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2 (30) April 2012

2 (30) April 2012
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				147.0016359013				monthAccess: 1				
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РЖД-Партнер

RZD in Fight against Defects

 13 contingency situations caused by fracture of steel molded parts of a wagon have happened on the RZD’s network since the beginning of 2012. The analysis of statistics of such cases, which took place in the recent years, makes talk about a rising trend of loss of quality of rolling stock manufacture and repair. Therefore, RZD as a company providing transportation process realisation sets itself a task of creating the quality control system relevant to the new economic conditions.
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Misbalance amid Monopolarity?

Obviously, the result of this activity will depend on the efficiency of the chosen forms of interaction with business structures, somehow adjacent to cargo transportation by railroad, and with authorities, whose competence is carrying out the state policy in this sector.
At first sight, the situation is not so threatening. For example, there were just 25 cases of solebar fractures (the most frequent reason for wagon derailment on the railway network) in 2011. Taking into account the increase in the wagon fleet used on the network (about one million units) and growing intensity of transportation, they might have paid no special attention to it. Every contingency situation creates a risk to cargoes and infrastructure facilities, and to people’s health and lives, and it makes senior managers of RZD take rather harsh measures (up to prohibition against using the rolling stock that potentially could have defects), and to initiate a search for the mechanisms to prevent defected products manufacture.
Headline-making emergencies, discussed by mass-media, are just the top of an iceberg. In the words of Alexander Tishanin, Vice President of RZD, the company pays special attention to prevention of such negative events. In three years, wagon inspectors detected 26,023 faulty parts. Most specialists agree that the trend of worse quality emerged several years ago, and products made 1-3 years ago cause most of all problems. An absolute record in the latest history has been set this year – 13 off-standard products have been detected by now.
According to Vadim Morozov, First Vice President of RZD, the loss from the accident at the Zabaikalsk Railway (an affiliate of RZD) regardless environmental harm is estimated at more than RUR 80 million. Particularly, the cost of the damaged rolling stock is RUR 28 million, and that of the damaged cargo – RUR 20 million.
As for ecological damage, according to preliminary data, oil spilt on more than 600 square metres. Specialists of the Emergencies Ministry of the Amur region were ready to evacuate people from Malinovka settlement, whose houses were 300 metres away from the railway, fortunately, they did not have to do it.
Experts believe that the major reason for such worrying situation is the decline in the efficiency of the traditional system of rolling stock production and repair quality control amid the sector reform. “Since the time of the Ministry of Railways, all key processes were carried out centrally,” notes a senior manager of RZD. “Rolling stock and parts were purchased according to the plan and under a constant corporate control. To bring to naught the possible flaws, specialists used to visit enterprises to make check-ups in manufacture workshops.” After private companies emerged on the network, the system based on the technological process entity started to fail. Rolling stock producers, operators, and wagon repair companies carry out their own development strategies each. Consequently, there appeared a gap in the technology of quality control with an inevitable emerge of ‘blind spots’ and failures at interaction of corporate services for quality control of different companies.
The situation became even worse due to the fast increase in the demand for rolling stock, which caused a shortage of wagons as well as components needed to build railcars and repair. Amid an acute need for molded parts, the temptation to overshadow quality issues appeared more and more often, and the separated control system was not able to create an efficient resistance to extension of failures and direct breaches. There were even such situations when a part rejected as defective at one enterprise was used at another as ‘meeting the standards.’

Responsibility Should Be Enhanced

It would be a mistake to simplify the situation and bring all problems to separate cases of incompetence or immorality. Experts say that at the existing level of metalwork production development on the territory of the former USSR, 100% quality cannot be provided even if advanced control systems are available. Moreover, a number of undetected defects are revealed only during exploitation. Diagnostic of such failures is not carried out in the existing repair system. “I think, this issue should be analysed from several aspects,” Yana David, Deputy CEO for Economy of SIBUR-Trans CJSC, is sure. “First of all, it is the responsibility of wagon repair depots, which carry out flaw detection regularly, including that of solebars to minimize risks of their fractures and further derailment of railcars. We see, however, that such accidents happened regularly in the last three or four years. And we understand that every railcar was inspected in a wagon repair depot in this period of time. The question is how the solebars were inspected. It turns out that somebody let things slide.”
In the opinion of some market players, a possible solution to the problem is responsibility clampdown on definite executives and officials. Skeptics, however, say that the number of punished will hardly correlate with the number of parts of low quality used to manufacture railcars if there are no technological possibilities to detect defects. Some prototypes of the federal model have been functioning in Russia for several years already. Mikhail Sapetov, CEO of Wagon Repair Company-2 (WRC-2), pays attention to the fact that the ASU WRC system (Automated Control System Wagon Repair Company), which was developed on the base of the RZD’s Central Directorate for Wagon Repair, works now in three wagon repair companies and helps to monitor and prevent usage of defected molded parts, which are sold at the second-hand market. “The approach is quite simple: it is possible to put information about a molded part into the list of equipment, if any defect in it was detected earlier, at none of the depots of the three WRCs. There are about 12,000 molded parts in this base. We suggest developing a common database on the basis of this system, it will not be too expensive. And information on new parts, defects in which were detected during the acceptance test, could be put into the database as well,” said he. Participants of the system may be any interested party, including wagon repair enterprises regardless of their proprietary form, steel mills, rolling stock owners, supervising bodies represented by the Transport Ministry and infrastructure represented by the Wagon Facilities Administration. The WRC made a suggestion that there must be a confirmation certificate for every molded part delivered to a depot from the second-hand market, but it has not been supported by steel mills. Meanwhile, wagon repair enterprises in cooperation with the RF Federal Agency for Supervision in the Transport Sector (Rostrasnadzor) and Rusagrotrans started to apply this model to second-hand molded parts.
Strange it is, but the problems in the sector of exploitation characteristics of parts may occur not because of breaching standards and rules, but because of … observing them. Most documents forming the legal base for rolling stock production and repair were developed in the 1960-s. Since then, the condition of infrastructure has changed, and the number of rolling stock types has extended. “Wagons with axle load of 25 tons are in use on the railway network, the length and weight of cargo trains grow, wooden sleepers have been replaced by concrete ones, etc,” notes Andrey Shlensky, Deputy CEO of Research and Production Corporation Uralvagonzavod. “That is why one of priorities is revision of “The Regulation on the System of Technical Maintenance and Repair of Cargo Wagons Permitted to Provide International Transportation via the Public Railways.” When this document is revised, it will allow to use innovative rolling stock with extended distance run between repairs and to regulate its maintenance.

To Carry Out System Approach

No matter how problems in the defected parts market and the reasons for them vary, the common result will hardly change if the problem is partly solved. RZD thinks that only system approach may be efficient. First of all, standard requirements to production, repair, maintenance, and confirmation evaluation are to be harmonized. RZD’s suggestions that some federal laws on railway transport and technical regulation should be revised to remove some definite problems and mismatches. Another measure to be taken is provision of guaranteed financial stability of the transportation process participants by means of responsibility insurance. Also, RZD as a transporter and the owner of infrastructure must have instruments for immediate reaction to detected defects, particularly, to prohibit exploitation of those railcars, for production of which parts from potentially not meeting the requirements lots were used.
To strengthen its position, the company works together with the federal bodies and non-commercial organizations, applies directly to separate market players to create a new system for providing the quality control relevant to the market reality. According to Salman Babaev, Vice President of RZD, even amid a competition model of economy, profit earning is not a sufficient reason for loss of quality in rolling stock production and exploitation sectors. “The practical consequences of man-caused catastrophes may be even more significant that those of acts of terrorism. The cost of a fracture may be so high, that the issues of quality must not be considered inessential, and they cannot be delayed. Every company and organization must understand it,” he believes. The authorities seem to share the opinion of RZD. It means that there will be significant changes at all levels of the system of control in the near future: from standard documents to organization of work of some definite executors. ®
By Dmitry Khantsevich [~DETAIL_TEXT] =>

Misbalance amid Monopolarity?

Obviously, the result of this activity will depend on the efficiency of the chosen forms of interaction with business structures, somehow adjacent to cargo transportation by railroad, and with authorities, whose competence is carrying out the state policy in this sector.
At first sight, the situation is not so threatening. For example, there were just 25 cases of solebar fractures (the most frequent reason for wagon derailment on the railway network) in 2011. Taking into account the increase in the wagon fleet used on the network (about one million units) and growing intensity of transportation, they might have paid no special attention to it. Every contingency situation creates a risk to cargoes and infrastructure facilities, and to people’s health and lives, and it makes senior managers of RZD take rather harsh measures (up to prohibition against using the rolling stock that potentially could have defects), and to initiate a search for the mechanisms to prevent defected products manufacture.
Headline-making emergencies, discussed by mass-media, are just the top of an iceberg. In the words of Alexander Tishanin, Vice President of RZD, the company pays special attention to prevention of such negative events. In three years, wagon inspectors detected 26,023 faulty parts. Most specialists agree that the trend of worse quality emerged several years ago, and products made 1-3 years ago cause most of all problems. An absolute record in the latest history has been set this year – 13 off-standard products have been detected by now.
According to Vadim Morozov, First Vice President of RZD, the loss from the accident at the Zabaikalsk Railway (an affiliate of RZD) regardless environmental harm is estimated at more than RUR 80 million. Particularly, the cost of the damaged rolling stock is RUR 28 million, and that of the damaged cargo – RUR 20 million.
As for ecological damage, according to preliminary data, oil spilt on more than 600 square metres. Specialists of the Emergencies Ministry of the Amur region were ready to evacuate people from Malinovka settlement, whose houses were 300 metres away from the railway, fortunately, they did not have to do it.
Experts believe that the major reason for such worrying situation is the decline in the efficiency of the traditional system of rolling stock production and repair quality control amid the sector reform. “Since the time of the Ministry of Railways, all key processes were carried out centrally,” notes a senior manager of RZD. “Rolling stock and parts were purchased according to the plan and under a constant corporate control. To bring to naught the possible flaws, specialists used to visit enterprises to make check-ups in manufacture workshops.” After private companies emerged on the network, the system based on the technological process entity started to fail. Rolling stock producers, operators, and wagon repair companies carry out their own development strategies each. Consequently, there appeared a gap in the technology of quality control with an inevitable emerge of ‘blind spots’ and failures at interaction of corporate services for quality control of different companies.
The situation became even worse due to the fast increase in the demand for rolling stock, which caused a shortage of wagons as well as components needed to build railcars and repair. Amid an acute need for molded parts, the temptation to overshadow quality issues appeared more and more often, and the separated control system was not able to create an efficient resistance to extension of failures and direct breaches. There were even such situations when a part rejected as defective at one enterprise was used at another as ‘meeting the standards.’

Responsibility Should Be Enhanced

It would be a mistake to simplify the situation and bring all problems to separate cases of incompetence or immorality. Experts say that at the existing level of metalwork production development on the territory of the former USSR, 100% quality cannot be provided even if advanced control systems are available. Moreover, a number of undetected defects are revealed only during exploitation. Diagnostic of such failures is not carried out in the existing repair system. “I think, this issue should be analysed from several aspects,” Yana David, Deputy CEO for Economy of SIBUR-Trans CJSC, is sure. “First of all, it is the responsibility of wagon repair depots, which carry out flaw detection regularly, including that of solebars to minimize risks of their fractures and further derailment of railcars. We see, however, that such accidents happened regularly in the last three or four years. And we understand that every railcar was inspected in a wagon repair depot in this period of time. The question is how the solebars were inspected. It turns out that somebody let things slide.”
In the opinion of some market players, a possible solution to the problem is responsibility clampdown on definite executives and officials. Skeptics, however, say that the number of punished will hardly correlate with the number of parts of low quality used to manufacture railcars if there are no technological possibilities to detect defects. Some prototypes of the federal model have been functioning in Russia for several years already. Mikhail Sapetov, CEO of Wagon Repair Company-2 (WRC-2), pays attention to the fact that the ASU WRC system (Automated Control System Wagon Repair Company), which was developed on the base of the RZD’s Central Directorate for Wagon Repair, works now in three wagon repair companies and helps to monitor and prevent usage of defected molded parts, which are sold at the second-hand market. “The approach is quite simple: it is possible to put information about a molded part into the list of equipment, if any defect in it was detected earlier, at none of the depots of the three WRCs. There are about 12,000 molded parts in this base. We suggest developing a common database on the basis of this system, it will not be too expensive. And information on new parts, defects in which were detected during the acceptance test, could be put into the database as well,” said he. Participants of the system may be any interested party, including wagon repair enterprises regardless of their proprietary form, steel mills, rolling stock owners, supervising bodies represented by the Transport Ministry and infrastructure represented by the Wagon Facilities Administration. The WRC made a suggestion that there must be a confirmation certificate for every molded part delivered to a depot from the second-hand market, but it has not been supported by steel mills. Meanwhile, wagon repair enterprises in cooperation with the RF Federal Agency for Supervision in the Transport Sector (Rostrasnadzor) and Rusagrotrans started to apply this model to second-hand molded parts.
Strange it is, but the problems in the sector of exploitation characteristics of parts may occur not because of breaching standards and rules, but because of … observing them. Most documents forming the legal base for rolling stock production and repair were developed in the 1960-s. Since then, the condition of infrastructure has changed, and the number of rolling stock types has extended. “Wagons with axle load of 25 tons are in use on the railway network, the length and weight of cargo trains grow, wooden sleepers have been replaced by concrete ones, etc,” notes Andrey Shlensky, Deputy CEO of Research and Production Corporation Uralvagonzavod. “That is why one of priorities is revision of “The Regulation on the System of Technical Maintenance and Repair of Cargo Wagons Permitted to Provide International Transportation via the Public Railways.” When this document is revised, it will allow to use innovative rolling stock with extended distance run between repairs and to regulate its maintenance.

To Carry Out System Approach

No matter how problems in the defected parts market and the reasons for them vary, the common result will hardly change if the problem is partly solved. RZD thinks that only system approach may be efficient. First of all, standard requirements to production, repair, maintenance, and confirmation evaluation are to be harmonized. RZD’s suggestions that some federal laws on railway transport and technical regulation should be revised to remove some definite problems and mismatches. Another measure to be taken is provision of guaranteed financial stability of the transportation process participants by means of responsibility insurance. Also, RZD as a transporter and the owner of infrastructure must have instruments for immediate reaction to detected defects, particularly, to prohibit exploitation of those railcars, for production of which parts from potentially not meeting the requirements lots were used.
To strengthen its position, the company works together with the federal bodies and non-commercial organizations, applies directly to separate market players to create a new system for providing the quality control relevant to the market reality. According to Salman Babaev, Vice President of RZD, even amid a competition model of economy, profit earning is not a sufficient reason for loss of quality in rolling stock production and exploitation sectors. “The practical consequences of man-caused catastrophes may be even more significant that those of acts of terrorism. The cost of a fracture may be so high, that the issues of quality must not be considered inessential, and they cannot be delayed. Every company and organization must understand it,” he believes. The authorities seem to share the opinion of RZD. It means that there will be significant changes at all levels of the system of control in the near future: from standard documents to organization of work of some definite executors. ®
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hspace="5" align="left" />13 contingency situations caused by fracture of steel molded parts of a wagon have happened on the RZD’s network since the beginning of 2012. 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    [DETAIL_TEXT] => 

Misbalance amid Monopolarity?

Obviously, the result of this activity will depend on the efficiency of the chosen forms of interaction with business structures, somehow adjacent to cargo transportation by railroad, and with authorities, whose competence is carrying out the state policy in this sector.
At first sight, the situation is not so threatening. For example, there were just 25 cases of solebar fractures (the most frequent reason for wagon derailment on the railway network) in 2011. Taking into account the increase in the wagon fleet used on the network (about one million units) and growing intensity of transportation, they might have paid no special attention to it. Every contingency situation creates a risk to cargoes and infrastructure facilities, and to people’s health and lives, and it makes senior managers of RZD take rather harsh measures (up to prohibition against using the rolling stock that potentially could have defects), and to initiate a search for the mechanisms to prevent defected products manufacture.
Headline-making emergencies, discussed by mass-media, are just the top of an iceberg. In the words of Alexander Tishanin, Vice President of RZD, the company pays special attention to prevention of such negative events. In three years, wagon inspectors detected 26,023 faulty parts. Most specialists agree that the trend of worse quality emerged several years ago, and products made 1-3 years ago cause most of all problems. An absolute record in the latest history has been set this year – 13 off-standard products have been detected by now.
According to Vadim Morozov, First Vice President of RZD, the loss from the accident at the Zabaikalsk Railway (an affiliate of RZD) regardless environmental harm is estimated at more than RUR 80 million. Particularly, the cost of the damaged rolling stock is RUR 28 million, and that of the damaged cargo – RUR 20 million.
As for ecological damage, according to preliminary data, oil spilt on more than 600 square metres. Specialists of the Emergencies Ministry of the Amur region were ready to evacuate people from Malinovka settlement, whose houses were 300 metres away from the railway, fortunately, they did not have to do it.
Experts believe that the major reason for such worrying situation is the decline in the efficiency of the traditional system of rolling stock production and repair quality control amid the sector reform. “Since the time of the Ministry of Railways, all key processes were carried out centrally,” notes a senior manager of RZD. “Rolling stock and parts were purchased according to the plan and under a constant corporate control. To bring to naught the possible flaws, specialists used to visit enterprises to make check-ups in manufacture workshops.” After private companies emerged on the network, the system based on the technological process entity started to fail. Rolling stock producers, operators, and wagon repair companies carry out their own development strategies each. Consequently, there appeared a gap in the technology of quality control with an inevitable emerge of ‘blind spots’ and failures at interaction of corporate services for quality control of different companies.
The situation became even worse due to the fast increase in the demand for rolling stock, which caused a shortage of wagons as well as components needed to build railcars and repair. Amid an acute need for molded parts, the temptation to overshadow quality issues appeared more and more often, and the separated control system was not able to create an efficient resistance to extension of failures and direct breaches. There were even such situations when a part rejected as defective at one enterprise was used at another as ‘meeting the standards.’

Responsibility Should Be Enhanced

It would be a mistake to simplify the situation and bring all problems to separate cases of incompetence or immorality. Experts say that at the existing level of metalwork production development on the territory of the former USSR, 100% quality cannot be provided even if advanced control systems are available. Moreover, a number of undetected defects are revealed only during exploitation. Diagnostic of such failures is not carried out in the existing repair system. “I think, this issue should be analysed from several aspects,” Yana David, Deputy CEO for Economy of SIBUR-Trans CJSC, is sure. “First of all, it is the responsibility of wagon repair depots, which carry out flaw detection regularly, including that of solebars to minimize risks of their fractures and further derailment of railcars. We see, however, that such accidents happened regularly in the last three or four years. And we understand that every railcar was inspected in a wagon repair depot in this period of time. The question is how the solebars were inspected. It turns out that somebody let things slide.”
In the opinion of some market players, a possible solution to the problem is responsibility clampdown on definite executives and officials. Skeptics, however, say that the number of punished will hardly correlate with the number of parts of low quality used to manufacture railcars if there are no technological possibilities to detect defects. Some prototypes of the federal model have been functioning in Russia for several years already. Mikhail Sapetov, CEO of Wagon Repair Company-2 (WRC-2), pays attention to the fact that the ASU WRC system (Automated Control System Wagon Repair Company), which was developed on the base of the RZD’s Central Directorate for Wagon Repair, works now in three wagon repair companies and helps to monitor and prevent usage of defected molded parts, which are sold at the second-hand market. “The approach is quite simple: it is possible to put information about a molded part into the list of equipment, if any defect in it was detected earlier, at none of the depots of the three WRCs. There are about 12,000 molded parts in this base. We suggest developing a common database on the basis of this system, it will not be too expensive. And information on new parts, defects in which were detected during the acceptance test, could be put into the database as well,” said he. Participants of the system may be any interested party, including wagon repair enterprises regardless of their proprietary form, steel mills, rolling stock owners, supervising bodies represented by the Transport Ministry and infrastructure represented by the Wagon Facilities Administration. The WRC made a suggestion that there must be a confirmation certificate for every molded part delivered to a depot from the second-hand market, but it has not been supported by steel mills. Meanwhile, wagon repair enterprises in cooperation with the RF Federal Agency for Supervision in the Transport Sector (Rostrasnadzor) and Rusagrotrans started to apply this model to second-hand molded parts.
Strange it is, but the problems in the sector of exploitation characteristics of parts may occur not because of breaching standards and rules, but because of … observing them. Most documents forming the legal base for rolling stock production and repair were developed in the 1960-s. Since then, the condition of infrastructure has changed, and the number of rolling stock types has extended. “Wagons with axle load of 25 tons are in use on the railway network, the length and weight of cargo trains grow, wooden sleepers have been replaced by concrete ones, etc,” notes Andrey Shlensky, Deputy CEO of Research and Production Corporation Uralvagonzavod. “That is why one of priorities is revision of “The Regulation on the System of Technical Maintenance and Repair of Cargo Wagons Permitted to Provide International Transportation via the Public Railways.” When this document is revised, it will allow to use innovative rolling stock with extended distance run between repairs and to regulate its maintenance.

To Carry Out System Approach

No matter how problems in the defected parts market and the reasons for them vary, the common result will hardly change if the problem is partly solved. RZD thinks that only system approach may be efficient. First of all, standard requirements to production, repair, maintenance, and confirmation evaluation are to be harmonized. RZD’s suggestions that some federal laws on railway transport and technical regulation should be revised to remove some definite problems and mismatches. Another measure to be taken is provision of guaranteed financial stability of the transportation process participants by means of responsibility insurance. Also, RZD as a transporter and the owner of infrastructure must have instruments for immediate reaction to detected defects, particularly, to prohibit exploitation of those railcars, for production of which parts from potentially not meeting the requirements lots were used.
To strengthen its position, the company works together with the federal bodies and non-commercial organizations, applies directly to separate market players to create a new system for providing the quality control relevant to the market reality. According to Salman Babaev, Vice President of RZD, even amid a competition model of economy, profit earning is not a sufficient reason for loss of quality in rolling stock production and exploitation sectors. “The practical consequences of man-caused catastrophes may be even more significant that those of acts of terrorism. The cost of a fracture may be so high, that the issues of quality must not be considered inessential, and they cannot be delayed. Every company and organization must understand it,” he believes. The authorities seem to share the opinion of RZD. It means that there will be significant changes at all levels of the system of control in the near future: from standard documents to organization of work of some definite executors. ®
By Dmitry Khantsevich [~DETAIL_TEXT] =>

Misbalance amid Monopolarity?

Obviously, the result of this activity will depend on the efficiency of the chosen forms of interaction with business structures, somehow adjacent to cargo transportation by railroad, and with authorities, whose competence is carrying out the state policy in this sector.
At first sight, the situation is not so threatening. For example, there were just 25 cases of solebar fractures (the most frequent reason for wagon derailment on the railway network) in 2011. Taking into account the increase in the wagon fleet used on the network (about one million units) and growing intensity of transportation, they might have paid no special attention to it. Every contingency situation creates a risk to cargoes and infrastructure facilities, and to people’s health and lives, and it makes senior managers of RZD take rather harsh measures (up to prohibition against using the rolling stock that potentially could have defects), and to initiate a search for the mechanisms to prevent defected products manufacture.
Headline-making emergencies, discussed by mass-media, are just the top of an iceberg. In the words of Alexander Tishanin, Vice President of RZD, the company pays special attention to prevention of such negative events. In three years, wagon inspectors detected 26,023 faulty parts. Most specialists agree that the trend of worse quality emerged several years ago, and products made 1-3 years ago cause most of all problems. An absolute record in the latest history has been set this year – 13 off-standard products have been detected by now.
According to Vadim Morozov, First Vice President of RZD, the loss from the accident at the Zabaikalsk Railway (an affiliate of RZD) regardless environmental harm is estimated at more than RUR 80 million. Particularly, the cost of the damaged rolling stock is RUR 28 million, and that of the damaged cargo – RUR 20 million.
As for ecological damage, according to preliminary data, oil spilt on more than 600 square metres. Specialists of the Emergencies Ministry of the Amur region were ready to evacuate people from Malinovka settlement, whose houses were 300 metres away from the railway, fortunately, they did not have to do it.
Experts believe that the major reason for such worrying situation is the decline in the efficiency of the traditional system of rolling stock production and repair quality control amid the sector reform. “Since the time of the Ministry of Railways, all key processes were carried out centrally,” notes a senior manager of RZD. “Rolling stock and parts were purchased according to the plan and under a constant corporate control. To bring to naught the possible flaws, specialists used to visit enterprises to make check-ups in manufacture workshops.” After private companies emerged on the network, the system based on the technological process entity started to fail. Rolling stock producers, operators, and wagon repair companies carry out their own development strategies each. Consequently, there appeared a gap in the technology of quality control with an inevitable emerge of ‘blind spots’ and failures at interaction of corporate services for quality control of different companies.
The situation became even worse due to the fast increase in the demand for rolling stock, which caused a shortage of wagons as well as components needed to build railcars and repair. Amid an acute need for molded parts, the temptation to overshadow quality issues appeared more and more often, and the separated control system was not able to create an efficient resistance to extension of failures and direct breaches. There were even such situations when a part rejected as defective at one enterprise was used at another as ‘meeting the standards.’

Responsibility Should Be Enhanced

It would be a mistake to simplify the situation and bring all problems to separate cases of incompetence or immorality. Experts say that at the existing level of metalwork production development on the territory of the former USSR, 100% quality cannot be provided even if advanced control systems are available. Moreover, a number of undetected defects are revealed only during exploitation. Diagnostic of such failures is not carried out in the existing repair system. “I think, this issue should be analysed from several aspects,” Yana David, Deputy CEO for Economy of SIBUR-Trans CJSC, is sure. “First of all, it is the responsibility of wagon repair depots, which carry out flaw detection regularly, including that of solebars to minimize risks of their fractures and further derailment of railcars. We see, however, that such accidents happened regularly in the last three or four years. And we understand that every railcar was inspected in a wagon repair depot in this period of time. The question is how the solebars were inspected. It turns out that somebody let things slide.”
In the opinion of some market players, a possible solution to the problem is responsibility clampdown on definite executives and officials. Skeptics, however, say that the number of punished will hardly correlate with the number of parts of low quality used to manufacture railcars if there are no technological possibilities to detect defects. Some prototypes of the federal model have been functioning in Russia for several years already. Mikhail Sapetov, CEO of Wagon Repair Company-2 (WRC-2), pays attention to the fact that the ASU WRC system (Automated Control System Wagon Repair Company), which was developed on the base of the RZD’s Central Directorate for Wagon Repair, works now in three wagon repair companies and helps to monitor and prevent usage of defected molded parts, which are sold at the second-hand market. “The approach is quite simple: it is possible to put information about a molded part into the list of equipment, if any defect in it was detected earlier, at none of the depots of the three WRCs. There are about 12,000 molded parts in this base. We suggest developing a common database on the basis of this system, it will not be too expensive. And information on new parts, defects in which were detected during the acceptance test, could be put into the database as well,” said he. Participants of the system may be any interested party, including wagon repair enterprises regardless of their proprietary form, steel mills, rolling stock owners, supervising bodies represented by the Transport Ministry and infrastructure represented by the Wagon Facilities Administration. The WRC made a suggestion that there must be a confirmation certificate for every molded part delivered to a depot from the second-hand market, but it has not been supported by steel mills. Meanwhile, wagon repair enterprises in cooperation with the RF Federal Agency for Supervision in the Transport Sector (Rostrasnadzor) and Rusagrotrans started to apply this model to second-hand molded parts.
Strange it is, but the problems in the sector of exploitation characteristics of parts may occur not because of breaching standards and rules, but because of … observing them. Most documents forming the legal base for rolling stock production and repair were developed in the 1960-s. Since then, the condition of infrastructure has changed, and the number of rolling stock types has extended. “Wagons with axle load of 25 tons are in use on the railway network, the length and weight of cargo trains grow, wooden sleepers have been replaced by concrete ones, etc,” notes Andrey Shlensky, Deputy CEO of Research and Production Corporation Uralvagonzavod. “That is why one of priorities is revision of “The Regulation on the System of Technical Maintenance and Repair of Cargo Wagons Permitted to Provide International Transportation via the Public Railways.” When this document is revised, it will allow to use innovative rolling stock with extended distance run between repairs and to regulate its maintenance.

To Carry Out System Approach

No matter how problems in the defected parts market and the reasons for them vary, the common result will hardly change if the problem is partly solved. RZD thinks that only system approach may be efficient. First of all, standard requirements to production, repair, maintenance, and confirmation evaluation are to be harmonized. RZD’s suggestions that some federal laws on railway transport and technical regulation should be revised to remove some definite problems and mismatches. Another measure to be taken is provision of guaranteed financial stability of the transportation process participants by means of responsibility insurance. Also, RZD as a transporter and the owner of infrastructure must have instruments for immediate reaction to detected defects, particularly, to prohibit exploitation of those railcars, for production of which parts from potentially not meeting the requirements lots were used.
To strengthen its position, the company works together with the federal bodies and non-commercial organizations, applies directly to separate market players to create a new system for providing the quality control relevant to the market reality. According to Salman Babaev, Vice President of RZD, even amid a competition model of economy, profit earning is not a sufficient reason for loss of quality in rolling stock production and exploitation sectors. “The practical consequences of man-caused catastrophes may be even more significant that those of acts of terrorism. The cost of a fracture may be so high, that the issues of quality must not be considered inessential, and they cannot be delayed. Every company and organization must understand it,” he believes. The authorities seem to share the opinion of RZD. It means that there will be significant changes at all levels of the system of control in the near future: from standard documents to organization of work of some definite executors. ®
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РЖД-Партнер

Russian trucking companies are very strong

 More and more European logistic operators talk about the importance of development intermodal services. PCC launched regular shuttle container trains between German ports, Rotterdam and Moscow. Business Development Manager of PCC Intermodal S.A. Jarosław Kubiczek told us about difficulties
in cargo transportation segment and competetivness with Russian companies.
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Rail&Road combination

– Mr Kubiczek, what types of cargo transportation does your company offer?

– Our main line of activity is providing logistical services to customers based on intermodal transport of containerized cargoes, which in our case means a combination of rail and road transportation. Combining the services of rail transportation on long distances between sea and inland terminals with road transportation to and from inland container terminals on a door-to-door basis, allowing us to optimize the supply chain. We organize intermodal transport on the basis of regular reliable rail connections network with daily service from marine ports of: Rotterdam, Hamburg, Bremerhaven, Gdańsk, Gdynia to main industrial European regions: Ruhr Area, Berlin region, Central Poland, Upper and Lower Silesia and since December 2011 – Moscow.

– What kind of goods is mostly carried by your company in Russia?

– For the Russian market we are aiming predominantly at consumer goods, white goods, and appliances since the Moscow region market is mostly an import market for such goods. It should be mentioned, that we organize the transportation of any kind of ISO containers, goods inside are not really of our interests, it is the container as a unit which we transport.

– So how you started your activities in Russia? Was it difficult?

– Through our affiliate offices in Moscow – ZAO PCC Rail Moscow – we initiated our talks with the partners with whom we could put the project together. The discussions on establishing the dedicated service took almost one year to complete and the main difficulties were to mutually understand our concept of the project and the constraints of implementing the idea on the territories of Belarus and the Russian Federation. The main problems connected with developing this project now evolve around technical issues related to import customs regulations. Thanks to the professionalism and experience of the PCC offices in Moscow we were able to overcome the major obstacles allowing us to implement into reality the project and start the operations at the end of last year.

– Do you offer any unique services here?

