukraine to Simplify Transit Cargo Inspections
Russia and Ukraine will hold joint accident rescue operations in the Black Sea and cooperate in cargo transportation from Asia to Europe. Russian Transport Minister Igor Levitin and Boris Kolesnikov, Vice Prime Minister of Ukraine, agreed to this at their meeting in Odessa at the end of September.
The most important issue discussed was transit containers idling in Ukrainian ports. “According to our customs rules, all transit containers are checked. This is not done in Europe. And their ports are more attractive for cargo owners because of the formal procedures in Ukraine and Russia. It is very important for us to have no delays in transit cargo transportation. The result of our meeting is the decision to apply to the governments of both states with offers to simplify customs clearance of transit cargoes,” explained Mr Kolesnikov.
Interact to Avoid Traffic Jams
RZD will create interregional coordinating councils for interaction between transportation process participants.
According to RZD, the large number of rolling stock owners and operators interacting individually with every consignor make for the wagons’ lingering presence on the public and non-public tracks. That is why wagons are not admitted to the non-public tracks on time, and have to idle on RZD’s network. Moreover, if railcars are loaded or unloaded over a long time, there appear significant losses in the loading resource and an artificial shortage of rolling stock arises.
For example, in October 2011, amid the idling park of empty private railcars, which was 21% larger than the required number of wagons, losses in coal loading amounted to 20% of the declared volume.
To solve the existing problems, efficient coordination of the activities of federal and regional authorities, RZD, operators, forwarders, consignors, ports, stevedores, and sea transporters is needed. That is why it was decided to create interregional coordinating councils led by heads of Railways – affiliates of RZD. Their basic tasks will be regular monitoring of the provision of necessary ore deliveries and the taking out of finished production in the regions, and development of offers to create mechanisms to encourage transportation process participants to improve their railcar efficiency figures; to cut the time the rolling stock spends being loaded/unloaded; efficient use of transport infrastructure; organisation of the technological process and formation of prices for services provided by industrial railway enterprises; the mechanism of RZD’s use of the wagons of rolling stock owners to manage the consolidated park on the technological principles of “depersonalised” park work.
[~DETAIL_TEXT] => Russia – Baltic Countries: Freight Shipments Increase
Between January and September 2011, the volu¬me of international railway freight traffic bet-ween Russia and the Baltic countries rose to 49.3 million tons, an increase of 5.5%. Export shipments amounted to 42.6 million tons, an increase of 2.2%, import shipments to 2.7 million tons, up 78.9%, and transit goods to 4 million tons, a rise of 14.3%.
The volume of international railway container traffic between Russia and the Baltic states from January to September 2011 amounted to 1,093,000 tons, up 21.3% on the same period last year.
The amount of freight exported by container increased by 130% to 65,900 tons, while the imported container shipments rose 64.4% to 322,300 tons. Transit freight sent by container was up 4.1% and amounted to 705,100 tons.
By Car or by Train?
The share of freight and passenger transportation by road transport will grow, that of railway transport will reduce. This forecast was made by Vadim Vorobyov, Vice President of Lukoil.
“On the one hand, this will be caused by the increase in the automobilisation of the population, since Russia falls behind developed countries according to the number of cars per head of population. On the other hand, the speed of passenger trains grows, and this may lead to cargo trains being forced out, as happened on the Moscow – St Petersburg line,” explained Mr Vorobyov.
Demonstration train makes run between Rajin and Khasan
A demonstration train made a run between Rajin in North Korea to Khasan in Russia on October 13, 2011. The run marked the end of the first stage of reconstructing the railway line between Rajin and Khasan. A meeting was held in the “House of Friendship between Russia and North Korea” near the border railway station of Tumangan in North Korea to celebrate. Taking part in the celebration were Valery Reshetnikov, Senior Vice President of Russian Railways, Mikhail Zaichenko, Head of the Far Eastern Railway, Ju Jae Dok, North Korea’s Deputy Minister of Railways and other officials.
“This stretch of railway line is a part of a pilot project to restore the entire Trans-Korean Main Line for its integration into the Trans-Siberian Railway. This includes developing a major transit hub at the port of Rajin,” said Mr Reshetnikov.
In the last three years, experts from Russian and Korean railways and the builders have completed a considerable amount of work. To date, a new 32-km combined-gauge track for handling trains using both the 1520mm broad-gauge track and the narrower 1435mm track has been laid on the stretch between Rajin and Tumangan on the border with Russia and major track repairs carried out on 20 kilometres –
work on replacing the track superstructure continued even after the demonstration train’s run.
The next step will be the construction of a modern cargo terminal at the port of Rajin. Russian coal for export will be the first commodity to be shipped along the reconstructed line. The capacity of the new infrastructure is designed to handle up to 5 million tons of coal.
At the same time, a study is also being carried out to assess the feasibility of using the newly-built infrastructure for the transshipment of containerised cargo from South Korea and other countries in the Asia-Pacific region with access to the Russian railway network, as originally planned.
The total cost of the project to reconstruct the Khasan – Rajin railway line and the construction of the container terminal at the port of Rajin is estimated at 8.3 billion roubles.
New Border Crossings to China Will Be Put into Operation
RZD is going to put into operation new border crossings with China, said Valery Reshetnikov, Russian Railways’ Senior Vice President, at the VII Baikal Economic Forum which was held in Irkutsk on September 12-14, 2011.
The company plans to recommence the work of the Malakhino – Hunchun (China), and to put into operation a new railway border crossing Nizhneleninskoye – Tongjiang (China).
Since June 2011, the company has been the owner of the railway infrastructure of the Makhalino – Hunchun border crossing that stopped its work. According to the results of the negotiations with the Chinese, the border crossing is supposed to open for foreign trade cargo transportation in the near future, said Mr Reshetnikov. He explained that RZD developed the investment feasibility study for the construction and exploitation of the bridge crossing Nizhneleninskoye – Tongjiang and the reconstruction of the Birobidzhan –
Leninsk line.
New Moscow – Berlin – Paris service begins on 12 December
The new Moscow – Berlin – Paris railway service is scheduled to begin on December, 12, 2011. The service will be run by the First Passenger Company, a subsidiary of Russian Railways.
Tickets for the service are now on sale.
Train No. 23/24 Moscow – Berlin – Paris will pass through five countries: Russia, Belarus, Poland, Germany and France via Vyazma, Smolensk, Krasnoe, Orsha, Minsk, Brest, Terespol, Warsaw, Poznan, Rzepin, Oderburk, Frankfurt (Oder), Berlin, Hanover, Fulda, Frankfurt am Main, Saarbrucken, Forbach and Metz-Ville. The Moscow – Berlin – Paris route is 3,177 km, making it the second-longest trans-European route plied by Russian trains after the Moscow – Nice run.
The trains on the new service can reach a maximum speed of around 200 kph.
Moscow – Berlin – Paris is the second service which links Russia and France following the launch of train No. 17/18 Moscow–Nice in September 2010.
RZD Logistics and TransContainer Launch a Fast Container Train
A fast container train Yekaterinburg – St Petersburg is a joint project of two subsidiaries of RZD – RZD Logistics and TransContainer.
The first fast container train ¹1213 Yekaterinburg – St Petersburg formed by RZD Logistics was dispatched from Yekaterinburg-Tovarnaya railway station at 16:20 (Moscow time) on September 9, 2011, and arrived at the Avtovo-Export railway station at 12:20 on September 12, 2011. Thus, it took the train 68 hours to run 2,300 kilometres. The launch of the train is an important stage in the framework of through transport and logistic services formation.
In the words of Vladimir Yakunin, President of RZD, a priority of the company’s work in this direction is the increase in competitiveness of railway transport in the container transportation market. The work of railway stations, freight yards, railcar owners, customs brokers, and traffic block should be integrated to provide a complex transport service. RZD Logistics must make a serious contribution to organisation of this work. In the opinion of the Board of RZD, one of the most important decisions for container railway transportation development will be the organisation of scheduled container trains traffic between the largest cities such as Moscow, St Petersburg, Yekaterinburg, Novosibirsk, Nizhny Novgorod, and Rostov-on-Don. In the words of Pavel Sokolov, CEO of RZD Logistics, a fast container train on the Yekaterinburg – St Petersburg line will be a comfortable and reliable service provided to exporters at Ural.
From Something in Mind to Something in Kind
In the next 3-5 years, there will be a terminal for large capacity containers in each regional centre of Russia, said Semyon Rezer, President of the Guild of Russian Forwarders, in his interview with “The RZD-Partner.ru.”
At the end of August, the Board of RZD discussed and approved “The Concept of Container Business Complex Development in the Holding Company”. Commenting on the adopted document, Mr Rezer noted that the technical part of realisation of projects envisaged by the Concept was the most costly. In his opinion, special attention should be paid to the section devoted to the actions of RZD in the transit sector.
“Only container transportation will help us to join the global system. That is why we should switch from something in mind to something in kind. We need to enlarge the range of transport products and to reform the system of cargo delivery. How do they do it in Europe? To transport a container you purchase a place on the flat wagon. If you failed to load the container on time, the train runs empty, but the transporter has the money. The same system should be put into operation in Russia. Its possible adaptation to Russian conditions we have already discussed. It may be put into operation in a test mode in 2012,” thinks the expert.
Russia and Ukraine to Simplify Transit Cargo Inspections
Russia and Ukraine will hold joint accident rescue operations in the Black Sea and cooperate in cargo transportation from Asia to Europe. Russian Transport Minister Igor Levitin and Boris Kolesnikov, Vice Prime Minister of Ukraine, agreed to this at their meeting in Odessa at the end of September.
The most important issue discussed was transit containers idling in Ukrainian ports. “According to our customs rules, all transit containers are checked. This is not done in Europe. And their ports are more attractive for cargo owners because of the formal procedures in Ukraine and Russia. It is very important for us to have no delays in transit cargo transportation. The result of our meeting is the decision to apply to the governments of both states with offers to simplify customs clearance of transit cargoes,” explained Mr Kolesnikov.
Interact to Avoid Traffic Jams
RZD will create interregional coordinating councils for interaction between transportation process participants.
According to RZD, the large number of rolling stock owners and operators interacting individually with every consignor make for the wagons’ lingering presence on the public and non-public tracks. That is why wagons are not admitted to the non-public tracks on time, and have to idle on RZD’s network. Moreover, if railcars are loaded or unloaded over a long time, there appear significant losses in the loading resource and an artificial shortage of rolling stock arises.
For example, in October 2011, amid the idling park of empty private railcars, which was 21% larger than the required number of wagons, losses in coal loading amounted to 20% of the declared volume.
To solve the existing problems, efficient coordination of the activities of federal and regional authorities, RZD, operators, forwarders, consignors, ports, stevedores, and sea transporters is needed. That is why it was decided to create interregional coordinating councils led by heads of Railways – affiliates of RZD. Their basic tasks will be regular monitoring of the provision of necessary ore deliveries and the taking out of finished production in the regions, and development of offers to create mechanisms to encourage transportation process participants to improve their railcar efficiency figures; to cut the time the rolling stock spends being loaded/unloaded; efficient use of transport infrastructure; organisation of the technological process and formation of prices for services provided by industrial railway enterprises; the mechanism of RZD’s use of the wagons of rolling stock owners to manage the consolidated park on the technological principles of “depersonalised” park work.
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[DETAIL_TEXT] => Russia – Baltic Countries: Freight Shipments Increase
Between January and September 2011, the volu¬me of international railway freight traffic bet-ween Russia and the Baltic countries rose to 49.3 million tons, an increase of 5.5%. Export shipments amounted to 42.6 million tons, an increase of 2.2%, import shipments to 2.7 million tons, up 78.9%, and transit goods to 4 million tons, a rise of 14.3%.
The volume of international railway container traffic between Russia and the Baltic states from January to September 2011 amounted to 1,093,000 tons, up 21.3% on the same period last year.
The amount of freight exported by container increased by 130% to 65,900 tons, while the imported container shipments rose 64.4% to 322,300 tons. Transit freight sent by container was up 4.1% and amounted to 705,100 tons.
By Car or by Train?
The share of freight and passenger transportation by road transport will grow, that of railway transport will reduce. This forecast was made by Vadim Vorobyov, Vice President of Lukoil.
“On the one hand, this will be caused by the increase in the automobilisation of the population, since Russia falls behind developed countries according to the number of cars per head of population. On the other hand, the speed of passenger trains grows, and this may lead to cargo trains being forced out, as happened on the Moscow – St Petersburg line,” explained Mr Vorobyov.
Demonstration train makes run between Rajin and Khasan
A demonstration train made a run between Rajin in North Korea to Khasan in Russia on October 13, 2011. The run marked the end of the first stage of reconstructing the railway line between Rajin and Khasan. A meeting was held in the “House of Friendship between Russia and North Korea” near the border railway station of Tumangan in North Korea to celebrate. Taking part in the celebration were Valery Reshetnikov, Senior Vice President of Russian Railways, Mikhail Zaichenko, Head of the Far Eastern Railway, Ju Jae Dok, North Korea’s Deputy Minister of Railways and other officials.
“This stretch of railway line is a part of a pilot project to restore the entire Trans-Korean Main Line for its integration into the Trans-Siberian Railway. This includes developing a major transit hub at the port of Rajin,” said Mr Reshetnikov.
In the last three years, experts from Russian and Korean railways and the builders have completed a considerable amount of work. To date, a new 32-km combined-gauge track for handling trains using both the 1520mm broad-gauge track and the narrower 1435mm track has been laid on the stretch between Rajin and Tumangan on the border with Russia and major track repairs carried out on 20 kilometres –
work on replacing the track superstructure continued even after the demonstration train’s run.
The next step will be the construction of a modern cargo terminal at the port of Rajin. Russian coal for export will be the first commodity to be shipped along the reconstructed line. The capacity of the new infrastructure is designed to handle up to 5 million tons of coal.
At the same time, a study is also being carried out to assess the feasibility of using the newly-built infrastructure for the transshipment of containerised cargo from South Korea and other countries in the Asia-Pacific region with access to the Russian railway network, as originally planned.
The total cost of the project to reconstruct the Khasan – Rajin railway line and the construction of the container terminal at the port of Rajin is estimated at 8.3 billion roubles.
New Border Crossings to China Will Be Put into Operation
RZD is going to put into operation new border crossings with China, said Valery Reshetnikov, Russian Railways’ Senior Vice President, at the VII Baikal Economic Forum which was held in Irkutsk on September 12-14, 2011.
The company plans to recommence the work of the Malakhino – Hunchun (China), and to put into operation a new railway border crossing Nizhneleninskoye – Tongjiang (China).
Since June 2011, the company has been the owner of the railway infrastructure of the Makhalino – Hunchun border crossing that stopped its work. According to the results of the negotiations with the Chinese, the border crossing is supposed to open for foreign trade cargo transportation in the near future, said Mr Reshetnikov. He explained that RZD developed the investment feasibility study for the construction and exploitation of the bridge crossing Nizhneleninskoye – Tongjiang and the reconstruction of the Birobidzhan –
Leninsk line.
New Moscow – Berlin – Paris service begins on 12 December
The new Moscow – Berlin – Paris railway service is scheduled to begin on December, 12, 2011. The service will be run by the First Passenger Company, a subsidiary of Russian Railways.
Tickets for the service are now on sale.
Train No. 23/24 Moscow – Berlin – Paris will pass through five countries: Russia, Belarus, Poland, Germany and France via Vyazma, Smolensk, Krasnoe, Orsha, Minsk, Brest, Terespol, Warsaw, Poznan, Rzepin, Oderburk, Frankfurt (Oder), Berlin, Hanover, Fulda, Frankfurt am Main, Saarbrucken, Forbach and Metz-Ville. The Moscow – Berlin – Paris route is 3,177 km, making it the second-longest trans-European route plied by Russian trains after the Moscow – Nice run.
The trains on the new service can reach a maximum speed of around 200 kph.
Moscow – Berlin – Paris is the second service which links Russia and France following the launch of train No. 17/18 Moscow–Nice in September 2010.
RZD Logistics and TransContainer Launch a Fast Container Train
A fast container train Yekaterinburg – St Petersburg is a joint project of two subsidiaries of RZD – RZD Logistics and TransContainer.
The first fast container train ¹1213 Yekaterinburg – St Petersburg formed by RZD Logistics was dispatched from Yekaterinburg-Tovarnaya railway station at 16:20 (Moscow time) on September 9, 2011, and arrived at the Avtovo-Export railway station at 12:20 on September 12, 2011. Thus, it took the train 68 hours to run 2,300 kilometres. The launch of the train is an important stage in the framework of through transport and logistic services formation.
In the words of Vladimir Yakunin, President of RZD, a priority of the company’s work in this direction is the increase in competitiveness of railway transport in the container transportation market. The work of railway stations, freight yards, railcar owners, customs brokers, and traffic block should be integrated to provide a complex transport service. RZD Logistics must make a serious contribution to organisation of this work. In the opinion of the Board of RZD, one of the most important decisions for container railway transportation development will be the organisation of scheduled container trains traffic between the largest cities such as Moscow, St Petersburg, Yekaterinburg, Novosibirsk, Nizhny Novgorod, and Rostov-on-Don. In the words of Pavel Sokolov, CEO of RZD Logistics, a fast container train on the Yekaterinburg – St Petersburg line will be a comfortable and reliable service provided to exporters at Ural.
From Something in Mind to Something in Kind
In the next 3-5 years, there will be a terminal for large capacity containers in each regional centre of Russia, said Semyon Rezer, President of the Guild of Russian Forwarders, in his interview with “The RZD-Partner.ru.”
At the end of August, the Board of RZD discussed and approved “The Concept of Container Business Complex Development in the Holding Company”. Commenting on the adopted document, Mr Rezer noted that the technical part of realisation of projects envisaged by the Concept was the most costly. In his opinion, special attention should be paid to the section devoted to the actions of RZD in the transit sector.
“Only container transportation will help us to join the global system. That is why we should switch from something in mind to something in kind. We need to enlarge the range of transport products and to reform the system of cargo delivery. How do they do it in Europe? To transport a container you purchase a place on the flat wagon. If you failed to load the container on time, the train runs empty, but the transporter has the money. The same system should be put into operation in Russia. Its possible adaptation to Russian conditions we have already discussed. It may be put into operation in a test mode in 2012,” thinks the expert.
Russia and Ukraine to Simplify Transit Cargo Inspections
Russia and Ukraine will hold joint accident rescue operations in the Black Sea and cooperate in cargo transportation from Asia to Europe. Russian Transport Minister Igor Levitin and Boris Kolesnikov, Vice Prime Minister of Ukraine, agreed to this at their meeting in Odessa at the end of September.
The most important issue discussed was transit containers idling in Ukrainian ports. “According to our customs rules, all transit containers are checked. This is not done in Europe. And their ports are more attractive for cargo owners because of the formal procedures in Ukraine and Russia. It is very important for us to have no delays in transit cargo transportation. The result of our meeting is the decision to apply to the governments of both states with offers to simplify customs clearance of transit cargoes,” explained Mr Kolesnikov.
Interact to Avoid Traffic Jams
RZD will create interregional coordinating councils for interaction between transportation process participants.
According to RZD, the large number of rolling stock owners and operators interacting individually with every consignor make for the wagons’ lingering presence on the public and non-public tracks. That is why wagons are not admitted to the non-public tracks on time, and have to idle on RZD’s network. Moreover, if railcars are loaded or unloaded over a long time, there appear significant losses in the loading resource and an artificial shortage of rolling stock arises.
For example, in October 2011, amid the idling park of empty private railcars, which was 21% larger than the required number of wagons, losses in coal loading amounted to 20% of the declared volume.
To solve the existing problems, efficient coordination of the activities of federal and regional authorities, RZD, operators, forwarders, consignors, ports, stevedores, and sea transporters is needed. That is why it was decided to create interregional coordinating councils led by heads of Railways – affiliates of RZD. Their basic tasks will be regular monitoring of the provision of necessary ore deliveries and the taking out of finished production in the regions, and development of offers to create mechanisms to encourage transportation process participants to improve their railcar efficiency figures; to cut the time the rolling stock spends being loaded/unloaded; efficient use of transport infrastructure; organisation of the technological process and formation of prices for services provided by industrial railway enterprises; the mechanism of RZD’s use of the wagons of rolling stock owners to manage the consolidated park on the technological principles of “depersonalised” park work.
[~DETAIL_TEXT] => Russia – Baltic Countries: Freight Shipments Increase
Between January and September 2011, the volu¬me of international railway freight traffic bet-ween Russia and the Baltic countries rose to 49.3 million tons, an increase of 5.5%. Export shipments amounted to 42.6 million tons, an increase of 2.2%, import shipments to 2.7 million tons, up 78.9%, and transit goods to 4 million tons, a rise of 14.3%.
The volume of international railway container traffic between Russia and the Baltic states from January to September 2011 amounted to 1,093,000 tons, up 21.3% on the same period last year.
The amount of freight exported by container increased by 130% to 65,900 tons, while the imported container shipments rose 64.4% to 322,300 tons. Transit freight sent by container was up 4.1% and amounted to 705,100 tons.
By Car or by Train?
The share of freight and passenger transportation by road transport will grow, that of railway transport will reduce. This forecast was made by Vadim Vorobyov, Vice President of Lukoil.
“On the one hand, this will be caused by the increase in the automobilisation of the population, since Russia falls behind developed countries according to the number of cars per head of population. On the other hand, the speed of passenger trains grows, and this may lead to cargo trains being forced out, as happened on the Moscow – St Petersburg line,” explained Mr Vorobyov.
Demonstration train makes run between Rajin and Khasan
A demonstration train made a run between Rajin in North Korea to Khasan in Russia on October 13, 2011. The run marked the end of the first stage of reconstructing the railway line between Rajin and Khasan. A meeting was held in the “House of Friendship between Russia and North Korea” near the border railway station of Tumangan in North Korea to celebrate. Taking part in the celebration were Valery Reshetnikov, Senior Vice President of Russian Railways, Mikhail Zaichenko, Head of the Far Eastern Railway, Ju Jae Dok, North Korea’s Deputy Minister of Railways and other officials.
“This stretch of railway line is a part of a pilot project to restore the entire Trans-Korean Main Line for its integration into the Trans-Siberian Railway. This includes developing a major transit hub at the port of Rajin,” said Mr Reshetnikov.
In the last three years, experts from Russian and Korean railways and the builders have completed a considerable amount of work. To date, a new 32-km combined-gauge track for handling trains using both the 1520mm broad-gauge track and the narrower 1435mm track has been laid on the stretch between Rajin and Tumangan on the border with Russia and major track repairs carried out on 20 kilometres –
work on replacing the track superstructure continued even after the demonstration train’s run.
The next step will be the construction of a modern cargo terminal at the port of Rajin. Russian coal for export will be the first commodity to be shipped along the reconstructed line. The capacity of the new infrastructure is designed to handle up to 5 million tons of coal.