– Our unique service which we offer to the market today is the PCC Moscow Express which is a dedicated service running on a fixed schedule, where we have agreed with the service providers – BZD and RZD – a schedule for our container train to run on and this schedule allows for a very fast transit time – for example, our train can load containers in either Rotterdam or Bremerhaven and Hamburg and deliver them to Moscow within 7 days, or load containers in Kutno Poland and deliver them to Moscow within 4 days on a fixed schedule, which in our opinion there is nobody at this time on the market able to provide such service. We are a flexible, modern organization, employing over 180 experienced and open minded people who are not afraid of taking challenges. This makes us being strong and stable link in international supply chain.

– How much of turnover is associated with Russia?

– The Russian market for us is a growing sector and the future for our natural expansion of the business. Today most of our traffic is concentrated between Poland and the western countries – Germany and the Netherland – where we have our regular connections to the major ports of northern Europe.

– So what major changes happened in your company last year in general and in Russian market?

– We commenced our long term investment program by opening in September our first green field project of a new inland container terminal in Kutno (hub for the region of central Poland). This new facility, being one of the most modern terminals in Poland today, is the beginning of a long term program to build a number of inland container terminals in Poland to service the newly developed and quickly growing intermodal transport sector. Another important step has been expansion of our network to Moscow. East bound expansion for our intermodal network was a natural step and the answer for market demand. We are proud of PCC Moscow Express, an important link between the Russian and Western European markets. 2011 was a good year, the time to develop further and offer a more competitive service for the PCC Intermodal clients.

– What difficulties do you see nowadays in working with Russian companies?

– We do not see any major problems compared to companies from other countries and we consider that the close proximity of both countries as well as cultures allow us to think positively for the future and with optimism about the prospects of growing together to build up the new transportation mode known as intermodal transport.

– Which usual problems of logistic operators do you have to solve up?

– We have not encountered any serious problems with delays but we do have very strong and able partners on our mutual project and we are confident that with the help of these local companies who participate in our project we will be able to overcome serious delays if we do encounter them in the future. If we talk about back loading… In the majority of cases today the traffic is one way full and empty on the back leg, so this is a major obstacle to the development of the intermodal corridors to and from Russia. We hope however that in time also those cargoes which today are trucked or railed conventionally will move to the intermodal transportation method as it seems that the tendency for containerization of most cargoes is a world-wide trend from which there is no escape.

– How many warehouses does company have in Russia?

– We do not have any warehousing facilities of our own, however in the Moscow terminal our partners are able to provide such facilities for the customer if needed. As an intermodal operator we concentrate on assuring reliable services of regular rail connections, fast terminal operations and at the last part of container delivery organizing door-to-door services.

Every day is a new challenge

– How often does your company invest in its fleet?

– We are constantly expanding our fleet of container platforms growing each year by approximately 30% year-to-year and obtaining more modern platforms to carry the containers. For the most part our policy is to rent on long terms basis the rolling stock which enables us on the one hand to have a steady supply of wagons and on the other gives us the flexibility to increase or decrease the number of wagons on stock at a short notice as the demand requires helping us to keep the operations efficient and cost effective.

– Tell us please about the methods of transportation of valuable cargo?

– We approach each container we carry as “valuable cargo” and apply no special terms to “less valuable” cargo however whenever the customer requires any special terms on the pre- or on-carriage legs of the journey we of course are ready to apply such requirements into our system (such as for example using special trucks with GPS tracking or guarded parking’s for the trucks on their stops). Our recent AEO Certification which we received this year proves that we maintain the highest standards for the safety of the cargoes which we undertake to carry.

– So what was the most interesting project your company participated in?

– Each day brings to us a number of new challenges and each new business is an interesting project for us, we think however that one of the most interesting is still ahead of us – namely the project to build a Dry Port in northern Poland as an extension to the two biggest Polish sea ports of Gdynia and Gdańsk. The project, known under the name of Intermodal Container Yard will be built in Tczew – located about 50 km south of the Tricity area and will be the biggest such facility in this part of Europe. It will serve as a Mega-hub and natural extension of the terminal port facilities for the Polish ports expanding their reach and capabilities substantially for the growing container market in central Europe. The project is planned for the years of 2015-2020 but its effects will be applicable for many years later.

– Does your company have “green logistic” policy?

– Our core business is implementing such “green policy” in practice as the intermodal transportation method which we provide is at this moment the most environmentally friendly method for land transportation in Europe (with the exception of inland waterway barging which is not our line of business today).

– Do you feel strong competition with Russian logistic companies?

– The logistics market in Poland and central Europe is one of the most competitive businesses in all of Europe today. The Russian trucking companies are very strong on the local and European markets and a formidable force to be reckoned with, the large logistics providers from Russia are also slowly starting to make their presence known here and we think we will see this continuing in the future.

– But what problems do you see in this segment in Russia?

– We are not certain which issues will be the major obstacles of development in Russia but assume they will be similar to those we have today in Poland and therefore must assume that the road ahead may still be rough and difficult for some time before the major problems are solved and we can move on to a smooth expansion. What for Poland, the logistics industry here is young and therefore still growing – one of the major problems is that the growth of this industry is very uneven due in part to unclear regulations and laws favoring one segment of this industry. In addition to this the delays in infrastructure development is a strong hindering factor of growth.

– In your opinion, what initiatives can the government take to help the growth of logistics sector?

– Establish clear and equal rules for all players in the market, initiate infrastructure developments.

– How does the company differ today, for better or worse, from what you envisioned when you started?

– The company was established not so long ago – in 2005 – and nobody then expected that it would go through such a dynamic growth and expansion. Starting in 2005 when 5 persons operated one rail connection with 6 trains per month, today we operate over 260 trains per month, employ 180 people in the head offices and 4 inland terminals where we own or operate as sole operators and have a year-to-year growth of 30%+. It is this factor which seems to be the most positive aspect of our activities.

– What key goals are you focusing on to ensure future success?

– Strong and steady growth of new infrastructure – terminals – and a expansion of the transportation corridors – railway connections – in line with the market requirements.

– Nowadays when market is expanding, should logistics companies look for continually merging or depend on themselves only?

– This should be seen on a case by case basis as in some cases the segmentation of the market is too large to allow for scale of efficiency advantages (example: the number of single truck transport companies in Poland is overwhelming) but on the other hand too big organizations do not allow sufficient competition and hinder the choices allowed by the customer and such strong concentration leads to a deterioration of the market. Therefore there is no one single right answer to this question.
Interviewed by Christina Alexandrova [~DETAIL_TEXT] =>

Rail&Road combination

– Mr Kubiczek, what types of cargo transportation does your company offer?

– Our main line of activity is providing logistical services to customers based on intermodal transport of containerized cargoes, which in our case means a combination of rail and road transportation. Combining the services of rail transportation on long distances between sea and inland terminals with road transportation to and from inland container terminals on a door-to-door basis, allowing us to optimize the supply chain. We organize intermodal transport on the basis of regular reliable rail connections network with daily service from marine ports of: Rotterdam, Hamburg, Bremerhaven, Gdańsk, Gdynia to main industrial European regions: Ruhr Area, Berlin region, Central Poland, Upper and Lower Silesia and since December 2011 – Moscow.

– What kind of goods is mostly carried by your company in Russia?

– For the Russian market we are aiming predominantly at consumer goods, white goods, and appliances since the Moscow region market is mostly an import market for such goods. It should be mentioned, that we organize the transportation of any kind of ISO containers, goods inside are not really of our interests, it is the container as a unit which we transport.

– So how you started your activities in Russia? Was it difficult?

– Through our affiliate offices in Moscow – ZAO PCC Rail Moscow – we initiated our talks with the partners with whom we could put the project together. The discussions on establishing the dedicated service took almost one year to complete and the main difficulties were to mutually understand our concept of the project and the constraints of implementing the idea on the territories of Belarus and the Russian Federation. The main problems connected with developing this project now evolve around technical issues related to import customs regulations. Thanks to the professionalism and experience of the PCC offices in Moscow we were able to overcome the major obstacles allowing us to implement into reality the project and start the operations at the end of last year.

– Do you offer any unique services here?

– Our unique service which we offer to the market today is the PCC Moscow Express which is a dedicated service running on a fixed schedule, where we have agreed with the service providers – BZD and RZD – a schedule for our container train to run on and this schedule allows for a very fast transit time – for example, our train can load containers in either Rotterdam or Bremerhaven and Hamburg and deliver them to Moscow within 7 days, or load containers in Kutno Poland and deliver them to Moscow within 4 days on a fixed schedule, which in our opinion there is nobody at this time on the market able to provide such service. We are a flexible, modern organization, employing over 180 experienced and open minded people who are not afraid of taking challenges. This makes us being strong and stable link in international supply chain.

– How much of turnover is associated with Russia?

– The Russian market for us is a growing sector and the future for our natural expansion of the business. Today most of our traffic is concentrated between Poland and the western countries – Germany and the Netherland – where we have our regular connections to the major ports of northern Europe.

– So what major changes happened in your company last year in general and in Russian market?

– We commenced our long term investment program by opening in September our first green field project of a new inland container terminal in Kutno (hub for the region of central Poland). This new facility, being one of the most modern terminals in Poland today, is the beginning of a long term program to build a number of inland container terminals in Poland to service the newly developed and quickly growing intermodal transport sector. Another important step has been expansion of our network to Moscow. East bound expansion for our intermodal network was a natural step and the answer for market demand. We are proud of PCC Moscow Express, an important link between the Russian and Western European markets. 2011 was a good year, the time to develop further and offer a more competitive service for the PCC Intermodal clients.

– What difficulties do you see nowadays in working with Russian companies?

– We do not see any major problems compared to companies from other countries and we consider that the close proximity of both countries as well as cultures allow us to think positively for the future and with optimism about the prospects of growing together to build up the new transportation mode known as intermodal transport.

– Which usual problems of logistic operators do you have to solve up?

– We have not encountered any serious problems with delays but we do have very strong and able partners on our mutual project and we are confident that with the help of these local companies who participate in our project we will be able to overcome serious delays if we do encounter them in the future. If we talk about back loading… In the majority of cases today the traffic is one way full and empty on the back leg, so this is a major obstacle to the development of the intermodal corridors to and from Russia. We hope however that in time also those cargoes which today are trucked or railed conventionally will move to the intermodal transportation method as it seems that the tendency for containerization of most cargoes is a world-wide trend from which there is no escape.

– How many warehouses does company have in Russia?

– We do not have any warehousing facilities of our own, however in the Moscow terminal our partners are able to provide such facilities for the customer if needed. As an intermodal operator we concentrate on assuring reliable services of regular rail connections, fast terminal operations and at the last part of container delivery organizing door-to-door services.

Every day is a new challenge

– How often does your company invest in its fleet?

– We are constantly expanding our fleet of container platforms growing each year by approximately 30% year-to-year and obtaining more modern platforms to carry the containers. For the most part our policy is to rent on long terms basis the rolling stock which enables us on the one hand to have a steady supply of wagons and on the other gives us the flexibility to increase or decrease the number of wagons on stock at a short notice as the demand requires helping us to keep the operations efficient and cost effective.

– Tell us please about the methods of transportation of valuable cargo?

– We approach each container we carry as “valuable cargo” and apply no special terms to “less valuable” cargo however whenever the customer requires any special terms on the pre- or on-carriage legs of the journey we of course are ready to apply such requirements into our system (such as for example using special trucks with GPS tracking or guarded parking’s for the trucks on their stops). Our recent AEO Certification which we received this year proves that we maintain the highest standards for the safety of the cargoes which we undertake to carry.

– So what was the most interesting project your company participated in?

– Each day brings to us a number of new challenges and each new business is an interesting project for us, we think however that one of the most interesting is still ahead of us – namely the project to build a Dry Port in northern Poland as an extension to the two biggest Polish sea ports of Gdynia and Gdańsk. The project, known under the name of Intermodal Container Yard will be built in Tczew – located about 50 km south of the Tricity area and will be the biggest such facility in this part of Europe. It will serve as a Mega-hub and natural extension of the terminal port facilities for the Polish ports expanding their reach and capabilities substantially for the growing container market in central Europe. The project is planned for the years of 2015-2020 but its effects will be applicable for many years later.

– Does your company have “green logistic” policy?

– Our core business is implementing such “green policy” in practice as the intermodal transportation method which we provide is at this moment the most environmentally friendly method for land transportation in Europe (with the exception of inland waterway barging which is not our line of business today).

– Do you feel strong competition with Russian logistic companies?

– The logistics market in Poland and central Europe is one of the most competitive businesses in all of Europe today. The Russian trucking companies are very strong on the local and European markets and a formidable force to be reckoned with, the large logistics providers from Russia are also slowly starting to make their presence known here and we think we will see this continuing in the future.

– But what problems do you see in this segment in Russia?

– We are not certain which issues will be the major obstacles of development in Russia but assume they will be similar to those we have today in Poland and therefore must assume that the road ahead may still be rough and difficult for some time before the major problems are solved and we can move on to a smooth expansion. What for Poland, the logistics industry here is young and therefore still growing – one of the major problems is that the growth of this industry is very uneven due in part to unclear regulations and laws favoring one segment of this industry. In addition to this the delays in infrastructure development is a strong hindering factor of growth.

– In your opinion, what initiatives can the government take to help the growth of logistics sector?

– Establish clear and equal rules for all players in the market, initiate infrastructure developments.

– How does the company differ today, for better or worse, from what you envisioned when you started?

– The company was established not so long ago – in 2005 – and nobody then expected that it would go through such a dynamic growth and expansion. Starting in 2005 when 5 persons operated one rail connection with 6 trains per month, today we operate over 260 trains per month, employ 180 people in the head offices and 4 inland terminals where we own or operate as sole operators and have a year-to-year growth of 30%+. It is this factor which seems to be the most positive aspect of our activities.

– What key goals are you focusing on to ensure future success?

– Strong and steady growth of new infrastructure – terminals – and a expansion of the transportation corridors – railway connections – in line with the market requirements.

– Nowadays when market is expanding, should logistics companies look for continually merging or depend on themselves only?

– This should be seen on a case by case basis as in some cases the segmentation of the market is too large to allow for scale of efficiency advantages (example: the number of single truck transport companies in Poland is overwhelming) but on the other hand too big organizations do not allow sufficient competition and hinder the choices allowed by the customer and such strong concentration leads to a deterioration of the market. Therefore there is no one single right answer to this question.
Interviewed by Christina Alexandrova [DETAIL_TEXT_TYPE] => html [~DETAIL_TEXT_TYPE] => html [PREVIEW_TEXT] =>  More and more European logistic operators talk about the importance of development intermodal services. PCC launched regular shuttle container trains between German ports, Rotterdam and Moscow. Business Development Manager of PCC Intermodal S.A. Jarosław Kubiczek told us about difficulties
in cargo transportation segment and competetivness with Russian companies. [~PREVIEW_TEXT] =>  More and more European logistic operators talk about the importance of development intermodal services. PCC launched regular shuttle container trains between German ports, Rotterdam and Moscow. Business Development Manager of PCC Intermodal S.A. Jarosław Kubiczek told us about difficulties
in cargo transportation segment and competetivness with Russian companies. 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Rail&Road combination

– Mr Kubiczek, what types of cargo transportation does your company offer?

– Our main line of activity is providing logistical services to customers based on intermodal transport of containerized cargoes, which in our case means a combination of rail and road transportation. Combining the services of rail transportation on long distances between sea and inland terminals with road transportation to and from inland container terminals on a door-to-door basis, allowing us to optimize the supply chain. We organize intermodal transport on the basis of regular reliable rail connections network with daily service from marine ports of: Rotterdam, Hamburg, Bremerhaven, Gdańsk, Gdynia to main industrial European regions: Ruhr Area, Berlin region, Central Poland, Upper and Lower Silesia and since December 2011 – Moscow.

– What kind of goods is mostly carried by your company in Russia?

– For the Russian market we are aiming predominantly at consumer goods, white goods, and appliances since the Moscow region market is mostly an import market for such goods. It should be mentioned, that we organize the transportation of any kind of ISO containers, goods inside are not really of our interests, it is the container as a unit which we transport.

– So how you started your activities in Russia? Was it difficult?

– Through our affiliate offices in Moscow – ZAO PCC Rail Moscow – we initiated our talks with the partners with whom we could put the project together. The discussions on establishing the dedicated service took almost one year to complete and the main difficulties were to mutually understand our concept of the project and the constraints of implementing the idea on the territories of Belarus and the Russian Federation. The main problems connected with developing this project now evolve around technical issues related to import customs regulations. Thanks to the professionalism and experience of the PCC offices in Moscow we were able to overcome the major obstacles allowing us to implement into reality the project and start the operations at the end of last year.

– Do you offer any unique services here?

– Our unique service which we offer to the market today is the PCC Moscow Express which is a dedicated service running on a fixed schedule, where we have agreed with the service providers – BZD and RZD – a schedule for our container train to run on and this schedule allows for a very fast transit time – for example, our train can load containers in either Rotterdam or Bremerhaven and Hamburg and deliver them to Moscow within 7 days, or load containers in Kutno Poland and deliver them to Moscow within 4 days on a fixed schedule, which in our opinion there is nobody at this time on the market able to provide such service. We are a flexible, modern organization, employing over 180 experienced and open minded people who are not afraid of taking challenges. This makes us being strong and stable link in international supply chain.

– How much of turnover is associated with Russia?

– The Russian market for us is a growing sector and the future for our natural expansion of the business. Today most of our traffic is concentrated between Poland and the western countries – Germany and the Netherland – where we have our regular connections to the major ports of northern Europe.

– So what major changes happened in your company last year in general and in Russian market?

– We commenced our long term investment program by opening in September our first green field project of a new inland container terminal in Kutno (hub for the region of central Poland). This new facility, being one of the most modern terminals in Poland today, is the beginning of a long term program to build a number of inland container terminals in Poland to service the newly developed and quickly growing intermodal transport sector. Another important step has been expansion of our network to Moscow. East bound expansion for our intermodal network was a natural step and the answer for market demand. We are proud of PCC Moscow Express, an important link between the Russian and Western European markets. 2011 was a good year, the time to develop further and offer a more competitive service for the PCC Intermodal clients.

– What difficulties do you see nowadays in working with Russian companies?

– We do not see any major problems compared to companies from other countries and we consider that the close proximity of both countries as well as cultures allow us to think positively for the future and with optimism about the prospects of growing together to build up the new transportation mode known as intermodal transport.

– Which usual problems of logistic operators do you have to solve up?

– We have not encountered any serious problems with delays but we do have very strong and able partners on our mutual project and we are confident that with the help of these local companies who participate in our project we will be able to overcome serious delays if we do encounter them in the future. If we talk about back loading… In the majority of cases today the traffic is one way full and empty on the back leg, so this is a major obstacle to the development of the intermodal corridors to and from Russia. We hope however that in time also those cargoes which today are trucked or railed conventionally will move to the intermodal transportation method as it seems that the tendency for containerization of most cargoes is a world-wide trend from which there is no escape.

– How many warehouses does company have in Russia?

– We do not have any warehousing facilities of our own, however in the Moscow terminal our partners are able to provide such facilities for the customer if needed. As an intermodal operator we concentrate on assuring reliable services of regular rail connections, fast terminal operations and at the last part of container delivery organizing door-to-door services.

Every day is a new challenge

– How often does your company invest in its fleet?

– We are constantly expanding our fleet of container platforms growing each year by approximately 30% year-to-year and obtaining more modern platforms to carry the containers. For the most part our policy is to rent on long terms basis the rolling stock which enables us on the one hand to have a steady supply of wagons and on the other gives us the flexibility to increase or decrease the number of wagons on stock at a short notice as the demand requires helping us to keep the operations efficient and cost effective.

– Tell us please about the methods of transportation of valuable cargo?

– We approach each container we carry as “valuable cargo” and apply no special terms to “less valuable” cargo however whenever the customer requires any special terms on the pre- or on-carriage legs of the journey we of course are ready to apply such requirements into our system (such as for example using special trucks with GPS tracking or guarded parking’s for the trucks on their stops). Our recent AEO Certification which we received this year proves that we maintain the highest standards for the safety of the cargoes which we undertake to carry.

– So what was the most interesting project your company participated in?

– Each day brings to us a number of new challenges and each new business is an interesting project for us, we think however that one of the most interesting is still ahead of us – namely the project to build a Dry Port in northern Poland as an extension to the two biggest Polish sea ports of Gdynia and Gdańsk. The project, known under the name of Intermodal Container Yard will be built in Tczew – located about 50 km south of the Tricity area and will be the biggest such facility in this part of Europe. It will serve as a Mega-hub and natural extension of the terminal port facilities for the Polish ports expanding their reach and capabilities substantially for the growing container market in central Europe. The project is planned for the years of 2015-2020 but its effects will be applicable for many years later.

– Does your company have “green logistic” policy?

– Our core business is implementing such “green policy” in practice as the intermodal transportation method which we provide is at this moment the most environmentally friendly method for land transportation in Europe (with the exception of inland waterway barging which is not our line of business today).

– Do you feel strong competition with Russian logistic companies?

– The logistics market in Poland and central Europe is one of the most competitive businesses in all of Europe today. The Russian trucking companies are very strong on the local and European markets and a formidable force to be reckoned with, the large logistics providers from Russia are also slowly starting to make their presence known here and we think we will see this continuing in the future.

– But what problems do you see in this segment in Russia?

– We are not certain which issues will be the major obstacles of development in Russia but assume they will be similar to those we have today in Poland and therefore must assume that the road ahead may still be rough and difficult for some time before the major problems are solved and we can move on to a smooth expansion. What for Poland, the logistics industry here is young and therefore still growing – one of the major problems is that the growth of this industry is very uneven due in part to unclear regulations and laws favoring one segment of this industry. In addition to this the delays in infrastructure development is a strong hindering factor of growth.

– In your opinion, what initiatives can the government take to help the growth of logistics sector?

– Establish clear and equal rules for all players in the market, initiate infrastructure developments.

– How does the company differ today, for better or worse, from what you envisioned when you started?

– The company was established not so long ago – in 2005 – and nobody then expected that it would go through such a dynamic growth and expansion. Starting in 2005 when 5 persons operated one rail connection with 6 trains per month, today we operate over 260 trains per month, employ 180 people in the head offices and 4 inland terminals where we own or operate as sole operators and have a year-to-year growth of 30%+. It is this factor which seems to be the most positive aspect of our activities.

– What key goals are you focusing on to ensure future success?

– Strong and steady growth of new infrastructure – terminals – and a expansion of the transportation corridors – railway connections – in line with the market requirements.

– Nowadays when market is expanding, should logistics companies look for continually merging or depend on themselves only?

– This should be seen on a case by case basis as in some cases the segmentation of the market is too large to allow for scale of efficiency advantages (example: the number of single truck transport companies in Poland is overwhelming) but on the other hand too big organizations do not allow sufficient competition and hinder the choices allowed by the customer and such strong concentration leads to a deterioration of the market. Therefore there is no one single right answer to this question.
Interviewed by Christina Alexandrova [~DETAIL_TEXT] =>

Rail&Road combination

– Mr Kubiczek, what types of cargo transportation does your company offer?

– Our main line of activity is providing logistical services to customers based on intermodal transport of containerized cargoes, which in our case means a combination of rail and road transportation. Combining the services of rail transportation on long distances between sea and inland terminals with road transportation to and from inland container terminals on a door-to-door basis, allowing us to optimize the supply chain. We organize intermodal transport on the basis of regular reliable rail connections network with daily service from marine ports of: Rotterdam, Hamburg, Bremerhaven, Gdańsk, Gdynia to main industrial European regions: Ruhr Area, Berlin region, Central Poland, Upper and Lower Silesia and since December 2011 – Moscow.

– What kind of goods is mostly carried by your company in Russia?

– For the Russian market we are aiming predominantly at consumer goods, white goods, and appliances since the Moscow region market is mostly an import market for such goods. It should be mentioned, that we organize the transportation of any kind of ISO containers, goods inside are not really of our interests, it is the container as a unit which we transport.

– So how you started your activities in Russia? Was it difficult?

– Through our affiliate offices in Moscow – ZAO PCC Rail Moscow – we initiated our talks with the partners with whom we could put the project together. The discussions on establishing the dedicated service took almost one year to complete and the main difficulties were to mutually understand our concept of the project and the constraints of implementing the idea on the territories of Belarus and the Russian Federation. The main problems connected with developing this project now evolve around technical issues related to import customs regulations. Thanks to the professionalism and experience of the PCC offices in Moscow we were able to overcome the major obstacles allowing us to implement into reality the project and start the operations at the end of last year.

– Do you offer any unique services here?

– Our unique service which we offer to the market today is the PCC Moscow Express which is a dedicated service running on a fixed schedule, where we have agreed with the service providers – BZD and RZD – a schedule for our container train to run on and this schedule allows for a very fast transit time – for example, our train can load containers in either Rotterdam or Bremerhaven and Hamburg and deliver them to Moscow within 7 days, or load containers in Kutno Poland and deliver them to Moscow within 4 days on a fixed schedule, which in our opinion there is nobody at this time on the market able to provide such service. We are a flexible, modern organization, employing over 180 experienced and open minded people who are not afraid of taking challenges. This makes us being strong and stable link in international supply chain.

– How much of turnover is associated with Russia?

– The Russian market for us is a growing sector and the future for our natural expansion of the business. Today most of our traffic is concentrated between Poland and the western countries – Germany and the Netherland – where we have our regular connections to the major ports of northern Europe.

– So what major changes happened in your company last year in general and in Russian market?

– We commenced our long term investment program by opening in September our first green field project of a new inland container terminal in Kutno (hub for the region of central Poland). This new facility, being one of the most modern terminals in Poland today, is the beginning of a long term program to build a number of inland container terminals in Poland to service the newly developed and quickly growing intermodal transport sector. Another important step has been expansion of our network to Moscow. East bound expansion for our intermodal network was a natural step and the answer for market demand. We are proud of PCC Moscow Express, an important link between the Russian and Western European markets. 2011 was a good year, the time to develop further and offer a more competitive service for the PCC Intermodal clients.

– What difficulties do you see nowadays in working with Russian companies?

– We do not see any major problems compared to companies from other countries and we consider that the close proximity of both countries as well as cultures allow us to think positively for the future and with optimism about the prospects of growing together to build up the new transportation mode known as intermodal transport.

– Which usual problems of logistic operators do you have to solve up?

– We have not encountered any serious problems with delays but we do have very strong and able partners on our mutual project and we are confident that with the help of these local companies who participate in our project we will be able to overcome serious delays if we do encounter them in the future. If we talk about back loading… In the majority of cases today the traffic is one way full and empty on the back leg, so this is a major obstacle to the development of the intermodal corridors to and from Russia. We hope however that in time also those cargoes which today are trucked or railed conventionally will move to the intermodal transportation method as it seems that the tendency for containerization of most cargoes is a world-wide trend from which there is no escape.

– How many warehouses does company have in Russia?

– We do not have any warehousing facilities of our own, however in the Moscow terminal our partners are able to provide such facilities for the customer if needed. As an intermodal operator we concentrate on assuring reliable services of regular rail connections, fast terminal operations and at the last part of container delivery organizing door-to-door services.

Every day is a new challenge

– How often does your company invest in its fleet?

– We are constantly expanding our fleet of container platforms growing each year by approximately 30% year-to-year and obtaining more modern platforms to carry the containers. For the most part our policy is to rent on long terms basis the rolling stock which enables us on the one hand to have a steady supply of wagons and on the other gives us the flexibility to increase or decrease the number of wagons on stock at a short notice as the demand requires helping us to keep the operations efficient and cost effective.

– Tell us please about the methods of transportation of valuable cargo?

– We approach each container we carry as “valuable cargo” and apply no special terms to “less valuable” cargo however whenever the customer requires any special terms on the pre- or on-carriage legs of the journey we of course are ready to apply such requirements into our system (such as for example using special trucks with GPS tracking or guarded parking’s for the trucks on their stops). Our recent AEO Certification which we received this year proves that we maintain the highest standards for the safety of the cargoes which we undertake to carry.

– So what was the most interesting project your company participated in?

– Each day brings to us a number of new challenges and each new business is an interesting project for us, we think however that one of the most interesting is still ahead of us – namely the project to build a Dry Port in northern Poland as an extension to the two biggest Polish sea ports of Gdynia and Gdańsk. The project, known under the name of Intermodal Container Yard will be built in Tczew – located about 50 km south of the Tricity area and will be the biggest such facility in this part of Europe. It will serve as a Mega-hub and natural extension of the terminal port facilities for the Polish ports expanding their reach and capabilities substantially for the growing container market in central Europe. The project is planned for the years of 2015-2020 but its effects will be applicable for many years later.

– Does your company have “green logistic” policy?

– Our core business is implementing such “green policy” in practice as the intermodal transportation method which we provide is at this moment the most environmentally friendly method for land transportation in Europe (with the exception of inland waterway barging which is not our line of business today).

– Do you feel strong competition with Russian logistic companies?

– The logistics market in Poland and central Europe is one of the most competitive businesses in all of Europe today. The Russian trucking companies are very strong on the local and European markets and a formidable force to be reckoned with, the large logistics providers from Russia are also slowly starting to make their presence known here and we think we will see this continuing in the future.

– But what problems do you see in this segment in Russia?

– We are not certain which issues will be the major obstacles of development in Russia but assume they will be similar to those we have today in Poland and therefore must assume that the road ahead may still be rough and difficult for some time before the major problems are solved and we can move on to a smooth expansion. What for Poland, the logistics industry here is young and therefore still growing – one of the major problems is that the growth of this industry is very uneven due in part to unclear regulations and laws favoring one segment of this industry. In addition to this the delays in infrastructure development is a strong hindering factor of growth.

– In your opinion, what initiatives can the government take to help the growth of logistics sector?

– Establish clear and equal rules for all players in the market, initiate infrastructure developments.

– How does the company differ today, for better or worse, from what you envisioned when you started?

– The company was established not so long ago – in 2005 – and nobody then expected that it would go through such a dynamic growth and expansion. Starting in 2005 when 5 persons operated one rail connection with 6 trains per month, today we operate over 260 trains per month, employ 180 people in the head offices and 4 inland terminals where we own or operate as sole operators and have a year-to-year growth of 30%+. It is this factor which seems to be the most positive aspect of our activities.

– What key goals are you focusing on to ensure future success?

– Strong and steady growth of new infrastructure – terminals – and a expansion of the transportation corridors – railway connections – in line with the market requirements.

– Nowadays when market is expanding, should logistics companies look for continually merging or depend on themselves only?

– This should be seen on a case by case basis as in some cases the segmentation of the market is too large to allow for scale of efficiency advantages (example: the number of single truck transport companies in Poland is overwhelming) but on the other hand too big organizations do not allow sufficient competition and hinder the choices allowed by the customer and such strong concentration leads to a deterioration of the market. Therefore there is no one single right answer to this question.
Interviewed by Christina Alexandrova [DETAIL_TEXT_TYPE] => html [~DETAIL_TEXT_TYPE] => html [PREVIEW_TEXT] =>  More and more European logistic operators talk about the importance of development intermodal services. PCC launched regular shuttle container trains between German ports, Rotterdam and Moscow. Business Development Manager of PCC Intermodal S.A. Jarosław Kubiczek told us about difficulties
in cargo transportation segment and competetivness with Russian companies. [~PREVIEW_TEXT] =>  More and more European logistic operators talk about the importance of development intermodal services. PCC launched regular shuttle container trains between German ports, Rotterdam and Moscow. Business Development Manager of PCC Intermodal S.A. Jarosław Kubiczek told us about difficulties
in cargo transportation segment and competetivness with Russian companies. 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РЖД-Партнер

Towards competition

 Private companies’ share of the market of freight wagon scheduled repairs in Russia reaches 25%. Up to now RZD remains a monopolist in the area of current uncoupling repair. Still, if earlier competition in this field was hardly possible, the situation is now changing. Alexander Lukyanov, First Deputy Head of the Wagon Facilities Department at RZD's Infrastructure Central Directorate (RZD branch) shared with us his views on the topic.
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    [DETAIL_TEXT] => –Mr Lukyanov, what are the typical problems of the car repair sheds concerning current uncoupling repair? What are they doing to solve them?

– Roszheldorsnab is the branch that organizes the supply of spare parts and materials. A deficit of wheel sets is one of the most acute problems. Owners of the rolling stock decided to shift the car pool to the 110,000–kilometre mileage, so it became possible for the repair sheds to use wheels with a tread thickness down to 34–27 millimetres. As a result, the wheels’ useful lifetime extends to 6–8 months, till defects in the tread surface emerge.
In 2011, the turnover of rolling stock had been replenished firstly by means of wheel repairs in wheel and car shops – about 17,000 sets. 12,000 wheel sets had been supplied by their owners, about 11,000 were purchased.
Still, in my opinion, this is not enough. To ensure timely fleet replacement we should buy more wheels that had undergone overall repair in the repair shops. But that’s where we face reluctance of the stock owners to take adequate measures. The issue is that the use of repaired wheel sets increases the costs of car repair, and the proprietors choose to wheel the locomotive with thinner wheels during repair.

– How has the reorganization of RZD’s Wagon Facilities Department, which had been the main supplier of spare parts, influenced the interaction with car repair shops?

– Now our cooperation is built on a contractual basis. The branches of RZD have a right to enter into a contract with any of the repair shops that they choose, considering quality of repair, price and location.

– Currently there are two schemes of payment for repair services – by unit rate (fixed price) and by actual expenditures. What do the customers prefer, and why?

– Uniform rate for repair of one freight car now amounts to RUR 18,923 (excluding VAT). This sum does not include costs of replacement of the condemned truck bolsters, wheel sets and solebars. If there’s a need to replace expensive parts that have become unserviceable, the fare is based on actual expenditures according to the current price list.
Last year 53 owners of rolling stock chose the uniform rate, their joint pool reaches 500 cars. They signed 113 contracts with RZD and its branches. 400 contracts based on actual expenditures were signed and prolonged last year as well. The terms of the treaty for current uncoupling repair are negotiated by the parties on mutually beneficial conditions. RZD does not impose a certain type of contract.
For a car owner a fixed–price contract can save on paperwork and document management, which is rather complicated. Another advantage is that it’s easier to estimate expenditures.
Payment for actual expenditures allows better control of spending for every particular car. Besides, this is an advantage for the operators that work in central Russia, where average expenditures are lower than the fixed price. In western regions of the country, where the situation is quite opposite, they chose the fixed price.

– What are the prospects for further development of current uncoupling repair?

– Frankly speaking, for RZD it would be much easier to have standard contracts with all rolling stock owners, but we try to meet the needs of each company and offer flexible conditions.
Currently RZD in cooperation with the rolling stock proprietors is looking for a compromise solution that would allow combining of fixed and flexible payments in one contract, depending on the type of repair works. It’s natural that the cost of current repair is of great importance for the rolling stock operators. The current price list that was adopted in July 2011 guarantees that calculations are transparent. Besides, an operator may reduce the costs substantially by using serviceable spare parts that are left over from decommissioned freight wagons.
In 2012, 30 car repair shops started making current uncoupling repair and have repaired over 1,800 cars. This is a good sign. I believe the competition in this sector is a positive thing; it would contribute to the quality of repairs and increase the safety of goods traffic. Operators and owners of cars may have different opinions on the rate–setting, but quality of car service and repair works remains the key aspect. ®
By Elena Ushkova [~DETAIL_TEXT] => –Mr Lukyanov, what are the typical problems of the car repair sheds concerning current uncoupling repair? What are they doing to solve them?

– Roszheldorsnab is the branch that organizes the supply of spare parts and materials. A deficit of wheel sets is one of the most acute problems. Owners of the rolling stock decided to shift the car pool to the 110,000–kilometre mileage, so it became possible for the repair sheds to use wheels with a tread thickness down to 34–27 millimetres. As a result, the wheels’ useful lifetime extends to 6–8 months, till defects in the tread surface emerge.
In 2011, the turnover of rolling stock had been replenished firstly by means of wheel repairs in wheel and car shops – about 17,000 sets. 12,000 wheel sets had been supplied by their owners, about 11,000 were purchased.
Still, in my opinion, this is not enough. To ensure timely fleet replacement we should buy more wheels that had undergone overall repair in the repair shops. But that’s where we face reluctance of the stock owners to take adequate measures. The issue is that the use of repaired wheel sets increases the costs of car repair, and the proprietors choose to wheel the locomotive with thinner wheels during repair.

– How has the reorganization of RZD’s Wagon Facilities Department, which had been the main supplier of spare parts, influenced the interaction with car repair shops?

– Now our cooperation is built on a contractual basis. The branches of RZD have a right to enter into a contract with any of the repair shops that they choose, considering quality of repair, price and location.

– Currently there are two schemes of payment for repair services – by unit rate (fixed price) and by actual expenditures. What do the customers prefer, and why?

– Uniform rate for repair of one freight car now amounts to RUR 18,923 (excluding VAT). This sum does not include costs of replacement of the condemned truck bolsters, wheel sets and solebars. If there’s a need to replace expensive parts that have become unserviceable, the fare is based on actual expenditures according to the current price list.
Last year 53 owners of rolling stock chose the uniform rate, their joint pool reaches 500 cars. They signed 113 contracts with RZD and its branches. 400 contracts based on actual expenditures were signed and prolonged last year as well. The terms of the treaty for current uncoupling repair are negotiated by the parties on mutually beneficial conditions. RZD does not impose a certain type of contract.
For a car owner a fixed–price contract can save on paperwork and document management, which is rather complicated. Another advantage is that it’s easier to estimate expenditures.
Payment for actual expenditures allows better control of spending for every particular car. Besides, this is an advantage for the operators that work in central Russia, where average expenditures are lower than the fixed price. In western regions of the country, where the situation is quite opposite, they chose the fixed price.

– What are the prospects for further development of current uncoupling repair?

– Frankly speaking, for RZD it would be much easier to have standard contracts with all rolling stock owners, but we try to meet the needs of each company and offer flexible conditions.
Currently RZD in cooperation with the rolling stock proprietors is looking for a compromise solution that would allow combining of fixed and flexible payments in one contract, depending on the type of repair works. It’s natural that the cost of current repair is of great importance for the rolling stock operators. The current price list that was adopted in July 2011 guarantees that calculations are transparent. Besides, an operator may reduce the costs substantially by using serviceable spare parts that are left over from decommissioned freight wagons.
In 2012, 30 car repair shops started making current uncoupling repair and have repaired over 1,800 cars. This is a good sign. I believe the competition in this sector is a positive thing; it would contribute to the quality of repairs and increase the safety of goods traffic. Operators and owners of cars may have different opinions on the rate–setting, but quality of car service and repair works remains the key aspect. ®
By Elena Ushkova [DETAIL_TEXT_TYPE] => html [~DETAIL_TEXT_TYPE] => html [PREVIEW_TEXT] =>  Private companies’ share of the market of freight wagon scheduled repairs in Russia reaches 25%. Up to now RZD remains a monopolist in the area of current uncoupling repair. Still, if earlier competition in this field was hardly possible, the situation is now changing. Alexander Lukyanov, First Deputy Head of the Wagon Facilities Department at RZD's Infrastructure Central Directorate (RZD branch) shared with us his views on the topic. [~PREVIEW_TEXT] =>  Private companies’ share of the market of freight wagon scheduled repairs in Russia reaches 25%. Up to now RZD remains a monopolist in the area of current uncoupling repair. Still, if earlier competition in this field was hardly possible, the situation is now changing. Alexander Lukyanov, First Deputy Head of the Wagon Facilities Department at RZD's Infrastructure Central Directorate (RZD branch) shared with us his views on the topic. 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height="199" align="left" />Private companies’ share of the market of freight wagon scheduled repairs in Russia reaches 25%. Up to now RZD remains a monopolist in the area of current uncoupling repair. Still, if earlier competition in this field was hardly possible, the situation is now changing. Alexander Lukyanov, First Deputy Head of the Wagon Facilities Department at RZD&#39;s Infrastructure Central Directorate (RZD branch) shared with us his views on the topic. [ELEMENT_META_TITLE] => Towards competition [ELEMENT_META_KEYWORDS] => towards competition [ELEMENT_META_DESCRIPTION] => <img src="/ufiles/image/rus/inter/2012/2/15.jpg" border="1" alt=" " hspace="5" width="300" height="199" align="left" />Private companies’ share of the market of freight wagon scheduled repairs in Russia reaches 25%. Up to now RZD remains a monopolist in the area of current uncoupling repair. Still, if earlier competition in this field was hardly possible, the situation is now changing. Alexander Lukyanov, First Deputy Head of the Wagon Facilities Department at RZD&#39;s Infrastructure Central Directorate (RZD branch) shared with us his views on the topic. [SECTION_PICTURE_FILE_ALT] => Towards competition [SECTION_PICTURE_FILE_TITLE] => Towards competition [SECTION_DETAIL_PICTURE_FILE_ALT] => Towards competition [SECTION_DETAIL_PICTURE_FILE_TITLE] => Towards competition [ELEMENT_PREVIEW_PICTURE_FILE_ALT] => Towards competition [ELEMENT_PREVIEW_PICTURE_FILE_TITLE] => Towards competition [ELEMENT_DETAIL_PICTURE_FILE_ALT] => Towards competition [ELEMENT_DETAIL_PICTURE_FILE_TITLE] => Towards competition ) )

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    [DETAIL_TEXT] => –Mr Lukyanov, what are the typical problems of the car repair sheds concerning current uncoupling repair? What are they doing to solve them?

– Roszheldorsnab is the branch that organizes the supply of spare parts and materials. A deficit of wheel sets is one of the most acute problems. Owners of the rolling stock decided to shift the car pool to the 110,000–kilometre mileage, so it became possible for the repair sheds to use wheels with a tread thickness down to 34–27 millimetres. As a result, the wheels’ useful lifetime extends to 6–8 months, till defects in the tread surface emerge.
In 2011, the turnover of rolling stock had been replenished firstly by means of wheel repairs in wheel and car shops – about 17,000 sets. 12,000 wheel sets had been supplied by their owners, about 11,000 were purchased.
Still, in my opinion, this is not enough. To ensure timely fleet replacement we should buy more wheels that had undergone overall repair in the repair shops. But that’s where we face reluctance of the stock owners to take adequate measures. The issue is that the use of repaired wheel sets increases the costs of car repair, and the proprietors choose to wheel the locomotive with thinner wheels during repair.

– How has the reorganization of RZD’s Wagon Facilities Department, which had been the main supplier of spare parts, influenced the interaction with car repair shops?

– Now our cooperation is built on a contractual basis. The branches of RZD have a right to enter into a contract with any of the repair shops that they choose, considering quality of repair, price and location.

– Currently there are two schemes of payment for repair services – by unit rate (fixed price) and by actual expenditures. What do the customers prefer, and why?

– Uniform rate for repair of one freight car now amounts to RUR 18,923 (excluding VAT). This sum does not include costs of replacement of the condemned truck bolsters, wheel sets and solebars. If there’s a need to replace expensive parts that have become unserviceable, the fare is based on actual expenditures according to the current price list.
Last year 53 owners of rolling stock chose the uniform rate, their joint pool reaches 500 cars. They signed 113 contracts with RZD and its branches. 400 contracts based on actual expenditures were signed and prolonged last year as well. The terms of the treaty for current uncoupling repair are negotiated by the parties on mutually beneficial conditions. RZD does not impose a certain type of contract.
For a car owner a fixed–price contract can save on paperwork and document management, which is rather complicated. Another advantage is that it’s easier to estimate expenditures.
Payment for actual expenditures allows better control of spending for every particular car. Besides, this is an advantage for the operators that work in central Russia, where average expenditures are lower than the fixed price. In western regions of the country, where the situation is quite opposite, they chose the fixed price.

– What are the prospects for further development of current uncoupling repair?

– Frankly speaking, for RZD it would be much easier to have standard contracts with all rolling stock owners, but we try to meet the needs of each company and offer flexible conditions.
Currently RZD in cooperation with the rolling stock proprietors is looking for a compromise solution that would allow combining of fixed and flexible payments in one contract, depending on the type of repair works. It’s natural that the cost of current repair is of great importance for the rolling stock operators. The current price list that was adopted in July 2011 guarantees that calculations are transparent. Besides, an operator may reduce the costs substantially by using serviceable spare parts that are left over from decommissioned freight wagons.
In 2012, 30 car repair shops started making current uncoupling repair and have repaired over 1,800 cars. This is a good sign. I believe the competition in this sector is a positive thing; it would contribute to the quality of repairs and increase the safety of goods traffic. Operators and owners of cars may have different opinions on the rate–setting, but quality of car service and repair works remains the key aspect. ®
By Elena Ushkova [~DETAIL_TEXT] => –Mr Lukyanov, what are the typical problems of the car repair sheds concerning current uncoupling repair? What are they doing to solve them?

– Roszheldorsnab is the branch that organizes the supply of spare parts and materials. A deficit of wheel sets is one of the most acute problems. Owners of the rolling stock decided to shift the car pool to the 110,000–kilometre mileage, so it became possible for the repair sheds to use wheels with a tread thickness down to 34–27 millimetres. As a result, the wheels’ useful lifetime extends to 6–8 months, till defects in the tread surface emerge.
In 2011, the turnover of rolling stock had been replenished firstly by means of wheel repairs in wheel and car shops – about 17,000 sets. 12,000 wheel sets had been supplied by their owners, about 11,000 were purchased.
Still, in my opinion, this is not enough. To ensure timely fleet replacement we should buy more wheels that had undergone overall repair in the repair shops. But that’s where we face reluctance of the stock owners to take adequate measures. The issue is that the use of repaired wheel sets increases the costs of car repair, and the proprietors choose to wheel the locomotive with thinner wheels during repair.

– How has the reorganization of RZD’s Wagon Facilities Department, which had been the main supplier of spare parts, influenced the interaction with car repair shops?

– Now our cooperation is built on a contractual basis. The branches of RZD have a right to enter into a contract with any of the repair shops that they choose, considering quality of repair, price and location.

– Currently there are two schemes of payment for repair services – by unit rate (fixed price) and by actual expenditures. What do the customers prefer, and why?

– Uniform rate for repair of one freight car now amounts to RUR 18,923 (excluding VAT). This sum does not include costs of replacement of the condemned truck bolsters, wheel sets and solebars. If there’s a need to replace expensive parts that have become unserviceable, the fare is based on actual expenditures according to the current price list.
Last year 53 owners of rolling stock chose the uniform rate, their joint pool reaches 500 cars. They signed 113 contracts with RZD and its branches. 400 contracts based on actual expenditures were signed and prolonged last year as well. The terms of the treaty for current uncoupling repair are negotiated by the parties on mutually beneficial conditions. RZD does not impose a certain type of contract.
For a car owner a fixed–price contract can save on paperwork and document management, which is rather complicated. Another advantage is that it’s easier to estimate expenditures.
Payment for actual expenditures allows better control of spending for every particular car. Besides, this is an advantage for the operators that work in central Russia, where average expenditures are lower than the fixed price. In western regions of the country, where the situation is quite opposite, they chose the fixed price.

– What are the prospects for further development of current uncoupling repair?

– Frankly speaking, for RZD it would be much easier to have standard contracts with all rolling stock owners, but we try to meet the needs of each company and offer flexible conditions.
Currently RZD in cooperation with the rolling stock proprietors is looking for a compromise solution that would allow combining of fixed and flexible payments in one contract, depending on the type of repair works. It’s natural that the cost of current repair is of great importance for the rolling stock operators. The current price list that was adopted in July 2011 guarantees that calculations are transparent. Besides, an operator may reduce the costs substantially by using serviceable spare parts that are left over from decommissioned freight wagons.
In 2012, 30 car repair shops started making current uncoupling repair and have repaired over 1,800 cars. This is a good sign. I believe the competition in this sector is a positive thing; it would contribute to the quality of repairs and increase the safety of goods traffic. Operators and owners of cars may have different opinions on the rate–setting, but quality of car service and repair works remains the key aspect. ®
By Elena Ushkova [DETAIL_TEXT_TYPE] => html [~DETAIL_TEXT_TYPE] => html [PREVIEW_TEXT] =>  Private companies’ share of the market of freight wagon scheduled repairs in Russia reaches 25%. Up to now RZD remains a monopolist in the area of current uncoupling repair. Still, if earlier competition in this field was hardly possible, the situation is now changing. Alexander Lukyanov, First Deputy Head of the Wagon Facilities Department at RZD's Infrastructure Central Directorate (RZD branch) shared with us his views on the topic. [~PREVIEW_TEXT] =>  Private companies’ share of the market of freight wagon scheduled repairs in Russia reaches 25%. Up to now RZD remains a monopolist in the area of current uncoupling repair. Still, if earlier competition in this field was hardly possible, the situation is now changing. Alexander Lukyanov, First Deputy Head of the Wagon Facilities Department at RZD's Infrastructure Central Directorate (RZD branch) shared with us his views on the topic. 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height="199" align="left" />Private companies’ share of the market of freight wagon scheduled repairs in Russia reaches 25%. Up to now RZD remains a monopolist in the area of current uncoupling repair. Still, if earlier competition in this field was hardly possible, the situation is now changing. Alexander Lukyanov, First Deputy Head of the Wagon Facilities Department at RZD&#39;s Infrastructure Central Directorate (RZD branch) shared with us his views on the topic. [ELEMENT_META_TITLE] => Towards competition [ELEMENT_META_KEYWORDS] => towards competition [ELEMENT_META_DESCRIPTION] => <img src="/ufiles/image/rus/inter/2012/2/15.jpg" border="1" alt=" " hspace="5" width="300" height="199" align="left" />Private companies’ share of the market of freight wagon scheduled repairs in Russia reaches 25%. Up to now RZD remains a monopolist in the area of current uncoupling repair. Still, if earlier competition in this field was hardly possible, the situation is now changing. Alexander Lukyanov, First Deputy Head of the Wagon Facilities Department at RZD&#39;s Infrastructure Central Directorate (RZD branch) shared with us his views on the topic. [SECTION_PICTURE_FILE_ALT] => Towards competition [SECTION_PICTURE_FILE_TITLE] => Towards competition [SECTION_DETAIL_PICTURE_FILE_ALT] => Towards competition [SECTION_DETAIL_PICTURE_FILE_TITLE] => Towards competition [ELEMENT_PREVIEW_PICTURE_FILE_ALT] => Towards competition [ELEMENT_PREVIEW_PICTURE_FILE_TITLE] => Towards competition [ELEMENT_DETAIL_PICTURE_FILE_ALT] => Towards competition [ELEMENT_DETAIL_PICTURE_FILE_TITLE] => Towards competition ) )
РЖД-Партнер

We Are Not Inspectors, but Experts in Technology

 RZD has created a vertical structure of technological services headed by the Centre for Technological Coordination. We talk to Sergey Kobzev, the Head of the Centre.
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Coordination Is the Key Word

– Mr Kobzev, what is your take on the main idea of the new structure?

– Firstly, the vertical structure of technological coordination must monitor those bottle-necks where the system of transportation organization and provision malfunctions at this or that level, where problems during the interaction of different services are revealed. Secondly, we must take measures to optimize work by forming a new regulatory base. Thirdly, we must monitor how it is executed, and join the activities of all sub-divisions in charge of transportation to reach the corporate goal.
In the basis of technological services appearance, there was a practical issue of organizing “windows” for repair and developing a more efficient interaction between departments engaged in transportation, infrastructure, locomotive operations, power supply – all adjacent divisions, in fact. Then, there appeared a broader horizon of work. The services must be organizers, keepers, and owners of technological processes. They must control every directorate to fulfill all requirements of the process thoroughly and in a timely fashion, and evaluate the consequences of breaching the technology. When the Centre for Technological Coordination was created, the set task was to organize the optimal transportation technology.

– Were the first steps taken by the Centre revision of the available technological standards and creation of a clear vision of what should be abolished, changed, or adopted again?

– Yes, they were. There are more than three million technological documents in force in the company. Of that, about a thousand documents refer to the transportation process. Several dozen documents describe relations with the external environment. We are to unify all of them to optimize the transportation process amid the company’s new structure, new economic relations with clients and regulators, dramatic changes in the form of property in a number of market segments, etc. Special attention should be paid to horizontal relations between sub-divisions of functional directorates at a regional level. These relations remain very close technologically, they cannot be divided into autonomous blocks.

– Do you think that the launch of a vertical structure for technological coordination is a temporary measure during the adjusting relations between sub-divisions formed in the framework of RZD’s restructuring or will this element of the holding company’s new model remain a part of it in the long term?

– It is rather difficult to make plans for several decades ahead amid a constantly developing market; however, I am sure that this structure will exist in the next 5-10 years. Moreover, there will be a need for improving the quality of its work. Recently, we held the first network conference of chiefs of technological services, where we defined the priority tasks and basic problems. Everyone got a clear vision that we are not only in charge of technological coordination issues, but we touch upon corporate management as well. For example, the head of a railway is working in new conditions. Who will help him to deal with conflict situations objectively when a failure happens? Who will be able to provide engineering solutions to this or that task? This is also a function of technological services, of the Centre for Technological Coordination. At the conference with deputy heads of railways for the regions, Vladimir Yakunin, the company’s President, touched on the theme of a professional growth school. For example, what can a deputy head of a railway for a region become in the future? Or from where should we take a candidate for this position? A deputy head for a region coordinates work of a number of our sub-divisions and interacts with local authorities, that is why one of the steps to this position is the head of technological service.

Powers Must Be Divided

– Is rulemaking the basic instrument of the technological service’s work? Does your Centre have the right to operational intervention?

– The basic ideology of our work may be formulated like this: we do not intervene in the current operational management, but find bottle-necks in it and remove them by means of technological regulations. Furthermore, we are not inspectors, we are experts in technology. There were a lot of debates at our conferences on such issues as the definition of operational work, including that of the head of a railway in his new capacity, a deputy head for a region, a head of the technological service. A number of informational systems are installed at my workplace.
Using them, I can see traffic schedules, wagon flows, usage of locomotives, safety, etc. I constantly use these data to monitor the exploitation situation. If I see a failure, shall I just look at the screen of the computer and do nothing about it? I doubt it. Another question is how should we intervene? Should we substitute a worker from the directorate of traffic control, haulage, or infrastructure? In my opinion, we should participate in solving the problem, but we should not substitute anyone. We must just fulfill our coordination functions. At the same time, there are a number of serious problems, which become the backbone of the new work. They are making the locomotive park at the Eastern area more efficient, and the issue of interaction with ports. The participation of specialists from our vertical structure is obligatory here, and it is to some degree an operational activity for us.

– Isn’t the settling down of extraordinary situations (for example, a port refuses to receive loaded wagons, or failures emerge at the junction point of two different railways) the work of the traffic service?

– Specialists of the traffic service act in accordance with the ordinary process, constantly used patterns, and if the situation requires non-standard or, I’d rather say, non-standardised actions, no service can carry them out without coordination with others. And the technological service must be a catalyst for generating such solutions. In a situation that requires interaction of a lot of transport process participants, we will help to find the correct way faster. For example, we see that they do not discharge grain for some reason, but it is possible to discharge metals, then the conveyor belt must adapt to service delivered metal. If metal is not discharged because port spaces are full, railcars with pipes can be unloaded, etc.
The port of Novorossiysk can unload up to 2,000 railcars a day, and it unloads only 1,600. Hence, the logistic must be developed more thoroughly, and we discussed it at the meeting of the coordinating council in Krasnodar last February. We are now developing this scheme for the North Caucasus to improve wagon turnover. We have a positive example of the work of St. Petersburg node – the port railway station Avtovo, and the ports of Ust-Luga and Vysotsk: the Oktyabrskaya railway in cooperation with the sea harbour works with trains not when they arrive at St. Petersburg, but when the train is just on the Sverdlovsk railway, or is just getting loaded at a station of the West-Siberian railway. Already then, the traffic control staff develop the order of trains’ arrival – which of them should get priority to avoid problems with unloading. This is an example of good interaction with ports.

“They Can’t Do without Us Already”

– Heading the Kuibyshev railway, you worked with technological service available, and now you are familiar with such experience in other regions. Do you think that technological services have already found their place in railways? Are they as welcome as a fifth wheel in a cart?

– Not the fifth wheel, for sure. And if we use this epithet, then the fifth is the steering wheel. Almost all chiefs of technological services are used to head structures responsible for traffic, technical policy, etc., i.e. these people understand the technology of work. As for their status, when I headed the Kuibyshev railway, I used to ask the head of technological service to speak first at the weekly operational conferences. He reported about what had been done, what failures there were, and the possible ways to remove them. And then chiefs of other sub-divisions talked about measures taken to stabilize this or that situation. Having visited three affiliates of RZD – the Moscow, the Oktyabrskaya, and the North Caucasus railways – I saw almost the same. It proves that the new services are not just in demand, but that heads of railways cannot imagine how to control the process without them.
I saw work organised according to the up-to-date achievements of quality management at the Oktyabrskaya and the Moscow railways. For example, active work is under way at the Oktyabrskaya railway to standardize, develop regulations of technological standards, maps. Moreover, we always start by defining relations – what blocks, subdivisions, people contact with each other, particularly, from the quality management system standpoint. Specialists of the Oktyabrskaya railway have not just described all these relations, but have developed parameters for each of them to know who is in charge of what. In this aspect, heads of technological services have done a lot, and railway chiefs can hardly do without them already. Moreover, at some railways, heads of technological services have become deputy chairpersons of coordinating councils headed by railway chiefs.

– As for development of rules for interaction between directorates… Has this work been partially done?

– Trying to settle a lot of issues, we may start not from a blank page (there are some groundworks, naturally), but we do have to form new documents. Nowadays, approximately 70-80 documents are to be developed at every railway, because there are very many interrelations. The number of documents for the Centre is almost the same, but it touches upon the central level only. We have defined priority tasks. The first is to audit and range that enormous number of papers I have already mentioned. When we started to analyse them, we found out that they did not form any clear hierarchy. Thus, we need to develop a corporate standard and make all documents meet it. Moreover, some different documents concerning one and the same standards may contain different parameters.
It is unacceptable, unification is needed. Another task is to develop rules for interaction, which do not exist now. For example, such a document for the Centre of Corporate Services and the Central Directorate of Traffic Control was signed recently. The next task is to unify all informational systems we have. We have always considered that actions in this field must be adjusted, however, life puts in its corrections – someone has made good progress in development, someone has slowed down, as a result there appears some disagreement, and technological coordination is required. One more important task is to develop a system to adjust the transportation plan and its source provision with the funds allocated to carry it out.

– To fulfill such tasks you must have significant resources, especially human ones. How many specialists work in the Centre? Has its final structure been defined?

– The structure of the Centre is built so that our staff number is just 12 people. They are experts, highly qualified specialists. The competition is very serious, there is an interview with every candidate, and tests as well. The task of our employee experts is to organize the system-based process of decision-making, ably hold it; to form a working group, and to achieve that a document is qualitatively developed by profile specialists, analysed, and adjusted. ®
Interviewed By Ivan Smirnov [~DETAIL_TEXT] =>

Coordination Is the Key Word

– Mr Kobzev, what is your take on the main idea of the new structure?

– Firstly, the vertical structure of technological coordination must monitor those bottle-necks where the system of transportation organization and provision malfunctions at this or that level, where problems during the interaction of different services are revealed. Secondly, we must take measures to optimize work by forming a new regulatory base. Thirdly, we must monitor how it is executed, and join the activities of all sub-divisions in charge of transportation to reach the corporate goal.
In the basis of technological services appearance, there was a practical issue of organizing “windows” for repair and developing a more efficient interaction between departments engaged in transportation, infrastructure, locomotive operations, power supply – all adjacent divisions, in fact. Then, there appeared a broader horizon of work. The services must be organizers, keepers, and owners of technological processes. They must control every directorate to fulfill all requirements of the process thoroughly and in a timely fashion, and evaluate the consequences of breaching the technology. When the Centre for Technological Coordination was created, the set task was to organize the optimal transportation technology.

– Were the first steps taken by the Centre revision of the available technological standards and creation of a clear vision of what should be abolished, changed, or adopted again?

– Yes, they were. There are more than three million technological documents in force in the company. Of that, about a thousand documents refer to the transportation process. Several dozen documents describe relations with the external environment. We are to unify all of them to optimize the transportation process amid the company’s new structure, new economic relations with clients and regulators, dramatic changes in the form of property in a number of market segments, etc. Special attention should be paid to horizontal relations between sub-divisions of functional directorates at a regional level. These relations remain very close technologically, they cannot be divided into autonomous blocks.

– Do you think that the launch of a vertical structure for technological coordination is a temporary measure during the adjusting relations between sub-divisions formed in the framework of RZD’s restructuring or will this element of the holding company’s new model remain a part of it in the long term?

– It is rather difficult to make plans for several decades ahead amid a constantly developing market; however, I am sure that this structure will exist in the next 5-10 years. Moreover, there will be a need for improving the quality of its work. Recently, we held the first network conference of chiefs of technological services, where we defined the priority tasks and basic problems. Everyone got a clear vision that we are not only in charge of technological coordination issues, but we touch upon corporate management as well. For example, the head of a railway is working in new conditions. Who will help him to deal with conflict situations objectively when a failure happens? Who will be able to provide engineering solutions to this or that task? This is also a function of technological services, of the Centre for Technological Coordination. At the conference with deputy heads of railways for the regions, Vladimir Yakunin, the company’s President, touched on the theme of a professional growth school. For example, what can a deputy head of a railway for a region become in the future? Or from where should we take a candidate for this position? A deputy head for a region coordinates work of a number of our sub-divisions and interacts with local authorities, that is why one of the steps to this position is the head of technological service.

Powers Must Be Divided

– Is rulemaking the basic instrument of the technological service’s work? Does your Centre have the right to operational intervention?

– The basic ideology of our work may be formulated like this: we do not intervene in the current operational management, but find bottle-necks in it and remove them by means of technological regulations. Furthermore, we are not inspectors, we are experts in technology. There were a lot of debates at our conferences on such issues as the definition of operational work, including that of the head of a railway in his new capacity, a deputy head for a region, a head of the technological service. A number of informational systems are installed at my workplace.
Using them, I can see traffic schedules, wagon flows, usage of locomotives, safety, etc. I constantly use these data to monitor the exploitation situation. If I see a failure, shall I just look at the screen of the computer and do nothing about it? I doubt it. Another question is how should we intervene? Should we substitute a worker from the directorate of traffic control, haulage, or infrastructure? In my opinion, we should participate in solving the problem, but we should not substitute anyone. We must just fulfill our coordination functions. At the same time, there are a number of serious problems, which become the backbone of the new work. They are making the locomotive park at the Eastern area more efficient, and the issue of interaction with ports. The participation of specialists from our vertical structure is obligatory here, and it is to some degree an operational activity for us.

– Isn’t the settling down of extraordinary situations (for example, a port refuses to receive loaded wagons, or failures emerge at the junction point of two different railways) the work of the traffic service?

– Specialists of the traffic service act in accordance with the ordinary process, constantly used patterns, and if the situation requires non-standard or, I’d rather say, non-standardised actions, no service can carry them out without coordination with others. And the technological service must be a catalyst for generating such solutions. In a situation that requires interaction of a lot of transport process participants, we will help to find the correct way faster. For example, we see that they do not discharge grain for some reason, but it is possible to discharge metals, then the conveyor belt must adapt to service delivered metal. If metal is not discharged because port spaces are full, railcars with pipes can be unloaded, etc.
The port of Novorossiysk can unload up to 2,000 railcars a day, and it unloads only 1,600. Hence, the logistic must be developed more thoroughly, and we discussed it at the meeting of the coordinating council in Krasnodar last February. We are now developing this scheme for the North Caucasus to improve wagon turnover. We have a positive example of the work of St. Petersburg node – the port railway station Avtovo, and the ports of Ust-Luga and Vysotsk: the Oktyabrskaya railway in cooperation with the sea harbour works with trains not when they arrive at St. Petersburg, but when the train is just on the Sverdlovsk railway, or is just getting loaded at a station of the West-Siberian railway. Already then, the traffic control staff develop the order of trains’ arrival – which of them should get priority to avoid problems with unloading. This is an example of good interaction with ports.