At the same time, a study is also being carried out to assess the feasibility of using the newly-built infrastructure for the transshipment of containerised cargo from South Korea and other countries in the Asia-Pacific region with access to the Russian railway network, as originally planned.
The total cost of the project to reconstruct the Khasan – Rajin railway line and the construction of the container terminal at the port of Rajin is estimated at 8.3 billion roubles.
New Border Crossings to China Will Be Put into Operation
RZD is going to put into operation new border crossings with China, said Valery Reshetnikov, Russian Railways’ Senior Vice President, at the VII Baikal Economic Forum which was held in Irkutsk on September 12-14, 2011.
The company plans to recommence the work of the Malakhino – Hunchun (China), and to put into operation a new railway border crossing Nizhneleninskoye – Tongjiang (China).
Since June 2011, the company has been the owner of the railway infrastructure of the Makhalino – Hunchun border crossing that stopped its work. According to the results of the negotiations with the Chinese, the border crossing is supposed to open for foreign trade cargo transportation in the near future, said Mr Reshetnikov. He explained that RZD developed the investment feasibility study for the construction and exploitation of the bridge crossing Nizhneleninskoye – Tongjiang and the reconstruction of the Birobidzhan –
Leninsk line.
New Moscow – Berlin – Paris service begins on 12 December
The new Moscow – Berlin – Paris railway service is scheduled to begin on December, 12, 2011. The service will be run by the First Passenger Company, a subsidiary of Russian Railways.
Tickets for the service are now on sale.
Train No. 23/24 Moscow – Berlin – Paris will pass through five countries: Russia, Belarus, Poland, Germany and France via Vyazma, Smolensk, Krasnoe, Orsha, Minsk, Brest, Terespol, Warsaw, Poznan, Rzepin, Oderburk, Frankfurt (Oder), Berlin, Hanover, Fulda, Frankfurt am Main, Saarbrucken, Forbach and Metz-Ville. The Moscow – Berlin – Paris route is 3,177 km, making it the second-longest trans-European route plied by Russian trains after the Moscow – Nice run.
The trains on the new service can reach a maximum speed of around 200 kph.
Moscow – Berlin – Paris is the second service which links Russia and France following the launch of train No. 17/18 Moscow–Nice in September 2010.
RZD Logistics and TransContainer Launch a Fast Container Train
A fast container train Yekaterinburg – St Petersburg is a joint project of two subsidiaries of RZD – RZD Logistics and TransContainer.
The first fast container train ¹1213 Yekaterinburg – St Petersburg formed by RZD Logistics was dispatched from Yekaterinburg-Tovarnaya railway station at 16:20 (Moscow time) on September 9, 2011, and arrived at the Avtovo-Export railway station at 12:20 on September 12, 2011. Thus, it took the train 68 hours to run 2,300 kilometres. The launch of the train is an important stage in the framework of through transport and logistic services formation.
In the words of Vladimir Yakunin, President of RZD, a priority of the company’s work in this direction is the increase in competitiveness of railway transport in the container transportation market. The work of railway stations, freight yards, railcar owners, customs brokers, and traffic block should be integrated to provide a complex transport service. RZD Logistics must make a serious contribution to organisation of this work. In the opinion of the Board of RZD, one of the most important decisions for container railway transportation development will be the organisation of scheduled container trains traffic between the largest cities such as Moscow, St Petersburg, Yekaterinburg, Novosibirsk, Nizhny Novgorod, and Rostov-on-Don. In the words of Pavel Sokolov, CEO of RZD Logistics, a fast container train on the Yekaterinburg – St Petersburg line will be a comfortable and reliable service provided to exporters at Ural.
From Something in Mind to Something in Kind
In the next 3-5 years, there will be a terminal for large capacity containers in each regional centre of Russia, said Semyon Rezer, President of the Guild of Russian Forwarders, in his interview with “The RZD-Partner.ru.”
At the end of August, the Board of RZD discussed and approved “The Concept of Container Business Complex Development in the Holding Company”. Commenting on the adopted document, Mr Rezer noted that the technical part of realisation of projects envisaged by the Concept was the most costly. In his opinion, special attention should be paid to the section devoted to the actions of RZD in the transit sector.
“Only container transportation will help us to join the global system. That is why we should switch from something in mind to something in kind. We need to enlarge the range of transport products and to reform the system of cargo delivery. How do they do it in Europe? To transport a container you purchase a place on the flat wagon. If you failed to load the container on time, the train runs empty, but the transporter has the money. The same system should be put into operation in Russia. Its possible adaptation to Russian conditions we have already discussed. It may be put into operation in a test mode in 2012,” thinks the expert.
Russia and Ukraine to Simplify Transit Cargo Inspections
Russia and Ukraine will hold joint accident rescue operations in the Black Sea and cooperate in cargo transportation from Asia to Europe. Russian Transport Minister Igor Levitin and Boris Kolesnikov, Vice Prime Minister of Ukraine, agreed to this at their meeting in Odessa at the end of September.
The most important issue discussed was transit containers idling in Ukrainian ports. “According to our customs rules, all transit containers are checked. This is not done in Europe. And their ports are more attractive for cargo owners because of the formal procedures in Ukraine and Russia. It is very important for us to have no delays in transit cargo transportation. The result of our meeting is the decision to apply to the governments of both states with offers to simplify customs clearance of transit cargoes,” explained Mr Kolesnikov.
Interact to Avoid Traffic Jams
RZD will create interregional coordinating councils for interaction between transportation process participants.
According to RZD, the large number of rolling stock owners and operators interacting individually with every consignor make for the wagons’ lingering presence on the public and non-public tracks. That is why wagons are not admitted to the non-public tracks on time, and have to idle on RZD’s network. Moreover, if railcars are loaded or unloaded over a long time, there appear significant losses in the loading resource and an artificial shortage of rolling stock arises.
For example, in October 2011, amid the idling park of empty private railcars, which was 21% larger than the required number of wagons, losses in coal loading amounted to 20% of the declared volume.
To solve the existing problems, efficient coordination of the activities of federal and regional authorities, RZD, operators, forwarders, consignors, ports, stevedores, and sea transporters is needed. That is why it was decided to create interregional coordinating councils led by heads of Railways – affiliates of RZD. Their basic tasks will be regular monitoring of the provision of necessary ore deliveries and the taking out of finished production in the regions, and development of offers to create mechanisms to encourage transportation process participants to improve their railcar efficiency figures; to cut the time the rolling stock spends being loaded/unloaded; efficient use of transport infrastructure; organisation of the technological process and formation of prices for services provided by industrial railway enterprises; the mechanism of RZD’s use of the wagons of rolling stock owners to manage the consolidated park on the technological principles of “depersonalised” park work.
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[DETAIL_TEXT] => New Period in the History of Yakutia
This year, RUR 8.4 billion was given to construct the railway line to Yakutsk. Construction of the 892.6-kilometre Berkakit – Tommot – Yakutsk line is one of the largest projects in the country. About 26 kilometres of railroad track bed is still to be laid. In the middle of November, a historic event will take place in Nizhny Bestyah settlement (and at the railway station with the same name) – three Far Eastern mainlines will be joined together.
In the words of Vasily Zagorodsky, Deputy CEO of Railroad of Yakutia, when the railway line reaches Yakutsk, the structure of passenger and freight transportation in the region will change, and the share of railways will increase. “This will be the beginning of a new period in the history of the region, the situation will be similar to that when the Transsib became the basis for rapid development of Eastern Siberia and the Far East. This is the target, and a lot of people, including personnel of the Railroad of Yakutia, are working hard to reach it,” says Mr Zagorodsky.
In fact, the role of the mainline in the development of the Republic cannot be overestimated. It is possible to say that further industrialisation, social and economic development of Yakutia, efficient development of its rich mineral resources depend on the new line.
According to Vasily Shimokhin, CEO of Railroad of Yakutia, it is possible to forecast a significant growth in the throughput after the new line is put into operation; and there will be a decrease in the volume of seasonal cargo, which earlier could be carried by river transport only.
“This may not just significantly reduce expenditure on so-called Severny Zavoz (delivery of goods to the Northern territories of Russia), but make the definition outdated, because the Republic will not be dependent on seasonal supplies of a lot of cargoes any longer,” believes Mr Shimokhin.
Also, all-season transportation of inert construction materials to Yakutsk, Aldan, Tommot, and Neryungri will increase. Thanks to lower tariffs on the railway transportation of these cargoes in comparison with those on transportation by road haulage (nowadays there is practically no alternative to road transport), the construction industry will benefit. On the whole, after the railway reaches Yakutsk, 47% of the Republic’s territory will be transport accessible all year round.
As soon as the line is put into operation, central, eastern, and western regions of Yakutia (where 85% of the Republic’s population live) will be provided with safe and economical transport mode available in any season of the year. So passengers and transporters in the Republic of Yakutia will at last receive the opportunity to travel or dispatch cargoes on quite reasonable tariffs to any place in Russia and abroad.
The Sky Is the Limit
According to the Scheme of complex development of productive forces, transport and energy sector of Yakutia to 2020, it is planned to create a multi-sector industrial area at the Far East of Russia. The new area will be based on the natural resource potential of Southern Yakutia as well as on the transport and power supply networks of the region. The investment project Complex Development of Southern Yakutia envisages design and construction of the following sections of the railway: Tommot – Elkon MMP, Kosarevsky – Seligdarsky Mining and Chemical complex, Tayozhnaya – Taezhny Mining and Concentration Mill, Chulbass – Inaglinsky Coal Complex, Khani (Ikabyekan) - Tarynnakhsky Mining and Concentration Mill.
It is planned that access to the railway will be possible for future mining and concentration mills and metallurgical integrated works, a plant for synthetic oils and oil product processing, and a new coal complex. “We are ready to act as the guarantor of the transportation that will appear as a result of the Complex Development of Southern Yakutia programme’s realisation. Moreover, four of the mentioned junctions between non-public railway lines and the infrastructure of the Railroad of Yakutia are at the stage when technical conditions are being adjusted,” says Mr Shimokhin.
[~DETAIL_TEXT] => New Period in the History of Yakutia
This year, RUR 8.4 billion was given to construct the railway line to Yakutsk. Construction of the 892.6-kilometre Berkakit – Tommot – Yakutsk line is one of the largest projects in the country. About 26 kilometres of railroad track bed is still to be laid. In the middle of November, a historic event will take place in Nizhny Bestyah settlement (and at the railway station with the same name) – three Far Eastern mainlines will be joined together.
In the words of Vasily Zagorodsky, Deputy CEO of Railroad of Yakutia, when the railway line reaches Yakutsk, the structure of passenger and freight transportation in the region will change, and the share of railways will increase. “This will be the beginning of a new period in the history of the region, the situation will be similar to that when the Transsib became the basis for rapid development of Eastern Siberia and the Far East. This is the target, and a lot of people, including personnel of the Railroad of Yakutia, are working hard to reach it,” says Mr Zagorodsky.
In fact, the role of the mainline in the development of the Republic cannot be overestimated. It is possible to say that further industrialisation, social and economic development of Yakutia, efficient development of its rich mineral resources depend on the new line.
According to Vasily Shimokhin, CEO of Railroad of Yakutia, it is possible to forecast a significant growth in the throughput after the new line is put into operation; and there will be a decrease in the volume of seasonal cargo, which earlier could be carried by river transport only.
“This may not just significantly reduce expenditure on so-called Severny Zavoz (delivery of goods to the Northern territories of Russia), but make the definition outdated, because the Republic will not be dependent on seasonal supplies of a lot of cargoes any longer,” believes Mr Shimokhin.
Also, all-season transportation of inert construction materials to Yakutsk, Aldan, Tommot, and Neryungri will increase. Thanks to lower tariffs on the railway transportation of these cargoes in comparison with those on transportation by road haulage (nowadays there is practically no alternative to road transport), the construction industry will benefit. On the whole, after the railway reaches Yakutsk, 47% of the Republic’s territory will be transport accessible all year round.
As soon as the line is put into operation, central, eastern, and western regions of Yakutia (where 85% of the Republic’s population live) will be provided with safe and economical transport mode available in any season of the year. So passengers and transporters in the Republic of Yakutia will at last receive the opportunity to travel or dispatch cargoes on quite reasonable tariffs to any place in Russia and abroad.
The Sky Is the Limit
According to the Scheme of complex development of productive forces, transport and energy sector of Yakutia to 2020, it is planned to create a multi-sector industrial area at the Far East of Russia. The new area will be based on the natural resource potential of Southern Yakutia as well as on the transport and power supply networks of the region. The investment project Complex Development of Southern Yakutia envisages design and construction of the following sections of the railway: Tommot – Elkon MMP, Kosarevsky – Seligdarsky Mining and Chemical complex, Tayozhnaya – Taezhny Mining and Concentration Mill, Chulbass – Inaglinsky Coal Complex, Khani (Ikabyekan) - Tarynnakhsky Mining and Concentration Mill.
It is planned that access to the railway will be possible for future mining and concentration mills and metallurgical integrated works, a plant for synthetic oils and oil product processing, and a new coal complex. “We are ready to act as the guarantor of the transportation that will appear as a result of the Complex Development of Southern Yakutia programme’s realisation. Moreover, four of the mentioned junctions between non-public railway lines and the infrastructure of the Railroad of Yakutia are at the stage when technical conditions are being adjusted,” says Mr Shimokhin.
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[PREVIEW_TEXT] => In the middle of November, the “golden link” of the railway line Berkakit – Tommot – Yakutsk will be laid in Nizhny Bestyah settlement (the Republic of Yakutia).
Thus, Railroad of Yakutia will be connected with the Baikal-Amur and Trans-Siberian Mainlines – Russian railway lines joining eastern and western parts of the country. Very soon, Railroad of Yakutia will have direct communication with the whole railway network of the Russian Federation.
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Thus, Railroad of Yakutia will be connected with the Baikal-Amur and Trans-Siberian Mainlines – Russian railway lines joining eastern and western parts of the country. Very soon, Railroad of Yakutia will have direct communication with the whole railway network of the Russian Federation.
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[DETAIL_TEXT] => New Period in the History of Yakutia
This year, RUR 8.4 billion was given to construct the railway line to Yakutsk. Construction of the 892.6-kilometre Berkakit – Tommot – Yakutsk line is one of the largest projects in the country. About 26 kilometres of railroad track bed is still to be laid. In the middle of November, a historic event will take place in Nizhny Bestyah settlement (and at the railway station with the same name) – three Far Eastern mainlines will be joined together.
In the words of Vasily Zagorodsky, Deputy CEO of Railroad of Yakutia, when the railway line reaches Yakutsk, the structure of passenger and freight transportation in the region will change, and the share of railways will increase. “This will be the beginning of a new period in the history of the region, the situation will be similar to that when the Transsib became the basis for rapid development of Eastern Siberia and the Far East. This is the target, and a lot of people, including personnel of the Railroad of Yakutia, are working hard to reach it,” says Mr Zagorodsky.
In fact, the role of the mainline in the development of the Republic cannot be overestimated. It is possible to say that further industrialisation, social and economic development of Yakutia, efficient development of its rich mineral resources depend on the new line.
According to Vasily Shimokhin, CEO of Railroad of Yakutia, it is possible to forecast a significant growth in the throughput after the new line is put into operation; and there will be a decrease in the volume of seasonal cargo, which earlier could be carried by river transport only.
“This may not just significantly reduce expenditure on so-called Severny Zavoz (delivery of goods to the Northern territories of Russia), but make the definition outdated, because the Republic will not be dependent on seasonal supplies of a lot of cargoes any longer,” believes Mr Shimokhin.
Also, all-season transportation of inert construction materials to Yakutsk, Aldan, Tommot, and Neryungri will increase. Thanks to lower tariffs on the railway transportation of these cargoes in comparison with those on transportation by road haulage (nowadays there is practically no alternative to road transport), the construction industry will benefit. On the whole, after the railway reaches Yakutsk, 47% of the Republic’s territory will be transport accessible all year round.
As soon as the line is put into operation, central, eastern, and western regions of Yakutia (where 85% of the Republic’s population live) will be provided with safe and economical transport mode available in any season of the year. So passengers and transporters in the Republic of Yakutia will at last receive the opportunity to travel or dispatch cargoes on quite reasonable tariffs to any place in Russia and abroad.
The Sky Is the Limit
According to the Scheme of complex development of productive forces, transport and energy sector of Yakutia to 2020, it is planned to create a multi-sector industrial area at the Far East of Russia. The new area will be based on the natural resource potential of Southern Yakutia as well as on the transport and power supply networks of the region. The investment project Complex Development of Southern Yakutia envisages design and construction of the following sections of the railway: Tommot – Elkon MMP, Kosarevsky – Seligdarsky Mining and Chemical complex, Tayozhnaya – Taezhny Mining and Concentration Mill, Chulbass – Inaglinsky Coal Complex, Khani (Ikabyekan) - Tarynnakhsky Mining and Concentration Mill.
It is planned that access to the railway will be possible for future mining and concentration mills and metallurgical integrated works, a plant for synthetic oils and oil product processing, and a new coal complex. “We are ready to act as the guarantor of the transportation that will appear as a result of the Complex Development of Southern Yakutia programme’s realisation. Moreover, four of the mentioned junctions between non-public railway lines and the infrastructure of the Railroad of Yakutia are at the stage when technical conditions are being adjusted,” says Mr Shimokhin.
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This year, RUR 8.4 billion was given to construct the railway line to Yakutsk. Construction of the 892.6-kilometre Berkakit – Tommot – Yakutsk line is one of the largest projects in the country. About 26 kilometres of railroad track bed is still to be laid. In the middle of November, a historic event will take place in Nizhny Bestyah settlement (and at the railway station with the same name) – three Far Eastern mainlines will be joined together.
In the words of Vasily Zagorodsky, Deputy CEO of Railroad of Yakutia, when the railway line reaches Yakutsk, the structure of passenger and freight transportation in the region will change, and the share of railways will increase. “This will be the beginning of a new period in the history of the region, the situation will be similar to that when the Transsib became the basis for rapid development of Eastern Siberia and the Far East. This is the target, and a lot of people, including personnel of the Railroad of Yakutia, are working hard to reach it,” says Mr Zagorodsky.
In fact, the role of the mainline in the development of the Republic cannot be overestimated. It is possible to say that further industrialisation, social and economic development of Yakutia, efficient development of its rich mineral resources depend on the new line.
According to Vasily Shimokhin, CEO of Railroad of Yakutia, it is possible to forecast a significant growth in the throughput after the new line is put into operation; and there will be a decrease in the volume of seasonal cargo, which earlier could be carried by river transport only.
“This may not just significantly reduce expenditure on so-called Severny Zavoz (delivery of goods to the Northern territories of Russia), but make the definition outdated, because the Republic will not be dependent on seasonal supplies of a lot of cargoes any longer,” believes Mr Shimokhin.
Also, all-season transportation of inert construction materials to Yakutsk, Aldan, Tommot, and Neryungri will increase. Thanks to lower tariffs on the railway transportation of these cargoes in comparison with those on transportation by road haulage (nowadays there is practically no alternative to road transport), the construction industry will benefit. On the whole, after the railway reaches Yakutsk, 47% of the Republic’s territory will be transport accessible all year round.
As soon as the line is put into operation, central, eastern, and western regions of Yakutia (where 85% of the Republic’s population live) will be provided with safe and economical transport mode available in any season of the year. So passengers and transporters in the Republic of Yakutia will at last receive the opportunity to travel or dispatch cargoes on quite reasonable tariffs to any place in Russia and abroad.
The Sky Is the Limit
According to the Scheme of complex development of productive forces, transport and energy sector of Yakutia to 2020, it is planned to create a multi-sector industrial area at the Far East of Russia. The new area will be based on the natural resource potential of Southern Yakutia as well as on the transport and power supply networks of the region. The investment project Complex Development of Southern Yakutia envisages design and construction of the following sections of the railway: Tommot – Elkon MMP, Kosarevsky – Seligdarsky Mining and Chemical complex, Tayozhnaya – Taezhny Mining and Concentration Mill, Chulbass – Inaglinsky Coal Complex, Khani (Ikabyekan) - Tarynnakhsky Mining and Concentration Mill.
It is planned that access to the railway will be possible for future mining and concentration mills and metallurgical integrated works, a plant for synthetic oils and oil product processing, and a new coal complex. “We are ready to act as the guarantor of the transportation that will appear as a result of the Complex Development of Southern Yakutia programme’s realisation. Moreover, four of the mentioned junctions between non-public railway lines and the infrastructure of the Railroad of Yakutia are at the stage when technical conditions are being adjusted,” says Mr Shimokhin.
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The Russian Railways JSC is exploring the possibility of constructing a transcontinental rail track across the Bering Strait to connect Yakutsk and Magadan in Russia with Alaska in the USA. The proposed line including a tunnel under the Strait is called oneArray
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[DETAIL_TEXT] => A hundred-year story
The idea of a transcontinental railroad linking Eurasia with America seized the imagination of engineers on the both sides of the Pacific in the end of the 19th century. The first Governor of Colorado territory William Gilpin is believed to be the first to declare it.
At present the plan to construct the tunnel is on the list of priority programs of the Asian and Pacific Region countries Cooperation Council. Russian “Strategy for rail transport development till 2030” envisages creation of the 3,500 kilometer transcontinental rail track Lena river – Zyranka – Yelen with access to the Bering Strait. In 1996 the USA granted $10 million to cover feasibility studies for the tunnel project. Alaska state government and American Railroads Association have set up Transcontinental Company to fulfill this work.
The Russian authorities also take an interest in the project, though a rather restrained one, considering its enormous costs. The strait is only 86 kilometers wide at its narrowest part, but there’s nothing on either coast to connect a road to. About 4,000 kilometers of rails are to be constructed from the ground up on the Russian side and over 2,000 in Canada and Alaska, where the track would follow from Dease-Lake town in Canada, through Fairbanks in Alaska till Nom town. The greater part of the way goes through Subarctic areas.
Still some steps are being made in this direction. Gennady Alexeev, the Vice President of Yakutia, said the Berkakit – Tommot – Yakutsk rail branch was to be completed by December 2012. In 2013 it will be extended to Magadan, and then to its final point in Egvekinot village in Chukotka.
Unapproachable resources
The reasons for such interest in the project are basically economic. The cargo flow between South-East Asia and North America is estimated at 370-380 million tones a year now and by 2030 it is expected to reach 460-500 million tones. “If about 15-20% of this volume is transported by rail instead of sea vessels, it’d be enough to cover the expenses of the project in 15-20 years,” says Victor Razbegin, an expert from Production Forces Researches Council. Currently 90% of the freight in the Asia-Pacific region is delivered by sea. The new overland route could cut the transportation time by two weeks and make it safer.
Experts at the Moscow State University of Railway Engineering approve of the idea as the line would provide access to vast low-populated areas that are extremely rich in natural resources, and give a second wind to the Trans Siberian Railway as well. The Transsib then would be incorporated into the American and global rail network and strengthen Russia’s role in the global economy.