“They Can’t Do without Us Already”

– Heading the Kuibyshev railway, you worked with technological service available, and now you are familiar with such experience in other regions. Do you think that technological services have already found their place in railways? Are they as welcome as a fifth wheel in a cart?

– Not the fifth wheel, for sure. And if we use this epithet, then the fifth is the steering wheel. Almost all chiefs of technological services are used to head structures responsible for traffic, technical policy, etc., i.e. these people understand the technology of work. As for their status, when I headed the Kuibyshev railway, I used to ask the head of technological service to speak first at the weekly operational conferences. He reported about what had been done, what failures there were, and the possible ways to remove them. And then chiefs of other sub-divisions talked about measures taken to stabilize this or that situation. Having visited three affiliates of RZD – the Moscow, the Oktyabrskaya, and the North Caucasus railways – I saw almost the same. It proves that the new services are not just in demand, but that heads of railways cannot imagine how to control the process without them.
I saw work organised according to the up-to-date achievements of quality management at the Oktyabrskaya and the Moscow railways. For example, active work is under way at the Oktyabrskaya railway to standardize, develop regulations of technological standards, maps. Moreover, we always start by defining relations – what blocks, subdivisions, people contact with each other, particularly, from the quality management system standpoint. Specialists of the Oktyabrskaya railway have not just described all these relations, but have developed parameters for each of them to know who is in charge of what. In this aspect, heads of technological services have done a lot, and railway chiefs can hardly do without them already. Moreover, at some railways, heads of technological services have become deputy chairpersons of coordinating councils headed by railway chiefs.

– As for development of rules for interaction between directorates… Has this work been partially done?

– Trying to settle a lot of issues, we may start not from a blank page (there are some groundworks, naturally), but we do have to form new documents. Nowadays, approximately 70-80 documents are to be developed at every railway, because there are very many interrelations. The number of documents for the Centre is almost the same, but it touches upon the central level only. We have defined priority tasks. The first is to audit and range that enormous number of papers I have already mentioned. When we started to analyse them, we found out that they did not form any clear hierarchy. Thus, we need to develop a corporate standard and make all documents meet it. Moreover, some different documents concerning one and the same standards may contain different parameters.
It is unacceptable, unification is needed. Another task is to develop rules for interaction, which do not exist now. For example, such a document for the Centre of Corporate Services and the Central Directorate of Traffic Control was signed recently. The next task is to unify all informational systems we have. We have always considered that actions in this field must be adjusted, however, life puts in its corrections – someone has made good progress in development, someone has slowed down, as a result there appears some disagreement, and technological coordination is required. One more important task is to develop a system to adjust the transportation plan and its source provision with the funds allocated to carry it out.

– To fulfill such tasks you must have significant resources, especially human ones. How many specialists work in the Centre? Has its final structure been defined?

– The structure of the Centre is built so that our staff number is just 12 people. They are experts, highly qualified specialists. The competition is very serious, there is an interview with every candidate, and tests as well. The task of our employee experts is to organize the system-based process of decision-making, ably hold it; to form a working group, and to achieve that a document is qualitatively developed by profile specialists, analysed, and adjusted. ®
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Coordination Is the Key Word

– Mr Kobzev, what is your take on the main idea of the new structure?

– Firstly, the vertical structure of technological coordination must monitor those bottle-necks where the system of transportation organization and provision malfunctions at this or that level, where problems during the interaction of different services are revealed. Secondly, we must take measures to optimize work by forming a new regulatory base. Thirdly, we must monitor how it is executed, and join the activities of all sub-divisions in charge of transportation to reach the corporate goal.
In the basis of technological services appearance, there was a practical issue of organizing “windows” for repair and developing a more efficient interaction between departments engaged in transportation, infrastructure, locomotive operations, power supply – all adjacent divisions, in fact. Then, there appeared a broader horizon of work. The services must be organizers, keepers, and owners of technological processes. They must control every directorate to fulfill all requirements of the process thoroughly and in a timely fashion, and evaluate the consequences of breaching the technology. When the Centre for Technological Coordination was created, the set task was to organize the optimal transportation technology.

– Were the first steps taken by the Centre revision of the available technological standards and creation of a clear vision of what should be abolished, changed, or adopted again?

– Yes, they were. There are more than three million technological documents in force in the company. Of that, about a thousand documents refer to the transportation process. Several dozen documents describe relations with the external environment. We are to unify all of them to optimize the transportation process amid the company’s new structure, new economic relations with clients and regulators, dramatic changes in the form of property in a number of market segments, etc. Special attention should be paid to horizontal relations between sub-divisions of functional directorates at a regional level. These relations remain very close technologically, they cannot be divided into autonomous blocks.

– Do you think that the launch of a vertical structure for technological coordination is a temporary measure during the adjusting relations between sub-divisions formed in the framework of RZD’s restructuring or will this element of the holding company’s new model remain a part of it in the long term?

– It is rather difficult to make plans for several decades ahead amid a constantly developing market; however, I am sure that this structure will exist in the next 5-10 years. Moreover, there will be a need for improving the quality of its work. Recently, we held the first network conference of chiefs of technological services, where we defined the priority tasks and basic problems. Everyone got a clear vision that we are not only in charge of technological coordination issues, but we touch upon corporate management as well. For example, the head of a railway is working in new conditions. Who will help him to deal with conflict situations objectively when a failure happens? Who will be able to provide engineering solutions to this or that task? This is also a function of technological services, of the Centre for Technological Coordination. At the conference with deputy heads of railways for the regions, Vladimir Yakunin, the company’s President, touched on the theme of a professional growth school. For example, what can a deputy head of a railway for a region become in the future? Or from where should we take a candidate for this position? A deputy head for a region coordinates work of a number of our sub-divisions and interacts with local authorities, that is why one of the steps to this position is the head of technological service.

Powers Must Be Divided

– Is rulemaking the basic instrument of the technological service’s work? Does your Centre have the right to operational intervention?

– The basic ideology of our work may be formulated like this: we do not intervene in the current operational management, but find bottle-necks in it and remove them by means of technological regulations. Furthermore, we are not inspectors, we are experts in technology. There were a lot of debates at our conferences on such issues as the definition of operational work, including that of the head of a railway in his new capacity, a deputy head for a region, a head of the technological service. A number of informational systems are installed at my workplace.
Using them, I can see traffic schedules, wagon flows, usage of locomotives, safety, etc. I constantly use these data to monitor the exploitation situation. If I see a failure, shall I just look at the screen of the computer and do nothing about it? I doubt it. Another question is how should we intervene? Should we substitute a worker from the directorate of traffic control, haulage, or infrastructure? In my opinion, we should participate in solving the problem, but we should not substitute anyone. We must just fulfill our coordination functions. At the same time, there are a number of serious problems, which become the backbone of the new work. They are making the locomotive park at the Eastern area more efficient, and the issue of interaction with ports. The participation of specialists from our vertical structure is obligatory here, and it is to some degree an operational activity for us.

– Isn’t the settling down of extraordinary situations (for example, a port refuses to receive loaded wagons, or failures emerge at the junction point of two different railways) the work of the traffic service?

– Specialists of the traffic service act in accordance with the ordinary process, constantly used patterns, and if the situation requires non-standard or, I’d rather say, non-standardised actions, no service can carry them out without coordination with others. And the technological service must be a catalyst for generating such solutions. In a situation that requires interaction of a lot of transport process participants, we will help to find the correct way faster. For example, we see that they do not discharge grain for some reason, but it is possible to discharge metals, then the conveyor belt must adapt to service delivered metal. If metal is not discharged because port spaces are full, railcars with pipes can be unloaded, etc.
The port of Novorossiysk can unload up to 2,000 railcars a day, and it unloads only 1,600. Hence, the logistic must be developed more thoroughly, and we discussed it at the meeting of the coordinating council in Krasnodar last February. We are now developing this scheme for the North Caucasus to improve wagon turnover. We have a positive example of the work of St. Petersburg node – the port railway station Avtovo, and the ports of Ust-Luga and Vysotsk: the Oktyabrskaya railway in cooperation with the sea harbour works with trains not when they arrive at St. Petersburg, but when the train is just on the Sverdlovsk railway, or is just getting loaded at a station of the West-Siberian railway. Already then, the traffic control staff develop the order of trains’ arrival – which of them should get priority to avoid problems with unloading. This is an example of good interaction with ports.

“They Can’t Do without Us Already”

– Heading the Kuibyshev railway, you worked with technological service available, and now you are familiar with such experience in other regions. Do you think that technological services have already found their place in railways? Are they as welcome as a fifth wheel in a cart?

– Not the fifth wheel, for sure. And if we use this epithet, then the fifth is the steering wheel. Almost all chiefs of technological services are used to head structures responsible for traffic, technical policy, etc., i.e. these people understand the technology of work. As for their status, when I headed the Kuibyshev railway, I used to ask the head of technological service to speak first at the weekly operational conferences. He reported about what had been done, what failures there were, and the possible ways to remove them. And then chiefs of other sub-divisions talked about measures taken to stabilize this or that situation. Having visited three affiliates of RZD – the Moscow, the Oktyabrskaya, and the North Caucasus railways – I saw almost the same. It proves that the new services are not just in demand, but that heads of railways cannot imagine how to control the process without them.
I saw work organised according to the up-to-date achievements of quality management at the Oktyabrskaya and the Moscow railways. For example, active work is under way at the Oktyabrskaya railway to standardize, develop regulations of technological standards, maps. Moreover, we always start by defining relations – what blocks, subdivisions, people contact with each other, particularly, from the quality management system standpoint. Specialists of the Oktyabrskaya railway have not just described all these relations, but have developed parameters for each of them to know who is in charge of what. In this aspect, heads of technological services have done a lot, and railway chiefs can hardly do without them already. Moreover, at some railways, heads of technological services have become deputy chairpersons of coordinating councils headed by railway chiefs.

– As for development of rules for interaction between directorates… Has this work been partially done?

– Trying to settle a lot of issues, we may start not from a blank page (there are some groundworks, naturally), but we do have to form new documents. Nowadays, approximately 70-80 documents are to be developed at every railway, because there are very many interrelations. The number of documents for the Centre is almost the same, but it touches upon the central level only. We have defined priority tasks. The first is to audit and range that enormous number of papers I have already mentioned. When we started to analyse them, we found out that they did not form any clear hierarchy. Thus, we need to develop a corporate standard and make all documents meet it. Moreover, some different documents concerning one and the same standards may contain different parameters.
It is unacceptable, unification is needed. Another task is to develop rules for interaction, which do not exist now. For example, such a document for the Centre of Corporate Services and the Central Directorate of Traffic Control was signed recently. The next task is to unify all informational systems we have. We have always considered that actions in this field must be adjusted, however, life puts in its corrections – someone has made good progress in development, someone has slowed down, as a result there appears some disagreement, and technological coordination is required. One more important task is to develop a system to adjust the transportation plan and its source provision with the funds allocated to carry it out.

– To fulfill such tasks you must have significant resources, especially human ones. How many specialists work in the Centre? Has its final structure been defined?

– The structure of the Centre is built so that our staff number is just 12 people. They are experts, highly qualified specialists. The competition is very serious, there is an interview with every candidate, and tests as well. The task of our employee experts is to organize the system-based process of decision-making, ably hold it; to form a working group, and to achieve that a document is qualitatively developed by profile specialists, analysed, and adjusted. ®
Interviewed By Ivan Smirnov [~DETAIL_TEXT] =>

Coordination Is the Key Word

– Mr Kobzev, what is your take on the main idea of the new structure?

– Firstly, the vertical structure of technological coordination must monitor those bottle-necks where the system of transportation organization and provision malfunctions at this or that level, where problems during the interaction of different services are revealed. Secondly, we must take measures to optimize work by forming a new regulatory base. Thirdly, we must monitor how it is executed, and join the activities of all sub-divisions in charge of transportation to reach the corporate goal.
In the basis of technological services appearance, there was a practical issue of organizing “windows” for repair and developing a more efficient interaction between departments engaged in transportation, infrastructure, locomotive operations, power supply – all adjacent divisions, in fact. Then, there appeared a broader horizon of work. The services must be organizers, keepers, and owners of technological processes. They must control every directorate to fulfill all requirements of the process thoroughly and in a timely fashion, and evaluate the consequences of breaching the technology. When the Centre for Technological Coordination was created, the set task was to organize the optimal transportation technology.

– Were the first steps taken by the Centre revision of the available technological standards and creation of a clear vision of what should be abolished, changed, or adopted again?

– Yes, they were. There are more than three million technological documents in force in the company. Of that, about a thousand documents refer to the transportation process. Several dozen documents describe relations with the external environment. We are to unify all of them to optimize the transportation process amid the company’s new structure, new economic relations with clients and regulators, dramatic changes in the form of property in a number of market segments, etc. Special attention should be paid to horizontal relations between sub-divisions of functional directorates at a regional level. These relations remain very close technologically, they cannot be divided into autonomous blocks.

– Do you think that the launch of a vertical structure for technological coordination is a temporary measure during the adjusting relations between sub-divisions formed in the framework of RZD’s restructuring or will this element of the holding company’s new model remain a part of it in the long term?

– It is rather difficult to make plans for several decades ahead amid a constantly developing market; however, I am sure that this structure will exist in the next 5-10 years. Moreover, there will be a need for improving the quality of its work. Recently, we held the first network conference of chiefs of technological services, where we defined the priority tasks and basic problems. Everyone got a clear vision that we are not only in charge of technological coordination issues, but we touch upon corporate management as well. For example, the head of a railway is working in new conditions. Who will help him to deal with conflict situations objectively when a failure happens? Who will be able to provide engineering solutions to this or that task? This is also a function of technological services, of the Centre for Technological Coordination. At the conference with deputy heads of railways for the regions, Vladimir Yakunin, the company’s President, touched on the theme of a professional growth school. For example, what can a deputy head of a railway for a region become in the future? Or from where should we take a candidate for this position? A deputy head for a region coordinates work of a number of our sub-divisions and interacts with local authorities, that is why one of the steps to this position is the head of technological service.

Powers Must Be Divided

– Is rulemaking the basic instrument of the technological service’s work? Does your Centre have the right to operational intervention?

– The basic ideology of our work may be formulated like this: we do not intervene in the current operational management, but find bottle-necks in it and remove them by means of technological regulations. Furthermore, we are not inspectors, we are experts in technology. There were a lot of debates at our conferences on such issues as the definition of operational work, including that of the head of a railway in his new capacity, a deputy head for a region, a head of the technological service. A number of informational systems are installed at my workplace.
Using them, I can see traffic schedules, wagon flows, usage of locomotives, safety, etc. I constantly use these data to monitor the exploitation situation. If I see a failure, shall I just look at the screen of the computer and do nothing about it? I doubt it. Another question is how should we intervene? Should we substitute a worker from the directorate of traffic control, haulage, or infrastructure? In my opinion, we should participate in solving the problem, but we should not substitute anyone. We must just fulfill our coordination functions. At the same time, there are a number of serious problems, which become the backbone of the new work. They are making the locomotive park at the Eastern area more efficient, and the issue of interaction with ports. The participation of specialists from our vertical structure is obligatory here, and it is to some degree an operational activity for us.

– Isn’t the settling down of extraordinary situations (for example, a port refuses to receive loaded wagons, or failures emerge at the junction point of two different railways) the work of the traffic service?

– Specialists of the traffic service act in accordance with the ordinary process, constantly used patterns, and if the situation requires non-standard or, I’d rather say, non-standardised actions, no service can carry them out without coordination with others. And the technological service must be a catalyst for generating such solutions. In a situation that requires interaction of a lot of transport process participants, we will help to find the correct way faster. For example, we see that they do not discharge grain for some reason, but it is possible to discharge metals, then the conveyor belt must adapt to service delivered metal. If metal is not discharged because port spaces are full, railcars with pipes can be unloaded, etc.
The port of Novorossiysk can unload up to 2,000 railcars a day, and it unloads only 1,600. Hence, the logistic must be developed more thoroughly, and we discussed it at the meeting of the coordinating council in Krasnodar last February. We are now developing this scheme for the North Caucasus to improve wagon turnover. We have a positive example of the work of St. Petersburg node – the port railway station Avtovo, and the ports of Ust-Luga and Vysotsk: the Oktyabrskaya railway in cooperation with the sea harbour works with trains not when they arrive at St. Petersburg, but when the train is just on the Sverdlovsk railway, or is just getting loaded at a station of the West-Siberian railway. Already then, the traffic control staff develop the order of trains’ arrival – which of them should get priority to avoid problems with unloading. This is an example of good interaction with ports.

“They Can’t Do without Us Already”

– Heading the Kuibyshev railway, you worked with technological service available, and now you are familiar with such experience in other regions. Do you think that technological services have already found their place in railways? Are they as welcome as a fifth wheel in a cart?

– Not the fifth wheel, for sure. And if we use this epithet, then the fifth is the steering wheel. Almost all chiefs of technological services are used to head structures responsible for traffic, technical policy, etc., i.e. these people understand the technology of work. As for their status, when I headed the Kuibyshev railway, I used to ask the head of technological service to speak first at the weekly operational conferences. He reported about what had been done, what failures there were, and the possible ways to remove them. And then chiefs of other sub-divisions talked about measures taken to stabilize this or that situation. Having visited three affiliates of RZD – the Moscow, the Oktyabrskaya, and the North Caucasus railways – I saw almost the same. It proves that the new services are not just in demand, but that heads of railways cannot imagine how to control the process without them.
I saw work organised according to the up-to-date achievements of quality management at the Oktyabrskaya and the Moscow railways. For example, active work is under way at the Oktyabrskaya railway to standardize, develop regulations of technological standards, maps. Moreover, we always start by defining relations – what blocks, subdivisions, people contact with each other, particularly, from the quality management system standpoint. Specialists of the Oktyabrskaya railway have not just described all these relations, but have developed parameters for each of them to know who is in charge of what. In this aspect, heads of technological services have done a lot, and railway chiefs can hardly do without them already. Moreover, at some railways, heads of technological services have become deputy chairpersons of coordinating councils headed by railway chiefs.

– As for development of rules for interaction between directorates… Has this work been partially done?

– Trying to settle a lot of issues, we may start not from a blank page (there are some groundworks, naturally), but we do have to form new documents. Nowadays, approximately 70-80 documents are to be developed at every railway, because there are very many interrelations. The number of documents for the Centre is almost the same, but it touches upon the central level only. We have defined priority tasks. The first is to audit and range that enormous number of papers I have already mentioned. When we started to analyse them, we found out that they did not form any clear hierarchy. Thus, we need to develop a corporate standard and make all documents meet it. Moreover, some different documents concerning one and the same standards may contain different parameters.
It is unacceptable, unification is needed. Another task is to develop rules for interaction, which do not exist now. For example, such a document for the Centre of Corporate Services and the Central Directorate of Traffic Control was signed recently. The next task is to unify all informational systems we have. We have always considered that actions in this field must be adjusted, however, life puts in its corrections – someone has made good progress in development, someone has slowed down, as a result there appears some disagreement, and technological coordination is required. One more important task is to develop a system to adjust the transportation plan and its source provision with the funds allocated to carry it out.

– To fulfill such tasks you must have significant resources, especially human ones. How many specialists work in the Centre? Has its final structure been defined?

– The structure of the Centre is built so that our staff number is just 12 people. They are experts, highly qualified specialists. The competition is very serious, there is an interview with every candidate, and tests as well. The task of our employee experts is to organize the system-based process of decision-making, ably hold it; to form a working group, and to achieve that a document is qualitatively developed by profile specialists, analysed, and adjusted. ®
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РЖД-Партнер

Promising Kilometres

 The building of the Naryn - Gazimursky zavod rail track in the South-East of Zabaikalsky region is nearing completion. Still difficulties with its financing may slow down the construction.
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The Road That Lost 100 Kilometres

A substantial part of Russia’s mineral wealth is concentrated in Zabaikalsky krai. The region comprises 38% of Russia’s explored reserves of fluorspar, over 25% of copper, 27% of molybdenum, 18% of titanium, 80% of lithium, 74% of zeolite, 7% of gold. Zabaikalsky region is also rich in uranium, iron, silver, vanadium, arsenic, hard coal and lignite. Geologists discovered many of these deposits in the 1950s, but for many years they remained unreachable due to the lack of infrastructure.
The first plans to construct a transportation system were announced in the early 2000s. This project aimed at the development of five metal deposits: Bystrinskoe, Bugdainskoe, Lugokanskoe, Kultuminskoe and Solonechenskoe, and the building of a 375-kilometre rail road connecting Naryn and Lugokan. Before, in the 1990s, an attempt to develop Bugdainsky ore field was made, and it proved to be one of the largest in the country. The five projected mining and smelting plants would be able to process 35 million tons of ore annually. The capacity of future road is estimated at 13.5 million tons of cargo a year.
In 2007 Norilsk Nickel Mining and Smelting Company and the Federal State Agency for Rail Transportation signed an agreement that gave birth to a large-scale infrastructure project. The Investment Fund of Russian Federation was to provide financing. The total costs of the project amounted to RUR 104.597 billion. It was agreed that 69% of the railway construction costs would be covered by the Fund and 31% by Norilsk Nickel. Industrial development of mineral deposits would be carried out solely at Norilsk Nickel’s expense.
But soon after, as the global financial crisis emerged, the project was curtailed. In the course of on-site exploration it became evident that three mineral deposits out of five initially selected could not ensure a viable rate of return. Finally, Nornickel abandoned the idea to build these three plants, and the designed railroad was cut by 100 kilometres.
The revised project was approved by the government in the second half of 2010. According to it, in eight years’ time two mining and processing plants are to be established, and connected with the approach ways to the Naryn - Gazimursky zavod railroad.
According to Nornickel, a plant at Bystrinskoe deposit will product and process 10 million tons of ore annually. And the new railroad will be loaded with 62,000 tons of copper concentrate, 6.3 tons of gold concentrate and 2.1 million tons of iron ore concentrate annually. Bugdainskoe deposit would provide extraction of 16 million tons of ore and production of 9,800 tons of molybdenum concentrate each year.

A Story About Money

Inzhtransstroy Corporation, the general contractor of the project, started construction of a new 223-kilometre road between Gazimursky plant (zavod) and Naryn rail station in 2008. By the end of 2010 the 130-kilometre-long section connecting Naryn and Aleksandrovsky plant was completed, and the first trail launched. Construction of the second part linking Aleksandrovsky and Gazimursky plants proved to be much tougher. Last year preparatory works had been fulfilled and 42 kilometres of the track laid out.
Initially it was envisaged that the road would be put in operation by the end of 2011. But difficulties with financing and material supply interfered with this plan.
The road will consist of the main track and spurs leading to each of the mineral deposits. In December 2011 preparatory works on approach ways to Bystrinskoe minefield were started. The 12-kilometre-long combined auto-rail line is to be commissioned in the third quarter of 2013. The costs are estimated at RUR 2.8 billion. A 36-kilometre spur track to Bugdainskoe minefield is also to be built this year.
Still, even a public-private partnership does not guarantee that the agreed terms are met. In 2010 Inzhtransstroy had to cover some of the expenses with its own money due to the lack of funding from investors resulting from the financial crisis. The Investment Fund and Norilsk Nickel had planned to invest RUR 7 billion each in 2011, but transferred only part of the sum and only at the end of the year. Irregular metal supply also delayed project fulfillment.
Victor Basargin, the Minister of Regional Development, in autumn 2011 expressed his dissatisfaction with this course of events: “This year less than 30% of required financing was provided. I have a lot of questions for investors: where are the billions that they had promised?”
“The company sticks to its commitments on the project. In 2011 we already transferred RUR 4.8 billion, and we were ready to provide the rest of the money. But the Federal Agency for Rail Transport took a decision to defer the tranche to the next year, as the contractor would fail to assimilate the funds in 2011,” Nornickel replied.
By now the contractor has no more complaints with investors, and we may hope that the terms of the road construction will be kept. According to the project, Bystrinsky and Bugdainsky plants are to be commissioned in 2016 to reach the designed capacities in several years.
Despite the unique mineral wealth of Zabaikalsky region, it still lives on federal subsidies. There is not much opportunity for making money without adequate transport infrastructure. Its construction is a great challenge, a goal that could be reached only through cooperation.
“Private companies won’t cope with such large-scale projects without state support. Industrialization of Zabaikalsky region implies construction of towns from the ground up. And the State must be sure that resourses are not spent in vain, and business is really interested in the efficiency of infrastructure,” stressed Oleg Semenov, Director of 2K Audit Business Consulting.
By now in Russia there are only a few projects based on public-private partnership, and it’s not possible yet to estimate the effectiveness of this tool. But the Naryn – Gazimursky zavod railroad’s construction is proceeding, although not as fast as desired. And surely it will become a framework for further development of the region. Experts expect that the railroad, when launched, will trigger development of many new industrial objects such as, for example, Novo-Shirokinsky mine.
By Elena Dmitrievskaya [~DETAIL_TEXT] =>

The Road That Lost 100 Kilometres

A substantial part of Russia’s mineral wealth is concentrated in Zabaikalsky krai. The region comprises 38% of Russia’s explored reserves of fluorspar, over 25% of copper, 27% of molybdenum, 18% of titanium, 80% of lithium, 74% of zeolite, 7% of gold. Zabaikalsky region is also rich in uranium, iron, silver, vanadium, arsenic, hard coal and lignite. Geologists discovered many of these deposits in the 1950s, but for many years they remained unreachable due to the lack of infrastructure.
The first plans to construct a transportation system were announced in the early 2000s. This project aimed at the development of five metal deposits: Bystrinskoe, Bugdainskoe, Lugokanskoe, Kultuminskoe and Solonechenskoe, and the building of a 375-kilometre rail road connecting Naryn and Lugokan. Before, in the 1990s, an attempt to develop Bugdainsky ore field was made, and it proved to be one of the largest in the country. The five projected mining and smelting plants would be able to process 35 million tons of ore annually. The capacity of future road is estimated at 13.5 million tons of cargo a year.
In 2007 Norilsk Nickel Mining and Smelting Company and the Federal State Agency for Rail Transportation signed an agreement that gave birth to a large-scale infrastructure project. The Investment Fund of Russian Federation was to provide financing. The total costs of the project amounted to RUR 104.597 billion. It was agreed that 69% of the railway construction costs would be covered by the Fund and 31% by Norilsk Nickel. Industrial development of mineral deposits would be carried out solely at Norilsk Nickel’s expense.
But soon after, as the global financial crisis emerged, the project was curtailed. In the course of on-site exploration it became evident that three mineral deposits out of five initially selected could not ensure a viable rate of return. Finally, Nornickel abandoned the idea to build these three plants, and the designed railroad was cut by 100 kilometres.
The revised project was approved by the government in the second half of 2010. According to it, in eight years’ time two mining and processing plants are to be established, and connected with the approach ways to the Naryn - Gazimursky zavod railroad.
According to Nornickel, a plant at Bystrinskoe deposit will product and process 10 million tons of ore annually. And the new railroad will be loaded with 62,000 tons of copper concentrate, 6.3 tons of gold concentrate and 2.1 million tons of iron ore concentrate annually. Bugdainskoe deposit would provide extraction of 16 million tons of ore and production of 9,800 tons of molybdenum concentrate each year.

A Story About Money

Inzhtransstroy Corporation, the general contractor of the project, started construction of a new 223-kilometre road between Gazimursky plant (zavod) and Naryn rail station in 2008. By the end of 2010 the 130-kilometre-long section connecting Naryn and Aleksandrovsky plant was completed, and the first trail launched. Construction of the second part linking Aleksandrovsky and Gazimursky plants proved to be much tougher. Last year preparatory works had been fulfilled and 42 kilometres of the track laid out.
Initially it was envisaged that the road would be put in operation by the end of 2011. But difficulties with financing and material supply interfered with this plan.
The road will consist of the main track and spurs leading to each of the mineral deposits. In December 2011 preparatory works on approach ways to Bystrinskoe minefield were started. The 12-kilometre-long combined auto-rail line is to be commissioned in the third quarter of 2013. The costs are estimated at RUR 2.8 billion. A 36-kilometre spur track to Bugdainskoe minefield is also to be built this year.
Still, even a public-private partnership does not guarantee that the agreed terms are met. In 2010 Inzhtransstroy had to cover some of the expenses with its own money due to the lack of funding from investors resulting from the financial crisis. The Investment Fund and Norilsk Nickel had planned to invest RUR 7 billion each in 2011, but transferred only part of the sum and only at the end of the year. Irregular metal supply also delayed project fulfillment.
Victor Basargin, the Minister of Regional Development, in autumn 2011 expressed his dissatisfaction with this course of events: “This year less than 30% of required financing was provided. I have a lot of questions for investors: where are the billions that they had promised?”
“The company sticks to its commitments on the project. In 2011 we already transferred RUR 4.8 billion, and we were ready to provide the rest of the money. But the Federal Agency for Rail Transport took a decision to defer the tranche to the next year, as the contractor would fail to assimilate the funds in 2011,” Nornickel replied.
By now the contractor has no more complaints with investors, and we may hope that the terms of the road construction will be kept. According to the project, Bystrinsky and Bugdainsky plants are to be commissioned in 2016 to reach the designed capacities in several years.
Despite the unique mineral wealth of Zabaikalsky region, it still lives on federal subsidies. There is not much opportunity for making money without adequate transport infrastructure. Its construction is a great challenge, a goal that could be reached only through cooperation.
“Private companies won’t cope with such large-scale projects without state support. Industrialization of Zabaikalsky region implies construction of towns from the ground up. And the State must be sure that resourses are not spent in vain, and business is really interested in the efficiency of infrastructure,” stressed Oleg Semenov, Director of 2K Audit Business Consulting.
By now in Russia there are only a few projects based on public-private partnership, and it’s not possible yet to estimate the effectiveness of this tool. But the Naryn – Gazimursky zavod railroad’s construction is proceeding, although not as fast as desired. And surely it will become a framework for further development of the region. Experts expect that the railroad, when launched, will trigger development of many new industrial objects such as, for example, Novo-Shirokinsky mine.
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    [DETAIL_TEXT] => 

The Road That Lost 100 Kilometres

A substantial part of Russia’s mineral wealth is concentrated in Zabaikalsky krai. The region comprises 38% of Russia’s explored reserves of fluorspar, over 25% of copper, 27% of molybdenum, 18% of titanium, 80% of lithium, 74% of zeolite, 7% of gold. Zabaikalsky region is also rich in uranium, iron, silver, vanadium, arsenic, hard coal and lignite. Geologists discovered many of these deposits in the 1950s, but for many years they remained unreachable due to the lack of infrastructure.
The first plans to construct a transportation system were announced in the early 2000s. This project aimed at the development of five metal deposits: Bystrinskoe, Bugdainskoe, Lugokanskoe, Kultuminskoe and Solonechenskoe, and the building of a 375-kilometre rail road connecting Naryn and Lugokan. Before, in the 1990s, an attempt to develop Bugdainsky ore field was made, and it proved to be one of the largest in the country. The five projected mining and smelting plants would be able to process 35 million tons of ore annually. The capacity of future road is estimated at 13.5 million tons of cargo a year.
In 2007 Norilsk Nickel Mining and Smelting Company and the Federal State Agency for Rail Transportation signed an agreement that gave birth to a large-scale infrastructure project. The Investment Fund of Russian Federation was to provide financing. The total costs of the project amounted to RUR 104.597 billion. It was agreed that 69% of the railway construction costs would be covered by the Fund and 31% by Norilsk Nickel. Industrial development of mineral deposits would be carried out solely at Norilsk Nickel’s expense.
But soon after, as the global financial crisis emerged, the project was curtailed. In the course of on-site exploration it became evident that three mineral deposits out of five initially selected could not ensure a viable rate of return. Finally, Nornickel abandoned the idea to build these three plants, and the designed railroad was cut by 100 kilometres.
The revised project was approved by the government in the second half of 2010. According to it, in eight years’ time two mining and processing plants are to be established, and connected with the approach ways to the Naryn - Gazimursky zavod railroad.
According to Nornickel, a plant at Bystrinskoe deposit will product and process 10 million tons of ore annually. And the new railroad will be loaded with 62,000 tons of copper concentrate, 6.3 tons of gold concentrate and 2.1 million tons of iron ore concentrate annually. Bugdainskoe deposit would provide extraction of 16 million tons of ore and production of 9,800 tons of molybdenum concentrate each year.