Mr Razbegin believes the track could become a basis for establishing a whole infrastructure network in the North-East, when it’s expanded with power lines, telecommunications, motorways and pipelines. “The new route would give an impulse to further exploration of currently unapproachable resources of Siberia and the Far East. These areas comprise 85% of all potential energy reserves in Russia, among them 90% of coal and 70% of oil and gas deposits, plus possible hydro-electric power that could generate about 644 billion kilowatt-hours – that’s going to be a nearly unlimited energy reserve. Currently only about 5% of the energy potential of this territory is being used”.
As was estimated, the hydroenergetic potential of the area is exceptional not only for Russia but also for Canada and North-West USA. A chain of hydro power stations and two tidal plants along the route (in Penzhinsky bay and Cook Inlet) would make up a Russian-American power bridge of 10 gigawatt capacity.
George Kumal, the President at Transcontinental non-profit organization revealed the details of the project. “At the first stage a single-track rail road is to be build to launch commercial operations, and after that a second track. The construction of the overwater part is not unprecedented, considering natural connection via Gvozdev islands in the middle if the strait. The draft scheme implies building a tunnel at about 100 meters depth. The water is shallow here (deepest point at 170 meters), and the sea bed is formed with compact granite and limestone rocks, that gives a certain engineering advantage. At the first stage we propose construction of the 9-meters in diameter main tunnel and 6-meter supplementary one. The subsoil excavated could be used to form ports areas in Wales and Chukotka peninsula”.
Tunnel in the middle of nowhere
Sceptics remind us that the underwater tunnel is the simplest part of the project. The toughest thing is the total absence of infrastructure in the region. In Russia the nearest transport junction is over 1,500 kilometers away from the proposed starting point of the tunnel in Providence Bay. Alaska does not have a direct rail connection with US mainland and Canada. This means that 6,000 kilometers of railways should be created between Yakutsk in Siberia and Fort-Nelson in British Columbia.
And the main traditional question – where to get the money – remains unanswered. Several years ago the project costs were estimated at USD 55-67 billion. The construction works would take 9-12 years with a payback period of about 13-15 years. But then the economic crisis of 2008-2009 interfered. According to the latest calculations, the expenses rose by 30% to USD 94 billion, and the payback period may reach 15-20 years. Aslambek Aslakhanov from Russian Federation Council claims that it’s still possible to get a return on such investments, as many countries are ready to participate – among them Korea, the USA and Canada.
It is anticipated that next year an intergovernmental working group would be established to promote the project. The group would call for the leaders of the states to discuss the issue at the coming Asia-Pacific Economic Cooperation Leaders’ Summit in Vladivostok.
By Maria Shevchenko
[~DETAIL_TEXT] => A hundred-year story
The idea of a transcontinental railroad linking Eurasia with America seized the imagination of engineers on the both sides of the Pacific in the end of the 19th century. The first Governor of Colorado territory William Gilpin is believed to be the first to declare it.
At present the plan to construct the tunnel is on the list of priority programs of the Asian and Pacific Region countries Cooperation Council. Russian “Strategy for rail transport development till 2030” envisages creation of the 3,500 kilometer transcontinental rail track Lena river – Zyranka – Yelen with access to the Bering Strait. In 1996 the USA granted $10 million to cover feasibility studies for the tunnel project. Alaska state government and American Railroads Association have set up Transcontinental Company to fulfill this work.
The Russian authorities also take an interest in the project, though a rather restrained one, considering its enormous costs. The strait is only 86 kilometers wide at its narrowest part, but there’s nothing on either coast to connect a road to. About 4,000 kilometers of rails are to be constructed from the ground up on the Russian side and over 2,000 in Canada and Alaska, where the track would follow from Dease-Lake town in Canada, through Fairbanks in Alaska till Nom town. The greater part of the way goes through Subarctic areas.
Still some steps are being made in this direction. Gennady Alexeev, the Vice President of Yakutia, said the Berkakit – Tommot – Yakutsk rail branch was to be completed by December 2012. In 2013 it will be extended to Magadan, and then to its final point in Egvekinot village in Chukotka.
Unapproachable resources
The reasons for such interest in the project are basically economic. The cargo flow between South-East Asia and North America is estimated at 370-380 million tones a year now and by 2030 it is expected to reach 460-500 million tones. “If about 15-20% of this volume is transported by rail instead of sea vessels, it’d be enough to cover the expenses of the project in 15-20 years,” says Victor Razbegin, an expert from Production Forces Researches Council. Currently 90% of the freight in the Asia-Pacific region is delivered by sea. The new overland route could cut the transportation time by two weeks and make it safer.
Experts at the Moscow State University of Railway Engineering approve of the idea as the line would provide access to vast low-populated areas that are extremely rich in natural resources, and give a second wind to the Trans Siberian Railway as well. The Transsib then would be incorporated into the American and global rail network and strengthen Russia’s role in the global economy.
Mr Razbegin believes the track could become a basis for establishing a whole infrastructure network in the North-East, when it’s expanded with power lines, telecommunications, motorways and pipelines. “The new route would give an impulse to further exploration of currently unapproachable resources of Siberia and the Far East. These areas comprise 85% of all potential energy reserves in Russia, among them 90% of coal and 70% of oil and gas deposits, plus possible hydro-electric power that could generate about 644 billion kilowatt-hours – that’s going to be a nearly unlimited energy reserve. Currently only about 5% of the energy potential of this territory is being used”.
As was estimated, the hydroenergetic potential of the area is exceptional not only for Russia but also for Canada and North-West USA. A chain of hydro power stations and two tidal plants along the route (in Penzhinsky bay and Cook Inlet) would make up a Russian-American power bridge of 10 gigawatt capacity.
George Kumal, the President at Transcontinental non-profit organization revealed the details of the project. “At the first stage a single-track rail road is to be build to launch commercial operations, and after that a second track. The construction of the overwater part is not unprecedented, considering natural connection via Gvozdev islands in the middle if the strait. The draft scheme implies building a tunnel at about 100 meters depth. The water is shallow here (deepest point at 170 meters), and the sea bed is formed with compact granite and limestone rocks, that gives a certain engineering advantage. At the first stage we propose construction of the 9-meters in diameter main tunnel and 6-meter supplementary one. The subsoil excavated could be used to form ports areas in Wales and Chukotka peninsula”.
Tunnel in the middle of nowhere
Sceptics remind us that the underwater tunnel is the simplest part of the project. The toughest thing is the total absence of infrastructure in the region. In Russia the nearest transport junction is over 1,500 kilometers away from the proposed starting point of the tunnel in Providence Bay. Alaska does not have a direct rail connection with US mainland and Canada. This means that 6,000 kilometers of railways should be created between Yakutsk in Siberia and Fort-Nelson in British Columbia.
And the main traditional question – where to get the money – remains unanswered. Several years ago the project costs were estimated at USD 55-67 billion. The construction works would take 9-12 years with a payback period of about 13-15 years. But then the economic crisis of 2008-2009 interfered. According to the latest calculations, the expenses rose by 30% to USD 94 billion, and the payback period may reach 15-20 years. Aslambek Aslakhanov from Russian Federation Council claims that it’s still possible to get a return on such investments, as many countries are ready to participate – among them Korea, the USA and Canada.
It is anticipated that next year an intergovernmental working group would be established to promote the project. The group would call for the leaders of the states to discuss the issue at the coming Asia-Pacific Economic Cooperation Leaders’ Summit in Vladivostok.
By Maria Shevchenko
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[DETAIL_TEXT] => A hundred-year story
The idea of a transcontinental railroad linking Eurasia with America seized the imagination of engineers on the both sides of the Pacific in the end of the 19th century. The first Governor of Colorado territory William Gilpin is believed to be the first to declare it.
At present the plan to construct the tunnel is on the list of priority programs of the Asian and Pacific Region countries Cooperation Council. Russian “Strategy for rail transport development till 2030” envisages creation of the 3,500 kilometer transcontinental rail track Lena river – Zyranka – Yelen with access to the Bering Strait. In 1996 the USA granted $10 million to cover feasibility studies for the tunnel project. Alaska state government and American Railroads Association have set up Transcontinental Company to fulfill this work.
The Russian authorities also take an interest in the project, though a rather restrained one, considering its enormous costs. The strait is only 86 kilometers wide at its narrowest part, but there’s nothing on either coast to connect a road to. About 4,000 kilometers of rails are to be constructed from the ground up on the Russian side and over 2,000 in Canada and Alaska, where the track would follow from Dease-Lake town in Canada, through Fairbanks in Alaska till Nom town. The greater part of the way goes through Subarctic areas.
Still some steps are being made in this direction. Gennady Alexeev, the Vice President of Yakutia, said the Berkakit – Tommot – Yakutsk rail branch was to be completed by December 2012. In 2013 it will be extended to Magadan, and then to its final point in Egvekinot village in Chukotka.
Unapproachable resources
The reasons for such interest in the project are basically economic. The cargo flow between South-East Asia and North America is estimated at 370-380 million tones a year now and by 2030 it is expected to reach 460-500 million tones. “If about 15-20% of this volume is transported by rail instead of sea vessels, it’d be enough to cover the expenses of the project in 15-20 years,” says Victor Razbegin, an expert from Production Forces Researches Council. Currently 90% of the freight in the Asia-Pacific region is delivered by sea. The new overland route could cut the transportation time by two weeks and make it safer.
Experts at the Moscow State University of Railway Engineering approve of the idea as the line would provide access to vast low-populated areas that are extremely rich in natural resources, and give a second wind to the Trans Siberian Railway as well. The Transsib then would be incorporated into the American and global rail network and strengthen Russia’s role in the global economy.
Mr Razbegin believes the track could become a basis for establishing a whole infrastructure network in the North-East, when it’s expanded with power lines, telecommunications, motorways and pipelines. “The new route would give an impulse to further exploration of currently unapproachable resources of Siberia and the Far East. These areas comprise 85% of all potential energy reserves in Russia, among them 90% of coal and 70% of oil and gas deposits, plus possible hydro-electric power that could generate about 644 billion kilowatt-hours – that’s going to be a nearly unlimited energy reserve. Currently only about 5% of the energy potential of this territory is being used”.
As was estimated, the hydroenergetic potential of the area is exceptional not only for Russia but also for Canada and North-West USA. A chain of hydro power stations and two tidal plants along the route (in Penzhinsky bay and Cook Inlet) would make up a Russian-American power bridge of 10 gigawatt capacity.
George Kumal, the President at Transcontinental non-profit organization revealed the details of the project. “At the first stage a single-track rail road is to be build to launch commercial operations, and after that a second track. The construction of the overwater part is not unprecedented, considering natural connection via Gvozdev islands in the middle if the strait. The draft scheme implies building a tunnel at about 100 meters depth. The water is shallow here (deepest point at 170 meters), and the sea bed is formed with compact granite and limestone rocks, that gives a certain engineering advantage. At the first stage we propose construction of the 9-meters in diameter main tunnel and 6-meter supplementary one. The subsoil excavated could be used to form ports areas in Wales and Chukotka peninsula”.
Tunnel in the middle of nowhere
Sceptics remind us that the underwater tunnel is the simplest part of the project. The toughest thing is the total absence of infrastructure in the region. In Russia the nearest transport junction is over 1,500 kilometers away from the proposed starting point of the tunnel in Providence Bay. Alaska does not have a direct rail connection with US mainland and Canada. This means that 6,000 kilometers of railways should be created between Yakutsk in Siberia and Fort-Nelson in British Columbia.
And the main traditional question – where to get the money – remains unanswered. Several years ago the project costs were estimated at USD 55-67 billion. The construction works would take 9-12 years with a payback period of about 13-15 years. But then the economic crisis of 2008-2009 interfered. According to the latest calculations, the expenses rose by 30% to USD 94 billion, and the payback period may reach 15-20 years. Aslambek Aslakhanov from Russian Federation Council claims that it’s still possible to get a return on such investments, as many countries are ready to participate – among them Korea, the USA and Canada.
It is anticipated that next year an intergovernmental working group would be established to promote the project. The group would call for the leaders of the states to discuss the issue at the coming Asia-Pacific Economic Cooperation Leaders’ Summit in Vladivostok.
By Maria Shevchenko
[~DETAIL_TEXT] => A hundred-year story
The idea of a transcontinental railroad linking Eurasia with America seized the imagination of engineers on the both sides of the Pacific in the end of the 19th century. The first Governor of Colorado territory William Gilpin is believed to be the first to declare it.
At present the plan to construct the tunnel is on the list of priority programs of the Asian and Pacific Region countries Cooperation Council. Russian “Strategy for rail transport development till 2030” envisages creation of the 3,500 kilometer transcontinental rail track Lena river – Zyranka – Yelen with access to the Bering Strait. In 1996 the USA granted $10 million to cover feasibility studies for the tunnel project. Alaska state government and American Railroads Association have set up Transcontinental Company to fulfill this work.
The Russian authorities also take an interest in the project, though a rather restrained one, considering its enormous costs. The strait is only 86 kilometers wide at its narrowest part, but there’s nothing on either coast to connect a road to. About 4,000 kilometers of rails are to be constructed from the ground up on the Russian side and over 2,000 in Canada and Alaska, where the track would follow from Dease-Lake town in Canada, through Fairbanks in Alaska till Nom town. The greater part of the way goes through Subarctic areas.
Still some steps are being made in this direction. Gennady Alexeev, the Vice President of Yakutia, said the Berkakit – Tommot – Yakutsk rail branch was to be completed by December 2012. In 2013 it will be extended to Magadan, and then to its final point in Egvekinot village in Chukotka.
Unapproachable resources
The reasons for such interest in the project are basically economic. The cargo flow between South-East Asia and North America is estimated at 370-380 million tones a year now and by 2030 it is expected to reach 460-500 million tones. “If about 15-20% of this volume is transported by rail instead of sea vessels, it’d be enough to cover the expenses of the project in 15-20 years,” says Victor Razbegin, an expert from Production Forces Researches Council. Currently 90% of the freight in the Asia-Pacific region is delivered by sea. The new overland route could cut the transportation time by two weeks and make it safer.
Experts at the Moscow State University of Railway Engineering approve of the idea as the line would provide access to vast low-populated areas that are extremely rich in natural resources, and give a second wind to the Trans Siberian Railway as well. The Transsib then would be incorporated into the American and global rail network and strengthen Russia’s role in the global economy.
Mr Razbegin believes the track could become a basis for establishing a whole infrastructure network in the North-East, when it’s expanded with power lines, telecommunications, motorways and pipelines. “The new route would give an impulse to further exploration of currently unapproachable resources of Siberia and the Far East. These areas comprise 85% of all potential energy reserves in Russia, among them 90% of coal and 70% of oil and gas deposits, plus possible hydro-electric power that could generate about 644 billion kilowatt-hours – that’s going to be a nearly unlimited energy reserve. Currently only about 5% of the energy potential of this territory is being used”.
As was estimated, the hydroenergetic potential of the area is exceptional not only for Russia but also for Canada and North-West USA. A chain of hydro power stations and two tidal plants along the route (in Penzhinsky bay and Cook Inlet) would make up a Russian-American power bridge of 10 gigawatt capacity.
George Kumal, the President at Transcontinental non-profit organization revealed the details of the project. “At the first stage a single-track rail road is to be build to launch commercial operations, and after that a second track. The construction of the overwater part is not unprecedented, considering natural connection via Gvozdev islands in the middle if the strait. The draft scheme implies building a tunnel at about 100 meters depth. The water is shallow here (deepest point at 170 meters), and the sea bed is formed with compact granite and limestone rocks, that gives a certain engineering advantage. At the first stage we propose construction of the 9-meters in diameter main tunnel and 6-meter supplementary one. The subsoil excavated could be used to form ports areas in Wales and Chukotka peninsula”.
Tunnel in the middle of nowhere
Sceptics remind us that the underwater tunnel is the simplest part of the project. The toughest thing is the total absence of infrastructure in the region. In Russia the nearest transport junction is over 1,500 kilometers away from the proposed starting point of the tunnel in Providence Bay. Alaska does not have a direct rail connection with US mainland and Canada. This means that 6,000 kilometers of railways should be created between Yakutsk in Siberia and Fort-Nelson in British Columbia.
And the main traditional question – where to get the money – remains unanswered. Several years ago the project costs were estimated at USD 55-67 billion. The construction works would take 9-12 years with a payback period of about 13-15 years. But then the economic crisis of 2008-2009 interfered. According to the latest calculations, the expenses rose by 30% to USD 94 billion, and the payback period may reach 15-20 years. Aslambek Aslakhanov from Russian Federation Council claims that it’s still possible to get a return on such investments, as many countries are ready to participate – among them Korea, the USA and Canada.
It is anticipated that next year an intergovernmental working group would be established to promote the project. The group would call for the leaders of the states to discuss the issue at the coming Asia-Pacific Economic Cooperation Leaders’ Summit in Vladivostok.
By Maria Shevchenko
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A Russian Governmental Investment Fund committee intends to come to a decision in relation to the White sea – Komi – Ural project. Experts note that this is the fifth attempt to revive a project with a 130-year history. This time connoisseurs predict that Belkomur stands a good chance of being implemented at least partially.Array
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[DETAIL_TEXT] => ALTERNATIVE TO THE TRANSSIB
The initiators of the reanimation of the White sea – Komi – Ural project assert that one of the main reasons that stimulates today’s appeal of this project is a need to create a transport infrastructure in a resource-rich region. Bringing a branch line to mineral-rich land, according to Yuri Utkin, Vice Chairman of the Perm municipal duma, will make the deposits much more attractive for the investors. They can go up in price ten-fold.
It will be recalled that Belkomur involves construction of a rectifying main line Arkhangelsk – Syktyvkar – Gainy – Solikamsk, construction of a deepwater port in Arkhangelsk, and in what follows, – inclusion of Belkomur into the trans-national line “Barenz-Link” (track from Norway to India). The total extent of the track will make up to 1,245 kilometres. Belkomur will reduce the distance for freight trains from Siberia to the ports of the White Sea by approximately 800 kilometres. The major part of the cargo traffic from the Urals will comprise fertilizers and raw materials for their production. Coking and thermal coal, bauxite, diamonds and timber will prevail in the cargo traffic from Komi to the Urals.
Thinking of the prospects for this project, Oleg Chirkunov, Governor of the Perm region, said at Second International Arctic Forum “The Arctic – Territory of Dialogue”: “The key business in the Berezniki – Solikamsk industrial unit is production of potash fertilizers. In the years 2006-2007 the government sold the new deposits to the investors at a fabulous price – 60-80 billion rubles. But how is it possible to transport cargo from there? How are you supposed to transport the product for which investors have started to make these investments? Today, the cargo traffic of the Berezniki – Solikamsk industrial unit, with potash fertilizers only, is about 10 million tons a year. In 2015, after launching new mines, it will be 15 million tons. If we are seriously speaking today about NSR (Northern Sea Route) performing 60 million tons, then it is a quarter of the tonnage. And that is just one product”. According to Mr Chirkunov, the need to construct a railway for the development of the local industrial unit is more than evident today. “However, it is necessary not only for us – it is needed for transportation of all cargo from the Urals and Siberia. Thus, the cargo base turns out to be up to 30 million tons, including the northern ports,” says
O. Chirkunov. “In 2008 we realized that we could not deliver the existing cargo volume on transport lines. The branch line to the Transsib is overloaded, and the Transsib itself is not able to ensure all the freights anymore. The Transsib has to let passenger trains through, as well as containerized cargos, to ensure delivery standards. While it is occupied by other cargo, it ceases to perform its direct functions”.
Thereby, according to Mr Chirkunov, drawing cargo traffic aside from the Transsib someway became a top priority for RZD and Russian Ministry of Transport. Thus, at the moment when interests of regional business, Ministry of Transport and RZD coincided, construction of the unit at the expense of the Investment Fund became probable. “There was a positive decision of the Investment Committee, but the crisis broke out, and it was decided to slow down all the projects of the Investment Fund, to put it mildly,” says O. Chirkunov.
At the moment the Transsib’s problem remains open. According to experts, it can be solved by the construction of Belkomur.
A GAME WITHOUT RULES?
The necessity of Belkomur’s construction is supported at the highest level. Thus, at a forum “The Arctic – Territory of Dialogue”, Victor Olersky, Deputy Minister of Transport, said, that he didn’t see an alternative to this project to date. “According to transport logic, the line can be extended not just to Arkhangelsk but to Murmansk. In addition, if we do not come to this diagonal, cargoes that will be moving towards the ports of Murmansk and Arkhangelsk, will jam the passage of the goods delivered to North-West, and particularly to Primorsk, Ust-Luga and St Petersburg. So, by not proceeding to Belkomur construction, we are worsening the situation with the delivery of cargoes to the ports of North-West”, he said.
Now there are two possible options for this project. “There is the so-called southern section, which runs from Solikamsk to Syktyvkar, and a northern one – from Syktyvkar to Arkhangelsk. Theoretically, only having the southern section implemented, we have the opportunity to reach the existing lines, but then, most likely, cargoes will be streamed to the port of St Petersburg,” says O. Chirkunov.
According to him, if the project is implemented in full, i.e. both southern and northern sections will be constructed, all the cargoes from 20 to 30 million tons will come to northern ports – Arkhangelsk and Murmansk and will become a serious basis for business to develop there, including NSR. “I think that everyone who is interested in the development of NSR should seriously fight for Belkomur to reach the northern seas,” noted O. Chirkunov.
According to Y. Utkin, today Belkomur includes not only plans to build the railway, but also a project on integrated development of infrastructure in the region. “The cargo base for the project is to be financed by business, and the government will provide the transport structure for this base – an effective, less costly railway”, says Y. Utkin.
The Ministry of Transport made a political decision that not only the means of the state monopoly represented by RZD should be involved in the project, but also private investments. In this sense Belkomur could become the first railway project in Russia which will be implemented through public-private partnership.
“I note that the transport infrastructure has always been a priority of the government, which also preserved it from private investors,” says Y. Utkin. “Now the main problem of implementation of the project is the absence of the government’s generated proposal about the game rules for private investors”.
Y. Utkin emphasizes that Belkomur is a project of national importance. In this regard, the government must submit it to the appropriate level – the Ministry of Transport, which, in turn, must formulate two messages in respect of the project.
“The first one has to do with the start of public financing of design estimates, at the same time transparent game rules for private investors who could take part in the project have to be determined,” asserts Y. Utkin. “The second message results from the first one: a project should appear as a separate line in the budget. What are the western investors’ basic complaints about the project? They say: “You have a huge number of PPP projects, but almost none of them are separate lines in the budget. After all, with such a state of affairs, the attitude towards the project is appropriate”.
Meanwhile O. Chirkunov asserts that the investment feasibility stage of the study project to date has been completed. According to an expert, the development of project documentation for Belkomur will require about 3 billion rubles. “You can have different opinions about such a sum. If the situation was like that: raise funds for the projection, and it will be guaranteed that RZD’s development strategy will be implemented, we would be ready to invest in that. But we would like to be assured that after we, together with other regions of the federation, invest in it, it will not lie on the shelf,” said O. Chirkunov.