A Story About Money

Inzhtransstroy Corporation, the general contractor of the project, started construction of a new 223-kilometre road between Gazimursky plant (zavod) and Naryn rail station in 2008. By the end of 2010 the 130-kilometre-long section connecting Naryn and Aleksandrovsky plant was completed, and the first trail launched. Construction of the second part linking Aleksandrovsky and Gazimursky plants proved to be much tougher. Last year preparatory works had been fulfilled and 42 kilometres of the track laid out.
Initially it was envisaged that the road would be put in operation by the end of 2011. But difficulties with financing and material supply interfered with this plan.
The road will consist of the main track and spurs leading to each of the mineral deposits. In December 2011 preparatory works on approach ways to Bystrinskoe minefield were started. The 12-kilometre-long combined auto-rail line is to be commissioned in the third quarter of 2013. The costs are estimated at RUR 2.8 billion. A 36-kilometre spur track to Bugdainskoe minefield is also to be built this year.
Still, even a public-private partnership does not guarantee that the agreed terms are met. In 2010 Inzhtransstroy had to cover some of the expenses with its own money due to the lack of funding from investors resulting from the financial crisis. The Investment Fund and Norilsk Nickel had planned to invest RUR 7 billion each in 2011, but transferred only part of the sum and only at the end of the year. Irregular metal supply also delayed project fulfillment.
Victor Basargin, the Minister of Regional Development, in autumn 2011 expressed his dissatisfaction with this course of events: “This year less than 30% of required financing was provided. I have a lot of questions for investors: where are the billions that they had promised?”
“The company sticks to its commitments on the project. In 2011 we already transferred RUR 4.8 billion, and we were ready to provide the rest of the money. But the Federal Agency for Rail Transport took a decision to defer the tranche to the next year, as the contractor would fail to assimilate the funds in 2011,” Nornickel replied.
By now the contractor has no more complaints with investors, and we may hope that the terms of the road construction will be kept. According to the project, Bystrinsky and Bugdainsky plants are to be commissioned in 2016 to reach the designed capacities in several years.
Despite the unique mineral wealth of Zabaikalsky region, it still lives on federal subsidies. There is not much opportunity for making money without adequate transport infrastructure. Its construction is a great challenge, a goal that could be reached only through cooperation.
“Private companies won’t cope with such large-scale projects without state support. Industrialization of Zabaikalsky region implies construction of towns from the ground up. And the State must be sure that resourses are not spent in vain, and business is really interested in the efficiency of infrastructure,” stressed Oleg Semenov, Director of 2K Audit Business Consulting.
By now in Russia there are only a few projects based on public-private partnership, and it’s not possible yet to estimate the effectiveness of this tool. But the Naryn – Gazimursky zavod railroad’s construction is proceeding, although not as fast as desired. And surely it will become a framework for further development of the region. Experts expect that the railroad, when launched, will trigger development of many new industrial objects such as, for example, Novo-Shirokinsky mine.
By Elena Dmitrievskaya [~DETAIL_TEXT] =>

The Road That Lost 100 Kilometres

A substantial part of Russia’s mineral wealth is concentrated in Zabaikalsky krai. The region comprises 38% of Russia’s explored reserves of fluorspar, over 25% of copper, 27% of molybdenum, 18% of titanium, 80% of lithium, 74% of zeolite, 7% of gold. Zabaikalsky region is also rich in uranium, iron, silver, vanadium, arsenic, hard coal and lignite. Geologists discovered many of these deposits in the 1950s, but for many years they remained unreachable due to the lack of infrastructure.
The first plans to construct a transportation system were announced in the early 2000s. This project aimed at the development of five metal deposits: Bystrinskoe, Bugdainskoe, Lugokanskoe, Kultuminskoe and Solonechenskoe, and the building of a 375-kilometre rail road connecting Naryn and Lugokan. Before, in the 1990s, an attempt to develop Bugdainsky ore field was made, and it proved to be one of the largest in the country. The five projected mining and smelting plants would be able to process 35 million tons of ore annually. The capacity of future road is estimated at 13.5 million tons of cargo a year.
In 2007 Norilsk Nickel Mining and Smelting Company and the Federal State Agency for Rail Transportation signed an agreement that gave birth to a large-scale infrastructure project. The Investment Fund of Russian Federation was to provide financing. The total costs of the project amounted to RUR 104.597 billion. It was agreed that 69% of the railway construction costs would be covered by the Fund and 31% by Norilsk Nickel. Industrial development of mineral deposits would be carried out solely at Norilsk Nickel’s expense.
But soon after, as the global financial crisis emerged, the project was curtailed. In the course of on-site exploration it became evident that three mineral deposits out of five initially selected could not ensure a viable rate of return. Finally, Nornickel abandoned the idea to build these three plants, and the designed railroad was cut by 100 kilometres.
The revised project was approved by the government in the second half of 2010. According to it, in eight years’ time two mining and processing plants are to be established, and connected with the approach ways to the Naryn - Gazimursky zavod railroad.
According to Nornickel, a plant at Bystrinskoe deposit will product and process 10 million tons of ore annually. And the new railroad will be loaded with 62,000 tons of copper concentrate, 6.3 tons of gold concentrate and 2.1 million tons of iron ore concentrate annually. Bugdainskoe deposit would provide extraction of 16 million tons of ore and production of 9,800 tons of molybdenum concentrate each year.

A Story About Money

Inzhtransstroy Corporation, the general contractor of the project, started construction of a new 223-kilometre road between Gazimursky plant (zavod) and Naryn rail station in 2008. By the end of 2010 the 130-kilometre-long section connecting Naryn and Aleksandrovsky plant was completed, and the first trail launched. Construction of the second part linking Aleksandrovsky and Gazimursky plants proved to be much tougher. Last year preparatory works had been fulfilled and 42 kilometres of the track laid out.
Initially it was envisaged that the road would be put in operation by the end of 2011. But difficulties with financing and material supply interfered with this plan.
The road will consist of the main track and spurs leading to each of the mineral deposits. In December 2011 preparatory works on approach ways to Bystrinskoe minefield were started. The 12-kilometre-long combined auto-rail line is to be commissioned in the third quarter of 2013. The costs are estimated at RUR 2.8 billion. A 36-kilometre spur track to Bugdainskoe minefield is also to be built this year.
Still, even a public-private partnership does not guarantee that the agreed terms are met. In 2010 Inzhtransstroy had to cover some of the expenses with its own money due to the lack of funding from investors resulting from the financial crisis. The Investment Fund and Norilsk Nickel had planned to invest RUR 7 billion each in 2011, but transferred only part of the sum and only at the end of the year. Irregular metal supply also delayed project fulfillment.
Victor Basargin, the Minister of Regional Development, in autumn 2011 expressed his dissatisfaction with this course of events: “This year less than 30% of required financing was provided. I have a lot of questions for investors: where are the billions that they had promised?”
“The company sticks to its commitments on the project. In 2011 we already transferred RUR 4.8 billion, and we were ready to provide the rest of the money. But the Federal Agency for Rail Transport took a decision to defer the tranche to the next year, as the contractor would fail to assimilate the funds in 2011,” Nornickel replied.
By now the contractor has no more complaints with investors, and we may hope that the terms of the road construction will be kept. According to the project, Bystrinsky and Bugdainsky plants are to be commissioned in 2016 to reach the designed capacities in several years.
Despite the unique mineral wealth of Zabaikalsky region, it still lives on federal subsidies. There is not much opportunity for making money without adequate transport infrastructure. Its construction is a great challenge, a goal that could be reached only through cooperation.
“Private companies won’t cope with such large-scale projects without state support. Industrialization of Zabaikalsky region implies construction of towns from the ground up. And the State must be sure that resourses are not spent in vain, and business is really interested in the efficiency of infrastructure,” stressed Oleg Semenov, Director of 2K Audit Business Consulting.
By now in Russia there are only a few projects based on public-private partnership, and it’s not possible yet to estimate the effectiveness of this tool. But the Naryn – Gazimursky zavod railroad’s construction is proceeding, although not as fast as desired. And surely it will become a framework for further development of the region. Experts expect that the railroad, when launched, will trigger development of many new industrial objects such as, for example, Novo-Shirokinsky mine.
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РЖД-Партнер

Panorama. Company

This year, Global Ports is going to restore the volume of petrochemicals handling by attracting new clients, the company’s representatives told analysts during a phone conference.
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Global Ports Plans to Restore Petrochemicals Handling Volume in 2012

This year, Global Ports is going to restore the volume of petrochemicals handling by attracting new clients, the company’s representatives told analysts during a phone conference.
Among other things, the company plans to attract new clients as a result of Russia joining the WTO, which would equally match railway tariffs on transportation to Russian ports and to the harbours of neighbouring states by the middle of 2013.
Global Ports handled 7.1 million tons of petrochemicals in the second half of 2011 against 8.8 million tons in the first half of 2011; or 15.9 million tons in 2011 against 18.2 million tons in 2010. The decline in the volume was caused by the launch of a petrochemicals terminal in Ust-Luga, the market share of which is 10%.


Ukrainian Wagon Builders Increased Cargo Railcars Production by 17% in January-February

In the first two months of 2012, Ukrainian wagons building enterprises increased manufacturing of cargo railcars by 17% in comparison with the same period of 2011.
According to the Ukrainian Ministry of Economic Development, they produced 7,900 freight wagons in January-February 2012. It is by 1,114 units more than in the first two months of 2011. For the sake of comparison: the increase in the number of freight railcars produced in January 2012 was 1,230 units (+41%).
The reason for the growth rate reduction was a smaller number of wagons made last February. 3,600 cargo wagons were produced by Ukrainian enterprises in February 2012, a 2.3% decrease year-on-year (-80 units). In comparison with January 2012, the decline was 15.2% (-640 units).
In 2011, Ukrainian enterprises produced 52,300 cargo wagons, a 32.6% increase year-on-year.

FAS Allows Mechel-Trans to Buy 100% Stake in Vanino Sea Port

The Federal Antimonopoly Service (the FAS) permitted Mechel-Trans LLC to purchase a 100% stake in Vanino Commercial Sea Port, the largest stevedoring company in the Khabarovsk region.
The story of the Vanino port privatization started in May 2011, when Seltchstroy LLC won the auction of a 55% stake in the port’s authorized capital. The company’s bid was the biggest – RUR 10.8 billion (the starting price was RUR 934 million), however Seltchstroy LLC failed to pay for the shareholding, and the auction was considered null and void.
At the end of January 2012, the FAS granted a similar request of UCL Holding, which participated in the first auction for the port Vanino privatization.
Representatives of Mechel refused to comment on the conditions on which the company will participate in the auction.
Alexey Uvarov, the Head of Property Relations Department, the Ministry of Economic Development, said in February that the auction for the Vanino port might take place this spring.

RZD-Logistiс Started Cargo Transportation for OBI Retail Chain

RZD-Logistiс started to provide multimodal transportation from south-east Asia ports to Moscow, the company’s press-service reported. In the framework of the new service, transportation of the first batch of cargoes for OBI’s retail chain has been organised.
On March 19, a ship with a batch of 40-foot containers left Ningbo port (China) for Inkou port (China). The complex service envisages transshipment to the transit port by sea, transloading of loaded containers on railcars, further transportation by railway in China to Manchuria-Zabaikalsk border crossing, transit customs registration, containers transloading from Chinese flat wagons to broad gauge railcars (1520 mm), transportation on the Russian territory to destination station Moscow-Tovarnaya-Paveletskaya, and road transportation from the destination station to the client’s warehouse.
In future, it is planned to consolidate outgoing import volumes of OBI in one of Chinese transit ports and to form a container block train destined for Moscow.
The planned volume of transportation is about 100 40-foot containers (two container trains) per month. This service will provide an optimal time of cargo delivery – not more than 25 days.

Investments of TransContainer to Reach RUR 6.8 Billion in 2012

According to the TransContainer’s information, its investment programme is to amount to RUR 6.8 billion in 2012.
RUR 4.2 billion will be spent purchasing flat wagons, RUR 0.6 billion – to buy containers, RUR 1.2 billion to develop terminals, and RUR 0.9 billion – on other facilities.
In 2013, the company’s investments are supposed to reach RUR 6.9 billion. The company can invest RUR 4.4 billion to buy railcars, RUR 0.8 billion to purchase boxes, RUR 0.9 billion to develop terminals, and RUR 0.8 billion on other facilities.

Georgian Railway Announces Financial Results

Georgian Railway LLC, Georgia’s integrated railway company, announced its financial results for the year 2011.
Revenue in 2011 was GEL 477.4 million (approximately EUR 220.18 million), representing an increase of 18% over revenue in the year 2010. Revenues from both freight traffic and passenger traffic increased in 2011. Freight traffic revenues increased by 16%, while passenger traffic revenues increased by 4%. Net profit for the year 2011 amounted to GEL 174.4 million (approximately EUR 80.44 million), an increase of 72% compared with the net profit of GEL 101.5 million (EUR 46.81 million) for the year 2010.

Freight One: Net Profit Increased by 80.2% in 2011

According to Russian Accounting Standards, in 2011 the net profit of Freight One increased by 80.2% year-on-year to RUR 20.5 billion.
The company’s revenue grew by 18.6% in comparison with 2010 to RUR 115.2 billion. As of the beginning of 2012, the company had an untapped line of credit for more than RUR 4 billion.

Ukrainian High-Speed Railway Company Established

The government of Ukraine launched a state enterprise Ukrainian High-Speed Railway Company.
The target of the new company is extension of services provided to passengers using high-speed railway transport.
According to the Ukrainian Ministry of Infrastructure, the company was established to fulfill the state target programme of preparation for Euro 2012, and to meet the requirements of the European Bank of Reconstruction and Development that conditions should be created for efficient reform of the sector of services provided at passenger transportation by high-speed railway rolling stock. The innovation is put into operation within the frameworks of the Ukraine’s course to develop transnational corridors for high-speed passenger transportation by railway and the programme of Ukrzaliznytsya to renew passenger rolling stock for interregional transportation.

Transmashholding: 38% Increase in Revenue in 2011

In 2011, the revenue from sale of products and services of Transmashholding group of companies (TMH) increased by 38% in comparison with the previous year to RUR 106.3 billion.
Sales of mainline diesel locomotives grew from 96 to 152 units (+59% year-on-year), that of mainline electric locomotives increased from 378 to 413 units (+10%). Last year, TMH sold 126 diesel-locomotive shunters (95 in 2010, +33%), 343 metro wagons (298 in 2010, +16%). Sales of industrial electric locomotives doubled (15 units in 2010, 33 in 2011).
In 2011, TMH supplied customers with 4,652 cargo wagons, a 47% increase in comparison with 2010, when 3,166 freight railcars were produced.

Primorsk Port Will Diversify Its Throughput Due to Dry Cargoes Handling Starting from 2015

The port of Primorsk will diversify its throughput due to dry cargoes handling starting from 2015, states the review of IFC Metropol analysts.
In addition, Novorossiysk Commercial Sea Port (NCSP) group of companies can build terminals for handling containers, ferrous metals, mineral fertilizers, petrochemicals, iron ore and ore concentrate in the Primorsk port. Analysts say that the total capacity of these terminals will amount to approximately 40 million tons.
“The company’s top management has already confirmed the need for capacities of 34 million tons. Despite information about capital investments in this project not being disclosed, we forecast that they will be more than $ 1 billion,” runs the review. Analysts believe that the final decision will be made after RZD constructs the necessary railway infrastructure.
In the opinion of analysts, the NCSP group of companies has chosen a pragmatic approach to carry out its strategy having concentrated on handling the most profitable cargoes in 2012-2014.
“We expect that a new terminal will be constructed in the Primorsk port after 2015,” they said in the review.

UVZ to Start Construction of New Casting Plant in 2012

Research and Production Corporation Uralvagonzavod (UVZ) will start to construct a new casting plant in 2012, said Alexander Petrov, Minister of Industry and Science of the Sverdlovsk Region.
The project will be financed from the company’s own means and the federal budget. According to the federal target programme, RUR 103 billion is planned to be invested in UVZ development. [~DETAIL_TEXT] =>

Global Ports Plans to Restore Petrochemicals Handling Volume in 2012

This year, Global Ports is going to restore the volume of petrochemicals handling by attracting new clients, the company’s representatives told analysts during a phone conference.
Among other things, the company plans to attract new clients as a result of Russia joining the WTO, which would equally match railway tariffs on transportation to Russian ports and to the harbours of neighbouring states by the middle of 2013.
Global Ports handled 7.1 million tons of petrochemicals in the second half of 2011 against 8.8 million tons in the first half of 2011; or 15.9 million tons in 2011 against 18.2 million tons in 2010. The decline in the volume was caused by the launch of a petrochemicals terminal in Ust-Luga, the market share of which is 10%.


Ukrainian Wagon Builders Increased Cargo Railcars Production by 17% in January-February

In the first two months of 2012, Ukrainian wagons building enterprises increased manufacturing of cargo railcars by 17% in comparison with the same period of 2011.
According to the Ukrainian Ministry of Economic Development, they produced 7,900 freight wagons in January-February 2012. It is by 1,114 units more than in the first two months of 2011. For the sake of comparison: the increase in the number of freight railcars produced in January 2012 was 1,230 units (+41%).
The reason for the growth rate reduction was a smaller number of wagons made last February. 3,600 cargo wagons were produced by Ukrainian enterprises in February 2012, a 2.3% decrease year-on-year (-80 units). In comparison with January 2012, the decline was 15.2% (-640 units).
In 2011, Ukrainian enterprises produced 52,300 cargo wagons, a 32.6% increase year-on-year.

FAS Allows Mechel-Trans to Buy 100% Stake in Vanino Sea Port

The Federal Antimonopoly Service (the FAS) permitted Mechel-Trans LLC to purchase a 100% stake in Vanino Commercial Sea Port, the largest stevedoring company in the Khabarovsk region.
The story of the Vanino port privatization started in May 2011, when Seltchstroy LLC won the auction of a 55% stake in the port’s authorized capital. The company’s bid was the biggest – RUR 10.8 billion (the starting price was RUR 934 million), however Seltchstroy LLC failed to pay for the shareholding, and the auction was considered null and void.
At the end of January 2012, the FAS granted a similar request of UCL Holding, which participated in the first auction for the port Vanino privatization.
Representatives of Mechel refused to comment on the conditions on which the company will participate in the auction.
Alexey Uvarov, the Head of Property Relations Department, the Ministry of Economic Development, said in February that the auction for the Vanino port might take place this spring.

RZD-Logistiс Started Cargo Transportation for OBI Retail Chain

RZD-Logistiс started to provide multimodal transportation from south-east Asia ports to Moscow, the company’s press-service reported. In the framework of the new service, transportation of the first batch of cargoes for OBI’s retail chain has been organised.
On March 19, a ship with a batch of 40-foot containers left Ningbo port (China) for Inkou port (China). The complex service envisages transshipment to the transit port by sea, transloading of loaded containers on railcars, further transportation by railway in China to Manchuria-Zabaikalsk border crossing, transit customs registration, containers transloading from Chinese flat wagons to broad gauge railcars (1520 mm), transportation on the Russian territory to destination station Moscow-Tovarnaya-Paveletskaya, and road transportation from the destination station to the client’s warehouse.
In future, it is planned to consolidate outgoing import volumes of OBI in one of Chinese transit ports and to form a container block train destined for Moscow.
The planned volume of transportation is about 100 40-foot containers (two container trains) per month. This service will provide an optimal time of cargo delivery – not more than 25 days.

Investments of TransContainer to Reach RUR 6.8 Billion in 2012

According to the TransContainer’s information, its investment programme is to amount to RUR 6.8 billion in 2012.
RUR 4.2 billion will be spent purchasing flat wagons, RUR 0.6 billion – to buy containers, RUR 1.2 billion to develop terminals, and RUR 0.9 billion – on other facilities.
In 2013, the company’s investments are supposed to reach RUR 6.9 billion. The company can invest RUR 4.4 billion to buy railcars, RUR 0.8 billion to purchase boxes, RUR 0.9 billion to develop terminals, and RUR 0.8 billion on other facilities.

Georgian Railway Announces Financial Results

Georgian Railway LLC, Georgia’s integrated railway company, announced its financial results for the year 2011.
Revenue in 2011 was GEL 477.4 million (approximately EUR 220.18 million), representing an increase of 18% over revenue in the year 2010. Revenues from both freight traffic and passenger traffic increased in 2011. Freight traffic revenues increased by 16%, while passenger traffic revenues increased by 4%. Net profit for the year 2011 amounted to GEL 174.4 million (approximately EUR 80.44 million), an increase of 72% compared with the net profit of GEL 101.5 million (EUR 46.81 million) for the year 2010.

Freight One: Net Profit Increased by 80.2% in 2011

According to Russian Accounting Standards, in 2011 the net profit of Freight One increased by 80.2% year-on-year to RUR 20.5 billion.
The company’s revenue grew by 18.6% in comparison with 2010 to RUR 115.2 billion. As of the beginning of 2012, the company had an untapped line of credit for more than RUR 4 billion.

Ukrainian High-Speed Railway Company Established

The government of Ukraine launched a state enterprise Ukrainian High-Speed Railway Company.
The target of the new company is extension of services provided to passengers using high-speed railway transport.
According to the Ukrainian Ministry of Infrastructure, the company was established to fulfill the state target programme of preparation for Euro 2012, and to meet the requirements of the European Bank of Reconstruction and Development that conditions should be created for efficient reform of the sector of services provided at passenger transportation by high-speed railway rolling stock. The innovation is put into operation within the frameworks of the Ukraine’s course to develop transnational corridors for high-speed passenger transportation by railway and the programme of Ukrzaliznytsya to renew passenger rolling stock for interregional transportation.

Transmashholding: 38% Increase in Revenue in 2011

In 2011, the revenue from sale of products and services of Transmashholding group of companies (TMH) increased by 38% in comparison with the previous year to RUR 106.3 billion.
Sales of mainline diesel locomotives grew from 96 to 152 units (+59% year-on-year), that of mainline electric locomotives increased from 378 to 413 units (+10%). Last year, TMH sold 126 diesel-locomotive shunters (95 in 2010, +33%), 343 metro wagons (298 in 2010, +16%). Sales of industrial electric locomotives doubled (15 units in 2010, 33 in 2011).
In 2011, TMH supplied customers with 4,652 cargo wagons, a 47% increase in comparison with 2010, when 3,166 freight railcars were produced.

Primorsk Port Will Diversify Its Throughput Due to Dry Cargoes Handling Starting from 2015

The port of Primorsk will diversify its throughput due to dry cargoes handling starting from 2015, states the review of IFC Metropol analysts.
In addition, Novorossiysk Commercial Sea Port (NCSP) group of companies can build terminals for handling containers, ferrous metals, mineral fertilizers, petrochemicals, iron ore and ore concentrate in the Primorsk port. Analysts say that the total capacity of these terminals will amount to approximately 40 million tons.
“The company’s top management has already confirmed the need for capacities of 34 million tons. Despite information about capital investments in this project not being disclosed, we forecast that they will be more than $ 1 billion,” runs the review. Analysts believe that the final decision will be made after RZD constructs the necessary railway infrastructure.
In the opinion of analysts, the NCSP group of companies has chosen a pragmatic approach to carry out its strategy having concentrated on handling the most profitable cargoes in 2012-2014.
“We expect that a new terminal will be constructed in the Primorsk port after 2015,” they said in the review.

UVZ to Start Construction of New Casting Plant in 2012

Research and Production Corporation Uralvagonzavod (UVZ) will start to construct a new casting plant in 2012, said Alexander Petrov, Minister of Industry and Science of the Sverdlovsk Region.
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Global Ports Plans to Restore Petrochemicals Handling Volume in 2012

This year, Global Ports is going to restore the volume of petrochemicals handling by attracting new clients, the company’s representatives told analysts during a phone conference.
Among other things, the company plans to attract new clients as a result of Russia joining the WTO, which would equally match railway tariffs on transportation to Russian ports and to the harbours of neighbouring states by the middle of 2013.
Global Ports handled 7.1 million tons of petrochemicals in the second half of 2011 against 8.8 million tons in the first half of 2011; or 15.9 million tons in 2011 against 18.2 million tons in 2010. The decline in the volume was caused by the launch of a petrochemicals terminal in Ust-Luga, the market share of which is 10%.


Ukrainian Wagon Builders Increased Cargo Railcars Production by 17% in January-February

In the first two months of 2012, Ukrainian wagons building enterprises increased manufacturing of cargo railcars by 17% in comparison with the same period of 2011.
According to the Ukrainian Ministry of Economic Development, they produced 7,900 freight wagons in January-February 2012. It is by 1,114 units more than in the first two months of 2011. For the sake of comparison: the increase in the number of freight railcars produced in January 2012 was 1,230 units (+41%).
The reason for the growth rate reduction was a smaller number of wagons made last February. 3,600 cargo wagons were produced by Ukrainian enterprises in February 2012, a 2.3% decrease year-on-year (-80 units). In comparison with January 2012, the decline was 15.2% (-640 units).
In 2011, Ukrainian enterprises produced 52,300 cargo wagons, a 32.6% increase year-on-year.

FAS Allows Mechel-Trans to Buy 100% Stake in Vanino Sea Port

The Federal Antimonopoly Service (the FAS) permitted Mechel-Trans LLC to purchase a 100% stake in Vanino Commercial Sea Port, the largest stevedoring company in the Khabarovsk region.
The story of the Vanino port privatization started in May 2011, when Seltchstroy LLC won the auction of a 55% stake in the port’s authorized capital. The company’s bid was the biggest – RUR 10.8 billion (the starting price was RUR 934 million), however Seltchstroy LLC failed to pay for the shareholding, and the auction was considered null and void.
At the end of January 2012, the FAS granted a similar request of UCL Holding, which participated in the first auction for the port Vanino privatization.
Representatives of Mechel refused to comment on the conditions on which the company will participate in the auction.
Alexey Uvarov, the Head of Property Relations Department, the Ministry of Economic Development, said in February that the auction for the Vanino port might take place this spring.

RZD-Logistiс Started Cargo Transportation for OBI Retail Chain

RZD-Logistiс started to provide multimodal transportation from south-east Asia ports to Moscow, the company’s press-service reported. In the framework of the new service, transportation of the first batch of cargoes for OBI’s retail chain has been organised.
On March 19, a ship with a batch of 40-foot containers left Ningbo port (China) for Inkou port (China). The complex service envisages transshipment to the transit port by sea, transloading of loaded containers on railcars, further transportation by railway in China to Manchuria-Zabaikalsk border crossing, transit customs registration, containers transloading from Chinese flat wagons to broad gauge railcars (1520 mm), transportation on the Russian territory to destination station Moscow-Tovarnaya-Paveletskaya, and road transportation from the destination station to the client’s warehouse.
In future, it is planned to consolidate outgoing import volumes of OBI in one of Chinese transit ports and to form a container block train destined for Moscow.
The planned volume of transportation is about 100 40-foot containers (two container trains) per month. This service will provide an optimal time of cargo delivery – not more than 25 days.

Investments of TransContainer to Reach RUR 6.8 Billion in 2012

According to the TransContainer’s information, its investment programme is to amount to RUR 6.8 billion in 2012.
RUR 4.2 billion will be spent purchasing flat wagons, RUR 0.6 billion – to buy containers, RUR 1.2 billion to develop terminals, and RUR 0.9 billion – on other facilities.
In 2013, the company’s investments are supposed to reach RUR 6.9 billion. The company can invest RUR 4.4 billion to buy railcars, RUR 0.8 billion to purchase boxes, RUR 0.9 billion to develop terminals, and RUR 0.8 billion on other facilities.

Georgian Railway Announces Financial Results

Georgian Railway LLC, Georgia’s integrated railway company, announced its financial results for the year 2011.
Revenue in 2011 was GEL 477.4 million (approximately EUR 220.18 million), representing an increase of 18% over revenue in the year 2010. Revenues from both freight traffic and passenger traffic increased in 2011. Freight traffic revenues increased by 16%, while passenger traffic revenues increased by 4%. Net profit for the year 2011 amounted to GEL 174.4 million (approximately EUR 80.44 million), an increase of 72% compared with the net profit of GEL 101.5 million (EUR 46.81 million) for the year 2010.

Freight One: Net Profit Increased by 80.2% in 2011

According to Russian Accounting Standards, in 2011 the net profit of Freight One increased by 80.2% year-on-year to RUR 20.5 billion.
The company’s revenue grew by 18.6% in comparison with 2010 to RUR 115.2 billion. As of the beginning of 2012, the company had an untapped line of credit for more than RUR 4 billion.

Ukrainian High-Speed Railway Company Established

The government of Ukraine launched a state enterprise Ukrainian High-Speed Railway Company.
The target of the new company is extension of services provided to passengers using high-speed railway transport.
According to the Ukrainian Ministry of Infrastructure, the company was established to fulfill the state target programme of preparation for Euro 2012, and to meet the requirements of the European Bank of Reconstruction and Development that conditions should be created for efficient reform of the sector of services provided at passenger transportation by high-speed railway rolling stock. The innovation is put into operation within the frameworks of the Ukraine’s course to develop transnational corridors for high-speed passenger transportation by railway and the programme of Ukrzaliznytsya to renew passenger rolling stock for interregional transportation.

Transmashholding: 38% Increase in Revenue in 2011

In 2011, the revenue from sale of products and services of Transmashholding group of companies (TMH) increased by 38% in comparison with the previous year to RUR 106.3 billion.
Sales of mainline diesel locomotives grew from 96 to 152 units (+59% year-on-year), that of mainline electric locomotives increased from 378 to 413 units (+10%). Last year, TMH sold 126 diesel-locomotive shunters (95 in 2010, +33%), 343 metro wagons (298 in 2010, +16%). Sales of industrial electric locomotives doubled (15 units in 2010, 33 in 2011).
In 2011, TMH supplied customers with 4,652 cargo wagons, a 47% increase in comparison with 2010, when 3,166 freight railcars were produced.

Primorsk Port Will Diversify Its Throughput Due to Dry Cargoes Handling Starting from 2015

The port of Primorsk will diversify its throughput due to dry cargoes handling starting from 2015, states the review of IFC Metropol analysts.
In addition, Novorossiysk Commercial Sea Port (NCSP) group of companies can build terminals for handling containers, ferrous metals, mineral fertilizers, petrochemicals, iron ore and ore concentrate in the Primorsk port. Analysts say that the total capacity of these terminals will amount to approximately 40 million tons.
“The company’s top management has already confirmed the need for capacities of 34 million tons. Despite information about capital investments in this project not being disclosed, we forecast that they will be more than $ 1 billion,” runs the review. Analysts believe that the final decision will be made after RZD constructs the necessary railway infrastructure.
In the opinion of analysts, the NCSP group of companies has chosen a pragmatic approach to carry out its strategy having concentrated on handling the most profitable cargoes in 2012-2014.
“We expect that a new terminal will be constructed in the Primorsk port after 2015,” they said in the review.