It should be remembered that in the pre-crisis period, the Russian government hoped to allocate funds for the main line through the Investment Fund of the Russian Federation. At that time the application was supported even by Vladimir Yakunin, President of RZD – he called Belkomur an indispensable project for the region.
According to Vyacheslav Gaiser, Head of the Republic of Komi, regions, members of the project have prepared a new concept of implementing a comprehensive inter-regional program of industrial and infrastructural development of the regions Belkomur and submitted it to the government of the Russian Federation. The new concept involves the optimization of funding from the federal budget to 180 billion rubles by increasing the contribution of private funding. In all, according to experts, the project requires 330 billion rubles.
“During February and March the bodies of state power of Russia will consider the scheme which we have proposed and, hopefully, will approve it. This will allow the start of implementing the project and construction of new railway sections of Belkomur this year, and bring the main line into service by 2017”, said V. Gaiser.
The original project plan stipulated the main line start-up by 2030. It should be mentioned that Belkomur is also included in the Russian rail transport development strategy until 2030. The strategy involves a large-scale development of railways in the Russian Federation.
“According to the rail transport development strategy until 2030, Belkomur is part of the second stage of the Russian railway network development,” said V. Yakunin. “The project has received federal support. After all, Belkomur is not only a transport route, it is first of all a new opportunity for the development of those regions through which the main line will pass.
The Russian Railways JSC understands the importance of this project and is ready to render Belkomur expert, informational and technical support. Direct investment is not provided by RZD to date. The RZD’s primary task in connection with the creation of Belkomur is the reconstruction of the track at Arkhangelsk – Karpogory – Vendinga – Mikun and Mikun – Syktyvkar sections”.
According to V. Yakunin, a number of service lines with total length of 1,200 km are planned to be constructed, including lines Karpogory – Vendinga, Syktyvkar – Perm (Grigoryevskaya). These sections will form a new main line Belkomur in the direction of Arkhangelsk – Karpogory – Vendinga – Syktyvkar – Perm.
by Elena Veligzhanina
[~DETAIL_TEXT] => ALTERNATIVE TO THE TRANSSIB
The initiators of the reanimation of the White sea – Komi – Ural project assert that one of the main reasons that stimulates today’s appeal of this project is a need to create a transport infrastructure in a resource-rich region. Bringing a branch line to mineral-rich land, according to Yuri Utkin, Vice Chairman of the Perm municipal duma, will make the deposits much more attractive for the investors. They can go up in price ten-fold.
It will be recalled that Belkomur involves construction of a rectifying main line Arkhangelsk – Syktyvkar – Gainy – Solikamsk, construction of a deepwater port in Arkhangelsk, and in what follows, – inclusion of Belkomur into the trans-national line “Barenz-Link” (track from Norway to India). The total extent of the track will make up to 1,245 kilometres. Belkomur will reduce the distance for freight trains from Siberia to the ports of the White Sea by approximately 800 kilometres. The major part of the cargo traffic from the Urals will comprise fertilizers and raw materials for their production. Coking and thermal coal, bauxite, diamonds and timber will prevail in the cargo traffic from Komi to the Urals.
Thinking of the prospects for this project, Oleg Chirkunov, Governor of the Perm region, said at Second International Arctic Forum “The Arctic – Territory of Dialogue”: “The key business in the Berezniki – Solikamsk industrial unit is production of potash fertilizers. In the years 2006-2007 the government sold the new deposits to the investors at a fabulous price – 60-80 billion rubles. But how is it possible to transport cargo from there? How are you supposed to transport the product for which investors have started to make these investments? Today, the cargo traffic of the Berezniki – Solikamsk industrial unit, with potash fertilizers only, is about 10 million tons a year. In 2015, after launching new mines, it will be 15 million tons. If we are seriously speaking today about NSR (Northern Sea Route) performing 60 million tons, then it is a quarter of the tonnage. And that is just one product”. According to Mr Chirkunov, the need to construct a railway for the development of the local industrial unit is more than evident today. “However, it is necessary not only for us – it is needed for transportation of all cargo from the Urals and Siberia. Thus, the cargo base turns out to be up to 30 million tons, including the northern ports,” says
O. Chirkunov. “In 2008 we realized that we could not deliver the existing cargo volume on transport lines. The branch line to the Transsib is overloaded, and the Transsib itself is not able to ensure all the freights anymore. The Transsib has to let passenger trains through, as well as containerized cargos, to ensure delivery standards. While it is occupied by other cargo, it ceases to perform its direct functions”.
Thereby, according to Mr Chirkunov, drawing cargo traffic aside from the Transsib someway became a top priority for RZD and Russian Ministry of Transport. Thus, at the moment when interests of regional business, Ministry of Transport and RZD coincided, construction of the unit at the expense of the Investment Fund became probable. “There was a positive decision of the Investment Committee, but the crisis broke out, and it was decided to slow down all the projects of the Investment Fund, to put it mildly,” says O. Chirkunov.
At the moment the Transsib’s problem remains open. According to experts, it can be solved by the construction of Belkomur.
A GAME WITHOUT RULES?
The necessity of Belkomur’s construction is supported at the highest level. Thus, at a forum “The Arctic – Territory of Dialogue”, Victor Olersky, Deputy Minister of Transport, said, that he didn’t see an alternative to this project to date. “According to transport logic, the line can be extended not just to Arkhangelsk but to Murmansk. In addition, if we do not come to this diagonal, cargoes that will be moving towards the ports of Murmansk and Arkhangelsk, will jam the passage of the goods delivered to North-West, and particularly to Primorsk, Ust-Luga and St Petersburg. So, by not proceeding to Belkomur construction, we are worsening the situation with the delivery of cargoes to the ports of North-West”, he said.
Now there are two possible options for this project. “There is the so-called southern section, which runs from Solikamsk to Syktyvkar, and a northern one – from Syktyvkar to Arkhangelsk. Theoretically, only having the southern section implemented, we have the opportunity to reach the existing lines, but then, most likely, cargoes will be streamed to the port of St Petersburg,” says O. Chirkunov.
According to him, if the project is implemented in full, i.e. both southern and northern sections will be constructed, all the cargoes from 20 to 30 million tons will come to northern ports – Arkhangelsk and Murmansk and will become a serious basis for business to develop there, including NSR. “I think that everyone who is interested in the development of NSR should seriously fight for Belkomur to reach the northern seas,” noted O. Chirkunov.
According to Y. Utkin, today Belkomur includes not only plans to build the railway, but also a project on integrated development of infrastructure in the region. “The cargo base for the project is to be financed by business, and the government will provide the transport structure for this base – an effective, less costly railway”, says Y. Utkin.
The Ministry of Transport made a political decision that not only the means of the state monopoly represented by RZD should be involved in the project, but also private investments. In this sense Belkomur could become the first railway project in Russia which will be implemented through public-private partnership.
“I note that the transport infrastructure has always been a priority of the government, which also preserved it from private investors,” says Y. Utkin. “Now the main problem of implementation of the project is the absence of the government’s generated proposal about the game rules for private investors”.
Y. Utkin emphasizes that Belkomur is a project of national importance. In this regard, the government must submit it to the appropriate level – the Ministry of Transport, which, in turn, must formulate two messages in respect of the project.
“The first one has to do with the start of public financing of design estimates, at the same time transparent game rules for private investors who could take part in the project have to be determined,” asserts Y. Utkin. “The second message results from the first one: a project should appear as a separate line in the budget. What are the western investors’ basic complaints about the project? They say: “You have a huge number of PPP projects, but almost none of them are separate lines in the budget. After all, with such a state of affairs, the attitude towards the project is appropriate”.
Meanwhile O. Chirkunov asserts that the investment feasibility stage of the study project to date has been completed. According to an expert, the development of project documentation for Belkomur will require about 3 billion rubles. “You can have different opinions about such a sum. If the situation was like that: raise funds for the projection, and it will be guaranteed that RZD’s development strategy will be implemented, we would be ready to invest in that. But we would like to be assured that after we, together with other regions of the federation, invest in it, it will not lie on the shelf,” said O. Chirkunov.
It should be remembered that in the pre-crisis period, the Russian government hoped to allocate funds for the main line through the Investment Fund of the Russian Federation. At that time the application was supported even by Vladimir Yakunin, President of RZD – he called Belkomur an indispensable project for the region.
According to Vyacheslav Gaiser, Head of the Republic of Komi, regions, members of the project have prepared a new concept of implementing a comprehensive inter-regional program of industrial and infrastructural development of the regions Belkomur and submitted it to the government of the Russian Federation. The new concept involves the optimization of funding from the federal budget to 180 billion rubles by increasing the contribution of private funding. In all, according to experts, the project requires 330 billion rubles.
“During February and March the bodies of state power of Russia will consider the scheme which we have proposed and, hopefully, will approve it. This will allow the start of implementing the project and construction of new railway sections of Belkomur this year, and bring the main line into service by 2017”, said V. Gaiser.
The original project plan stipulated the main line start-up by 2030. It should be mentioned that Belkomur is also included in the Russian rail transport development strategy until 2030. The strategy involves a large-scale development of railways in the Russian Federation.
“According to the rail transport development strategy until 2030, Belkomur is part of the second stage of the Russian railway network development,” said V. Yakunin. “The project has received federal support. After all, Belkomur is not only a transport route, it is first of all a new opportunity for the development of those regions through which the main line will pass.
The Russian Railways JSC understands the importance of this project and is ready to render Belkomur expert, informational and technical support. Direct investment is not provided by RZD to date. The RZD’s primary task in connection with the creation of Belkomur is the reconstruction of the track at Arkhangelsk – Karpogory – Vendinga – Mikun and Mikun – Syktyvkar sections”.
According to V. Yakunin, a number of service lines with total length of 1,200 km are planned to be constructed, including lines Karpogory – Vendinga, Syktyvkar – Perm (Grigoryevskaya). These sections will form a new main line Belkomur in the direction of Arkhangelsk – Karpogory – Vendinga – Syktyvkar – Perm.
by Elena Veligzhanina
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[DETAIL_TEXT] => ALTERNATIVE TO THE TRANSSIB
The initiators of the reanimation of the White sea – Komi – Ural project assert that one of the main reasons that stimulates today’s appeal of this project is a need to create a transport infrastructure in a resource-rich region. Bringing a branch line to mineral-rich land, according to Yuri Utkin, Vice Chairman of the Perm municipal duma, will make the deposits much more attractive for the investors. They can go up in price ten-fold.
It will be recalled that Belkomur involves construction of a rectifying main line Arkhangelsk – Syktyvkar – Gainy – Solikamsk, construction of a deepwater port in Arkhangelsk, and in what follows, – inclusion of Belkomur into the trans-national line “Barenz-Link” (track from Norway to India). The total extent of the track will make up to 1,245 kilometres. Belkomur will reduce the distance for freight trains from Siberia to the ports of the White Sea by approximately 800 kilometres. The major part of the cargo traffic from the Urals will comprise fertilizers and raw materials for their production. Coking and thermal coal, bauxite, diamonds and timber will prevail in the cargo traffic from Komi to the Urals.
Thinking of the prospects for this project, Oleg Chirkunov, Governor of the Perm region, said at Second International Arctic Forum “The Arctic – Territory of Dialogue”: “The key business in the Berezniki – Solikamsk industrial unit is production of potash fertilizers. In the years 2006-2007 the government sold the new deposits to the investors at a fabulous price – 60-80 billion rubles. But how is it possible to transport cargo from there? How are you supposed to transport the product for which investors have started to make these investments? Today, the cargo traffic of the Berezniki – Solikamsk industrial unit, with potash fertilizers only, is about 10 million tons a year. In 2015, after launching new mines, it will be 15 million tons. If we are seriously speaking today about NSR (Northern Sea Route) performing 60 million tons, then it is a quarter of the tonnage. And that is just one product”. According to Mr Chirkunov, the need to construct a railway for the development of the local industrial unit is more than evident today. “However, it is necessary not only for us – it is needed for transportation of all cargo from the Urals and Siberia. Thus, the cargo base turns out to be up to 30 million tons, including the northern ports,” says
O. Chirkunov. “In 2008 we realized that we could not deliver the existing cargo volume on transport lines. The branch line to the Transsib is overloaded, and the Transsib itself is not able to ensure all the freights anymore. The Transsib has to let passenger trains through, as well as containerized cargos, to ensure delivery standards. While it is occupied by other cargo, it ceases to perform its direct functions”.
Thereby, according to Mr Chirkunov, drawing cargo traffic aside from the Transsib someway became a top priority for RZD and Russian Ministry of Transport. Thus, at the moment when interests of regional business, Ministry of Transport and RZD coincided, construction of the unit at the expense of the Investment Fund became probable. “There was a positive decision of the Investment Committee, but the crisis broke out, and it was decided to slow down all the projects of the Investment Fund, to put it mildly,” says O. Chirkunov.
At the moment the Transsib’s problem remains open. According to experts, it can be solved by the construction of Belkomur.
A GAME WITHOUT RULES?
The necessity of Belkomur’s construction is supported at the highest level. Thus, at a forum “The Arctic – Territory of Dialogue”, Victor Olersky, Deputy Minister of Transport, said, that he didn’t see an alternative to this project to date. “According to transport logic, the line can be extended not just to Arkhangelsk but to Murmansk. In addition, if we do not come to this diagonal, cargoes that will be moving towards the ports of Murmansk and Arkhangelsk, will jam the passage of the goods delivered to North-West, and particularly to Primorsk, Ust-Luga and St Petersburg. So, by not proceeding to Belkomur construction, we are worsening the situation with the delivery of cargoes to the ports of North-West”, he said.
Now there are two possible options for this project. “There is the so-called southern section, which runs from Solikamsk to Syktyvkar, and a northern one – from Syktyvkar to Arkhangelsk. Theoretically, only having the southern section implemented, we have the opportunity to reach the existing lines, but then, most likely, cargoes will be streamed to the port of St Petersburg,” says O. Chirkunov.
According to him, if the project is implemented in full, i.e. both southern and northern sections will be constructed, all the cargoes from 20 to 30 million tons will come to northern ports – Arkhangelsk and Murmansk and will become a serious basis for business to develop there, including NSR. “I think that everyone who is interested in the development of NSR should seriously fight for Belkomur to reach the northern seas,” noted O. Chirkunov.
According to Y. Utkin, today Belkomur includes not only plans to build the railway, but also a project on integrated development of infrastructure in the region. “The cargo base for the project is to be financed by business, and the government will provide the transport structure for this base – an effective, less costly railway”, says Y. Utkin.
The Ministry of Transport made a political decision that not only the means of the state monopoly represented by RZD should be involved in the project, but also private investments. In this sense Belkomur could become the first railway project in Russia which will be implemented through public-private partnership.
“I note that the transport infrastructure has always been a priority of the government, which also preserved it from private investors,” says Y. Utkin. “Now the main problem of implementation of the project is the absence of the government’s generated proposal about the game rules for private investors”.
Y. Utkin emphasizes that Belkomur is a project of national importance. In this regard, the government must submit it to the appropriate level – the Ministry of Transport, which, in turn, must formulate two messages in respect of the project.
“The first one has to do with the start of public financing of design estimates, at the same time transparent game rules for private investors who could take part in the project have to be determined,” asserts Y. Utkin. “The second message results from the first one: a project should appear as a separate line in the budget. What are the western investors’ basic complaints about the project? They say: “You have a huge number of PPP projects, but almost none of them are separate lines in the budget. After all, with such a state of affairs, the attitude towards the project is appropriate”.
Meanwhile O. Chirkunov asserts that the investment feasibility stage of the study project to date has been completed. According to an expert, the development of project documentation for Belkomur will require about 3 billion rubles. “You can have different opinions about such a sum. If the situation was like that: raise funds for the projection, and it will be guaranteed that RZD’s development strategy will be implemented, we would be ready to invest in that. But we would like to be assured that after we, together with other regions of the federation, invest in it, it will not lie on the shelf,” said O. Chirkunov.
It should be remembered that in the pre-crisis period, the Russian government hoped to allocate funds for the main line through the Investment Fund of the Russian Federation. At that time the application was supported even by Vladimir Yakunin, President of RZD – he called Belkomur an indispensable project for the region.
According to Vyacheslav Gaiser, Head of the Republic of Komi, regions, members of the project have prepared a new concept of implementing a comprehensive inter-regional program of industrial and infrastructural development of the regions Belkomur and submitted it to the government of the Russian Federation. The new concept involves the optimization of funding from the federal budget to 180 billion rubles by increasing the contribution of private funding. In all, according to experts, the project requires 330 billion rubles.
“During February and March the bodies of state power of Russia will consider the scheme which we have proposed and, hopefully, will approve it. This will allow the start of implementing the project and construction of new railway sections of Belkomur this year, and bring the main line into service by 2017”, said V. Gaiser.
The original project plan stipulated the main line start-up by 2030. It should be mentioned that Belkomur is also included in the Russian rail transport development strategy until 2030. The strategy involves a large-scale development of railways in the Russian Federation.
“According to the rail transport development strategy until 2030, Belkomur is part of the second stage of the Russian railway network development,” said V. Yakunin. “The project has received federal support. After all, Belkomur is not only a transport route, it is first of all a new opportunity for the development of those regions through which the main line will pass.
The Russian Railways JSC understands the importance of this project and is ready to render Belkomur expert, informational and technical support. Direct investment is not provided by RZD to date. The RZD’s primary task in connection with the creation of Belkomur is the reconstruction of the track at Arkhangelsk – Karpogory – Vendinga – Mikun and Mikun – Syktyvkar sections”.
According to V. Yakunin, a number of service lines with total length of 1,200 km are planned to be constructed, including lines Karpogory – Vendinga, Syktyvkar – Perm (Grigoryevskaya). These sections will form a new main line Belkomur in the direction of Arkhangelsk – Karpogory – Vendinga – Syktyvkar – Perm.
by Elena Veligzhanina
[~DETAIL_TEXT] => ALTERNATIVE TO THE TRANSSIB
The initiators of the reanimation of the White sea – Komi – Ural project assert that one of the main reasons that stimulates today’s appeal of this project is a need to create a transport infrastructure in a resource-rich region. Bringing a branch line to mineral-rich land, according to Yuri Utkin, Vice Chairman of the Perm municipal duma, will make the deposits much more attractive for the investors. They can go up in price ten-fold.
It will be recalled that Belkomur involves construction of a rectifying main line Arkhangelsk – Syktyvkar – Gainy – Solikamsk, construction of a deepwater port in Arkhangelsk, and in what follows, – inclusion of Belkomur into the trans-national line “Barenz-Link” (track from Norway to India). The total extent of the track will make up to 1,245 kilometres. Belkomur will reduce the distance for freight trains from Siberia to the ports of the White Sea by approximately 800 kilometres. The major part of the cargo traffic from the Urals will comprise fertilizers and raw materials for their production. Coking and thermal coal, bauxite, diamonds and timber will prevail in the cargo traffic from Komi to the Urals.
Thinking of the prospects for this project, Oleg Chirkunov, Governor of the Perm region, said at Second International Arctic Forum “The Arctic – Territory of Dialogue”: “The key business in the Berezniki – Solikamsk industrial unit is production of potash fertilizers. In the years 2006-2007 the government sold the new deposits to the investors at a fabulous price – 60-80 billion rubles. But how is it possible to transport cargo from there? How are you supposed to transport the product for which investors have started to make these investments? Today, the cargo traffic of the Berezniki – Solikamsk industrial unit, with potash fertilizers only, is about 10 million tons a year. In 2015, after launching new mines, it will be 15 million tons. If we are seriously speaking today about NSR (Northern Sea Route) performing 60 million tons, then it is a quarter of the tonnage. And that is just one product”. According to Mr Chirkunov, the need to construct a railway for the development of the local industrial unit is more than evident today. “However, it is necessary not only for us – it is needed for transportation of all cargo from the Urals and Siberia. Thus, the cargo base turns out to be up to 30 million tons, including the northern ports,” says
O. Chirkunov. “In 2008 we realized that we could not deliver the existing cargo volume on transport lines. The branch line to the Transsib is overloaded, and the Transsib itself is not able to ensure all the freights anymore. The Transsib has to let passenger trains through, as well as containerized cargos, to ensure delivery standards. While it is occupied by other cargo, it ceases to perform its direct functions”.
Thereby, according to Mr Chirkunov, drawing cargo traffic aside from the Transsib someway became a top priority for RZD and Russian Ministry of Transport. Thus, at the moment when interests of regional business, Ministry of Transport and RZD coincided, construction of the unit at the expense of the Investment Fund became probable. “There was a positive decision of the Investment Committee, but the crisis broke out, and it was decided to slow down all the projects of the Investment Fund, to put it mildly,” says O. Chirkunov.
At the moment the Transsib’s problem remains open. According to experts, it can be solved by the construction of Belkomur.
A GAME WITHOUT RULES?
The necessity of Belkomur’s construction is supported at the highest level. Thus, at a forum “The Arctic – Territory of Dialogue”, Victor Olersky, Deputy Minister of Transport, said, that he didn’t see an alternative to this project to date. “According to transport logic, the line can be extended not just to Arkhangelsk but to Murmansk. In addition, if we do not come to this diagonal, cargoes that will be moving towards the ports of Murmansk and Arkhangelsk, will jam the passage of the goods delivered to North-West, and particularly to Primorsk, Ust-Luga and St Petersburg. So, by not proceeding to Belkomur construction, we are worsening the situation with the delivery of cargoes to the ports of North-West”, he said.
Now there are two possible options for this project. “There is the so-called southern section, which runs from Solikamsk to Syktyvkar, and a northern one – from Syktyvkar to Arkhangelsk. Theoretically, only having the southern section implemented, we have the opportunity to reach the existing lines, but then, most likely, cargoes will be streamed to the port of St Petersburg,” says O. Chirkunov.
According to him, if the project is implemented in full, i.e. both southern and northern sections will be constructed, all the cargoes from 20 to 30 million tons will come to northern ports – Arkhangelsk and Murmansk and will become a serious basis for business to develop there, including NSR. “I think that everyone who is interested in the development of NSR should seriously fight for Belkomur to reach the northern seas,” noted O. Chirkunov.
According to Y. Utkin, today Belkomur includes not only plans to build the railway, but also a project on integrated development of infrastructure in the region. “The cargo base for the project is to be financed by business, and the government will provide the transport structure for this base – an effective, less costly railway”, says Y. Utkin.
The Ministry of Transport made a political decision that not only the means of the state monopoly represented by RZD should be involved in the project, but also private investments. In this sense Belkomur could become the first railway project in Russia which will be implemented through public-private partnership.
“I note that the transport infrastructure has always been a priority of the government, which also preserved it from private investors,” says Y. Utkin. “Now the main problem of implementation of the project is the absence of the government’s generated proposal about the game rules for private investors”.
Y. Utkin emphasizes that Belkomur is a project of national importance. In this regard, the government must submit it to the appropriate level – the Ministry of Transport, which, in turn, must formulate two messages in respect of the project.
“The first one has to do with the start of public financing of design estimates, at the same time transparent game rules for private investors who could take part in the project have to be determined,” asserts Y. Utkin. “The second message results from the first one: a project should appear as a separate line in the budget. What are the western investors’ basic complaints about the project? They say: “You have a huge number of PPP projects, but almost none of them are separate lines in the budget. After all, with such a state of affairs, the attitude towards the project is appropriate”.
Meanwhile O. Chirkunov asserts that the investment feasibility stage of the study project to date has been completed. According to an expert, the development of project documentation for Belkomur will require about 3 billion rubles. “You can have different opinions about such a sum. If the situation was like that: raise funds for the projection, and it will be guaranteed that RZD’s development strategy will be implemented, we would be ready to invest in that. But we would like to be assured that after we, together with other regions of the federation, invest in it, it will not lie on the shelf,” said O. Chirkunov.
It should be remembered that in the pre-crisis period, the Russian government hoped to allocate funds for the main line through the Investment Fund of the Russian Federation. At that time the application was supported even by Vladimir Yakunin, President of RZD – he called Belkomur an indispensable project for the region.
According to Vyacheslav Gaiser, Head of the Republic of Komi, regions, members of the project have prepared a new concept of implementing a comprehensive inter-regional program of industrial and infrastructural development of the regions Belkomur and submitted it to the government of the Russian Federation. The new concept involves the optimization of funding from the federal budget to 180 billion rubles by increasing the contribution of private funding. In all, according to experts, the project requires 330 billion rubles.
“During February and March the bodies of state power of Russia will consider the scheme which we have proposed and, hopefully, will approve it. This will allow the start of implementing the project and construction of new railway sections of Belkomur this year, and bring the main line into service by 2017”, said V. Gaiser.
The original project plan stipulated the main line start-up by 2030. It should be mentioned that Belkomur is also included in the Russian rail transport development strategy until 2030. The strategy involves a large-scale development of railways in the Russian Federation.
“According to the rail transport development strategy until 2030, Belkomur is part of the second stage of the Russian railway network development,” said V. Yakunin. “The project has received federal support. After all, Belkomur is not only a transport route, it is first of all a new opportunity for the development of those regions through which the main line will pass.
The Russian Railways JSC understands the importance of this project and is ready to render Belkomur expert, informational and technical support. Direct investment is not provided by RZD to date. The RZD’s primary task in connection with the creation of Belkomur is the reconstruction of the track at Arkhangelsk – Karpogory – Vendinga – Mikun and Mikun – Syktyvkar sections”.
According to V. Yakunin, a number of service lines with total length of 1,200 km are planned to be constructed, including lines Karpogory – Vendinga, Syktyvkar – Perm (Grigoryevskaya). These sections will form a new main line Belkomur in the direction of Arkhangelsk – Karpogory – Vendinga – Syktyvkar – Perm.
by Elena Veligzhanina
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Nowadays, the need to apply public-private partnership (PPP) mechanisms to carry out transport infrastructure projects is being actively discussed in Russia. Meanwhile, the first large project realised on the PPP principle is already working efficiently and developing. The Ust-Luga sea commercial port is justifiably considered the pioneer Array
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[DETAIL_TEXT] => More Private Investments
The story of the port complex construction in Ust-Luga started in the 1990s, when the USSR collapsed and Russia lost ports located on the territory of the former Soviet republics, particularly in the Baltic region. To keep the strategic position of Russia, it was decided to build a port on the Luga Bay of the Gulf of Finland of the Baltic Sea. However, the most active stage of the port’s development started only in 1999, when a new team came and succeeded in persuading investors and the state of the economic efficiency of the project.
The PPP principles were formulated at that time. They became the basis of the project realisation. The idea is that the state finances the development of the port complex and the infrastructure (railway accesses, dredging), and the business builds and exploits transshipment centres.
At first, small volumes of state financing attracted minimum volumes of private investments, then the volumes of the both types of financing were equal. Lately, private investments have been much larger than direct state investments. In the words of Sergey Ivanov, Deputy Chairman of the RF Government, by January 1, 2011, RUR 90 billion had been invested into the port development. Of that, RUR 65 billion was given by the private business.
In the context of the Ust-Luga port construction, public-private partnership got first definite contract forms. State agencies and ministries concluded contracts with Ust-Luga Company and nominated it to be the project owner/developer. According to the contracts, the volume of state investments is to match the volume of private investments.
Developing Fast
Nowadays, it is possible to state that the project is a success. By now, seven reloading centres have been put into operation in the Ust-Luga sea commercial port: a timber terminal, an auto-railway ferry complex, the multipurpose terminal Yug-2, a coal terminal, a universal cargo terminal, a sulphur terminal, and a liquid bulk terminal, which is now working in the test mode (it will be officially put into operation before the end of the year). In 2010, the acting terminals of the Ust-Luga port increased throughput by 13.6% year-on-year to 11.8 million tons of cargo. The terminal Yug-2 worked very efficiently – the handling volume of cars there increased by 280% in 2010. In January-September 2011, the throughput of the Ust-Luga port grew by 87.6% in comparison with the same period the previous year and amounted to 15.7 million tons. In 2011, the handling volume of the port is expected to rise by 70% year-on-year to 20 million tons.
In December 2011, it is planned to launch the first stage of the Ust-Luga oil depot – the final point of the Baltic Pipeline System-2 (BPS-2, the investor is Transneft). The basic storage facilities of the terminal have been constructed, the secondary infrastructure is being built now. Also, the construction of the first stage of the Ust-Luga container terminal is almost complete (the investor is the National Container Company). It is supposed to start functioning at the end of 2011 as well.
In 2012-2013, it is planned to put into operation the Baltic Metallurgical Terminal, a terminal for handling and fractionation of stable gas condensate and gas products, a terminal for oil products handling and bunkering, and a LNG terminal.
On the whole, according to the Scheme of the general plan of the Ust-Luga port development, 19 reloading complexes with a total throughput of 180 million tons per annum are to be built there before 2018.
A Town And a Port
Engineering infrastructure (systems for port power supply, drinking water supply, communication, surface-stream flow transfer from the territory of the Northern section of the port) were built to support the work of the reloading complexes and they were developed in a timely fashion.
In the framework of the investment programme of RZD, the outer railway approaches to the port are being reconstructed, and the Luzhskaya station complex is being developed. The current carrying capacity of the railway there is 36 million tons per annum.
The depth of the harbour waters in the liquid bulk section and the Northern sea canal is to increase to 17.5 metres in 2011. This will give large-capacity tank vessels the maximum possible draft for the Baltic Sea and a deadweight of 160,000 tons and to minimise the sea constituent of the transport expenditure on the export of oil transported via the BPS-2.
From the very beginning, the Ust-Luga project envisaged not only the construction of the port, but development of the neighbouring territories as well. To put it in practice, Ust-Luga Company initiated a relative programme. Carrying it out, the company got a unique experience of mechanisms and approaches to complex investment projects development and expediting at all levels of executive and legislative powers.
An industrial production zone is planned to be created on a site of over two hectares. The Concept of the Territory Development and the General Plan of the New Town Construction are being carried out. It is supposed that 34,500 people will live in the new town. The total living area will exceed one million square metres.
Naturally, there were some problems with the project’s realisation – gaps in the legislation, the lack of the mechanism for land plot transfer for the complex development of territories, etc. Despite all the difficulties, the first experience of applying the PPP scheme to construct a large piece of infrastructure in Russia has proved its efficiency.
By Olga Gorbunova
[~DETAIL_TEXT] => More Private Investments
The story of the port complex construction in Ust-Luga started in the 1990s, when the USSR collapsed and Russia lost ports located on the territory of the former Soviet republics, particularly in the Baltic region. To keep the strategic position of Russia, it was decided to build a port on the Luga Bay of the Gulf of Finland of the Baltic Sea. However, the most active stage of the port’s development started only in 1999, when a new team came and succeeded in persuading investors and the state of the economic efficiency of the project.
The PPP principles were formulated at that time. They became the basis of the project realisation. The idea is that the state finances the development of the port complex and the infrastructure (railway accesses, dredging), and the business builds and exploits transshipment centres.
At first, small volumes of state financing attracted minimum volumes of private investments, then the volumes of the both types of financing were equal. Lately, private investments have been much larger than direct state investments. In the words of Sergey Ivanov, Deputy Chairman of the RF Government, by January 1, 2011, RUR 90 billion had been invested into the port development. Of that, RUR 65 billion was given by the private business.
In the context of the Ust-Luga port construction, public-private partnership got first definite contract forms. State agencies and ministries concluded contracts with Ust-Luga Company and nominated it to be the project owner/developer. According to the contracts, the volume of state investments is to match the volume of private investments.
Developing Fast
Nowadays, it is possible to state that the project is a success. By now, seven reloading centres have been put into operation in the Ust-Luga sea commercial port: a timber terminal, an auto-railway ferry complex, the multipurpose terminal Yug-2, a coal terminal, a universal cargo terminal, a sulphur terminal, and a liquid bulk terminal, which is now working in the test mode (it will be officially put into operation before the end of the year). In 2010, the acting terminals of the Ust-Luga port increased throughput by 13.6% year-on-year to 11.8 million tons of cargo. The terminal Yug-2 worked very efficiently – the handling volume of cars there increased by 280% in 2010. In January-September 2011, the throughput of the Ust-Luga port grew by 87.6% in comparison with the same period the previous year and amounted to 15.7 million tons. In 2011, the handling volume of the port is expected to rise by 70% year-on-year to 20 million tons.
In December 2011, it is planned to launch the first stage of the Ust-Luga oil depot – the final point of the Baltic Pipeline System-2 (BPS-2, the investor is Transneft). The basic storage facilities of the terminal have been constructed, the secondary infrastructure is being built now. Also, the construction of the first stage of the Ust-Luga container terminal is almost complete (the investor is the National Container Company). It is supposed to start functioning at the end of 2011 as well.
In 2012-2013, it is planned to put into operation the Baltic Metallurgical Terminal, a terminal for handling and fractionation of stable gas condensate and gas products, a terminal for oil products handling and bunkering, and a LNG terminal.
On the whole, according to the Scheme of the general plan of the Ust-Luga port development, 19 reloading complexes with a total throughput of 180 million tons per annum are to be built there before 2018.
A Town And a Port
Engineering infrastructure (systems for port power supply, drinking water supply, communication, surface-stream flow transfer from the territory of the Northern section of the port) were built to support the work of the reloading complexes and they were developed in a timely fashion.
In the framework of the investment programme of RZD, the outer railway approaches to the port are being reconstructed, and the Luzhskaya station complex is being developed. The current carrying capacity of the railway there is 36 million tons per annum.
The depth of the harbour waters in the liquid bulk section and the Northern sea canal is to increase to 17.5 metres in 2011. This will give large-capacity tank vessels the maximum possible draft for the Baltic Sea and a deadweight of 160,000 tons and to minimise the sea constituent of the transport expenditure on the export of oil transported via the BPS-2.
From the very beginning, the Ust-Luga project envisaged not only the construction of the port, but development of the neighbouring territories as well. To put it in practice, Ust-Luga Company initiated a relative programme. Carrying it out, the company got a unique experience of mechanisms and approaches to complex investment projects development and expediting at all levels of executive and legislative powers.
An industrial production zone is planned to be created on a site of over two hectares. The Concept of the Territory Development and the General Plan of the New Town Construction are being carried out. It is supposed that 34,500 people will live in the new town. The total living area will exceed one million square metres.
Naturally, there were some problems with the project’s realisation – gaps in the legislation, the lack of the mechanism for land plot transfer for the complex development of territories, etc. Despite all the difficulties, the first experience of applying the PPP scheme to construct a large piece of infrastructure in Russia has proved its efficiency.
By Olga Gorbunova
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The story of the port complex construction in Ust-Luga started in the 1990s, when the USSR collapsed and Russia lost ports located on the territory of the former Soviet republics, particularly in the Baltic region. To keep the strategic position of Russia, it was decided to build a port on the Luga Bay of the Gulf of Finland of the Baltic Sea. However, the most active stage of the port’s development started only in 1999, when a new team came and succeeded in persuading investors and the state of the economic efficiency of the project.
The PPP principles were formulated at that time. They became the basis of the project realisation. The idea is that the state finances the development of the port complex and the infrastructure (railway accesses, dredging), and the business builds and exploits transshipment centres.
At first, small volumes of state financing attracted minimum volumes of private investments, then the volumes of the both types of financing were equal. Lately, private investments have been much larger than direct state investments. In the words of Sergey Ivanov, Deputy Chairman of the RF Government, by January 1, 2011, RUR 90 billion had been invested into the port development. Of that, RUR 65 billion was given by the private business.
In the context of the Ust-Luga port construction, public-private partnership got first definite contract forms. State agencies and ministries concluded contracts with Ust-Luga Company and nominated it to be the project owner/developer. According to the contracts, the volume of state investments is to match the volume of private investments.
Developing Fast
Nowadays, it is possible to state that the project is a success. By now, seven reloading centres have been put into operation in the Ust-Luga sea commercial port: a timber terminal, an auto-railway ferry complex, the multipurpose terminal Yug-2, a coal terminal, a universal cargo terminal, a sulphur terminal, and a liquid bulk terminal, which is now working in the test mode (it will be officially put into operation before the end of the year). In 2010, the acting terminals of the Ust-Luga port increased throughput by 13.6% year-on-year to 11.8 million tons of cargo. The terminal Yug-2 worked very efficiently – the handling volume of cars there increased by 280% in 2010. In January-September 2011, the throughput of the Ust-Luga port grew by 87.6% in comparison with the same period the previous year and amounted to 15.7 million tons. In 2011, the handling volume of the port is expected to rise by 70% year-on-year to 20 million tons.
In December 2011, it is planned to launch the first stage of the Ust-Luga oil depot – the final point of the Baltic Pipeline System-2 (BPS-2, the investor is Transneft). The basic storage facilities of the terminal have been constructed, the secondary infrastructure is being built now. Also, the construction of the first stage of the Ust-Luga container terminal is almost complete (the investor is the National Container Company). It is supposed to start functioning at the end of 2011 as well.
In 2012-2013, it is planned to put into operation the Baltic Metallurgical Terminal, a terminal for handling and fractionation of stable gas condensate and gas products, a terminal for oil products handling and bunkering, and a LNG terminal.
On the whole, according to the Scheme of the general plan of the Ust-Luga port development, 19 reloading complexes with a total throughput of 180 million tons per annum are to be built there before 2018.
A Town And a Port
Engineering infrastructure (systems for port power supply, drinking water supply, communication, surface-stream flow transfer from the territory of the Northern section of the port) were built to support the work of the reloading complexes and they were developed in a timely fashion.
In the framework of the investment programme of RZD, the outer railway approaches to the port are being reconstructed, and the Luzhskaya station complex is being developed. The current carrying capacity of the railway there is 36 million tons per annum.
The depth of the harbour waters in the liquid bulk section and the Northern sea canal is to increase to 17.5 metres in 2011. This will give large-capacity tank vessels the maximum possible draft for the Baltic Sea and a deadweight of 160,000 tons and to minimise the sea constituent of the transport expenditure on the export of oil transported via the BPS-2.
From the very beginning, the Ust-Luga project envisaged not only the construction of the port, but development of the neighbouring territories as well. To put it in practice, Ust-Luga Company initiated a relative programme. Carrying it out, the company got a unique experience of mechanisms and approaches to complex investment projects development and expediting at all levels of executive and legislative powers.
An industrial production zone is planned to be created on a site of over two hectares. The Concept of the Territory Development and the General Plan of the New Town Construction are being carried out. It is supposed that 34,500 people will live in the new town. The total living area will exceed one million square metres.
Naturally, there were some problems with the project’s realisation – gaps in the legislation, the lack of the mechanism for land plot transfer for the complex development of territories, etc. Despite all the difficulties, the first experience of applying the PPP scheme to construct a large piece of infrastructure in Russia has proved its efficiency.
By Olga Gorbunova
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The story of the port complex construction in Ust-Luga started in the 1990s, when the USSR collapsed and Russia lost ports located on the territory of the former Soviet republics, particularly in the Baltic region. To keep the strategic position of Russia, it was decided to build a port on the Luga Bay of the Gulf of Finland of the Baltic Sea. However, the most active stage of the port’s development started only in 1999, when a new team came and succeeded in persuading investors and the state of the economic efficiency of the project.
The PPP principles were formulated at that time. They became the basis of the project realisation. The idea is that the state finances the development of the port complex and the infrastructure (railway accesses, dredging), and the business builds and exploits transshipment centres.
At first, small volumes of state financing attracted minimum volumes of private investments, then the volumes of the both types of financing were equal. Lately, private investments have been much larger than direct state investments. In the words of Sergey Ivanov, Deputy Chairman of the RF Government, by January 1, 2011, RUR 90 billion had been invested into the port development. Of that, RUR 65 billion was given by the private business.
In the context of the Ust-Luga port construction, public-private partnership got first definite contract forms. State agencies and ministries concluded contracts with Ust-Luga Company and nominated it to be the project owner/developer. According to the contracts, the volume of state investments is to match the volume of private investments.
Developing Fast
Nowadays, it is possible to state that the project is a success. By now, seven reloading centres have been put into operation in the Ust-Luga sea commercial port: a timber terminal, an auto-railway ferry complex, the multipurpose terminal Yug-2, a coal terminal, a universal cargo terminal, a sulphur terminal, and a liquid bulk terminal, which is now working in the test mode (it will be officially put into operation before the end of the year). In 2010, the acting terminals of the Ust-Luga port increased throughput by 13.6% year-on-year to 11.8 million tons of cargo. The terminal Yug-2 worked very efficiently – the handling volume of cars there increased by 280% in 2010. In January-September 2011, the throughput of the Ust-Luga port grew by 87.6% in comparison with the same period the previous year and amounted to 15.7 million tons. In 2011, the handling volume of the port is expected to rise by 70% year-on-year to 20 million tons.
In December 2011, it is planned to launch the first stage of the Ust-Luga oil depot – the final point of the Baltic Pipeline System-2 (BPS-2, the investor is Transneft). The basic storage facilities of the terminal have been constructed, the secondary infrastructure is being built now. Also, the construction of the first stage of the Ust-Luga container terminal is almost complete (the investor is the National Container Company). It is supposed to start functioning at the end of 2011 as well.
In 2012-2013, it is planned to put into operation the Baltic Metallurgical Terminal, a terminal for handling and fractionation of stable gas condensate and gas products, a terminal for oil products handling and bunkering, and a LNG terminal.
On the whole, according to the Scheme of the general plan of the Ust-Luga port development, 19 reloading complexes with a total throughput of 180 million tons per annum are to be built there before 2018.
A Town And a Port
Engineering infrastructure (systems for port power supply, drinking water supply, communication, surface-stream flow transfer from the territory of the Northern section of the port) were built to support the work of the reloading complexes and they were developed in a timely fashion.
In the framework of the investment programme of RZD, the outer railway approaches to the port are being reconstructed, and the Luzhskaya station complex is being developed. The current carrying capacity of the railway there is 36 million tons per annum.
The depth of the harbour waters in the liquid bulk section and the Northern sea canal is to increase to 17.5 metres in 2011. This will give large-capacity tank vessels the maximum possible draft for the Baltic Sea and a deadweight of 160,000 tons and to minimise the sea constituent of the transport expenditure on the export of oil transported via the BPS-2.
From the very beginning, the Ust-Luga project envisaged not only the construction of the port, but development of the neighbouring territories as well. To put it in practice, Ust-Luga Company initiated a relative programme. Carrying it out, the company got a unique experience of mechanisms and approaches to complex investment projects development and expediting at all levels of executive and legislative powers.
An industrial production zone is planned to be created on a site of over two hectares. The Concept of the Territory Development and the General Plan of the New Town Construction are being carried out. It is supposed that 34,500 people will live in the new town. The total living area will exceed one million square metres.
Naturally, there were some problems with the project’s realisation – gaps in the legislation, the lack of the mechanism for land plot transfer for the complex development of territories, etc. Despite all the difficulties, the first experience of applying the PPP scheme to construct a large piece of infrastructure in Russia has proved its efficiency.
By Olga Gorbunova
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in this sector in the Russian Federation.
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Victor Olersky, Deputy Minister of Transport of the Russian Federation, told about the results of legislative activity for Russian waterway transport, about the measures that were taken in 2011 to support the shipping industry, as well as about the tasks and plans for the near future.Array
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[DETAIL_TEXT] => Raise the Status of the Russian Registry
– Mr Olersky, first of all, let us congratulate you on the adoption of a law on Support of the Russian Shipbuilding and Shipping Measures. What are the most important measures in it that provide the development of both branches and what effect can be expected as a result?
– The work on the law started in November 2009. We set enough ambitious goals –
to achieve a number of preferences, which at the same time will encourage domestic fleet renewal, attract vessels under the Russian flag and give impetus to Russian shipbuilding by returning orders to Russian shipyards. The working group that was created by the Ministry of Transport included representatives of the Ministry of Industry and Trade, as well as representatives of the largest companies of two industries, including United Shipbuilding Corporation JSC and Sovcomflot JSC. Debates on this draft of law by the relevant authorities have gone on long enough. In the end we managed to convince our colleagues and achieved almost all our goals. When on 30 May, 2011, the project was introduced to the State Duma by the government of Russia it was completely agreed. Due to the support of our legislative initiatives by the deputies of both houses of parliament, so expected by shipping community law received the full approval of the Federal Assembly on October 26. (In November, the law was signed by the President - editor).
We have done a great work of comparing tax regimes of different countries in order to increase the attractiveness of the Russian flag during the preparation of the law. And during the process of negotiations with the Ministry of Finance of Russia we have found the most optimal form: during 2012-2027 years there will be zero tariffs of insurance contributions to the Pension Fund, to Social Insurance Fund and to Federal Fund of Mandatory Health Insurance with compensation of these contributions from the state budget of the Russian Federation for crews of ships that are registered in Russian International Register of Shipping (RIRS). There is one good argument in support of this decision: if we are going to return ships under the Russian flag and we want the new fleet to be built under the Russian flag, our terms and conditions should be the best, even compared to the comfortable conditions that are provided by foreign flags.
As a result the ship owner replaces all previous contributions on tonnage contributions. And a ship crew pays only personal income tax, which is 13% in Russia. By the way, if a ship under the Russian flag registered in Russian International Register of Shipping has foreigners in a crew, then all these foreigners are subject to taxation according to the rules of the country of their residence. And, at the same time, if some time ago Russian sailors that worked more than 183 days abroad were taxed at a rate of 30% (like foreigners) then now we have removed this restriction and the rate is 13% as well.