UVZ to Start Construction of New Casting Plant in 2012

Research and Production Corporation Uralvagonzavod (UVZ) will start to construct a new casting plant in 2012, said Alexander Petrov, Minister of Industry and Science of the Sverdlovsk Region.
The project will be financed from the company’s own means and the federal budget. According to the federal target programme, RUR 103 billion is planned to be invested in UVZ development. [~DETAIL_TEXT] =>

Global Ports Plans to Restore Petrochemicals Handling Volume in 2012

This year, Global Ports is going to restore the volume of petrochemicals handling by attracting new clients, the company’s representatives told analysts during a phone conference.
Among other things, the company plans to attract new clients as a result of Russia joining the WTO, which would equally match railway tariffs on transportation to Russian ports and to the harbours of neighbouring states by the middle of 2013.
Global Ports handled 7.1 million tons of petrochemicals in the second half of 2011 against 8.8 million tons in the first half of 2011; or 15.9 million tons in 2011 against 18.2 million tons in 2010. The decline in the volume was caused by the launch of a petrochemicals terminal in Ust-Luga, the market share of which is 10%.


Ukrainian Wagon Builders Increased Cargo Railcars Production by 17% in January-February

In the first two months of 2012, Ukrainian wagons building enterprises increased manufacturing of cargo railcars by 17% in comparison with the same period of 2011.
According to the Ukrainian Ministry of Economic Development, they produced 7,900 freight wagons in January-February 2012. It is by 1,114 units more than in the first two months of 2011. For the sake of comparison: the increase in the number of freight railcars produced in January 2012 was 1,230 units (+41%).
The reason for the growth rate reduction was a smaller number of wagons made last February. 3,600 cargo wagons were produced by Ukrainian enterprises in February 2012, a 2.3% decrease year-on-year (-80 units). In comparison with January 2012, the decline was 15.2% (-640 units).
In 2011, Ukrainian enterprises produced 52,300 cargo wagons, a 32.6% increase year-on-year.

FAS Allows Mechel-Trans to Buy 100% Stake in Vanino Sea Port

The Federal Antimonopoly Service (the FAS) permitted Mechel-Trans LLC to purchase a 100% stake in Vanino Commercial Sea Port, the largest stevedoring company in the Khabarovsk region.
The story of the Vanino port privatization started in May 2011, when Seltchstroy LLC won the auction of a 55% stake in the port’s authorized capital. The company’s bid was the biggest – RUR 10.8 billion (the starting price was RUR 934 million), however Seltchstroy LLC failed to pay for the shareholding, and the auction was considered null and void.
At the end of January 2012, the FAS granted a similar request of UCL Holding, which participated in the first auction for the port Vanino privatization.
Representatives of Mechel refused to comment on the conditions on which the company will participate in the auction.
Alexey Uvarov, the Head of Property Relations Department, the Ministry of Economic Development, said in February that the auction for the Vanino port might take place this spring.

RZD-Logistiс Started Cargo Transportation for OBI Retail Chain

RZD-Logistiс started to provide multimodal transportation from south-east Asia ports to Moscow, the company’s press-service reported. In the framework of the new service, transportation of the first batch of cargoes for OBI’s retail chain has been organised.
On March 19, a ship with a batch of 40-foot containers left Ningbo port (China) for Inkou port (China). The complex service envisages transshipment to the transit port by sea, transloading of loaded containers on railcars, further transportation by railway in China to Manchuria-Zabaikalsk border crossing, transit customs registration, containers transloading from Chinese flat wagons to broad gauge railcars (1520 mm), transportation on the Russian territory to destination station Moscow-Tovarnaya-Paveletskaya, and road transportation from the destination station to the client’s warehouse.
In future, it is planned to consolidate outgoing import volumes of OBI in one of Chinese transit ports and to form a container block train destined for Moscow.
The planned volume of transportation is about 100 40-foot containers (two container trains) per month. This service will provide an optimal time of cargo delivery – not more than 25 days.

Investments of TransContainer to Reach RUR 6.8 Billion in 2012

According to the TransContainer’s information, its investment programme is to amount to RUR 6.8 billion in 2012.
RUR 4.2 billion will be spent purchasing flat wagons, RUR 0.6 billion – to buy containers, RUR 1.2 billion to develop terminals, and RUR 0.9 billion – on other facilities.
In 2013, the company’s investments are supposed to reach RUR 6.9 billion. The company can invest RUR 4.4 billion to buy railcars, RUR 0.8 billion to purchase boxes, RUR 0.9 billion to develop terminals, and RUR 0.8 billion on other facilities.

Georgian Railway Announces Financial Results

Georgian Railway LLC, Georgia’s integrated railway company, announced its financial results for the year 2011.
Revenue in 2011 was GEL 477.4 million (approximately EUR 220.18 million), representing an increase of 18% over revenue in the year 2010. Revenues from both freight traffic and passenger traffic increased in 2011. Freight traffic revenues increased by 16%, while passenger traffic revenues increased by 4%. Net profit for the year 2011 amounted to GEL 174.4 million (approximately EUR 80.44 million), an increase of 72% compared with the net profit of GEL 101.5 million (EUR 46.81 million) for the year 2010.

Freight One: Net Profit Increased by 80.2% in 2011

According to Russian Accounting Standards, in 2011 the net profit of Freight One increased by 80.2% year-on-year to RUR 20.5 billion.
The company’s revenue grew by 18.6% in comparison with 2010 to RUR 115.2 billion. As of the beginning of 2012, the company had an untapped line of credit for more than RUR 4 billion.

Ukrainian High-Speed Railway Company Established

The government of Ukraine launched a state enterprise Ukrainian High-Speed Railway Company.
The target of the new company is extension of services provided to passengers using high-speed railway transport.
According to the Ukrainian Ministry of Infrastructure, the company was established to fulfill the state target programme of preparation for Euro 2012, and to meet the requirements of the European Bank of Reconstruction and Development that conditions should be created for efficient reform of the sector of services provided at passenger transportation by high-speed railway rolling stock. The innovation is put into operation within the frameworks of the Ukraine’s course to develop transnational corridors for high-speed passenger transportation by railway and the programme of Ukrzaliznytsya to renew passenger rolling stock for interregional transportation.

Transmashholding: 38% Increase in Revenue in 2011

In 2011, the revenue from sale of products and services of Transmashholding group of companies (TMH) increased by 38% in comparison with the previous year to RUR 106.3 billion.
Sales of mainline diesel locomotives grew from 96 to 152 units (+59% year-on-year), that of mainline electric locomotives increased from 378 to 413 units (+10%). Last year, TMH sold 126 diesel-locomotive shunters (95 in 2010, +33%), 343 metro wagons (298 in 2010, +16%). Sales of industrial electric locomotives doubled (15 units in 2010, 33 in 2011).
In 2011, TMH supplied customers with 4,652 cargo wagons, a 47% increase in comparison with 2010, when 3,166 freight railcars were produced.

Primorsk Port Will Diversify Its Throughput Due to Dry Cargoes Handling Starting from 2015

The port of Primorsk will diversify its throughput due to dry cargoes handling starting from 2015, states the review of IFC Metropol analysts.
In addition, Novorossiysk Commercial Sea Port (NCSP) group of companies can build terminals for handling containers, ferrous metals, mineral fertilizers, petrochemicals, iron ore and ore concentrate in the Primorsk port. Analysts say that the total capacity of these terminals will amount to approximately 40 million tons.
“The company’s top management has already confirmed the need for capacities of 34 million tons. Despite information about capital investments in this project not being disclosed, we forecast that they will be more than $ 1 billion,” runs the review. Analysts believe that the final decision will be made after RZD constructs the necessary railway infrastructure.
In the opinion of analysts, the NCSP group of companies has chosen a pragmatic approach to carry out its strategy having concentrated on handling the most profitable cargoes in 2012-2014.
“We expect that a new terminal will be constructed in the Primorsk port after 2015,” they said in the review.

UVZ to Start Construction of New Casting Plant in 2012

Research and Production Corporation Uralvagonzavod (UVZ) will start to construct a new casting plant in 2012, said Alexander Petrov, Minister of Industry and Science of the Sverdlovsk Region.
The project will be financed from the company’s own means and the federal budget. According to the federal target programme, RUR 103 billion is planned to be invested in UVZ development. [DETAIL_TEXT_TYPE] => html [~DETAIL_TEXT_TYPE] => html [PREVIEW_TEXT] => This year, Global Ports is going to restore the volume of petrochemicals handling by attracting new clients, the company’s representatives told analysts during a phone conference. [~PREVIEW_TEXT] => This year, Global Ports is going to restore the volume of petrochemicals handling by attracting new clients, the company’s representatives told analysts during a phone conference. 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РЖД-Партнер

Piggyback Ride for Neighbour

 As predicted by experts, interest in piggyback transportation in Russia is increasing. The major factor is the Sochi Olympic Games coming soon. European experience shows that such a method of freight transportation is ideal for fast, continuous delivery of cargoes. It seems impossible to launch regular piggyback trains by 2014, but the first steps have already been taken. RZD will start to work with Finland, with whom they share the 1520 gauge.
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Green Policy Vs. Profit

According to the Finnish Freight Forwarders’ Association, almost 90% of all freight transportation today falls on road transport. More than 80,000 trucks are being operated by almost 10,000 companies in Finland. And about 5,000 vehicles are involved in freight transportation with Russia. Internal transportation in Finland has approximately 450 million tons of cargo annually. Only about 40 million tons are carried by railway companies, and 70% of them are being transported by inland routes.
Piggyback transportation between Finland and Russia is planned for the second half of 2013. And both sides are really enthusiastic about this. The document, stating that the main objective of such cooperation is the creation of a competitive product on delivery of cargoes in the international transport market, has already been signed. Moreover, last summer pilot transportation on the route Helsinki-St Petersburg-Moscow took place. The rolling stock of Finnish production was used for it, the employer company was “UPM-Kymmene”, Europe’s biggest producer of plywood.
Most goods from Finland arrive in Russia from the ports of Helsinki, Kotka and Hamina. Such a volume of traffic naturally creates serious traffic jams at the border, which often make problems and do not help to deliver the goods on time. According to the International Union of Combined Road-Rail Transport Companies punctuality of piggyback trains is 70%, it is also estimated that it is profitable to use piggyback carriage up to a distance of 400-500 km. According to the Finnish Consul for trade and economy of Finland in St. Petersburg Jyrki Terva, “switching” from road traffic to the railway, without any doubt, will improve the transportation situation in general.
But according to the Secretary-General of the International Transport Forum, Jack Short, American experience has shown that piggyback carriage had never been really profitable. The main reason is the unwillingness to support this type of rail transportation. However, in Europe, the situation is different – the demand for piggyback trains in Switzerland, Austria, Germany, France and Finland is highly associated with interest in environmental security, rather than with economic efficiency, as it was in the United States.
Therefore, in the countries of the European Union switching the bulk of freight traffic to the railway is the priority. According to the European Commission’s White Paper on the strategy for transport to the year 2030, it is scheduled to transfer 30% of road traffic to rail or water transport, and by the year 2050 – more than 50%. In Russia such goals have not been put yet – economic factors are more influential. A new system will help companies reduce the cost of transport logistics, fuel and maintenance (for example, transportation by rail allows you to prevent wear of tyres), and extend the life of the road surface. Quite important is the safety of cargo delivery, because on the road connecting Helsinki and St Petersburg, car accidents are not uncommon.

Is it Easy?

The desire for cooperation with the Finns can be explained – Russia shares a common gauge. However, unlike Austria, where piggyback transport has become commercially viable, Finnish railways have not really succeeded in it. In last year’s report of the Chief Engineer of the Ministry of Transport and Communications Jari Grun stated that railway operators are doing this service at almost unprofitable rates.
Another problem is connected with the existing infrastructure, particularly with the absence of normal access to ports. Thus, the volumes of cargo transportation in piggyback trains reduce. According to statistics of VR Transpoint, in 2010 less than 5,000 trailers were moved by railway, which is almost half that of 2006. «In 2010 VR Transpoint transported 5,378 vehicle combinations (truck & trailer) and 4,715 trailers, which is 17.4% less than previous year», said Ilkka Seppanen, Director for Freight Traffic in VR Group.
Perhaps the reason is that in Finland intermodal transport is carried out on only one route Helsinki-Oulu. Before that two other lines Tampere-Oulu and Turku were operating. According to a study by the British Commission for integrated transport, in terms of the relative intensity of cargo transportations in EU countries, Finland is a leader today. Therefore, among the potential areas for domestic intermodal transports routes Helsinki-Tampere and Helsinki-Ûvâskilâ, Helsinki-Kuopio, Turku-Rovaniemi are named. But it is clear that the development of these lines requires significant investment.
There are several options for the development of intermodal transport in Finland. If you leave the situation as it is, it could become worse in the near future and almost lead to the disappearance of piggyback trains completely. Specialists of the Ministry of Transport and Communications also think that in such a case, logistics costs would be increased, because market players will switch to roads.
To avoid this, new terminals should be built, at least five. Terminals serving piggyback trains are already working at stations in Helsinki, Oulu and Tampere. Construction of logistic centres in Kuopio, Ûlivieska, Kokkola, Vaasa and Seinäjoki are being discussed now. But it is important to consider the demand, because if they are not fully loaded, an issue of underinvestment will appear.

Fast and Cheap

Because of the low ground clearance on most European railways, piggyback transport there differs from those of the United States. In Finland, VR Group has park of 159 flat wagons. Trailers on the route Helsinki-Oulu, about 680 km long, are being transported. Drivers do not travel together with rolling stock and transportation is carried out only at night, making the entire system profitable.
“The lorry drivers drive the vehicles onto the wagons in the terminal via loading ramps. After positioning the vehicles according the loading regulations they secure the vehicles on wagons with aluminium wedges, - said Mr Seppanen. - An auxiliary dolly-axle is attached to the king pin of the trailer and then trailers are loaded on the wagons with a help of a terminal tractor. The drivers secure the trailers on wagons with aluminium wedges equally like the vehicles. Drivers are not travelling with the train. Local drivers take care of the pick-up and loading at the point of origin and other local drivers take care of unloading and delivery transport at the point of destination”.
According to Mr Seppanen, it’s possible to implement this technology in Russia, because it’s not necessary to make big changes to the existing railway system.
“The existing infrastructure is suited very well to piggyback. Only because trailers on flat cars exceed the normal loading gauge, we have enlarged the loading gauge on all relevant routes. There were very few obstacles which should be removed. The need to remove the obstacles is dependent on the route and number of obstacles”, – he said.
In general, the number of obstacles that must be removed from a route (e.g. low bridges), of course, depends on individual cases. But the basic costs are not associated with infrastructure reconstruction. Substantial sums have to be spent on rolling stock and terminal services.
The annual report of VR Cargo in 2010 said: “Piggybacking does have great potential”.
By By Christina Alexandrova [~DETAIL_TEXT] =>

Green Policy Vs. Profit

According to the Finnish Freight Forwarders’ Association, almost 90% of all freight transportation today falls on road transport. More than 80,000 trucks are being operated by almost 10,000 companies in Finland. And about 5,000 vehicles are involved in freight transportation with Russia. Internal transportation in Finland has approximately 450 million tons of cargo annually. Only about 40 million tons are carried by railway companies, and 70% of them are being transported by inland routes.
Piggyback transportation between Finland and Russia is planned for the second half of 2013. And both sides are really enthusiastic about this. The document, stating that the main objective of such cooperation is the creation of a competitive product on delivery of cargoes in the international transport market, has already been signed. Moreover, last summer pilot transportation on the route Helsinki-St Petersburg-Moscow took place. The rolling stock of Finnish production was used for it, the employer company was “UPM-Kymmene”, Europe’s biggest producer of plywood.
Most goods from Finland arrive in Russia from the ports of Helsinki, Kotka and Hamina. Such a volume of traffic naturally creates serious traffic jams at the border, which often make problems and do not help to deliver the goods on time. According to the International Union of Combined Road-Rail Transport Companies punctuality of piggyback trains is 70%, it is also estimated that it is profitable to use piggyback carriage up to a distance of 400-500 km. According to the Finnish Consul for trade and economy of Finland in St. Petersburg Jyrki Terva, “switching” from road traffic to the railway, without any doubt, will improve the transportation situation in general.
But according to the Secretary-General of the International Transport Forum, Jack Short, American experience has shown that piggyback carriage had never been really profitable. The main reason is the unwillingness to support this type of rail transportation. However, in Europe, the situation is different – the demand for piggyback trains in Switzerland, Austria, Germany, France and Finland is highly associated with interest in environmental security, rather than with economic efficiency, as it was in the United States.
Therefore, in the countries of the European Union switching the bulk of freight traffic to the railway is the priority. According to the European Commission’s White Paper on the strategy for transport to the year 2030, it is scheduled to transfer 30% of road traffic to rail or water transport, and by the year 2050 – more than 50%. In Russia such goals have not been put yet – economic factors are more influential. A new system will help companies reduce the cost of transport logistics, fuel and maintenance (for example, transportation by rail allows you to prevent wear of tyres), and extend the life of the road surface. Quite important is the safety of cargo delivery, because on the road connecting Helsinki and St Petersburg, car accidents are not uncommon.

Is it Easy?

The desire for cooperation with the Finns can be explained – Russia shares a common gauge. However, unlike Austria, where piggyback transport has become commercially viable, Finnish railways have not really succeeded in it. In last year’s report of the Chief Engineer of the Ministry of Transport and Communications Jari Grun stated that railway operators are doing this service at almost unprofitable rates.
Another problem is connected with the existing infrastructure, particularly with the absence of normal access to ports. Thus, the volumes of cargo transportation in piggyback trains reduce. According to statistics of VR Transpoint, in 2010 less than 5,000 trailers were moved by railway, which is almost half that of 2006. «In 2010 VR Transpoint transported 5,378 vehicle combinations (truck & trailer) and 4,715 trailers, which is 17.4% less than previous year», said Ilkka Seppanen, Director for Freight Traffic in VR Group.
Perhaps the reason is that in Finland intermodal transport is carried out on only one route Helsinki-Oulu. Before that two other lines Tampere-Oulu and Turku were operating. According to a study by the British Commission for integrated transport, in terms of the relative intensity of cargo transportations in EU countries, Finland is a leader today. Therefore, among the potential areas for domestic intermodal transports routes Helsinki-Tampere and Helsinki-Ûvâskilâ, Helsinki-Kuopio, Turku-Rovaniemi are named. But it is clear that the development of these lines requires significant investment.
There are several options for the development of intermodal transport in Finland. If you leave the situation as it is, it could become worse in the near future and almost lead to the disappearance of piggyback trains completely. Specialists of the Ministry of Transport and Communications also think that in such a case, logistics costs would be increased, because market players will switch to roads.
To avoid this, new terminals should be built, at least five. Terminals serving piggyback trains are already working at stations in Helsinki, Oulu and Tampere. Construction of logistic centres in Kuopio, Ûlivieska, Kokkola, Vaasa and Seinäjoki are being discussed now. But it is important to consider the demand, because if they are not fully loaded, an issue of underinvestment will appear.

Fast and Cheap

Because of the low ground clearance on most European railways, piggyback transport there differs from those of the United States. In Finland, VR Group has park of 159 flat wagons. Trailers on the route Helsinki-Oulu, about 680 km long, are being transported. Drivers do not travel together with rolling stock and transportation is carried out only at night, making the entire system profitable.
“The lorry drivers drive the vehicles onto the wagons in the terminal via loading ramps. After positioning the vehicles according the loading regulations they secure the vehicles on wagons with aluminium wedges, - said Mr Seppanen. - An auxiliary dolly-axle is attached to the king pin of the trailer and then trailers are loaded on the wagons with a help of a terminal tractor. The drivers secure the trailers on wagons with aluminium wedges equally like the vehicles. Drivers are not travelling with the train. Local drivers take care of the pick-up and loading at the point of origin and other local drivers take care of unloading and delivery transport at the point of destination”.
According to Mr Seppanen, it’s possible to implement this technology in Russia, because it’s not necessary to make big changes to the existing railway system.
“The existing infrastructure is suited very well to piggyback. Only because trailers on flat cars exceed the normal loading gauge, we have enlarged the loading gauge on all relevant routes. There were very few obstacles which should be removed. The need to remove the obstacles is dependent on the route and number of obstacles”, – he said.
In general, the number of obstacles that must be removed from a route (e.g. low bridges), of course, depends on individual cases. But the basic costs are not associated with infrastructure reconstruction. Substantial sums have to be spent on rolling stock and terminal services.
The annual report of VR Cargo in 2010 said: “Piggybacking does have great potential”.
By By Christina Alexandrova [DETAIL_TEXT_TYPE] => html [~DETAIL_TEXT_TYPE] => html [PREVIEW_TEXT] =>  As predicted by experts, interest in piggyback transportation in Russia is increasing. The major factor is the Sochi Olympic Games coming soon. European experience shows that such a method of freight transportation is ideal for fast, continuous delivery of cargoes. It seems impossible to launch regular piggyback trains by 2014, but the first steps have already been taken. RZD will start to work with Finland, with whom they share the 1520 gauge. [~PREVIEW_TEXT] =>  As predicted by experts, interest in piggyback transportation in Russia is increasing. The major factor is the Sochi Olympic Games coming soon. European experience shows that such a method of freight transportation is ideal for fast, continuous delivery of cargoes. It seems impossible to launch regular piggyback trains by 2014, but the first steps have already been taken. RZD will start to work with Finland, with whom they share the 1520 gauge. 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Green Policy Vs. Profit

According to the Finnish Freight Forwarders’ Association, almost 90% of all freight transportation today falls on road transport. More than 80,000 trucks are being operated by almost 10,000 companies in Finland. And about 5,000 vehicles are involved in freight transportation with Russia. Internal transportation in Finland has approximately 450 million tons of cargo annually. Only about 40 million tons are carried by railway companies, and 70% of them are being transported by inland routes.
Piggyback transportation between Finland and Russia is planned for the second half of 2013. And both sides are really enthusiastic about this. The document, stating that the main objective of such cooperation is the creation of a competitive product on delivery of cargoes in the international transport market, has already been signed. Moreover, last summer pilot transportation on the route Helsinki-St Petersburg-Moscow took place. The rolling stock of Finnish production was used for it, the employer company was “UPM-Kymmene”, Europe’s biggest producer of plywood.
Most goods from Finland arrive in Russia from the ports of Helsinki, Kotka and Hamina. Such a volume of traffic naturally creates serious traffic jams at the border, which often make problems and do not help to deliver the goods on time. According to the International Union of Combined Road-Rail Transport Companies punctuality of piggyback trains is 70%, it is also estimated that it is profitable to use piggyback carriage up to a distance of 400-500 km. According to the Finnish Consul for trade and economy of Finland in St. Petersburg Jyrki Terva, “switching” from road traffic to the railway, without any doubt, will improve the transportation situation in general.
But according to the Secretary-General of the International Transport Forum, Jack Short, American experience has shown that piggyback carriage had never been really profitable. The main reason is the unwillingness to support this type of rail transportation. However, in Europe, the situation is different – the demand for piggyback trains in Switzerland, Austria, Germany, France and Finland is highly associated with interest in environmental security, rather than with economic efficiency, as it was in the United States.
Therefore, in the countries of the European Union switching the bulk of freight traffic to the railway is the priority. According to the European Commission’s White Paper on the strategy for transport to the year 2030, it is scheduled to transfer 30% of road traffic to rail or water transport, and by the year 2050 – more than 50%. In Russia such goals have not been put yet – economic factors are more influential. A new system will help companies reduce the cost of transport logistics, fuel and maintenance (for example, transportation by rail allows you to prevent wear of tyres), and extend the life of the road surface. Quite important is the safety of cargo delivery, because on the road connecting Helsinki and St Petersburg, car accidents are not uncommon.

Is it Easy?

The desire for cooperation with the Finns can be explained – Russia shares a common gauge. However, unlike Austria, where piggyback transport has become commercially viable, Finnish railways have not really succeeded in it. In last year’s report of the Chief Engineer of the Ministry of Transport and Communications Jari Grun stated that railway operators are doing this service at almost unprofitable rates.
Another problem is connected with the existing infrastructure, particularly with the absence of normal access to ports. Thus, the volumes of cargo transportation in piggyback trains reduce. According to statistics of VR Transpoint, in 2010 less than 5,000 trailers were moved by railway, which is almost half that of 2006. «In 2010 VR Transpoint transported 5,378 vehicle combinations (truck & trailer) and 4,715 trailers, which is 17.4% less than previous year», said Ilkka Seppanen, Director for Freight Traffic in VR Group.
Perhaps the reason is that in Finland intermodal transport is carried out on only one route Helsinki-Oulu. Before that two other lines Tampere-Oulu and Turku were operating. According to a study by the British Commission for integrated transport, in terms of the relative intensity of cargo transportations in EU countries, Finland is a leader today. Therefore, among the potential areas for domestic intermodal transports routes Helsinki-Tampere and Helsinki-Ûvâskilâ, Helsinki-Kuopio, Turku-Rovaniemi are named. But it is clear that the development of these lines requires significant investment.
There are several options for the development of intermodal transport in Finland. If you leave the situation as it is, it could become worse in the near future and almost lead to the disappearance of piggyback trains completely. Specialists of the Ministry of Transport and Communications also think that in such a case, logistics costs would be increased, because market players will switch to roads.
To avoid this, new terminals should be built, at least five. Terminals serving piggyback trains are already working at stations in Helsinki, Oulu and Tampere. Construction of logistic centres in Kuopio, Ûlivieska, Kokkola, Vaasa and Seinäjoki are being discussed now. But it is important to consider the demand, because if they are not fully loaded, an issue of underinvestment will appear.

Fast and Cheap

Because of the low ground clearance on most European railways, piggyback transport there differs from those of the United States. In Finland, VR Group has park of 159 flat wagons. Trailers on the route Helsinki-Oulu, about 680 km long, are being transported. Drivers do not travel together with rolling stock and transportation is carried out only at night, making the entire system profitable.
“The lorry drivers drive the vehicles onto the wagons in the terminal via loading ramps. After positioning the vehicles according the loading regulations they secure the vehicles on wagons with aluminium wedges, - said Mr Seppanen. - An auxiliary dolly-axle is attached to the king pin of the trailer and then trailers are loaded on the wagons with a help of a terminal tractor. The drivers secure the trailers on wagons with aluminium wedges equally like the vehicles. Drivers are not travelling with the train. Local drivers take care of the pick-up and loading at the point of origin and other local drivers take care of unloading and delivery transport at the point of destination”.
According to Mr Seppanen, it’s possible to implement this technology in Russia, because it’s not necessary to make big changes to the existing railway system.
“The existing infrastructure is suited very well to piggyback. Only because trailers on flat cars exceed the normal loading gauge, we have enlarged the loading gauge on all relevant routes. There were very few obstacles which should be removed. The need to remove the obstacles is dependent on the route and number of obstacles”, – he said.
In general, the number of obstacles that must be removed from a route (e.g. low bridges), of course, depends on individual cases. But the basic costs are not associated with infrastructure reconstruction. Substantial sums have to be spent on rolling stock and terminal services.
The annual report of VR Cargo in 2010 said: “Piggybacking does have great potential”.
By By Christina Alexandrova [~DETAIL_TEXT] =>

Green Policy Vs. Profit

According to the Finnish Freight Forwarders’ Association, almost 90% of all freight transportation today falls on road transport. More than 80,000 trucks are being operated by almost 10,000 companies in Finland. And about 5,000 vehicles are involved in freight transportation with Russia. Internal transportation in Finland has approximately 450 million tons of cargo annually. Only about 40 million tons are carried by railway companies, and 70% of them are being transported by inland routes.
Piggyback transportation between Finland and Russia is planned for the second half of 2013. And both sides are really enthusiastic about this. The document, stating that the main objective of such cooperation is the creation of a competitive product on delivery of cargoes in the international transport market, has already been signed. Moreover, last summer pilot transportation on the route Helsinki-St Petersburg-Moscow took place. The rolling stock of Finnish production was used for it, the employer company was “UPM-Kymmene”, Europe’s biggest producer of plywood.
Most goods from Finland arrive in Russia from the ports of Helsinki, Kotka and Hamina. Such a volume of traffic naturally creates serious traffic jams at the border, which often make problems and do not help to deliver the goods on time. According to the International Union of Combined Road-Rail Transport Companies punctuality of piggyback trains is 70%, it is also estimated that it is profitable to use piggyback carriage up to a distance of 400-500 km. According to the Finnish Consul for trade and economy of Finland in St. Petersburg Jyrki Terva, “switching” from road traffic to the railway, without any doubt, will improve the transportation situation in general.
But according to the Secretary-General of the International Transport Forum, Jack Short, American experience has shown that piggyback carriage had never been really profitable. The main reason is the unwillingness to support this type of rail transportation. However, in Europe, the situation is different – the demand for piggyback trains in Switzerland, Austria, Germany, France and Finland is highly associated with interest in environmental security, rather than with economic efficiency, as it was in the United States.
Therefore, in the countries of the European Union switching the bulk of freight traffic to the railway is the priority. According to the European Commission’s White Paper on the strategy for transport to the year 2030, it is scheduled to transfer 30% of road traffic to rail or water transport, and by the year 2050 – more than 50%. In Russia such goals have not been put yet – economic factors are more influential. A new system will help companies reduce the cost of transport logistics, fuel and maintenance (for example, transportation by rail allows you to prevent wear of tyres), and extend the life of the road surface. Quite important is the safety of cargo delivery, because on the road connecting Helsinki and St Petersburg, car accidents are not uncommon.

Is it Easy?

The desire for cooperation with the Finns can be explained – Russia shares a common gauge. However, unlike Austria, where piggyback transport has become commercially viable, Finnish railways have not really succeeded in it. In last year’s report of the Chief Engineer of the Ministry of Transport and Communications Jari Grun stated that railway operators are doing this service at almost unprofitable rates.
Another problem is connected with the existing infrastructure, particularly with the absence of normal access to ports. Thus, the volumes of cargo transportation in piggyback trains reduce. According to statistics of VR Transpoint, in 2010 less than 5,000 trailers were moved by railway, which is almost half that of 2006. «In 2010 VR Transpoint transported 5,378 vehicle combinations (truck & trailer) and 4,715 trailers, which is 17.4% less than previous year», said Ilkka Seppanen, Director for Freight Traffic in VR Group.
Perhaps the reason is that in Finland intermodal transport is carried out on only one route Helsinki-Oulu. Before that two other lines Tampere-Oulu and Turku were operating. According to a study by the British Commission for integrated transport, in terms of the relative intensity of cargo transportations in EU countries, Finland is a leader today. Therefore, among the potential areas for domestic intermodal transports routes Helsinki-Tampere and Helsinki-Ûvâskilâ, Helsinki-Kuopio, Turku-Rovaniemi are named. But it is clear that the development of these lines requires significant investment.
There are several options for the development of intermodal transport in Finland. If you leave the situation as it is, it could become worse in the near future and almost lead to the disappearance of piggyback trains completely. Specialists of the Ministry of Transport and Communications also think that in such a case, logistics costs would be increased, because market players will switch to roads.
To avoid this, new terminals should be built, at least five. Terminals serving piggyback trains are already working at stations in Helsinki, Oulu and Tampere. Construction of logistic centres in Kuopio, Ûlivieska, Kokkola, Vaasa and Seinäjoki are being discussed now. But it is important to consider the demand, because if they are not fully loaded, an issue of underinvestment will appear.