It is remarkable that during the last days before the second reading of a draft of law considerable changes of a part connected with possible registration of ships were made. At some moment we understood that we can’t leave the article of law in a form it was. There was a risk that the old parts of the fleet (30-40 years) would return under the Russian flag, so the government would have to compensate to it the difference between the actual value of contributions paid into the insurance funds and zero, and this would be, at least, unfair. There was the same situation with cabotage fleet. Of course, it is also should be developed but at the moment there are problems with its ships. If we had not introduced some restrictions, the entire old cabotage fleet would have re-registered in Russian International Register of Shipping. We also have gave to ships registered in the Russian International Register of Shipping to work in cabotage, which was not so before.
For reasons of development, including the development of the cabotage fleet, we have set the age limit for vessels that receive the initial registration in Russian International Register of Shipping to 15 years. This also refers to vessels that are currently registered on a foreign register. Thus, we give the right to stay in our registry, but only for a relatively young fleet. Furthermore – and this is one of the most important measures to support the Russian shipbuilding industry – any ship built in Russia after January 1, 2010, regardless of its purpose (and this is a revolutionary idea), can be registered on the Russian International Register of Shipping. We believe that this rule will lead to a boom in shipbuilding in this country.
The shipbuilding industry will also get preferences. The new law provides for the existence of a regime of industrial and production special economic zones on shipyards as well as government safeguards. If earlier such SEZ could be created only on public lands then now they can on all, including private ones. As for the tax preferences then all shipbuilding organizations that are residents of SEZ became free of land tax payment and of property tax payment for a period of ten years (instead of current five years), as well as of customs duties on imported foreign equipment.
– Does this mean that all proposals made by the developers of the project were taken into account in the new law?
– Yes, during the work on the draft of law all suggestions and comments of the Ministry of Transport have been taken into account. We are very pleased that we have been heard. I can say that if a zero rate had not been approved, the law would have been emasculated. And now there is real sense in making ships sail under a Russian flag. Today we have created the conditions and it’s the turn of ship owners to act.
I should add that at the moment we are working on the formation of effective financing mechanisms for shipbuilding projects and on compensation of interest rates. Although this is a task of the Ministry of Industry and Trade, the high-quality execution of this task, first of all, will be a good for the Russian ship owners. Therefore, we often are the initiators of fresh proposals.
Today, subsidies are granted on condition of presentation of the purchase contract, that means at the moment of transfer of the already-built ship to the customer. Current practice shows that lending is needed to the ship owner at the time of ordering the vessel at a shipyard. However, it is not in accordance with the rules of applying for a loan. We propose to consider applying for loans, not only in case of the purchase contract presence, but also in case of presentation of a contract for the construction of the vessel.
The Ministry of Transport also insists on increasing the term of subsidies loans to ship-owners from 5 to 10 years. Ship construction industry are characterized by various forms of financing, including loans, leasing, short-term bridge loans. That is why we hope that the Ministry of Industry and Trade will also introduce the initiative of opportunities for ship owners to get subsidies for loans in case of change of the financial instrument (refinancing).
There are some problems with leasing scheme, as VAT should be taken into account there. But here we are also looking for the optimal solution.
Going back to the law on the support of shipping, its primary task is to raise the status of the Russian registry by promoting sailing conditions under the Russian flag. Many national administrations do so. As for the opening of the inland waterways of Russia for vessels under foreign flags, then here is a necessary condition to simplifying registration procedure. Previously, this required the agreement of eight departments, which took about three months. It is much easier to do it at one place and electronically. For example, Malta and Cyprus, offer preliminary registration (so-called provisional) by fax and e-mail. This significantly reduces the time to get the necessary permits. At the moment we are also facing the task to create a friendly administration.
– In July 2011 some changes were made in the Code of Inland Water Transport of the Russian Federation that can be considered as the first step to opening Russian waterways to the sailing of ships with another country’s flag. Who will be attracted first?
– First of all we are talking about of free entry into our domestic water of sports and pleasure fleet. It is not a secret that river infrastructure of RF is not on a very high level. But demand determines supply. We hope that foreign yachts coming to us will provide an impetus for investors to participate in development of infrastructure.
We have simplified from the legislative point of view the procedure of getting access to Russia for non commercial fleet under foreign flags. The system will be organized in such a way that it would be not more difficult than to cross the border by car. Now we are finishing the work on the creation the Rules of sailing of sports and pleasure ships and ships under foreign flags that sail with touristic purpose along inland waterways, as well as we are working on a list of river ports opened for the entry of such ships. This will be the appropriate order of Ministry of Transport of RF. The new rules will be not much differ from those were in force previously, but some additions will definitely appear. In particular, we will do our best not to crush the guests with pilotage duty; otherwise the whole idea of opening our rivers will be lost. I know that there are many people who want to come to Russia for to have rest on own their vessels not only among foreigners but also among citizens of Russia who keep boats abroad because of very high custom duties.
As for the commercial navigation via inland water ways (IWW) of foreign vessels, it will be possible within the framework of intergovernmental agreements that don’t need the ratification.
Together with this, we do not just open for all our waterways. While signing intergovernmental agreement, we will search for compromises so that all parties will benefit. For countries with high status of flag it would be easy enough to do. Holland was the first country that officially addressed us with this proposal. And I hope that the first ship under the Dutch flag will go via Russian rivers already in the next navigation.
By the way, we provided special mechanisms that don’t allow selling of the flag. For example, Malta has attractive conditions for registration and together with this it will have signed an agreement with Russia (this is the only version!). Let’s assume that any owner who has aged fleet, wants to re-register it under a Maltese flag to enter the waterways of Russia. This can be implemented only if the fleet really has a working, fully-fledged company in the state of the flag.
The Start of New Projects
– When will the draft law on shipping via the Northern Sea Route (NSR) be adopted?
– The draft law has already been introduced to the State Duma and the first reading is scheduled on November 17. In the first place the document provides reestablishing of the Northern Sea Route Administration. In 2004 it was, in fact, eliminated and its functions were transferred to a small department in the Federal Agency for Sea and River Transport. In addition to the separate control authority, there is also a need for rules of navigation in this region and clear tariff conditions.
– There is an opinion that today, despite the reduction of delivery time via the Northern Sea Route comparing to alternative routes, this are tariffs for icebreaking service that don’t allow traffic to grow ...
– I want to underline that tariffs can be regulated and they are set as a maximum. It means that if Atomflot Federal State Unitary Enterprise sees economic feasibility in a tariffs decrease then it can decrease them. For example, this is happening in respect of Sovcomflot and Novatec. But along with tariffs there are also other restrictions connected with the NSR navigation. These are ice conditions and lack of modern Arctic fleet. However, the NSR, without a doubt, is one of the most promising routes that should be developed.
A work of Sabbeta port that is now being built by Novatec can give a great impetus to the route. With its help we plan to develop five billion tonnes in the first stage, in 2016-2017, and later – up to 25 million tonnes.
– At what stage is building of Taman port at the moment? What investors are participating in it?
– I would like you to notice that the most investors will get into the project on a tender basis. At the moment selection criteria are being prepared. So, all the companies that have announced their participation in the project are only candidates. At the present moment we have received applications from Metalloinvest Management Company LLC, Basel Group of Companies, Global Ports Investments PLC, Eurochem JSC, UCL Port B.V., United Grain Company JSC and Suek JSC. Thus, there are plans to build terminals for handling iron ore, containers, fertilizers, coal, sulfur and grain. The tender is likely to be held in the spring of 2012. But we have already started to work closely with potential investors to make the correct configuration of port terminals. Volumes, which will be handled in Taman can be evaluated at 65-90 million tonnes. This figure will depend on the specific parameters of each of the terminals, as well as on the time horizon. In any case, these facilities will be complementary to existing ones, including those of Novorossiysk.
State participation in the Federal Target Program on the construction of the port of Taman is estimated at 50 billion rubles. The proportion of the budget to private investment will be approximately 1 to 3.
– To what extent does building of rail approaches meet the tempo of port facilities capacity?
– Synchronization of the efforts of railway men and port men has always been a burning question. Without developing of nearby and distant approaches to ports it is useless increasing the capacity of terminals. We develop nearby approaches within the Port Federal Target Programs and RZD is occupied with distant approaches that are also within the Target Programs of the Ministry of Transport. Honestly, the capacity of all directions has reached a critical level, perhaps, except in the North-West direction. Yes, there are plans to recover some of the most jammed roads, but it is not enough. Soon we will have new ports of Taman and Novorossiysk, but we have no developed rail approaches to them. In my opinion, we can’t do without the support of the government.
In particular, it is necessary to coordinate efforts for the development of the Murmansk transport hub. It can be rational, perhaps, to switch part of the cargo going to Murmansk on Belkomur, then the branch going from St Petersburg to North will be unloaded. Discussions on this question do not cease, and the decision will largely depend on the proven freight base. No doubt, there are serious tasks ahead on increasing the capacity of the BAM and the Transsib Railway in the direction of the Far Eastern ports.
It is obvious that 2011 was the year of the maritime flag for the transportation industry. The industry has received much of what was planned. So, I would like to wish that our railwaymen colleagues work under their own sign next year.
by Elena Ushkova
[~DETAIL_TEXT] => Raise the Status of the Russian Registry
– Mr Olersky, first of all, let us congratulate you on the adoption of a law on Support of the Russian Shipbuilding and Shipping Measures. What are the most important measures in it that provide the development of both branches and what effect can be expected as a result?
– The work on the law started in November 2009. We set enough ambitious goals –
to achieve a number of preferences, which at the same time will encourage domestic fleet renewal, attract vessels under the Russian flag and give impetus to Russian shipbuilding by returning orders to Russian shipyards. The working group that was created by the Ministry of Transport included representatives of the Ministry of Industry and Trade, as well as representatives of the largest companies of two industries, including United Shipbuilding Corporation JSC and Sovcomflot JSC. Debates on this draft of law by the relevant authorities have gone on long enough. In the end we managed to convince our colleagues and achieved almost all our goals. When on 30 May, 2011, the project was introduced to the State Duma by the government of Russia it was completely agreed. Due to the support of our legislative initiatives by the deputies of both houses of parliament, so expected by shipping community law received the full approval of the Federal Assembly on October 26. (In November, the law was signed by the President - editor).
We have done a great work of comparing tax regimes of different countries in order to increase the attractiveness of the Russian flag during the preparation of the law. And during the process of negotiations with the Ministry of Finance of Russia we have found the most optimal form: during 2012-2027 years there will be zero tariffs of insurance contributions to the Pension Fund, to Social Insurance Fund and to Federal Fund of Mandatory Health Insurance with compensation of these contributions from the state budget of the Russian Federation for crews of ships that are registered in Russian International Register of Shipping (RIRS). There is one good argument in support of this decision: if we are going to return ships under the Russian flag and we want the new fleet to be built under the Russian flag, our terms and conditions should be the best, even compared to the comfortable conditions that are provided by foreign flags.
As a result the ship owner replaces all previous contributions on tonnage contributions. And a ship crew pays only personal income tax, which is 13% in Russia. By the way, if a ship under the Russian flag registered in Russian International Register of Shipping has foreigners in a crew, then all these foreigners are subject to taxation according to the rules of the country of their residence. And, at the same time, if some time ago Russian sailors that worked more than 183 days abroad were taxed at a rate of 30% (like foreigners) then now we have removed this restriction and the rate is 13% as well.
It is remarkable that during the last days before the second reading of a draft of law considerable changes of a part connected with possible registration of ships were made. At some moment we understood that we can’t leave the article of law in a form it was. There was a risk that the old parts of the fleet (30-40 years) would return under the Russian flag, so the government would have to compensate to it the difference between the actual value of contributions paid into the insurance funds and zero, and this would be, at least, unfair. There was the same situation with cabotage fleet. Of course, it is also should be developed but at the moment there are problems with its ships. If we had not introduced some restrictions, the entire old cabotage fleet would have re-registered in Russian International Register of Shipping. We also have gave to ships registered in the Russian International Register of Shipping to work in cabotage, which was not so before.
For reasons of development, including the development of the cabotage fleet, we have set the age limit for vessels that receive the initial registration in Russian International Register of Shipping to 15 years. This also refers to vessels that are currently registered on a foreign register. Thus, we give the right to stay in our registry, but only for a relatively young fleet. Furthermore – and this is one of the most important measures to support the Russian shipbuilding industry – any ship built in Russia after January 1, 2010, regardless of its purpose (and this is a revolutionary idea), can be registered on the Russian International Register of Shipping. We believe that this rule will lead to a boom in shipbuilding in this country.
The shipbuilding industry will also get preferences. The new law provides for the existence of a regime of industrial and production special economic zones on shipyards as well as government safeguards. If earlier such SEZ could be created only on public lands then now they can on all, including private ones. As for the tax preferences then all shipbuilding organizations that are residents of SEZ became free of land tax payment and of property tax payment for a period of ten years (instead of current five years), as well as of customs duties on imported foreign equipment.
– Does this mean that all proposals made by the developers of the project were taken into account in the new law?
– Yes, during the work on the draft of law all suggestions and comments of the Ministry of Transport have been taken into account. We are very pleased that we have been heard. I can say that if a zero rate had not been approved, the law would have been emasculated. And now there is real sense in making ships sail under a Russian flag. Today we have created the conditions and it’s the turn of ship owners to act.
I should add that at the moment we are working on the formation of effective financing mechanisms for shipbuilding projects and on compensation of interest rates. Although this is a task of the Ministry of Industry and Trade, the high-quality execution of this task, first of all, will be a good for the Russian ship owners. Therefore, we often are the initiators of fresh proposals.
Today, subsidies are granted on condition of presentation of the purchase contract, that means at the moment of transfer of the already-built ship to the customer. Current practice shows that lending is needed to the ship owner at the time of ordering the vessel at a shipyard. However, it is not in accordance with the rules of applying for a loan. We propose to consider applying for loans, not only in case of the purchase contract presence, but also in case of presentation of a contract for the construction of the vessel.
The Ministry of Transport also insists on increasing the term of subsidies loans to ship-owners from 5 to 10 years. Ship construction industry are characterized by various forms of financing, including loans, leasing, short-term bridge loans. That is why we hope that the Ministry of Industry and Trade will also introduce the initiative of opportunities for ship owners to get subsidies for loans in case of change of the financial instrument (refinancing).
There are some problems with leasing scheme, as VAT should be taken into account there. But here we are also looking for the optimal solution.
Going back to the law on the support of shipping, its primary task is to raise the status of the Russian registry by promoting sailing conditions under the Russian flag. Many national administrations do so. As for the opening of the inland waterways of Russia for vessels under foreign flags, then here is a necessary condition to simplifying registration procedure. Previously, this required the agreement of eight departments, which took about three months. It is much easier to do it at one place and electronically. For example, Malta and Cyprus, offer preliminary registration (so-called provisional) by fax and e-mail. This significantly reduces the time to get the necessary permits. At the moment we are also facing the task to create a friendly administration.
– In July 2011 some changes were made in the Code of Inland Water Transport of the Russian Federation that can be considered as the first step to opening Russian waterways to the sailing of ships with another country’s flag. Who will be attracted first?
– First of all we are talking about of free entry into our domestic water of sports and pleasure fleet. It is not a secret that river infrastructure of RF is not on a very high level. But demand determines supply. We hope that foreign yachts coming to us will provide an impetus for investors to participate in development of infrastructure.
We have simplified from the legislative point of view the procedure of getting access to Russia for non commercial fleet under foreign flags. The system will be organized in such a way that it would be not more difficult than to cross the border by car. Now we are finishing the work on the creation the Rules of sailing of sports and pleasure ships and ships under foreign flags that sail with touristic purpose along inland waterways, as well as we are working on a list of river ports opened for the entry of such ships. This will be the appropriate order of Ministry of Transport of RF. The new rules will be not much differ from those were in force previously, but some additions will definitely appear. In particular, we will do our best not to crush the guests with pilotage duty; otherwise the whole idea of opening our rivers will be lost. I know that there are many people who want to come to Russia for to have rest on own their vessels not only among foreigners but also among citizens of Russia who keep boats abroad because of very high custom duties.
As for the commercial navigation via inland water ways (IWW) of foreign vessels, it will be possible within the framework of intergovernmental agreements that don’t need the ratification.
Together with this, we do not just open for all our waterways. While signing intergovernmental agreement, we will search for compromises so that all parties will benefit. For countries with high status of flag it would be easy enough to do. Holland was the first country that officially addressed us with this proposal. And I hope that the first ship under the Dutch flag will go via Russian rivers already in the next navigation.
By the way, we provided special mechanisms that don’t allow selling of the flag. For example, Malta has attractive conditions for registration and together with this it will have signed an agreement with Russia (this is the only version!). Let’s assume that any owner who has aged fleet, wants to re-register it under a Maltese flag to enter the waterways of Russia. This can be implemented only if the fleet really has a working, fully-fledged company in the state of the flag.
The Start of New Projects
– When will the draft law on shipping via the Northern Sea Route (NSR) be adopted?
– The draft law has already been introduced to the State Duma and the first reading is scheduled on November 17. In the first place the document provides reestablishing of the Northern Sea Route Administration. In 2004 it was, in fact, eliminated and its functions were transferred to a small department in the Federal Agency for Sea and River Transport. In addition to the separate control authority, there is also a need for rules of navigation in this region and clear tariff conditions.
– There is an opinion that today, despite the reduction of delivery time via the Northern Sea Route comparing to alternative routes, this are tariffs for icebreaking service that don’t allow traffic to grow ...
– I want to underline that tariffs can be regulated and they are set as a maximum. It means that if Atomflot Federal State Unitary Enterprise sees economic feasibility in a tariffs decrease then it can decrease them. For example, this is happening in respect of Sovcomflot and Novatec. But along with tariffs there are also other restrictions connected with the NSR navigation. These are ice conditions and lack of modern Arctic fleet. However, the NSR, without a doubt, is one of the most promising routes that should be developed.
A work of Sabbeta port that is now being built by Novatec can give a great impetus to the route. With its help we plan to develop five billion tonnes in the first stage, in 2016-2017, and later – up to 25 million tonnes.
– At what stage is building of Taman port at the moment? What investors are participating in it?
– I would like you to notice that the most investors will get into the project on a tender basis. At the moment selection criteria are being prepared. So, all the companies that have announced their participation in the project are only candidates. At the present moment we have received applications from Metalloinvest Management Company LLC, Basel Group of Companies, Global Ports Investments PLC, Eurochem JSC, UCL Port B.V., United Grain Company JSC and Suek JSC. Thus, there are plans to build terminals for handling iron ore, containers, fertilizers, coal, sulfur and grain. The tender is likely to be held in the spring of 2012. But we have already started to work closely with potential investors to make the correct configuration of port terminals. Volumes, which will be handled in Taman can be evaluated at 65-90 million tonnes. This figure will depend on the specific parameters of each of the terminals, as well as on the time horizon. In any case, these facilities will be complementary to existing ones, including those of Novorossiysk.
State participation in the Federal Target Program on the construction of the port of Taman is estimated at 50 billion rubles. The proportion of the budget to private investment will be approximately 1 to 3.
– To what extent does building of rail approaches meet the tempo of port facilities capacity?
– Synchronization of the efforts of railway men and port men has always been a burning question. Without developing of nearby and distant approaches to ports it is useless increasing the capacity of terminals. We develop nearby approaches within the Port Federal Target Programs and RZD is occupied with distant approaches that are also within the Target Programs of the Ministry of Transport. Honestly, the capacity of all directions has reached a critical level, perhaps, except in the North-West direction. Yes, there are plans to recover some of the most jammed roads, but it is not enough. Soon we will have new ports of Taman and Novorossiysk, but we have no developed rail approaches to them. In my opinion, we can’t do without the support of the government.
In particular, it is necessary to coordinate efforts for the development of the Murmansk transport hub. It can be rational, perhaps, to switch part of the cargo going to Murmansk on Belkomur, then the branch going from St Petersburg to North will be unloaded. Discussions on this question do not cease, and the decision will largely depend on the proven freight base. No doubt, there are serious tasks ahead on increasing the capacity of the BAM and the Transsib Railway in the direction of the Far Eastern ports.
It is obvious that 2011 was the year of the maritime flag for the transportation industry. The industry has received much of what was planned. So, I would like to wish that our railwaymen colleagues work under their own sign next year.
by Elena Ushkova
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[DETAIL_TEXT] => Raise the Status of the Russian Registry
– Mr Olersky, first of all, let us congratulate you on the adoption of a law on Support of the Russian Shipbuilding and Shipping Measures. What are the most important measures in it that provide the development of both branches and what effect can be expected as a result?
– The work on the law started in November 2009. We set enough ambitious goals –
to achieve a number of preferences, which at the same time will encourage domestic fleet renewal, attract vessels under the Russian flag and give impetus to Russian shipbuilding by returning orders to Russian shipyards. The working group that was created by the Ministry of Transport included representatives of the Ministry of Industry and Trade, as well as representatives of the largest companies of two industries, including United Shipbuilding Corporation JSC and Sovcomflot JSC. Debates on this draft of law by the relevant authorities have gone on long enough. In the end we managed to convince our colleagues and achieved almost all our goals. When on 30 May, 2011, the project was introduced to the State Duma by the government of Russia it was completely agreed. Due to the support of our legislative initiatives by the deputies of both houses of parliament, so expected by shipping community law received the full approval of the Federal Assembly on October 26. (In November, the law was signed by the President - editor).
We have done a great work of comparing tax regimes of different countries in order to increase the attractiveness of the Russian flag during the preparation of the law. And during the process of negotiations with the Ministry of Finance of Russia we have found the most optimal form: during 2012-2027 years there will be zero tariffs of insurance contributions to the Pension Fund, to Social Insurance Fund and to Federal Fund of Mandatory Health Insurance with compensation of these contributions from the state budget of the Russian Federation for crews of ships that are registered in Russian International Register of Shipping (RIRS). There is one good argument in support of this decision: if we are going to return ships under the Russian flag and we want the new fleet to be built under the Russian flag, our terms and conditions should be the best, even compared to the comfortable conditions that are provided by foreign flags.
As a result the ship owner replaces all previous contributions on tonnage contributions. And a ship crew pays only personal income tax, which is 13% in Russia. By the way, if a ship under the Russian flag registered in Russian International Register of Shipping has foreigners in a crew, then all these foreigners are subject to taxation according to the rules of the country of their residence. And, at the same time, if some time ago Russian sailors that worked more than 183 days abroad were taxed at a rate of 30% (like foreigners) then now we have removed this restriction and the rate is 13% as well.
It is remarkable that during the last days before the second reading of a draft of law considerable changes of a part connected with possible registration of ships were made. At some moment we understood that we can’t leave the article of law in a form it was. There was a risk that the old parts of the fleet (30-40 years) would return under the Russian flag, so the government would have to compensate to it the difference between the actual value of contributions paid into the insurance funds and zero, and this would be, at least, unfair. There was the same situation with cabotage fleet. Of course, it is also should be developed but at the moment there are problems with its ships. If we had not introduced some restrictions, the entire old cabotage fleet would have re-registered in Russian International Register of Shipping. We also have gave to ships registered in the Russian International Register of Shipping to work in cabotage, which was not so before.
For reasons of development, including the development of the cabotage fleet, we have set the age limit for vessels that receive the initial registration in Russian International Register of Shipping to 15 years. This also refers to vessels that are currently registered on a foreign register. Thus, we give the right to stay in our registry, but only for a relatively young fleet. Furthermore – and this is one of the most important measures to support the Russian shipbuilding industry – any ship built in Russia after January 1, 2010, regardless of its purpose (and this is a revolutionary idea), can be registered on the Russian International Register of Shipping. We believe that this rule will lead to a boom in shipbuilding in this country.
The shipbuilding industry will also get preferences. The new law provides for the existence of a regime of industrial and production special economic zones on shipyards as well as government safeguards. If earlier such SEZ could be created only on public lands then now they can on all, including private ones. As for the tax preferences then all shipbuilding organizations that are residents of SEZ became free of land tax payment and of property tax payment for a period of ten years (instead of current five years), as well as of customs duties on imported foreign equipment.
– Does this mean that all proposals made by the developers of the project were taken into account in the new law?
– Yes, during the work on the draft of law all suggestions and comments of the Ministry of Transport have been taken into account. We are very pleased that we have been heard. I can say that if a zero rate had not been approved, the law would have been emasculated. And now there is real sense in making ships sail under a Russian flag. Today we have created the conditions and it’s the turn of ship owners to act.
I should add that at the moment we are working on the formation of effective financing mechanisms for shipbuilding projects and on compensation of interest rates. Although this is a task of the Ministry of Industry and Trade, the high-quality execution of this task, first of all, will be a good for the Russian ship owners. Therefore, we often are the initiators of fresh proposals.
Today, subsidies are granted on condition of presentation of the purchase contract, that means at the moment of transfer of the already-built ship to the customer. Current practice shows that lending is needed to the ship owner at the time of ordering the vessel at a shipyard. However, it is not in accordance with the rules of applying for a loan. We propose to consider applying for loans, not only in case of the purchase contract presence, but also in case of presentation of a contract for the construction of the vessel.
The Ministry of Transport also insists on increasing the term of subsidies loans to ship-owners from 5 to 10 years. Ship construction industry are characterized by various forms of financing, including loans, leasing, short-term bridge loans. That is why we hope that the Ministry of Industry and Trade will also introduce the initiative of opportunities for ship owners to get subsidies for loans in case of change of the financial instrument (refinancing).
There are some problems with leasing scheme, as VAT should be taken into account there. But here we are also looking for the optimal solution.
Going back to the law on the support of shipping, its primary task is to raise the status of the Russian registry by promoting sailing conditions under the Russian flag. Many national administrations do so. As for the opening of the inland waterways of Russia for vessels under foreign flags, then here is a necessary condition to simplifying registration procedure. Previously, this required the agreement of eight departments, which took about three months. It is much easier to do it at one place and electronically. For example, Malta and Cyprus, offer preliminary registration (so-called provisional) by fax and e-mail. This significantly reduces the time to get the necessary permits. At the moment we are also facing the task to create a friendly administration.
– In July 2011 some changes were made in the Code of Inland Water Transport of the Russian Federation that can be considered as the first step to opening Russian waterways to the sailing of ships with another country’s flag. Who will be attracted first?
– First of all we are talking about of free entry into our domestic water of sports and pleasure fleet. It is not a secret that river infrastructure of RF is not on a very high level. But demand determines supply. We hope that foreign yachts coming to us will provide an impetus for investors to participate in development of infrastructure.
We have simplified from the legislative point of view the procedure of getting access to Russia for non commercial fleet under foreign flags. The system will be organized in such a way that it would be not more difficult than to cross the border by car. Now we are finishing the work on the creation the Rules of sailing of sports and pleasure ships and ships under foreign flags that sail with touristic purpose along inland waterways, as well as we are working on a list of river ports opened for the entry of such ships. This will be the appropriate order of Ministry of Transport of RF. The new rules will be not much differ from those were in force previously, but some additions will definitely appear. In particular, we will do our best not to crush the guests with pilotage duty; otherwise the whole idea of opening our rivers will be lost. I know that there are many people who want to come to Russia for to have rest on own their vessels not only among foreigners but also among citizens of Russia who keep boats abroad because of very high custom duties.
As for the commercial navigation via inland water ways (IWW) of foreign vessels, it will be possible within the framework of intergovernmental agreements that don’t need the ratification.
Together with this, we do not just open for all our waterways. While signing intergovernmental agreement, we will search for compromises so that all parties will benefit. For countries with high status of flag it would be easy enough to do. Holland was the first country that officially addressed us with this proposal. And I hope that the first ship under the Dutch flag will go via Russian rivers already in the next navigation.
By the way, we provided special mechanisms that don’t allow selling of the flag. For example, Malta has attractive conditions for registration and together with this it will have signed an agreement with Russia (this is the only version!). Let’s assume that any owner who has aged fleet, wants to re-register it under a Maltese flag to enter the waterways of Russia. This can be implemented only if the fleet really has a working, fully-fledged company in the state of the flag.
The Start of New Projects
– When will the draft law on shipping via the Northern Sea Route (NSR) be adopted?
– The draft law has already been introduced to the State Duma and the first reading is scheduled on November 17. In the first place the document provides reestablishing of the Northern Sea Route Administration. In 2004 it was, in fact, eliminated and its functions were transferred to a small department in the Federal Agency for Sea and River Transport. In addition to the separate control authority, there is also a need for rules of navigation in this region and clear tariff conditions.
– There is an opinion that today, despite the reduction of delivery time via the Northern Sea Route comparing to alternative routes, this are tariffs for icebreaking service that don’t allow traffic to grow ...
– I want to underline that tariffs can be regulated and they are set as a maximum. It means that if Atomflot Federal State Unitary Enterprise sees economic feasibility in a tariffs decrease then it can decrease them. For example, this is happening in respect of Sovcomflot and Novatec. But along with tariffs there are also other restrictions connected with the NSR navigation. These are ice conditions and lack of modern Arctic fleet. However, the NSR, without a doubt, is one of the most promising routes that should be developed.
A work of Sabbeta port that is now being built by Novatec can give a great impetus to the route. With its help we plan to develop five billion tonnes in the first stage, in 2016-2017, and later – up to 25 million tonnes.
– At what stage is building of Taman port at the moment? What investors are participating in it?
– I would like you to notice that the most investors will get into the project on a tender basis. At the moment selection criteria are being prepared. So, all the companies that have announced their participation in the project are only candidates. At the present moment we have received applications from Metalloinvest Management Company LLC, Basel Group of Companies, Global Ports Investments PLC, Eurochem JSC, UCL Port B.V., United Grain Company JSC and Suek JSC. Thus, there are plans to build terminals for handling iron ore, containers, fertilizers, coal, sulfur and grain. The tender is likely to be held in the spring of 2012. But we have already started to work closely with potential investors to make the correct configuration of port terminals. Volumes, which will be handled in Taman can be evaluated at 65-90 million tonnes. This figure will depend on the specific parameters of each of the terminals, as well as on the time horizon. In any case, these facilities will be complementary to existing ones, including those of Novorossiysk.
State participation in the Federal Target Program on the construction of the port of Taman is estimated at 50 billion rubles. The proportion of the budget to private investment will be approximately 1 to 3.
– To what extent does building of rail approaches meet the tempo of port facilities capacity?
– Synchronization of the efforts of railway men and port men has always been a burning question. Without developing of nearby and distant approaches to ports it is useless increasing the capacity of terminals. We develop nearby approaches within the Port Federal Target Programs and RZD is occupied with distant approaches that are also within the Target Programs of the Ministry of Transport. Honestly, the capacity of all directions has reached a critical level, perhaps, except in the North-West direction. Yes, there are plans to recover some of the most jammed roads, but it is not enough. Soon we will have new ports of Taman and Novorossiysk, but we have no developed rail approaches to them. In my opinion, we can’t do without the support of the government.
In particular, it is necessary to coordinate efforts for the development of the Murmansk transport hub. It can be rational, perhaps, to switch part of the cargo going to Murmansk on Belkomur, then the branch going from St Petersburg to North will be unloaded. Discussions on this question do not cease, and the decision will largely depend on the proven freight base. No doubt, there are serious tasks ahead on increasing the capacity of the BAM and the Transsib Railway in the direction of the Far Eastern ports.
It is obvious that 2011 was the year of the maritime flag for the transportation industry. The industry has received much of what was planned. So, I would like to wish that our railwaymen colleagues work under their own sign next year.
by Elena Ushkova
[~DETAIL_TEXT] => Raise the Status of the Russian Registry
– Mr Olersky, first of all, let us congratulate you on the adoption of a law on Support of the Russian Shipbuilding and Shipping Measures. What are the most important measures in it that provide the development of both branches and what effect can be expected as a result?
– The work on the law started in November 2009. We set enough ambitious goals –
to achieve a number of preferences, which at the same time will encourage domestic fleet renewal, attract vessels under the Russian flag and give impetus to Russian shipbuilding by returning orders to Russian shipyards. The working group that was created by the Ministry of Transport included representatives of the Ministry of Industry and Trade, as well as representatives of the largest companies of two industries, including United Shipbuilding Corporation JSC and Sovcomflot JSC. Debates on this draft of law by the relevant authorities have gone on long enough. In the end we managed to convince our colleagues and achieved almost all our goals. When on 30 May, 2011, the project was introduced to the State Duma by the government of Russia it was completely agreed. Due to the support of our legislative initiatives by the deputies of both houses of parliament, so expected by shipping community law received the full approval of the Federal Assembly on October 26. (In November, the law was signed by the President - editor).
We have done a great work of comparing tax regimes of different countries in order to increase the attractiveness of the Russian flag during the preparation of the law. And during the process of negotiations with the Ministry of Finance of Russia we have found the most optimal form: during 2012-2027 years there will be zero tariffs of insurance contributions to the Pension Fund, to Social Insurance Fund and to Federal Fund of Mandatory Health Insurance with compensation of these contributions from the state budget of the Russian Federation for crews of ships that are registered in Russian International Register of Shipping (RIRS). There is one good argument in support of this decision: if we are going to return ships under the Russian flag and we want the new fleet to be built under the Russian flag, our terms and conditions should be the best, even compared to the comfortable conditions that are provided by foreign flags.
As a result the ship owner replaces all previous contributions on tonnage contributions. And a ship crew pays only personal income tax, which is 13% in Russia. By the way, if a ship under the Russian flag registered in Russian International Register of Shipping has foreigners in a crew, then all these foreigners are subject to taxation according to the rules of the country of their residence. And, at the same time, if some time ago Russian sailors that worked more than 183 days abroad were taxed at a rate of 30% (like foreigners) then now we have removed this restriction and the rate is 13% as well.
It is remarkable that during the last days before the second reading of a draft of law considerable changes of a part connected with possible registration of ships were made. At some moment we understood that we can’t leave the article of law in a form it was. There was a risk that the old parts of the fleet (30-40 years) would return under the Russian flag, so the government would have to compensate to it the difference between the actual value of contributions paid into the insurance funds and zero, and this would be, at least, unfair. There was the same situation with cabotage fleet. Of course, it is also should be developed but at the moment there are problems with its ships. If we had not introduced some restrictions, the entire old cabotage fleet would have re-registered in Russian International Register of Shipping. We also have gave to ships registered in the Russian International Register of Shipping to work in cabotage, which was not so before.
For reasons of development, including the development of the cabotage fleet, we have set the age limit for vessels that receive the initial registration in Russian International Register of Shipping to 15 years. This also refers to vessels that are currently registered on a foreign register. Thus, we give the right to stay in our registry, but only for a relatively young fleet. Furthermore – and this is one of the most important measures to support the Russian shipbuilding industry – any ship built in Russia after January 1, 2010, regardless of its purpose (and this is a revolutionary idea), can be registered on the Russian International Register of Shipping. We believe that this rule will lead to a boom in shipbuilding in this country.
The shipbuilding industry will also get preferences. The new law provides for the existence of a regime of industrial and production special economic zones on shipyards as well as government safeguards. If earlier such SEZ could be created only on public lands then now they can on all, including private ones. As for the tax preferences then all shipbuilding organizations that are residents of SEZ became free of land tax payment and of property tax payment for a period of ten years (instead of current five years), as well as of customs duties on imported foreign equipment.
– Does this mean that all proposals made by the developers of the project were taken into account in the new law?
– Yes, during the work on the draft of law all suggestions and comments of the Ministry of Transport have been taken into account. We are very pleased that we have been heard. I can say that if a zero rate had not been approved, the law would have been emasculated. And now there is real sense in making ships sail under a Russian flag. Today we have created the conditions and it’s the turn of ship owners to act.
I should add that at the moment we are working on the formation of effective financing mechanisms for shipbuilding projects and on compensation of interest rates. Although this is a task of the Ministry of Industry and Trade, the high-quality execution of this task, first of all, will be a good for the Russian ship owners. Therefore, we often are the initiators of fresh proposals.
Today, subsidies are granted on condition of presentation of the purchase contract, that means at the moment of transfer of the already-built ship to the customer. Current practice shows that lending is needed to the ship owner at the time of ordering the vessel at a shipyard. However, it is not in accordance with the rules of applying for a loan. We propose to consider applying for loans, not only in case of the purchase contract presence, but also in case of presentation of a contract for the construction of the vessel.
The Ministry of Transport also insists on increasing the term of subsidies loans to ship-owners from 5 to 10 years. Ship construction industry are characterized by various forms of financing, including loans, leasing, short-term bridge loans. That is why we hope that the Ministry of Industry and Trade will also introduce the initiative of opportunities for ship owners to get subsidies for loans in case of change of the financial instrument (refinancing).
There are some problems with leasing scheme, as VAT should be taken into account there. But here we are also looking for the optimal solution.
Going back to the law on the support of shipping, its primary task is to raise the status of the Russian registry by promoting sailing conditions under the Russian flag. Many national administrations do so. As for the opening of the inland waterways of Russia for vessels under foreign flags, then here is a necessary condition to simplifying registration procedure. Previously, this required the agreement of eight departments, which took about three months. It is much easier to do it at one place and electronically. For example, Malta and Cyprus, offer preliminary registration (so-called provisional) by fax and e-mail. This significantly reduces the time to get the necessary permits. At the moment we are also facing the task to create a friendly administration.
– In July 2011 some changes were made in the Code of Inland Water Transport of the Russian Federation that can be considered as the first step to opening Russian waterways to the sailing of ships with another country’s flag. Who will be attracted first?
– First of all we are talking about of free entry into our domestic water of sports and pleasure fleet. It is not a secret that river infrastructure of RF is not on a very high level. But demand determines supply. We hope that foreign yachts coming to us will provide an impetus for investors to participate in development of infrastructure.
We have simplified from the legislative point of view the procedure of getting access to Russia for non commercial fleet under foreign flags. The system will be organized in such a way that it would be not more difficult than to cross the border by car. Now we are finishing the work on the creation the Rules of sailing of sports and pleasure ships and ships under foreign flags that sail with touristic purpose along inland waterways, as well as we are working on a list of river ports opened for the entry of such ships. This will be the appropriate order of Ministry of Transport of RF. The new rules will be not much differ from those were in force previously, but some additions will definitely appear. In particular, we will do our best not to crush the guests with pilotage duty; otherwise the whole idea of opening our rivers will be lost. I know that there are many people who want to come to Russia for to have rest on own their vessels not only among foreigners but also among citizens of Russia who keep boats abroad because of very high custom duties.
As for the commercial navigation via inland water ways (IWW) of foreign vessels, it will be possible within the framework of intergovernmental agreements that don’t need the ratification.
Together with this, we do not just open for all our waterways. While signing intergovernmental agreement, we will search for compromises so that all parties will benefit. For countries with high status of flag it would be easy enough to do. Holland was the first country that officially addressed us with this proposal. And I hope that the first ship under the Dutch flag will go via Russian rivers already in the next navigation.
By the way, we provided special mechanisms that don’t allow selling of the flag. For example, Malta has attractive conditions for registration and together with this it will have signed an agreement with Russia (this is the only version!). Let’s assume that any owner who has aged fleet, wants to re-register it under a Maltese flag to enter the waterways of Russia. This can be implemented only if the fleet really has a working, fully-fledged company in the state of the flag.
The Start of New Projects
– When will the draft law on shipping via the Northern Sea Route (NSR) be adopted?
– The draft law has already been introduced to the State Duma and the first reading is scheduled on November 17. In the first place the document provides reestablishing of the Northern Sea Route Administration. In 2004 it was, in fact, eliminated and its functions were transferred to a small department in the Federal Agency for Sea and River Transport. In addition to the separate control authority, there is also a need for rules of navigation in this region and clear tariff conditions.
– There is an opinion that today, despite the reduction of delivery time via the Northern Sea Route comparing to alternative routes, this are tariffs for icebreaking service that don’t allow traffic to grow ...
– I want to underline that tariffs can be regulated and they are set as a maximum. It means that if Atomflot Federal State Unitary Enterprise sees economic feasibility in a tariffs decrease then it can decrease them. For example, this is happening in respect of Sovcomflot and Novatec. But along with tariffs there are also other restrictions connected with the NSR navigation. These are ice conditions and lack of modern Arctic fleet. However, the NSR, without a doubt, is one of the most promising routes that should be developed.
A work of Sabbeta port that is now being built by Novatec can give a great impetus to the route. With its help we plan to develop five billion tonnes in the first stage, in 2016-2017, and later – up to 25 million tonnes.
– At what stage is building of Taman port at the moment? What investors are participating in it?
– I would like you to notice that the most investors will get into the project on a tender basis. At the moment selection criteria are being prepared. So, all the companies that have announced their participation in the project are only candidates. At the present moment we have received applications from Metalloinvest Management Company LLC, Basel Group of Companies, Global Ports Investments PLC, Eurochem JSC, UCL Port B.V., United Grain Company JSC and Suek JSC. Thus, there are plans to build terminals for handling iron ore, containers, fertilizers, coal, sulfur and grain. The tender is likely to be held in the spring of 2012. But we have already started to work closely with potential investors to make the correct configuration of port terminals. Volumes, which will be handled in Taman can be evaluated at 65-90 million tonnes. This figure will depend on the specific parameters of each of the terminals, as well as on the time horizon. In any case, these facilities will be complementary to existing ones, including those of Novorossiysk.
State participation in the Federal Target Program on the construction of the port of Taman is estimated at 50 billion rubles. The proportion of the budget to private investment will be approximately 1 to 3.
– To what extent does building of rail approaches meet the tempo of port facilities capacity?
– Synchronization of the efforts of railway men and port men has always been a burning question. Without developing of nearby and distant approaches to ports it is useless increasing the capacity of terminals. We develop nearby approaches within the Port Federal Target Programs and RZD is occupied with distant approaches that are also within the Target Programs of the Ministry of Transport. Honestly, the capacity of all directions has reached a critical level, perhaps, except in the North-West direction. Yes, there are plans to recover some of the most jammed roads, but it is not enough. Soon we will have new ports of Taman and Novorossiysk, but we have no developed rail approaches to them. In my opinion, we can’t do without the support of the government.
In particular, it is necessary to coordinate efforts for the development of the Murmansk transport hub. It can be rational, perhaps, to switch part of the cargo going to Murmansk on Belkomur, then the branch going from St Petersburg to North will be unloaded. Discussions on this question do not cease, and the decision will largely depend on the proven freight base. No doubt, there are serious tasks ahead on increasing the capacity of the BAM and the Transsib Railway in the direction of the Far Eastern ports.
It is obvious that 2011 was the year of the maritime flag for the transportation industry. The industry has received much of what was planned. So, I would like to wish that our railwaymen colleagues work under their own sign next year.
by Elena Ushkova
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Lately, Russian Railways and their clients have faced a lot of difficulties because all wagons belong to private companies and it is very hard to influence their traffic. So, Russia plans to restore the public wagon park accumulating private operators’ railcars under the single management of RZD.Array
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[DETAIL_TEXT] => Wagon Owners Became Personas Non Grata
The final stage of Russian railway structural reform turned out to be not easy for all participants in the transportation market. Asynchronous realisation of different mutually connected changes led to the failure to solve a number of questions in the decade that has passed since the beginning of the railway reforms. And now all these problems are to be solved on an expedited basis.
Development of the operators’ traffic on the network caused traffic jams in some regions of Russia. The rolling stock leasing and rent market was developing, the number of operators increased (nowadays, there are over 1,500 of them), and the lack of proper technological interaction between wagon owners and the transporter provoked the present situation.
As a result, instead of playing the role of a centre of commercial interaction with consignors (as is written in the Target Model of Cargo Railway Transportation Market Development to 2015), an operator has almost turned into a persona non-grata. More and more often, cargo owners (especially small and medium-size ones) complain that operators’ tariff rates are too high, and often an operator refuses to transport the cargo even at a high tariff rate. However, this cannot be applied to the whole network and to all types of cargo. They complain that operators and RZD overload the infrastructure by chaotic movement of their railcars. And operators hinder each other in their fight for large clients – they occupy all free entry lines so that their colleagues do not have an opportunity to load cargo into their rolling stock.
Uniting Private Railcars
Because of the complicated situation that has emerged on Russian Railways’ network lately – failures to transport cargo and complaints of the heads of regions about the work of the transporter and private operators – Sergey Ivanov, Vice Prime Minister of Russia, charged RZD to rent gondola wagons from its subsidiaries – Freight One and Freight Two (their total own park of gondola cars amounts to 150,000 units, which is more than a third of the total Russian park of gondola wagons).
Since November 1, these gondola cars have been provided to cargo owners under the guidance and management of RZD. However, it is not possible to say that RZD is already providing cargo owners with the rolling stock of Freight One and Freight Two in the framework of the project of work with the consolidated park. The first contracts on renting wagons from Freight One were received in the company only after October 15. So, the process of the park transfer to RZD may last at least a month.
Also, RZD applied to authorities with the request to deregulate the wagon constituent for the work with such park, because the difference between the rates on wagon rent and the tariff on the railcar supply results in a loss. The Federal Tariff Service is developing a tariff range, in the framework of which RZD will be able to rent wagons from Freight One, Freight Two, and other operators.
Nowadays, there are projects on the methods to define the fee for using gondola cars rented by RZD from other owners and a draft decree of the Government on the order of RZD’s rent of railcars from other owners and a special order of price formation for transportation in such railcars. At the time of going to press, the Government had not discussed them yet. Moreover, some statements in these documents have changed radically.