Fast and Cheap

Because of the low ground clearance on most European railways, piggyback transport there differs from those of the United States. In Finland, VR Group has park of 159 flat wagons. Trailers on the route Helsinki-Oulu, about 680 km long, are being transported. Drivers do not travel together with rolling stock and transportation is carried out only at night, making the entire system profitable.
“The lorry drivers drive the vehicles onto the wagons in the terminal via loading ramps. After positioning the vehicles according the loading regulations they secure the vehicles on wagons with aluminium wedges, - said Mr Seppanen. - An auxiliary dolly-axle is attached to the king pin of the trailer and then trailers are loaded on the wagons with a help of a terminal tractor. The drivers secure the trailers on wagons with aluminium wedges equally like the vehicles. Drivers are not travelling with the train. Local drivers take care of the pick-up and loading at the point of origin and other local drivers take care of unloading and delivery transport at the point of destination”.
According to Mr Seppanen, it’s possible to implement this technology in Russia, because it’s not necessary to make big changes to the existing railway system.
“The existing infrastructure is suited very well to piggyback. Only because trailers on flat cars exceed the normal loading gauge, we have enlarged the loading gauge on all relevant routes. There were very few obstacles which should be removed. The need to remove the obstacles is dependent on the route and number of obstacles”, – he said.
In general, the number of obstacles that must be removed from a route (e.g. low bridges), of course, depends on individual cases. But the basic costs are not associated with infrastructure reconstruction. Substantial sums have to be spent on rolling stock and terminal services.
The annual report of VR Cargo in 2010 said: “Piggybacking does have great potential”.
By By Christina Alexandrova [DETAIL_TEXT_TYPE] => html [~DETAIL_TEXT_TYPE] => html [PREVIEW_TEXT] =>  As predicted by experts, interest in piggyback transportation in Russia is increasing. The major factor is the Sochi Olympic Games coming soon. European experience shows that such a method of freight transportation is ideal for fast, continuous delivery of cargoes. It seems impossible to launch regular piggyback trains by 2014, but the first steps have already been taken. RZD will start to work with Finland, with whom they share the 1520 gauge. [~PREVIEW_TEXT] =>  As predicted by experts, interest in piggyback transportation in Russia is increasing. The major factor is the Sochi Olympic Games coming soon. European experience shows that such a method of freight transportation is ideal for fast, continuous delivery of cargoes. It seems impossible to launch regular piggyback trains by 2014, but the first steps have already been taken. RZD will start to work with Finland, with whom they share the 1520 gauge. 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РЖД-Партнер

One And A Half Century of Success

 This year Finnish state-owned railway company VR Group is celebrating its 150th anniversary. Today President and CEO of company Mikael Aro is summing up work results and talking on VR Group future policy.
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    [DETAIL_TEXT] => – Mr Aro, was the last year successful for VR Group? What projects were implemented?

– VR Group had both successes and problems in 2011. The Group is going through a major transition which has already changed things for the better but there is still work to be done. One of the successes is the revamping of the pricing system used by Passenger Services. The idea is to introduce variable pricing sometime in the future. In this model demand would influence the fare on a particular train service. We think the new pricing scheme will bring an increase to passenger volumes. Many measures were introduced to improve the punctuality of rail services after two difficult winters. Logistics freight volumes are now at a reasonable level even though the financial uncertainty in Europe has certainly affected them.

– What companies are the major partners of VR Group in Russia and the CIS nowadays?

– VR Group has a long history of cooperation with railways, railway freight carriers and cargo owners in the Russian and CIS market area. In the Russian market our main partner is Russian Railways. We also have close cooperation via joint ventures with Russia’s largest rail cargo operator Freight One and leading national container operator TransContainer. VR Transpoint, which combines all VR Group’s logistics operations, has long-established relations with a number of railway freight carriers and cargo owners in Russia and CIS countries.

– So what projects in cooperation with RZD do you have right now? And what are your further plans?

– Currently we have several development projects with JSC Russian Railways, especially in the rail logistics sector. VR Group and Russian Railways have actively developed the usage of electronic documents during rail transportations. We have also started a joint project aiming at transporting trailers by rail from Finland to Russia. This would be a huge step forward for international logistics in providing a fast, easy and ecologically sustainable option for transporting cargo in trucks.

– Are you satisfied with the results of first year of “Allegro” operation? What do you think about further development of high speed trains between Finland and Russia?

– I am proud to say that Allegro high speed service between Helsinki and St. Petersburg has been a success. High speed train Allegro is a joint project of VR Group and Russian Railways. Operation on Helsinki - St. Petersburg line was started 10.12.2010. There are four daily departures to both directions. Passenger levels exceeded expectations during the year 2011 and increased approximately 50% in comparison with the previous year. The total number of passengers in 2011 was over 300 000 people. We see that there is still potential in developing further high speed service between Finland and Russia.

– But what do you like about VR service as a passenger yourself? What changes would you like to see in the nearest future?

– VR has invested heavily in rolling stock lately. Travel comfort has improved. We want to continue to improve customer-orientation and the customer experience.

– Are discount air companies a big threat for railway in Finland right now? Will their influence become stronger in the nearest future?

– VR’s main target is to have people and their families choose the train instead of their car. The significance of airlines can be seen in rail services between Helsinki and northern Finland. VR wants to attract more passengers with the new pricing scheme which offers cheaper alternatives and special offers than before.

– Does VR Group have a special environmental policy? How much does the company concern about the environment situation in Europe?

– The environment is important for VR Group for a number of reasons. The Group has been actively involved in environmental work for a long time. The work is guided by the Group’s environmental system, environmental principles and the 12 environmental pledges given in December 2007. VR Group participates in joint environmental projects of European railway companies in addition to its own projects.

– RZD has a problem of depreciation of rolling stock. What about Finland? Do you currently have some contracts with rolling stock manufacturers or you are going to sign some important contracts?

– At the moment VR Group does not have contracts with Russian manufacturers. VR Group is in the process of acquiring large numbers of new rolling stock. Passenger services will receive 40 double-decker InterCity cars, 12 steering cars and 15 restaurant cars in 2011–2014. The cars will be manufactured by Finnish Transtech Oy. Freight services will receive 220 new raw wood wagons and 106 wood chip wagons in 2011–2015. VR Group’s Pieksämäki Workshop will manufacture the freight wagons. In addition, a bidding competition was launched at the beginning of this year for 80 new electric locomotives. The acquisition includes an option for 97 additional electric locomotives.

– How can you estimate the level of safety of railway system in Finland? What is VR Group going to do to increase it, if needed?

– Safety of rail traffic is at a high level in Finland when compared with other European countries. In rail yard work we invest in safety by providing training and shaping the attitudes of employees and by emphasizing compliance with guidelines and safe work methods.

– What do you think about the current situation with the railway infrastructure and transport in Finland? How do you see the situation in 5 years?

– To make rail services (passenger and freight) successful in the future significantly more must be invested in the rail network. Investments are moreover required if we are to be able to take sustainable development and ecological aspects into account. A governmental transport policy report is being drawn up in Finland outlining future transport infrastructure areas of focus and goals.

– What would you point out as a segment which needs an urgent action when it comes to Finnish railway system?

– Investments must be made immediately in renovating the rail network. The capacity of the current rail network must be assured. Repairs made to the rail network must be substantially speeded up. In Finland the responsibility for the rail network is with the Finnish Transport Agency which is responsible for the country’s transport infrastructure. VR is a service operator and is responsible for rolling stock and its business operations.

– Are there any aspects of VR Group activity that require a strong political support from the government right now?

– VR Group hopes that its views will be taken into account in the transport policy report and that this way the future of rail services is secured. The appeal of public transport must be increased by enabling faster and more flexible connections.

– What is the greatest achievement of VR Group in the whole history of the company in your opinion?

– There are a number of great achievements but the highlight of recent years is the completed restructuring program which has enabled us to adapt our operations to the structural change.

– What are the main objectives of VR Group today?

– Our goal is to improve customer orientation and to have satisfied customers, to develop profitable business activities and make our transport system more efficient. We try to generate more international business, in particular between Finland and Russia.

– How is VR Group going to celebrate its anniversary this year?

– We participate in the Group’s joint celebrations and the 150 year anniversary gala. The anniversary year is visible in our marketing and for instance at our stand in Moscow’s TransRussia exhibition in April.
Interviewed by Christina Alexandrova [~DETAIL_TEXT] => – Mr Aro, was the last year successful for VR Group? What projects were implemented?

– VR Group had both successes and problems in 2011. The Group is going through a major transition which has already changed things for the better but there is still work to be done. One of the successes is the revamping of the pricing system used by Passenger Services. The idea is to introduce variable pricing sometime in the future. In this model demand would influence the fare on a particular train service. We think the new pricing scheme will bring an increase to passenger volumes. Many measures were introduced to improve the punctuality of rail services after two difficult winters. Logistics freight volumes are now at a reasonable level even though the financial uncertainty in Europe has certainly affected them.

– What companies are the major partners of VR Group in Russia and the CIS nowadays?

– VR Group has a long history of cooperation with railways, railway freight carriers and cargo owners in the Russian and CIS market area. In the Russian market our main partner is Russian Railways. We also have close cooperation via joint ventures with Russia’s largest rail cargo operator Freight One and leading national container operator TransContainer. VR Transpoint, which combines all VR Group’s logistics operations, has long-established relations with a number of railway freight carriers and cargo owners in Russia and CIS countries.

– So what projects in cooperation with RZD do you have right now? And what are your further plans?

– Currently we have several development projects with JSC Russian Railways, especially in the rail logistics sector. VR Group and Russian Railways have actively developed the usage of electronic documents during rail transportations. We have also started a joint project aiming at transporting trailers by rail from Finland to Russia. This would be a huge step forward for international logistics in providing a fast, easy and ecologically sustainable option for transporting cargo in trucks.

– Are you satisfied with the results of first year of “Allegro” operation? What do you think about further development of high speed trains between Finland and Russia?

– I am proud to say that Allegro high speed service between Helsinki and St. Petersburg has been a success. High speed train Allegro is a joint project of VR Group and Russian Railways. Operation on Helsinki - St. Petersburg line was started 10.12.2010. There are four daily departures to both directions. Passenger levels exceeded expectations during the year 2011 and increased approximately 50% in comparison with the previous year. The total number of passengers in 2011 was over 300 000 people. We see that there is still potential in developing further high speed service between Finland and Russia.

– But what do you like about VR service as a passenger yourself? What changes would you like to see in the nearest future?

– VR has invested heavily in rolling stock lately. Travel comfort has improved. We want to continue to improve customer-orientation and the customer experience.

– Are discount air companies a big threat for railway in Finland right now? Will their influence become stronger in the nearest future?

– VR’s main target is to have people and their families choose the train instead of their car. The significance of airlines can be seen in rail services between Helsinki and northern Finland. VR wants to attract more passengers with the new pricing scheme which offers cheaper alternatives and special offers than before.

– Does VR Group have a special environmental policy? How much does the company concern about the environment situation in Europe?

– The environment is important for VR Group for a number of reasons. The Group has been actively involved in environmental work for a long time. The work is guided by the Group’s environmental system, environmental principles and the 12 environmental pledges given in December 2007. VR Group participates in joint environmental projects of European railway companies in addition to its own projects.

– RZD has a problem of depreciation of rolling stock. What about Finland? Do you currently have some contracts with rolling stock manufacturers or you are going to sign some important contracts?

– At the moment VR Group does not have contracts with Russian manufacturers. VR Group is in the process of acquiring large numbers of new rolling stock. Passenger services will receive 40 double-decker InterCity cars, 12 steering cars and 15 restaurant cars in 2011–2014. The cars will be manufactured by Finnish Transtech Oy. Freight services will receive 220 new raw wood wagons and 106 wood chip wagons in 2011–2015. VR Group’s Pieksämäki Workshop will manufacture the freight wagons. In addition, a bidding competition was launched at the beginning of this year for 80 new electric locomotives. The acquisition includes an option for 97 additional electric locomotives.

– How can you estimate the level of safety of railway system in Finland? What is VR Group going to do to increase it, if needed?

– Safety of rail traffic is at a high level in Finland when compared with other European countries. In rail yard work we invest in safety by providing training and shaping the attitudes of employees and by emphasizing compliance with guidelines and safe work methods.

– What do you think about the current situation with the railway infrastructure and transport in Finland? How do you see the situation in 5 years?

– To make rail services (passenger and freight) successful in the future significantly more must be invested in the rail network. Investments are moreover required if we are to be able to take sustainable development and ecological aspects into account. A governmental transport policy report is being drawn up in Finland outlining future transport infrastructure areas of focus and goals.

– What would you point out as a segment which needs an urgent action when it comes to Finnish railway system?

– Investments must be made immediately in renovating the rail network. The capacity of the current rail network must be assured. Repairs made to the rail network must be substantially speeded up. In Finland the responsibility for the rail network is with the Finnish Transport Agency which is responsible for the country’s transport infrastructure. VR is a service operator and is responsible for rolling stock and its business operations.

– Are there any aspects of VR Group activity that require a strong political support from the government right now?

– VR Group hopes that its views will be taken into account in the transport policy report and that this way the future of rail services is secured. The appeal of public transport must be increased by enabling faster and more flexible connections.

– What is the greatest achievement of VR Group in the whole history of the company in your opinion?

– There are a number of great achievements but the highlight of recent years is the completed restructuring program which has enabled us to adapt our operations to the structural change.

– What are the main objectives of VR Group today?

– Our goal is to improve customer orientation and to have satisfied customers, to develop profitable business activities and make our transport system more efficient. We try to generate more international business, in particular between Finland and Russia.

– How is VR Group going to celebrate its anniversary this year?

– We participate in the Group’s joint celebrations and the 150 year anniversary gala. The anniversary year is visible in our marketing and for instance at our stand in Moscow’s TransRussia exhibition in April.
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" hspace="5" width="200" height="266" align="left" />This year Finnish state-owned railway company VR Group is celebrating its 150th anniversary. Today President and CEO of company Mikael Aro is summing up work results and talking on VR Group future policy. [ELEMENT_META_TITLE] => One And A Half Century of Success [ELEMENT_META_KEYWORDS] => one and a half century of success [ELEMENT_META_DESCRIPTION] => <img src="/ufiles/image/rus/inter/2012/2/11.jpg" border="1" alt=" " hspace="5" width="200" height="266" align="left" />This year Finnish state-owned railway company VR Group is celebrating its 150th anniversary. Today President and CEO of company Mikael Aro is summing up work results and talking on VR Group future policy. 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    [DETAIL_TEXT] => – Mr Aro, was the last year successful for VR Group? What projects were implemented?

– VR Group had both successes and problems in 2011. The Group is going through a major transition which has already changed things for the better but there is still work to be done. One of the successes is the revamping of the pricing system used by Passenger Services. The idea is to introduce variable pricing sometime in the future. In this model demand would influence the fare on a particular train service. We think the new pricing scheme will bring an increase to passenger volumes. Many measures were introduced to improve the punctuality of rail services after two difficult winters. Logistics freight volumes are now at a reasonable level even though the financial uncertainty in Europe has certainly affected them.

– What companies are the major partners of VR Group in Russia and the CIS nowadays?

– VR Group has a long history of cooperation with railways, railway freight carriers and cargo owners in the Russian and CIS market area. In the Russian market our main partner is Russian Railways. We also have close cooperation via joint ventures with Russia’s largest rail cargo operator Freight One and leading national container operator TransContainer. VR Transpoint, which combines all VR Group’s logistics operations, has long-established relations with a number of railway freight carriers and cargo owners in Russia and CIS countries.

– So what projects in cooperation with RZD do you have right now? And what are your further plans?

– Currently we have several development projects with JSC Russian Railways, especially in the rail logistics sector. VR Group and Russian Railways have actively developed the usage of electronic documents during rail transportations. We have also started a joint project aiming at transporting trailers by rail from Finland to Russia. This would be a huge step forward for international logistics in providing a fast, easy and ecologically sustainable option for transporting cargo in trucks.

– Are you satisfied with the results of first year of “Allegro” operation? What do you think about further development of high speed trains between Finland and Russia?

– I am proud to say that Allegro high speed service between Helsinki and St. Petersburg has been a success. High speed train Allegro is a joint project of VR Group and Russian Railways. Operation on Helsinki - St. Petersburg line was started 10.12.2010. There are four daily departures to both directions. Passenger levels exceeded expectations during the year 2011 and increased approximately 50% in comparison with the previous year. The total number of passengers in 2011 was over 300 000 people. We see that there is still potential in developing further high speed service between Finland and Russia.

– But what do you like about VR service as a passenger yourself? What changes would you like to see in the nearest future?

– VR has invested heavily in rolling stock lately. Travel comfort has improved. We want to continue to improve customer-orientation and the customer experience.

– Are discount air companies a big threat for railway in Finland right now? Will their influence become stronger in the nearest future?

– VR’s main target is to have people and their families choose the train instead of their car. The significance of airlines can be seen in rail services between Helsinki and northern Finland. VR wants to attract more passengers with the new pricing scheme which offers cheaper alternatives and special offers than before.

– Does VR Group have a special environmental policy? How much does the company concern about the environment situation in Europe?

– The environment is important for VR Group for a number of reasons. The Group has been actively involved in environmental work for a long time. The work is guided by the Group’s environmental system, environmental principles and the 12 environmental pledges given in December 2007. VR Group participates in joint environmental projects of European railway companies in addition to its own projects.

– RZD has a problem of depreciation of rolling stock. What about Finland? Do you currently have some contracts with rolling stock manufacturers or you are going to sign some important contracts?

– At the moment VR Group does not have contracts with Russian manufacturers. VR Group is in the process of acquiring large numbers of new rolling stock. Passenger services will receive 40 double-decker InterCity cars, 12 steering cars and 15 restaurant cars in 2011–2014. The cars will be manufactured by Finnish Transtech Oy. Freight services will receive 220 new raw wood wagons and 106 wood chip wagons in 2011–2015. VR Group’s Pieksämäki Workshop will manufacture the freight wagons. In addition, a bidding competition was launched at the beginning of this year for 80 new electric locomotives. The acquisition includes an option for 97 additional electric locomotives.

– How can you estimate the level of safety of railway system in Finland? What is VR Group going to do to increase it, if needed?

– Safety of rail traffic is at a high level in Finland when compared with other European countries. In rail yard work we invest in safety by providing training and shaping the attitudes of employees and by emphasizing compliance with guidelines and safe work methods.

– What do you think about the current situation with the railway infrastructure and transport in Finland? How do you see the situation in 5 years?

– To make rail services (passenger and freight) successful in the future significantly more must be invested in the rail network. Investments are moreover required if we are to be able to take sustainable development and ecological aspects into account. A governmental transport policy report is being drawn up in Finland outlining future transport infrastructure areas of focus and goals.

– What would you point out as a segment which needs an urgent action when it comes to Finnish railway system?

– Investments must be made immediately in renovating the rail network. The capacity of the current rail network must be assured. Repairs made to the rail network must be substantially speeded up. In Finland the responsibility for the rail network is with the Finnish Transport Agency which is responsible for the country’s transport infrastructure. VR is a service operator and is responsible for rolling stock and its business operations.

– Are there any aspects of VR Group activity that require a strong political support from the government right now?

– VR Group hopes that its views will be taken into account in the transport policy report and that this way the future of rail services is secured. The appeal of public transport must be increased by enabling faster and more flexible connections.

– What is the greatest achievement of VR Group in the whole history of the company in your opinion?

– There are a number of great achievements but the highlight of recent years is the completed restructuring program which has enabled us to adapt our operations to the structural change.

– What are the main objectives of VR Group today?

– Our goal is to improve customer orientation and to have satisfied customers, to develop profitable business activities and make our transport system more efficient. We try to generate more international business, in particular between Finland and Russia.

– How is VR Group going to celebrate its anniversary this year?

– We participate in the Group’s joint celebrations and the 150 year anniversary gala. The anniversary year is visible in our marketing and for instance at our stand in Moscow’s TransRussia exhibition in April.
Interviewed by Christina Alexandrova [~DETAIL_TEXT] => – Mr Aro, was the last year successful for VR Group? What projects were implemented?

– VR Group had both successes and problems in 2011. The Group is going through a major transition which has already changed things for the better but there is still work to be done. One of the successes is the revamping of the pricing system used by Passenger Services. The idea is to introduce variable pricing sometime in the future. In this model demand would influence the fare on a particular train service. We think the new pricing scheme will bring an increase to passenger volumes. Many measures were introduced to improve the punctuality of rail services after two difficult winters. Logistics freight volumes are now at a reasonable level even though the financial uncertainty in Europe has certainly affected them.

– What companies are the major partners of VR Group in Russia and the CIS nowadays?

– VR Group has a long history of cooperation with railways, railway freight carriers and cargo owners in the Russian and CIS market area. In the Russian market our main partner is Russian Railways. We also have close cooperation via joint ventures with Russia’s largest rail cargo operator Freight One and leading national container operator TransContainer. VR Transpoint, which combines all VR Group’s logistics operations, has long-established relations with a number of railway freight carriers and cargo owners in Russia and CIS countries.

– So what projects in cooperation with RZD do you have right now? And what are your further plans?

– Currently we have several development projects with JSC Russian Railways, especially in the rail logistics sector. VR Group and Russian Railways have actively developed the usage of electronic documents during rail transportations. We have also started a joint project aiming at transporting trailers by rail from Finland to Russia. This would be a huge step forward for international logistics in providing a fast, easy and ecologically sustainable option for transporting cargo in trucks.

– Are you satisfied with the results of first year of “Allegro” operation? What do you think about further development of high speed trains between Finland and Russia?

– I am proud to say that Allegro high speed service between Helsinki and St. Petersburg has been a success. High speed train Allegro is a joint project of VR Group and Russian Railways. Operation on Helsinki - St. Petersburg line was started 10.12.2010. There are four daily departures to both directions. Passenger levels exceeded expectations during the year 2011 and increased approximately 50% in comparison with the previous year. The total number of passengers in 2011 was over 300 000 people. We see that there is still potential in developing further high speed service between Finland and Russia.

– But what do you like about VR service as a passenger yourself? What changes would you like to see in the nearest future?

– VR has invested heavily in rolling stock lately. Travel comfort has improved. We want to continue to improve customer-orientation and the customer experience.

– Are discount air companies a big threat for railway in Finland right now? Will their influence become stronger in the nearest future?

– VR’s main target is to have people and their families choose the train instead of their car. The significance of airlines can be seen in rail services between Helsinki and northern Finland. VR wants to attract more passengers with the new pricing scheme which offers cheaper alternatives and special offers than before.

– Does VR Group have a special environmental policy? How much does the company concern about the environment situation in Europe?

– The environment is important for VR Group for a number of reasons. The Group has been actively involved in environmental work for a long time. The work is guided by the Group’s environmental system, environmental principles and the 12 environmental pledges given in December 2007. VR Group participates in joint environmental projects of European railway companies in addition to its own projects.

– RZD has a problem of depreciation of rolling stock. What about Finland? Do you currently have some contracts with rolling stock manufacturers or you are going to sign some important contracts?

– At the moment VR Group does not have contracts with Russian manufacturers. VR Group is in the process of acquiring large numbers of new rolling stock. Passenger services will receive 40 double-decker InterCity cars, 12 steering cars and 15 restaurant cars in 2011–2014. The cars will be manufactured by Finnish Transtech Oy. Freight services will receive 220 new raw wood wagons and 106 wood chip wagons in 2011–2015. VR Group’s Pieksämäki Workshop will manufacture the freight wagons. In addition, a bidding competition was launched at the beginning of this year for 80 new electric locomotives. The acquisition includes an option for 97 additional electric locomotives.

– How can you estimate the level of safety of railway system in Finland? What is VR Group going to do to increase it, if needed?

– Safety of rail traffic is at a high level in Finland when compared with other European countries. In rail yard work we invest in safety by providing training and shaping the attitudes of employees and by emphasizing compliance with guidelines and safe work methods.

– What do you think about the current situation with the railway infrastructure and transport in Finland? How do you see the situation in 5 years?

– To make rail services (passenger and freight) successful in the future significantly more must be invested in the rail network. Investments are moreover required if we are to be able to take sustainable development and ecological aspects into account. A governmental transport policy report is being drawn up in Finland outlining future transport infrastructure areas of focus and goals.

– What would you point out as a segment which needs an urgent action when it comes to Finnish railway system?

– Investments must be made immediately in renovating the rail network. The capacity of the current rail network must be assured. Repairs made to the rail network must be substantially speeded up. In Finland the responsibility for the rail network is with the Finnish Transport Agency which is responsible for the country’s transport infrastructure. VR is a service operator and is responsible for rolling stock and its business operations.

– Are there any aspects of VR Group activity that require a strong political support from the government right now?

– VR Group hopes that its views will be taken into account in the transport policy report and that this way the future of rail services is secured. The appeal of public transport must be increased by enabling faster and more flexible connections.

– What is the greatest achievement of VR Group in the whole history of the company in your opinion?

– There are a number of great achievements but the highlight of recent years is the completed restructuring program which has enabled us to adapt our operations to the structural change.

– What are the main objectives of VR Group today?

– Our goal is to improve customer orientation and to have satisfied customers, to develop profitable business activities and make our transport system more efficient. We try to generate more international business, in particular between Finland and Russia.

– How is VR Group going to celebrate its anniversary this year?

– We participate in the Group’s joint celebrations and the 150 year anniversary gala. The anniversary year is visible in our marketing and for instance at our stand in Moscow’s TransRussia exhibition in April.
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" hspace="5" width="200" height="266" align="left" />This year Finnish state-owned railway company VR Group is celebrating its 150th anniversary. 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РЖД-Партнер

Euro-4 Will Wait Another Year

 The transition to Euro-4-compliant vehicles failed to take place on schedule - from the 1st of January. Automanufacturers and fuel producers got a one-year respite. While oil companies are not ready to produce Euro-4 petrol yet, Russian carmakers can already provide appropriate vehicles. However, motor carriers are not eager to buy home-produced cars.
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Euro-3 Will Stay

in January 2009, the European Parliament proposed the EU Member States reduce greenhouse gas emissions by 25% to 40% by 2020. With a view to this proposal the EU countries had earlier begun to develop vehicles and fuel complying with the new ecological standard. Russians gave thought to ecology much later. While in Europe they are driving Euro-4 and Euro-5 cars, here in Russia we can’t switch even to the Euro-4 standard. According to foreign researchers, this standard provides modern ecological requirements which reduce emissions of nitrogene oxides (NOx) by almost a third and toxic substances by 80%. Every new ecological standard imposes new emission limits, while the most toxic of all the pollutants is carbon monoxide (CO). Therefore, the exhaust gas from Euro-3 cars should not contain more than 20 g/kWh of CO, 1,1 g/kWh of СН and 7 g/kWh of NO. Euro-4-compliant vehicles have to meet stricter requirements: 4 g/kWh of СО, 0,55 g/kWh of СН, 2 g/kWh 2 of NO.
Russian authorities conceived the transition to new ecological standards as far back as in 2005, when they adopted “Technical Regulations on Emission Requirements for Motor Vehicles Manufactured in the Circulation in the territory of the Russian Federation, harmful (polluting) substances”. But these requirements refer either to imported or to domestic motor vehicles. The next step towards a cleaner environment was adoption of technical regulation that stipulates fuel quality requirements. The plan envisages a gradual implementation of higher ecological standards to start selling Euro-5 and higher grade vehicles and gasoline by 2013. Production and sales of lower grade vehicles will be prohibited. This does not apply to cars that have been already bought. The transition to Euro-4-compliant vehicles was scheduled to take place as early as 2010. Carmakers were notified in advance, two years earlier. But eventually carmakers developed new engines and cars in accordance with the new ecological standard, whilst oil companies proved to be unprepared to produce new fuel. That is why introduction of new ecological standards was deferred to the 1st of January, 2012.
According to the new technical regulations, the beginning of 2012 should have become a watershed moment for Russian road-users: production and sales of Euro-3 standard cars would have been banned since that day. But the miracle didn’t happen: carmakers and oil companies got a respite again. Car factories can produce and trade Euro-3-compliant vehicles till the 1st of January, 2013. The impediment is again primarily caused by the fact that Euro-4 fuel production was delayed for another year. At present some oil companies produce and sell small amounts of Euro-4-compliant gasoline, but they have a long way to go to industrial-scale production. There appeared to be several obstacles in the way to this goal, and one of them was the 2008 Economic Crisis. Meanwhile the number of Euro-3 and Euro-4-compliant cars in Russia does not increase. According to the Russian Deputy Minister of Transport Nickolay Asaul, 60% of home-produced trucks in Russia are close to Еuro-0 level and only 12% comply with Euro-3 and higher standards. In turn, Europe continues to forge ahead: soon it will commence production of Euro-6-compliant vehicles – namely, on the 31st of December 2012. Nevertheless, even European countries cannot get rid of sub-Euro-4 cars on their roads. Eastern Europe spoils the whole statistical picture: Euro-0, Euro-1 and Euro-2 vehicles are still on the road there.

Auto Industry is Ready ...

As mentioned above, domestic carmakers proved to be law abiding as they were ready to produce light and heavy duty vehicles in compliance with the new ecological standards already by the end of 2011. All Russian auto plants had started development long before, and quantity manufacturing is now being hampered only by delays in fuel production. In particular, Ulianovsk Automobile Plant assembled a pilot batch of Euro-4-compliant cars in April, 2011 and started mass production in summer.
Other industry players kept apace. Automobile plants KAMAZ and the Ural have also developed new models. The former commenced production of new Euro-4-compliant trucks in January 2012. KAMAZ’s engineers laboured at the task not only to bring their product into accord with ecological standards, but also to make it more fuel-efficient, to extend service intervals for the engine and ensure a better traction dynamic. As a result, KAMAZ had to spend about 2,5 bln RUB to devise a new engine and to pay another 300 mln RUB for redesigning its vehicles.
The Ural has also got through a lot of money. During the whole of 2011 the plant conducted development work and eventually prepared to produce new models in 2012. Low-volume batch production is scheduled for the current year to enable the plant to test new vehicles together with its customers and rectify any issues found.
Although the Euro-3 stage was extended for another year, domestic vehicle makers have no intention of postponing sales of their new product. Especially as they are sure that there is demand for Euro-4 trucks in Russia. In particular, according to KAMAZ, the delay in Euro-4 fuel introduction will not adversely affect the plant’s sales, as the new type of fuel is being sold in Russia, though on a limited scale, and this is enough for the small quantity of new trucks which will appear on Russian roads this year.