Thus, the draft decree charged the Transport Ministry, the Ministry of Economic Development, and the Federal Tariff Service with developing a temporary order for RZD to rent gondola cars from Freight Two (earlier, before Freight One was sold, its wagons had also been mentioned in the project) till December 31, 2012, considering the necessity to develop an efficient model of private wagons management, envisaging the order of their exploitation (hereinafter we speak just about the territory of the Russian Federation) under terms and rules of the public park exploitation. After that the Federal Tariff Service and the Transport Ministry are to develop a special order of price formation for cargo transportation in such wagons, envisaging a tariff range of -30% – +10% in comparison with rates from Tariff List № 10-01.
Time will tell what happens later. The fact is that operators used to feel not bad in the market (at least until the crisis of 2008), but now they are in rather an unfavourable situation. A lot of them agree that the consolidation of parks on the basis of Freight One and Freight Two is not the worst way out, but most operators think that this measure should be temporary.
Companies independent from RZD may receive a public offer on their rolling stock (not just gondola cars) rent to RZD. As far as we know, operators are not enthusiastic about this idea. On the one hand, a lot of them doubt that RZD will be able to offer profitable conditions of such rent. On the other hand, many specialists forecast there will be queues for cheaper wagons from rented park, and this, perhaps, will make operators cut their tariffs step-by-step.
Moreover, to create the conditions for further rental of wagons from other owners to provide transportation on the public park terms, the project envisages a number of special measures. In particular, it is planned to make amendments to the acting legislation and the RF normative acts to define the basis of legal regulation of the activity of owners (operators) of railway rolling stock at their interaction with transporters.
Firstly, it is planned to legalise the definition of a rolling stock operator as any juridical person or an individual entrepreneur – beneficial owner of rolling stock supplying it for freight transportation on the public railway network. Secondly, it is planned to legalise the definition of “rented wagon park”. Thirdly, the draft decree sets the right of RZD to rent wagons from other beneficial rolling stock owners. Earlier, it was even planned to make it obligatory for operators to give a certain part (from 10% to 40%) of their park, but the ideologues of this document have declined this idea.
It Is Time to Become carriers
All this is rather strange. Initially, the Target Model contained a specific target – competition in the freight transportation market. For that, it was planned to sell Freight One and Freight Two and to provide conditions for competition between private operators in the market. Meanwhile, the project of park consolidation practically returns the public park to the market.
It turns out that once again there is a multi-component system, as Sergey Maltsev, Chairman of the Presidium of the Market Council. If this measure (the (partial) restoration of the public park) is not temporary, amendments to the Target Model should be made. “We need to have a clear vision of what will happen, because if the multi-level system continues to exist, the measures envisaged by the document will become rather controversial, for example, from the technology viewpoint,” says the expert.
Meanwhile, it is already obvious that soon there will be just three or four network-wide operators in the rolling stock supply market, as was declared in the Target Model. The purchase of Freight One by a private operator became another step on the road to rolling stock consolidation and market enlargement. Moreover, experts believe that if the crisis does not seriously affect Russia, the profitability will increase after the park consolidation. Otherwise, the profitability will fall, and a lot of operators will leave the market of their own desire, but not because of being merged or forced out. Anyway, there will be not more than four or five large operators and 10-15 local (regional) ones in the sector.
Perhaps, all these circumstances, and the ambiguity of the future of the private park management process and of the new schemes, which will be developed to regulate private wagon traffic, make large operators think more and more often about the fate of local transporters (companies owning wagons and locomotives).
As for the locomotive services sector, RZD is going to keep the park of locomotives as a single integrated park of Russian Railways as a network-wide national transporter. Private operators may pretend to work with their locomotives on specific lines, i.e. to be local transporters.
It is possible that having consolidated (mainly, by force) and having failed to become fully-fledged market entities as railway rolling stock operators, the companies will start to master a new sector in the framework of the competition for a route. This will happen, if the normative ambiguity and their instable market position do not make them leave this business completely.
By Nadezhda Vtorushina
[~DETAIL_TEXT] => Wagon Owners Became Personas Non Grata
The final stage of Russian railway structural reform turned out to be not easy for all participants in the transportation market. Asynchronous realisation of different mutually connected changes led to the failure to solve a number of questions in the decade that has passed since the beginning of the railway reforms. And now all these problems are to be solved on an expedited basis.
Development of the operators’ traffic on the network caused traffic jams in some regions of Russia. The rolling stock leasing and rent market was developing, the number of operators increased (nowadays, there are over 1,500 of them), and the lack of proper technological interaction between wagon owners and the transporter provoked the present situation.
As a result, instead of playing the role of a centre of commercial interaction with consignors (as is written in the Target Model of Cargo Railway Transportation Market Development to 2015), an operator has almost turned into a persona non-grata. More and more often, cargo owners (especially small and medium-size ones) complain that operators’ tariff rates are too high, and often an operator refuses to transport the cargo even at a high tariff rate. However, this cannot be applied to the whole network and to all types of cargo. They complain that operators and RZD overload the infrastructure by chaotic movement of their railcars. And operators hinder each other in their fight for large clients – they occupy all free entry lines so that their colleagues do not have an opportunity to load cargo into their rolling stock.
Uniting Private Railcars
Because of the complicated situation that has emerged on Russian Railways’ network lately – failures to transport cargo and complaints of the heads of regions about the work of the transporter and private operators – Sergey Ivanov, Vice Prime Minister of Russia, charged RZD to rent gondola wagons from its subsidiaries – Freight One and Freight Two (their total own park of gondola cars amounts to 150,000 units, which is more than a third of the total Russian park of gondola wagons).
Since November 1, these gondola cars have been provided to cargo owners under the guidance and management of RZD. However, it is not possible to say that RZD is already providing cargo owners with the rolling stock of Freight One and Freight Two in the framework of the project of work with the consolidated park. The first contracts on renting wagons from Freight One were received in the company only after October 15. So, the process of the park transfer to RZD may last at least a month.
Also, RZD applied to authorities with the request to deregulate the wagon constituent for the work with such park, because the difference between the rates on wagon rent and the tariff on the railcar supply results in a loss. The Federal Tariff Service is developing a tariff range, in the framework of which RZD will be able to rent wagons from Freight One, Freight Two, and other operators.
Nowadays, there are projects on the methods to define the fee for using gondola cars rented by RZD from other owners and a draft decree of the Government on the order of RZD’s rent of railcars from other owners and a special order of price formation for transportation in such railcars. At the time of going to press, the Government had not discussed them yet. Moreover, some statements in these documents have changed radically.
Thus, the draft decree charged the Transport Ministry, the Ministry of Economic Development, and the Federal Tariff Service with developing a temporary order for RZD to rent gondola cars from Freight Two (earlier, before Freight One was sold, its wagons had also been mentioned in the project) till December 31, 2012, considering the necessity to develop an efficient model of private wagons management, envisaging the order of their exploitation (hereinafter we speak just about the territory of the Russian Federation) under terms and rules of the public park exploitation. After that the Federal Tariff Service and the Transport Ministry are to develop a special order of price formation for cargo transportation in such wagons, envisaging a tariff range of -30% – +10% in comparison with rates from Tariff List № 10-01.
Time will tell what happens later. The fact is that operators used to feel not bad in the market (at least until the crisis of 2008), but now they are in rather an unfavourable situation. A lot of them agree that the consolidation of parks on the basis of Freight One and Freight Two is not the worst way out, but most operators think that this measure should be temporary.
Companies independent from RZD may receive a public offer on their rolling stock (not just gondola cars) rent to RZD. As far as we know, operators are not enthusiastic about this idea. On the one hand, a lot of them doubt that RZD will be able to offer profitable conditions of such rent. On the other hand, many specialists forecast there will be queues for cheaper wagons from rented park, and this, perhaps, will make operators cut their tariffs step-by-step.
Moreover, to create the conditions for further rental of wagons from other owners to provide transportation on the public park terms, the project envisages a number of special measures. In particular, it is planned to make amendments to the acting legislation and the RF normative acts to define the basis of legal regulation of the activity of owners (operators) of railway rolling stock at their interaction with transporters.
Firstly, it is planned to legalise the definition of a rolling stock operator as any juridical person or an individual entrepreneur – beneficial owner of rolling stock supplying it for freight transportation on the public railway network. Secondly, it is planned to legalise the definition of “rented wagon park”. Thirdly, the draft decree sets the right of RZD to rent wagons from other beneficial rolling stock owners. Earlier, it was even planned to make it obligatory for operators to give a certain part (from 10% to 40%) of their park, but the ideologues of this document have declined this idea.
It Is Time to Become carriers
All this is rather strange. Initially, the Target Model contained a specific target – competition in the freight transportation market. For that, it was planned to sell Freight One and Freight Two and to provide conditions for competition between private operators in the market. Meanwhile, the project of park consolidation practically returns the public park to the market.
It turns out that once again there is a multi-component system, as Sergey Maltsev, Chairman of the Presidium of the Market Council. If this measure (the (partial) restoration of the public park) is not temporary, amendments to the Target Model should be made. “We need to have a clear vision of what will happen, because if the multi-level system continues to exist, the measures envisaged by the document will become rather controversial, for example, from the technology viewpoint,” says the expert.
Meanwhile, it is already obvious that soon there will be just three or four network-wide operators in the rolling stock supply market, as was declared in the Target Model. The purchase of Freight One by a private operator became another step on the road to rolling stock consolidation and market enlargement. Moreover, experts believe that if the crisis does not seriously affect Russia, the profitability will increase after the park consolidation. Otherwise, the profitability will fall, and a lot of operators will leave the market of their own desire, but not because of being merged or forced out. Anyway, there will be not more than four or five large operators and 10-15 local (regional) ones in the sector.
Perhaps, all these circumstances, and the ambiguity of the future of the private park management process and of the new schemes, which will be developed to regulate private wagon traffic, make large operators think more and more often about the fate of local transporters (companies owning wagons and locomotives).
As for the locomotive services sector, RZD is going to keep the park of locomotives as a single integrated park of Russian Railways as a network-wide national transporter. Private operators may pretend to work with their locomotives on specific lines, i.e. to be local transporters.
It is possible that having consolidated (mainly, by force) and having failed to become fully-fledged market entities as railway rolling stock operators, the companies will start to master a new sector in the framework of the competition for a route. This will happen, if the normative ambiguity and their instable market position do not make them leave this business completely.
By Nadezhda Vtorushina
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[DETAIL_TEXT] => Wagon Owners Became Personas Non Grata
The final stage of Russian railway structural reform turned out to be not easy for all participants in the transportation market. Asynchronous realisation of different mutually connected changes led to the failure to solve a number of questions in the decade that has passed since the beginning of the railway reforms. And now all these problems are to be solved on an expedited basis.
Development of the operators’ traffic on the network caused traffic jams in some regions of Russia. The rolling stock leasing and rent market was developing, the number of operators increased (nowadays, there are over 1,500 of them), and the lack of proper technological interaction between wagon owners and the transporter provoked the present situation.
As a result, instead of playing the role of a centre of commercial interaction with consignors (as is written in the Target Model of Cargo Railway Transportation Market Development to 2015), an operator has almost turned into a persona non-grata. More and more often, cargo owners (especially small and medium-size ones) complain that operators’ tariff rates are too high, and often an operator refuses to transport the cargo even at a high tariff rate. However, this cannot be applied to the whole network and to all types of cargo. They complain that operators and RZD overload the infrastructure by chaotic movement of their railcars. And operators hinder each other in their fight for large clients – they occupy all free entry lines so that their colleagues do not have an opportunity to load cargo into their rolling stock.
Uniting Private Railcars
Because of the complicated situation that has emerged on Russian Railways’ network lately – failures to transport cargo and complaints of the heads of regions about the work of the transporter and private operators – Sergey Ivanov, Vice Prime Minister of Russia, charged RZD to rent gondola wagons from its subsidiaries – Freight One and Freight Two (their total own park of gondola cars amounts to 150,000 units, which is more than a third of the total Russian park of gondola wagons).
Since November 1, these gondola cars have been provided to cargo owners under the guidance and management of RZD. However, it is not possible to say that RZD is already providing cargo owners with the rolling stock of Freight One and Freight Two in the framework of the project of work with the consolidated park. The first contracts on renting wagons from Freight One were received in the company only after October 15. So, the process of the park transfer to RZD may last at least a month.
Also, RZD applied to authorities with the request to deregulate the wagon constituent for the work with such park, because the difference between the rates on wagon rent and the tariff on the railcar supply results in a loss. The Federal Tariff Service is developing a tariff range, in the framework of which RZD will be able to rent wagons from Freight One, Freight Two, and other operators.
Nowadays, there are projects on the methods to define the fee for using gondola cars rented by RZD from other owners and a draft decree of the Government on the order of RZD’s rent of railcars from other owners and a special order of price formation for transportation in such railcars. At the time of going to press, the Government had not discussed them yet. Moreover, some statements in these documents have changed radically.
Thus, the draft decree charged the Transport Ministry, the Ministry of Economic Development, and the Federal Tariff Service with developing a temporary order for RZD to rent gondola cars from Freight Two (earlier, before Freight One was sold, its wagons had also been mentioned in the project) till December 31, 2012, considering the necessity to develop an efficient model of private wagons management, envisaging the order of their exploitation (hereinafter we speak just about the territory of the Russian Federation) under terms and rules of the public park exploitation. After that the Federal Tariff Service and the Transport Ministry are to develop a special order of price formation for cargo transportation in such wagons, envisaging a tariff range of -30% – +10% in comparison with rates from Tariff List № 10-01.
Time will tell what happens later. The fact is that operators used to feel not bad in the market (at least until the crisis of 2008), but now they are in rather an unfavourable situation. A lot of them agree that the consolidation of parks on the basis of Freight One and Freight Two is not the worst way out, but most operators think that this measure should be temporary.
Companies independent from RZD may receive a public offer on their rolling stock (not just gondola cars) rent to RZD. As far as we know, operators are not enthusiastic about this idea. On the one hand, a lot of them doubt that RZD will be able to offer profitable conditions of such rent. On the other hand, many specialists forecast there will be queues for cheaper wagons from rented park, and this, perhaps, will make operators cut their tariffs step-by-step.
Moreover, to create the conditions for further rental of wagons from other owners to provide transportation on the public park terms, the project envisages a number of special measures. In particular, it is planned to make amendments to the acting legislation and the RF normative acts to define the basis of legal regulation of the activity of owners (operators) of railway rolling stock at their interaction with transporters.
Firstly, it is planned to legalise the definition of a rolling stock operator as any juridical person or an individual entrepreneur – beneficial owner of rolling stock supplying it for freight transportation on the public railway network. Secondly, it is planned to legalise the definition of “rented wagon park”. Thirdly, the draft decree sets the right of RZD to rent wagons from other beneficial rolling stock owners. Earlier, it was even planned to make it obligatory for operators to give a certain part (from 10% to 40%) of their park, but the ideologues of this document have declined this idea.
It Is Time to Become carriers
All this is rather strange. Initially, the Target Model contained a specific target – competition in the freight transportation market. For that, it was planned to sell Freight One and Freight Two and to provide conditions for competition between private operators in the market. Meanwhile, the project of park consolidation practically returns the public park to the market.
It turns out that once again there is a multi-component system, as Sergey Maltsev, Chairman of the Presidium of the Market Council. If this measure (the (partial) restoration of the public park) is not temporary, amendments to the Target Model should be made. “We need to have a clear vision of what will happen, because if the multi-level system continues to exist, the measures envisaged by the document will become rather controversial, for example, from the technology viewpoint,” says the expert.
Meanwhile, it is already obvious that soon there will be just three or four network-wide operators in the rolling stock supply market, as was declared in the Target Model. The purchase of Freight One by a private operator became another step on the road to rolling stock consolidation and market enlargement. Moreover, experts believe that if the crisis does not seriously affect Russia, the profitability will increase after the park consolidation. Otherwise, the profitability will fall, and a lot of operators will leave the market of their own desire, but not because of being merged or forced out. Anyway, there will be not more than four or five large operators and 10-15 local (regional) ones in the sector.
Perhaps, all these circumstances, and the ambiguity of the future of the private park management process and of the new schemes, which will be developed to regulate private wagon traffic, make large operators think more and more often about the fate of local transporters (companies owning wagons and locomotives).
As for the locomotive services sector, RZD is going to keep the park of locomotives as a single integrated park of Russian Railways as a network-wide national transporter. Private operators may pretend to work with their locomotives on specific lines, i.e. to be local transporters.
It is possible that having consolidated (mainly, by force) and having failed to become fully-fledged market entities as railway rolling stock operators, the companies will start to master a new sector in the framework of the competition for a route. This will happen, if the normative ambiguity and their instable market position do not make them leave this business completely.
By Nadezhda Vtorushina
[~DETAIL_TEXT] => Wagon Owners Became Personas Non Grata
The final stage of Russian railway structural reform turned out to be not easy for all participants in the transportation market. Asynchronous realisation of different mutually connected changes led to the failure to solve a number of questions in the decade that has passed since the beginning of the railway reforms. And now all these problems are to be solved on an expedited basis.
Development of the operators’ traffic on the network caused traffic jams in some regions of Russia. The rolling stock leasing and rent market was developing, the number of operators increased (nowadays, there are over 1,500 of them), and the lack of proper technological interaction between wagon owners and the transporter provoked the present situation.
As a result, instead of playing the role of a centre of commercial interaction with consignors (as is written in the Target Model of Cargo Railway Transportation Market Development to 2015), an operator has almost turned into a persona non-grata. More and more often, cargo owners (especially small and medium-size ones) complain that operators’ tariff rates are too high, and often an operator refuses to transport the cargo even at a high tariff rate. However, this cannot be applied to the whole network and to all types of cargo. They complain that operators and RZD overload the infrastructure by chaotic movement of their railcars. And operators hinder each other in their fight for large clients – they occupy all free entry lines so that their colleagues do not have an opportunity to load cargo into their rolling stock.
Uniting Private Railcars
Because of the complicated situation that has emerged on Russian Railways’ network lately – failures to transport cargo and complaints of the heads of regions about the work of the transporter and private operators – Sergey Ivanov, Vice Prime Minister of Russia, charged RZD to rent gondola wagons from its subsidiaries – Freight One and Freight Two (their total own park of gondola cars amounts to 150,000 units, which is more than a third of the total Russian park of gondola wagons).
Since November 1, these gondola cars have been provided to cargo owners under the guidance and management of RZD. However, it is not possible to say that RZD is already providing cargo owners with the rolling stock of Freight One and Freight Two in the framework of the project of work with the consolidated park. The first contracts on renting wagons from Freight One were received in the company only after October 15. So, the process of the park transfer to RZD may last at least a month.
Also, RZD applied to authorities with the request to deregulate the wagon constituent for the work with such park, because the difference between the rates on wagon rent and the tariff on the railcar supply results in a loss. The Federal Tariff Service is developing a tariff range, in the framework of which RZD will be able to rent wagons from Freight One, Freight Two, and other operators.
Nowadays, there are projects on the methods to define the fee for using gondola cars rented by RZD from other owners and a draft decree of the Government on the order of RZD’s rent of railcars from other owners and a special order of price formation for transportation in such railcars. At the time of going to press, the Government had not discussed them yet. Moreover, some statements in these documents have changed radically.
Thus, the draft decree charged the Transport Ministry, the Ministry of Economic Development, and the Federal Tariff Service with developing a temporary order for RZD to rent gondola cars from Freight Two (earlier, before Freight One was sold, its wagons had also been mentioned in the project) till December 31, 2012, considering the necessity to develop an efficient model of private wagons management, envisaging the order of their exploitation (hereinafter we speak just about the territory of the Russian Federation) under terms and rules of the public park exploitation. After that the Federal Tariff Service and the Transport Ministry are to develop a special order of price formation for cargo transportation in such wagons, envisaging a tariff range of -30% – +10% in comparison with rates from Tariff List № 10-01.
Time will tell what happens later. The fact is that operators used to feel not bad in the market (at least until the crisis of 2008), but now they are in rather an unfavourable situation. A lot of them agree that the consolidation of parks on the basis of Freight One and Freight Two is not the worst way out, but most operators think that this measure should be temporary.
Companies independent from RZD may receive a public offer on their rolling stock (not just gondola cars) rent to RZD. As far as we know, operators are not enthusiastic about this idea. On the one hand, a lot of them doubt that RZD will be able to offer profitable conditions of such rent. On the other hand, many specialists forecast there will be queues for cheaper wagons from rented park, and this, perhaps, will make operators cut their tariffs step-by-step.
Moreover, to create the conditions for further rental of wagons from other owners to provide transportation on the public park terms, the project envisages a number of special measures. In particular, it is planned to make amendments to the acting legislation and the RF normative acts to define the basis of legal regulation of the activity of owners (operators) of railway rolling stock at their interaction with transporters.
Firstly, it is planned to legalise the definition of a rolling stock operator as any juridical person or an individual entrepreneur – beneficial owner of rolling stock supplying it for freight transportation on the public railway network. Secondly, it is planned to legalise the definition of “rented wagon park”. Thirdly, the draft decree sets the right of RZD to rent wagons from other beneficial rolling stock owners. Earlier, it was even planned to make it obligatory for operators to give a certain part (from 10% to 40%) of their park, but the ideologues of this document have declined this idea.
It Is Time to Become carriers
All this is rather strange. Initially, the Target Model contained a specific target – competition in the freight transportation market. For that, it was planned to sell Freight One and Freight Two and to provide conditions for competition between private operators in the market. Meanwhile, the project of park consolidation practically returns the public park to the market.
It turns out that once again there is a multi-component system, as Sergey Maltsev, Chairman of the Presidium of the Market Council. If this measure (the (partial) restoration of the public park) is not temporary, amendments to the Target Model should be made. “We need to have a clear vision of what will happen, because if the multi-level system continues to exist, the measures envisaged by the document will become rather controversial, for example, from the technology viewpoint,” says the expert.
Meanwhile, it is already obvious that soon there will be just three or four network-wide operators in the rolling stock supply market, as was declared in the Target Model. The purchase of Freight One by a private operator became another step on the road to rolling stock consolidation and market enlargement. Moreover, experts believe that if the crisis does not seriously affect Russia, the profitability will increase after the park consolidation. Otherwise, the profitability will fall, and a lot of operators will leave the market of their own desire, but not because of being merged or forced out. Anyway, there will be not more than four or five large operators and 10-15 local (regional) ones in the sector.
Perhaps, all these circumstances, and the ambiguity of the future of the private park management process and of the new schemes, which will be developed to regulate private wagon traffic, make large operators think more and more often about the fate of local transporters (companies owning wagons and locomotives).
As for the locomotive services sector, RZD is going to keep the park of locomotives as a single integrated park of Russian Railways as a network-wide national transporter. Private operators may pretend to work with their locomotives on specific lines, i.e. to be local transporters.
It is possible that having consolidated (mainly, by force) and having failed to become fully-fledged market entities as railway rolling stock operators, the companies will start to master a new sector in the framework of the competition for a route. This will happen, if the normative ambiguity and their instable market position do not make them leave this business completely.
By Nadezhda Vtorushina
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