...But Motor Carriers Are Not

Despite the manufacturers’ confidence in demand for their products, Russian motor carriers hold off from buying trucks made domestically. In particular, this position is typical for the players in the Russian motor transportation market who work with European countries. Their fleets have long been procured and consist of Euro-4 and Euro-5 foreign-made trucks. They made such a choice because sub-Euro-4 vehicles are barred from entry into some European countries.
The apparent unwillingness to buy home-made trucks can easily be explained by the carriers’ dissatisfaction with their quality. As Eugenia Turutina, the CEO of LLC Nordland, has put it, the company’s fleet consists of foreign-made vehicles. Nordland deals with transportation of perishable goods from Norway and Finland, and its lorries track the difficult northern routes. “I am not going to buy domestic cars even with Euro-4 grade engines, because Russian trucks can’t cope with mountain roads,” Turutina says. The businesswoman believes that it is necessary to change not only the truck engine, but the design in general. Only in this case could Russian vehicles be of some interest for motor carriers.
Another argument in favour of foreign trucks is their cost effectiveness. “For example, in Germany you pay far less when you enter a toll road in a Euro-5 car, than in a Euro-3 one,” an employee of Trans-Eco company says. Generally speaking, motor carriers have got used to foreign cars and don’t want to buy Russian vehicles yet.
Meanwhile the delay in Euro-4 standard introduction gives privileges neither to producers, nor to consumers. All changes should be synchronized, KAMAZ experts are sure. “You need relevant fuel and infrastructure to operate equipment on Euro-4 and higher level. The owners of advanced vehicles should also enjoy some economic benefits such as low tax rates,” they add. That said, the prices for Euro-4 vehicles are only 2% to 5% higher, analysts assert. They insist it is justified, because any design refinement leads to some increase in prices. But the transition to the new ecological standard may hit the profits of the companies that work exclusively in the Russian market – though only in a few years’ time.
The new ecological entries into the automobile market cannot drastically change freight transportation prices, because the number of Euro-4 trucks in the carriers’ fleets will increase only gradually. “If the plants switch to production and the importers switch to sales of Euro-4 trucks, the motor carriers’ prices will be influenced only indirectly, as the main bulk of shipping operations is still carried out by Euro-3 and lower standard trucks, which form the major part of the fleets,” the head of the analytical department of the Autostat agency Andrey Topotun said.
Thus, sub-Euro-4 vehicles will run along Russian roads for several more years, while the transition to ecological transport will take longer than originally scheduled, even if there were no delays.
By Elena Dmitrievskaya [~DETAIL_TEXT] =>

Euro-3 Will Stay

in January 2009, the European Parliament proposed the EU Member States reduce greenhouse gas emissions by 25% to 40% by 2020. With a view to this proposal the EU countries had earlier begun to develop vehicles and fuel complying with the new ecological standard. Russians gave thought to ecology much later. While in Europe they are driving Euro-4 and Euro-5 cars, here in Russia we can’t switch even to the Euro-4 standard. According to foreign researchers, this standard provides modern ecological requirements which reduce emissions of nitrogene oxides (NOx) by almost a third and toxic substances by 80%. Every new ecological standard imposes new emission limits, while the most toxic of all the pollutants is carbon monoxide (CO). Therefore, the exhaust gas from Euro-3 cars should not contain more than 20 g/kWh of CO, 1,1 g/kWh of СН and 7 g/kWh of NO. Euro-4-compliant vehicles have to meet stricter requirements: 4 g/kWh of СО, 0,55 g/kWh of СН, 2 g/kWh 2 of NO.
Russian authorities conceived the transition to new ecological standards as far back as in 2005, when they adopted “Technical Regulations on Emission Requirements for Motor Vehicles Manufactured in the Circulation in the territory of the Russian Federation, harmful (polluting) substances”. But these requirements refer either to imported or to domestic motor vehicles. The next step towards a cleaner environment was adoption of technical regulation that stipulates fuel quality requirements. The plan envisages a gradual implementation of higher ecological standards to start selling Euro-5 and higher grade vehicles and gasoline by 2013. Production and sales of lower grade vehicles will be prohibited. This does not apply to cars that have been already bought. The transition to Euro-4-compliant vehicles was scheduled to take place as early as 2010. Carmakers were notified in advance, two years earlier. But eventually carmakers developed new engines and cars in accordance with the new ecological standard, whilst oil companies proved to be unprepared to produce new fuel. That is why introduction of new ecological standards was deferred to the 1st of January, 2012.
According to the new technical regulations, the beginning of 2012 should have become a watershed moment for Russian road-users: production and sales of Euro-3 standard cars would have been banned since that day. But the miracle didn’t happen: carmakers and oil companies got a respite again. Car factories can produce and trade Euro-3-compliant vehicles till the 1st of January, 2013. The impediment is again primarily caused by the fact that Euro-4 fuel production was delayed for another year. At present some oil companies produce and sell small amounts of Euro-4-compliant gasoline, but they have a long way to go to industrial-scale production. There appeared to be several obstacles in the way to this goal, and one of them was the 2008 Economic Crisis. Meanwhile the number of Euro-3 and Euro-4-compliant cars in Russia does not increase. According to the Russian Deputy Minister of Transport Nickolay Asaul, 60% of home-produced trucks in Russia are close to Еuro-0 level and only 12% comply with Euro-3 and higher standards. In turn, Europe continues to forge ahead: soon it will commence production of Euro-6-compliant vehicles – namely, on the 31st of December 2012. Nevertheless, even European countries cannot get rid of sub-Euro-4 cars on their roads. Eastern Europe spoils the whole statistical picture: Euro-0, Euro-1 and Euro-2 vehicles are still on the road there.

Auto Industry is Ready ...

As mentioned above, domestic carmakers proved to be law abiding as they were ready to produce light and heavy duty vehicles in compliance with the new ecological standards already by the end of 2011. All Russian auto plants had started development long before, and quantity manufacturing is now being hampered only by delays in fuel production. In particular, Ulianovsk Automobile Plant assembled a pilot batch of Euro-4-compliant cars in April, 2011 and started mass production in summer.
Other industry players kept apace. Automobile plants KAMAZ and the Ural have also developed new models. The former commenced production of new Euro-4-compliant trucks in January 2012. KAMAZ’s engineers laboured at the task not only to bring their product into accord with ecological standards, but also to make it more fuel-efficient, to extend service intervals for the engine and ensure a better traction dynamic. As a result, KAMAZ had to spend about 2,5 bln RUB to devise a new engine and to pay another 300 mln RUB for redesigning its vehicles.
The Ural has also got through a lot of money. During the whole of 2011 the plant conducted development work and eventually prepared to produce new models in 2012. Low-volume batch production is scheduled for the current year to enable the plant to test new vehicles together with its customers and rectify any issues found.
Although the Euro-3 stage was extended for another year, domestic vehicle makers have no intention of postponing sales of their new product. Especially as they are sure that there is demand for Euro-4 trucks in Russia. In particular, according to KAMAZ, the delay in Euro-4 fuel introduction will not adversely affect the plant’s sales, as the new type of fuel is being sold in Russia, though on a limited scale, and this is enough for the small quantity of new trucks which will appear on Russian roads this year.

...But Motor Carriers Are Not

Despite the manufacturers’ confidence in demand for their products, Russian motor carriers hold off from buying trucks made domestically. In particular, this position is typical for the players in the Russian motor transportation market who work with European countries. Their fleets have long been procured and consist of Euro-4 and Euro-5 foreign-made trucks. They made such a choice because sub-Euro-4 vehicles are barred from entry into some European countries.
The apparent unwillingness to buy home-made trucks can easily be explained by the carriers’ dissatisfaction with their quality. As Eugenia Turutina, the CEO of LLC Nordland, has put it, the company’s fleet consists of foreign-made vehicles. Nordland deals with transportation of perishable goods from Norway and Finland, and its lorries track the difficult northern routes. “I am not going to buy domestic cars even with Euro-4 grade engines, because Russian trucks can’t cope with mountain roads,” Turutina says. The businesswoman believes that it is necessary to change not only the truck engine, but the design in general. Only in this case could Russian vehicles be of some interest for motor carriers.
Another argument in favour of foreign trucks is their cost effectiveness. “For example, in Germany you pay far less when you enter a toll road in a Euro-5 car, than in a Euro-3 one,” an employee of Trans-Eco company says. Generally speaking, motor carriers have got used to foreign cars and don’t want to buy Russian vehicles yet.
Meanwhile the delay in Euro-4 standard introduction gives privileges neither to producers, nor to consumers. All changes should be synchronized, KAMAZ experts are sure. “You need relevant fuel and infrastructure to operate equipment on Euro-4 and higher level. The owners of advanced vehicles should also enjoy some economic benefits such as low tax rates,” they add. That said, the prices for Euro-4 vehicles are only 2% to 5% higher, analysts assert. They insist it is justified, because any design refinement leads to some increase in prices. But the transition to the new ecological standard may hit the profits of the companies that work exclusively in the Russian market – though only in a few years’ time.
The new ecological entries into the automobile market cannot drastically change freight transportation prices, because the number of Euro-4 trucks in the carriers’ fleets will increase only gradually. “If the plants switch to production and the importers switch to sales of Euro-4 trucks, the motor carriers’ prices will be influenced only indirectly, as the main bulk of shipping operations is still carried out by Euro-3 and lower standard trucks, which form the major part of the fleets,” the head of the analytical department of the Autostat agency Andrey Topotun said.
Thus, sub-Euro-4 vehicles will run along Russian roads for several more years, while the transition to ecological transport will take longer than originally scheduled, even if there were no delays.
By Elena Dmitrievskaya [DETAIL_TEXT_TYPE] => html [~DETAIL_TEXT_TYPE] => html [PREVIEW_TEXT] =>  The transition to Euro-4-compliant vehicles failed to take place on schedule - from the 1st of January. Automanufacturers and fuel producers got a one-year respite. While oil companies are not ready to produce Euro-4 petrol yet, Russian carmakers can already provide appropriate vehicles. However, motor carriers are not eager to buy home-produced cars. [~PREVIEW_TEXT] =>  The transition to Euro-4-compliant vehicles failed to take place on schedule - from the 1st of January. Automanufacturers and fuel producers got a one-year respite. While oil companies are not ready to produce Euro-4 petrol yet, Russian carmakers can already provide appropriate vehicles. However, motor carriers are not eager to buy home-produced cars. 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hspace="5" width="200" height="334" align="left" />The transition to Euro-4-compliant vehicles failed to take place on schedule - from the 1st of January. 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Euro-3 Will Stay

in January 2009, the European Parliament proposed the EU Member States reduce greenhouse gas emissions by 25% to 40% by 2020. With a view to this proposal the EU countries had earlier begun to develop vehicles and fuel complying with the new ecological standard. Russians gave thought to ecology much later. While in Europe they are driving Euro-4 and Euro-5 cars, here in Russia we can’t switch even to the Euro-4 standard. According to foreign researchers, this standard provides modern ecological requirements which reduce emissions of nitrogene oxides (NOx) by almost a third and toxic substances by 80%. Every new ecological standard imposes new emission limits, while the most toxic of all the pollutants is carbon monoxide (CO). Therefore, the exhaust gas from Euro-3 cars should not contain more than 20 g/kWh of CO, 1,1 g/kWh of СН and 7 g/kWh of NO. Euro-4-compliant vehicles have to meet stricter requirements: 4 g/kWh of СО, 0,55 g/kWh of СН, 2 g/kWh 2 of NO.
Russian authorities conceived the transition to new ecological standards as far back as in 2005, when they adopted “Technical Regulations on Emission Requirements for Motor Vehicles Manufactured in the Circulation in the territory of the Russian Federation, harmful (polluting) substances”. But these requirements refer either to imported or to domestic motor vehicles. The next step towards a cleaner environment was adoption of technical regulation that stipulates fuel quality requirements. The plan envisages a gradual implementation of higher ecological standards to start selling Euro-5 and higher grade vehicles and gasoline by 2013. Production and sales of lower grade vehicles will be prohibited. This does not apply to cars that have been already bought. The transition to Euro-4-compliant vehicles was scheduled to take place as early as 2010. Carmakers were notified in advance, two years earlier. But eventually carmakers developed new engines and cars in accordance with the new ecological standard, whilst oil companies proved to be unprepared to produce new fuel. That is why introduction of new ecological standards was deferred to the 1st of January, 2012.
According to the new technical regulations, the beginning of 2012 should have become a watershed moment for Russian road-users: production and sales of Euro-3 standard cars would have been banned since that day. But the miracle didn’t happen: carmakers and oil companies got a respite again. Car factories can produce and trade Euro-3-compliant vehicles till the 1st of January, 2013. The impediment is again primarily caused by the fact that Euro-4 fuel production was delayed for another year. At present some oil companies produce and sell small amounts of Euro-4-compliant gasoline, but they have a long way to go to industrial-scale production. There appeared to be several obstacles in the way to this goal, and one of them was the 2008 Economic Crisis. Meanwhile the number of Euro-3 and Euro-4-compliant cars in Russia does not increase. According to the Russian Deputy Minister of Transport Nickolay Asaul, 60% of home-produced trucks in Russia are close to Еuro-0 level and only 12% comply with Euro-3 and higher standards. In turn, Europe continues to forge ahead: soon it will commence production of Euro-6-compliant vehicles – namely, on the 31st of December 2012. Nevertheless, even European countries cannot get rid of sub-Euro-4 cars on their roads. Eastern Europe spoils the whole statistical picture: Euro-0, Euro-1 and Euro-2 vehicles are still on the road there.

Auto Industry is Ready ...

As mentioned above, domestic carmakers proved to be law abiding as they were ready to produce light and heavy duty vehicles in compliance with the new ecological standards already by the end of 2011. All Russian auto plants had started development long before, and quantity manufacturing is now being hampered only by delays in fuel production. In particular, Ulianovsk Automobile Plant assembled a pilot batch of Euro-4-compliant cars in April, 2011 and started mass production in summer.
Other industry players kept apace. Automobile plants KAMAZ and the Ural have also developed new models. The former commenced production of new Euro-4-compliant trucks in January 2012. KAMAZ’s engineers laboured at the task not only to bring their product into accord with ecological standards, but also to make it more fuel-efficient, to extend service intervals for the engine and ensure a better traction dynamic. As a result, KAMAZ had to spend about 2,5 bln RUB to devise a new engine and to pay another 300 mln RUB for redesigning its vehicles.
The Ural has also got through a lot of money. During the whole of 2011 the plant conducted development work and eventually prepared to produce new models in 2012. Low-volume batch production is scheduled for the current year to enable the plant to test new vehicles together with its customers and rectify any issues found.
Although the Euro-3 stage was extended for another year, domestic vehicle makers have no intention of postponing sales of their new product. Especially as they are sure that there is demand for Euro-4 trucks in Russia. In particular, according to KAMAZ, the delay in Euro-4 fuel introduction will not adversely affect the plant’s sales, as the new type of fuel is being sold in Russia, though on a limited scale, and this is enough for the small quantity of new trucks which will appear on Russian roads this year.

...But Motor Carriers Are Not

Despite the manufacturers’ confidence in demand for their products, Russian motor carriers hold off from buying trucks made domestically. In particular, this position is typical for the players in the Russian motor transportation market who work with European countries. Their fleets have long been procured and consist of Euro-4 and Euro-5 foreign-made trucks. They made such a choice because sub-Euro-4 vehicles are barred from entry into some European countries.
The apparent unwillingness to buy home-made trucks can easily be explained by the carriers’ dissatisfaction with their quality. As Eugenia Turutina, the CEO of LLC Nordland, has put it, the company’s fleet consists of foreign-made vehicles. Nordland deals with transportation of perishable goods from Norway and Finland, and its lorries track the difficult northern routes. “I am not going to buy domestic cars even with Euro-4 grade engines, because Russian trucks can’t cope with mountain roads,” Turutina says. The businesswoman believes that it is necessary to change not only the truck engine, but the design in general. Only in this case could Russian vehicles be of some interest for motor carriers.
Another argument in favour of foreign trucks is their cost effectiveness. “For example, in Germany you pay far less when you enter a toll road in a Euro-5 car, than in a Euro-3 one,” an employee of Trans-Eco company says. Generally speaking, motor carriers have got used to foreign cars and don’t want to buy Russian vehicles yet.
Meanwhile the delay in Euro-4 standard introduction gives privileges neither to producers, nor to consumers. All changes should be synchronized, KAMAZ experts are sure. “You need relevant fuel and infrastructure to operate equipment on Euro-4 and higher level. The owners of advanced vehicles should also enjoy some economic benefits such as low tax rates,” they add. That said, the prices for Euro-4 vehicles are only 2% to 5% higher, analysts assert. They insist it is justified, because any design refinement leads to some increase in prices. But the transition to the new ecological standard may hit the profits of the companies that work exclusively in the Russian market – though only in a few years’ time.
The new ecological entries into the automobile market cannot drastically change freight transportation prices, because the number of Euro-4 trucks in the carriers’ fleets will increase only gradually. “If the plants switch to production and the importers switch to sales of Euro-4 trucks, the motor carriers’ prices will be influenced only indirectly, as the main bulk of shipping operations is still carried out by Euro-3 and lower standard trucks, which form the major part of the fleets,” the head of the analytical department of the Autostat agency Andrey Topotun said.
Thus, sub-Euro-4 vehicles will run along Russian roads for several more years, while the transition to ecological transport will take longer than originally scheduled, even if there were no delays.
By Elena Dmitrievskaya [~DETAIL_TEXT] =>

Euro-3 Will Stay

in January 2009, the European Parliament proposed the EU Member States reduce greenhouse gas emissions by 25% to 40% by 2020. With a view to this proposal the EU countries had earlier begun to develop vehicles and fuel complying with the new ecological standard. Russians gave thought to ecology much later. While in Europe they are driving Euro-4 and Euro-5 cars, here in Russia we can’t switch even to the Euro-4 standard. According to foreign researchers, this standard provides modern ecological requirements which reduce emissions of nitrogene oxides (NOx) by almost a third and toxic substances by 80%. Every new ecological standard imposes new emission limits, while the most toxic of all the pollutants is carbon monoxide (CO). Therefore, the exhaust gas from Euro-3 cars should not contain more than 20 g/kWh of CO, 1,1 g/kWh of СН and 7 g/kWh of NO. Euro-4-compliant vehicles have to meet stricter requirements: 4 g/kWh of СО, 0,55 g/kWh of СН, 2 g/kWh 2 of NO.
Russian authorities conceived the transition to new ecological standards as far back as in 2005, when they adopted “Technical Regulations on Emission Requirements for Motor Vehicles Manufactured in the Circulation in the territory of the Russian Federation, harmful (polluting) substances”. But these requirements refer either to imported or to domestic motor vehicles. The next step towards a cleaner environment was adoption of technical regulation that stipulates fuel quality requirements. The plan envisages a gradual implementation of higher ecological standards to start selling Euro-5 and higher grade vehicles and gasoline by 2013. Production and sales of lower grade vehicles will be prohibited. This does not apply to cars that have been already bought. The transition to Euro-4-compliant vehicles was scheduled to take place as early as 2010. Carmakers were notified in advance, two years earlier. But eventually carmakers developed new engines and cars in accordance with the new ecological standard, whilst oil companies proved to be unprepared to produce new fuel. That is why introduction of new ecological standards was deferred to the 1st of January, 2012.
According to the new technical regulations, the beginning of 2012 should have become a watershed moment for Russian road-users: production and sales of Euro-3 standard cars would have been banned since that day. But the miracle didn’t happen: carmakers and oil companies got a respite again. Car factories can produce and trade Euro-3-compliant vehicles till the 1st of January, 2013. The impediment is again primarily caused by the fact that Euro-4 fuel production was delayed for another year. At present some oil companies produce and sell small amounts of Euro-4-compliant gasoline, but they have a long way to go to industrial-scale production. There appeared to be several obstacles in the way to this goal, and one of them was the 2008 Economic Crisis. Meanwhile the number of Euro-3 and Euro-4-compliant cars in Russia does not increase. According to the Russian Deputy Minister of Transport Nickolay Asaul, 60% of home-produced trucks in Russia are close to Еuro-0 level and only 12% comply with Euro-3 and higher standards. In turn, Europe continues to forge ahead: soon it will commence production of Euro-6-compliant vehicles – namely, on the 31st of December 2012. Nevertheless, even European countries cannot get rid of sub-Euro-4 cars on their roads. Eastern Europe spoils the whole statistical picture: Euro-0, Euro-1 and Euro-2 vehicles are still on the road there.

Auto Industry is Ready ...

As mentioned above, domestic carmakers proved to be law abiding as they were ready to produce light and heavy duty vehicles in compliance with the new ecological standards already by the end of 2011. All Russian auto plants had started development long before, and quantity manufacturing is now being hampered only by delays in fuel production. In particular, Ulianovsk Automobile Plant assembled a pilot batch of Euro-4-compliant cars in April, 2011 and started mass production in summer.
Other industry players kept apace. Automobile plants KAMAZ and the Ural have also developed new models. The former commenced production of new Euro-4-compliant trucks in January 2012. KAMAZ’s engineers laboured at the task not only to bring their product into accord with ecological standards, but also to make it more fuel-efficient, to extend service intervals for the engine and ensure a better traction dynamic. As a result, KAMAZ had to spend about 2,5 bln RUB to devise a new engine and to pay another 300 mln RUB for redesigning its vehicles.
The Ural has also got through a lot of money. During the whole of 2011 the plant conducted development work and eventually prepared to produce new models in 2012. Low-volume batch production is scheduled for the current year to enable the plant to test new vehicles together with its customers and rectify any issues found.
Although the Euro-3 stage was extended for another year, domestic vehicle makers have no intention of postponing sales of their new product. Especially as they are sure that there is demand for Euro-4 trucks in Russia. In particular, according to KAMAZ, the delay in Euro-4 fuel introduction will not adversely affect the plant’s sales, as the new type of fuel is being sold in Russia, though on a limited scale, and this is enough for the small quantity of new trucks which will appear on Russian roads this year.

...But Motor Carriers Are Not

Despite the manufacturers’ confidence in demand for their products, Russian motor carriers hold off from buying trucks made domestically. In particular, this position is typical for the players in the Russian motor transportation market who work with European countries. Their fleets have long been procured and consist of Euro-4 and Euro-5 foreign-made trucks. They made such a choice because sub-Euro-4 vehicles are barred from entry into some European countries.
The apparent unwillingness to buy home-made trucks can easily be explained by the carriers’ dissatisfaction with their quality. As Eugenia Turutina, the CEO of LLC Nordland, has put it, the company’s fleet consists of foreign-made vehicles. Nordland deals with transportation of perishable goods from Norway and Finland, and its lorries track the difficult northern routes. “I am not going to buy domestic cars even with Euro-4 grade engines, because Russian trucks can’t cope with mountain roads,” Turutina says. The businesswoman believes that it is necessary to change not only the truck engine, but the design in general. Only in this case could Russian vehicles be of some interest for motor carriers.
Another argument in favour of foreign trucks is their cost effectiveness. “For example, in Germany you pay far less when you enter a toll road in a Euro-5 car, than in a Euro-3 one,” an employee of Trans-Eco company says. Generally speaking, motor carriers have got used to foreign cars and don’t want to buy Russian vehicles yet.
Meanwhile the delay in Euro-4 standard introduction gives privileges neither to producers, nor to consumers. All changes should be synchronized, KAMAZ experts are sure. “You need relevant fuel and infrastructure to operate equipment on Euro-4 and higher level. The owners of advanced vehicles should also enjoy some economic benefits such as low tax rates,” they add. That said, the prices for Euro-4 vehicles are only 2% to 5% higher, analysts assert. They insist it is justified, because any design refinement leads to some increase in prices. But the transition to the new ecological standard may hit the profits of the companies that work exclusively in the Russian market – though only in a few years’ time.
The new ecological entries into the automobile market cannot drastically change freight transportation prices, because the number of Euro-4 trucks in the carriers’ fleets will increase only gradually. “If the plants switch to production and the importers switch to sales of Euro-4 trucks, the motor carriers’ prices will be influenced only indirectly, as the main bulk of shipping operations is still carried out by Euro-3 and lower standard trucks, which form the major part of the fleets,” the head of the analytical department of the Autostat agency Andrey Topotun said.
Thus, sub-Euro-4 vehicles will run along Russian roads for several more years, while the transition to ecological transport will take longer than originally scheduled, even if there were no delays.
By Elena Dmitrievskaya [DETAIL_TEXT_TYPE] => html [~DETAIL_TEXT_TYPE] => html [PREVIEW_TEXT] =>  The transition to Euro-4-compliant vehicles failed to take place on schedule - from the 1st of January. Automanufacturers and fuel producers got a one-year respite. While oil companies are not ready to produce Euro-4 petrol yet, Russian carmakers can already provide appropriate vehicles. However, motor carriers are not eager to buy home-produced cars. [~PREVIEW_TEXT] =>  The transition to Euro-4-compliant vehicles failed to take place on schedule - from the 1st of January. Automanufacturers and fuel producers got a one-year respite. While oil companies are not ready to produce Euro-4 petrol yet, Russian carmakers can already provide appropriate vehicles. However, motor carriers are not eager to buy home-produced cars. 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hspace="5" width="200" height="334" align="left" />The transition to Euro-4-compliant vehicles failed to take place on schedule - from the 1st of January. Automanufacturers and fuel producers got a one-year respite. While oil companies are not ready to produce Euro-4 petrol yet, Russian carmakers can already provide appropriate vehicles. However, motor carriers are not eager to buy home-produced cars. [ELEMENT_META_TITLE] => Euro-4 Will Wait Another Year [ELEMENT_META_KEYWORDS] => euro-4 will wait another year [ELEMENT_META_DESCRIPTION] => <img src="/ufiles/image/rus/inter/2012/2/10.jpg" border="1" alt=" " hspace="5" width="200" height="334" align="left" />The transition to Euro-4-compliant vehicles failed to take place on schedule - from the 1st of January. Automanufacturers and fuel producers got a one-year respite. While oil companies are not ready to produce Euro-4 petrol yet, Russian carmakers can already provide appropriate vehicles. However, motor carriers are not eager to buy home-produced cars. 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РЖД-Партнер

Searching for the Optimal Structure

 The Russian railway transportation market has been going through reforms for several years already. As a result, the entire wagon fleet now belongs to private companies. However, state regulators and senior managers of Russian Railways do not quite understand how to control hundreds of private railcars.
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Couldn’t Do without the Government

The entire wagon fleet was the property of RZD earlier, and the company provided centralized administration of railcars. Nowadays, more than a million wagons belong to more than 1,500 private operators, and every owner disposes of his railcar at his own discretion, reasoning from his own benefit. Thus, the situation that emerged last summer – traffic jams because of empty wagons that idled waiting for loading in one of Russia’s regions (the Kuzbass), and, on the contrary, an acute shortage of wagons in other regions of Russia, – made a lot of cargo owners apply to the Government for help.
As a result, the mass accumulation of wagons at stations was removed due to administrative reduction of the number of operators with which consignors worked. Every such case, however, cannot be regulated in this way. In autumn 2011, it was decided to create a so-called park of own and rented wagons – consolidated or rented, a peculiar kind of RZD’s park restoration. Then, officials faced the following problem: there were neither juridical, nor economic conditions for an activity of such structure.
The target model of railway transportation market development to 2015 envisaged creation of a sector, where private companies would operate, and the transporter and infrastructure owner (i.e. RZD) would have no rolling stock. Consequently, the tariffs, according to which RZD’s park used to work, were to become a matter of the past.
Therefore, a separate regulatory document was needed to legalise the new consolidated park (at first it consisted of railcars of Freight One and the Second Cargo Company – daughter companies of RZD, and then – of private operators’ wagons) in its existing condition. As a result, last December, the Government issued a decree regulating questions concerning the work of the rented rolling stock park (decree №1051 dated December 20, 2011 “On the Order of Borrowing Railway Rolling Stock by RZD to Transport Cargo and on Setting a Special Order of Formation of Prices for Cargo Transportation in Mentioned Rolling Stock”).

Nothing Is More Permanent Than Something Temporary

In practice, this document touched first of all those RZD subsidiaries with a large fleet of gondola railcars – Freight One and the Second Cargo Company. Since November 2011, before the document was approved, the universal rolling stock of Freight One and the Second Cargo Company (100% of the former was owned by RZD at that time) has been aggregated into the owned and rented wagon park under the control of RZD. After the auction of Freight One, in February 2012, the new owner of the company took all its railcars from the consolidated fleet.
Clause 1 of Decree № 1051 obligates RZD to provide rental of gondola cars from the Second Cargo Company (either own or managed by the company) to transport freight. Simultaneously, it is noted that gondola cars of other owners should be rented as well on the basis of an auction or a public offer (on the same conditions). And the period of time when this clause is in force is limited – December 31, 2012, which means that it is temporary.
Nevertheless, some representatives of large operator companies fear now that this extraordinary measure may become permanent. In their opinion, it is not the best way out, because a new scheme of work must be developed to solve the problem of wagon supplies to fulfill cargo owners’ applications and to remove traffic jams on the network.
Such schemes are being developed by groups of scientists on the order of RZD, and by operators, but none of the suggestions has been approved by everyone and chosen as a pattern yet. The Ministry of Transport is trying to solve the problem too. State Secretary – Deputy Minister of Transport of the Russian Federation Sergey Aristov said recently that a new technology of transportation process management should be developed before the end of the current year to provide market normal functioning. This technology should meet the parameters of the Target Model to 2015, considering multiplicity of participants in the sector.

Tariff Chosen

For the transporter to borrow private rolling stock without damaging its own economy, tariffs were to be revised. Representatives of the Centre of Transport Services of RZD noted several times that RZD could rent wagons only on rates set by Tariff Regulation № 10-01, while they had to rent private wagons at market prices only. And there was nobody to compensate for the imbalance.
According to Clause 3 of Decree № 1051, the Federal Tariff Service (FTS) was charged with solving this problem, i.e. to develop and approve the order of calculation and rules of usage of tariffs on cargo transportation in rented wagon parks (it was planned to rent railcars on the conditions of RZD’s fleet with a special order of price formation adjusted). With the help of RZD, the Federal Tariff Service completed this task. At the end of January, order № 444-t/4 of the FTS dated December 27, 2011 “On Enactment of the Order of Calculation of Tariffs on Cargo Transportation in Rented Railcars and Rules of Their Usage” came into force.
According to RZD, an offer suggesting the rental of gondola cars in accordance with the tariffs developed by the FTS has been sent to small and medium-size operators (perhaps, to most interested persons). As far as we know, operators do not rush to give their gondola cars to the consolidated wagon park, which consists of the rolling stock of the Second Cargo Company only. Perhaps, amid the shortage of gondola cars and the necessity to make leasing payments, the offered rate turned out to be too low for private companies. According to the order of the FTS, the transporter can vary the coefficient to readjust such rates.

There Is Some Progress

On the other hand, there is some progress in the field of regulating the empty mileage on the RZD’s network. A respective order of the Transport Ministry (Order № 258 dated October 3, 2011, “On Amendments to Some Acts of the RF Ministry of Railways”) came into force already. After it appeared, RZD became able to control the movement of private empty railcars on the infrastructure by carrying out the transporter’s right to refuse empty wagons transportation if there is no adjusted application for transportation of cargo in them from the destination point.
This decree came into force on January 18, 2012. It sets the interconnection between a definite private empty railcar, received for transportation and moving to the place where it will be loaded, and the consignor that will use it. This measure is aimed at the targeted dispatch of empty wagons in accordance with an adjusted application and further transportation of cargo in it. Also, starting from January 18, the consignor is obligated to mention the owner of wagon in the GU-12 application.
It seems that nothing special is required from a consignor – he is just to name the owner of wagons at cargo dispatch and have an application for the further loading when an empty railcar is dispatched. In practice, it has turned out to be impossible often to meet these two requirements (for example, there is no information about the exact time of a railcar arrival and its owner, etc.). Wagons do not accumulate at places of mass loading today. Instead, they may now accumulate at the places of mass unloading.
Another problem connected with carrying out Order № 258 of the Transport Ministry is that the owner of a wagon is to be named in the application. There are few cargo owners now that work with one or two operators.
To carry out the new idea of the order (only wagon owner, named in the GU-12 application, can form a notification of an empty railcar dispatch), the Centre of Transport Services in cooperation with the Council of the Market of Operators (an organization uniting 33 operators, to whom the larger part of the entire wagon fleet belongs) decided to develop two e-databases – an e-base of notifications from cargo owners of the expected wagon supplies, and an e-base of wagon owners’ warrants.
Despite a number of difficulties faced by consignors because of the new order, the problem of traffic jams at places of mass loading will be solved soon. Perhaps, later, due to amendments to statements in this order, an efficient system of wagons movement (at least, empty ones) may be built in future.

The Second Is Better

According to Clause 4 of the Decree № 1051, some regulators headed by the Transport Ministry were commissioned to develop regulatory acts defining the legal basis for regulation of operators’ activity and their interaction with other market players. The first draft decree of the RF Government “On the Basis of Legal Regulation of Activity of Operators and Their Interaction with Transportation Process Participants at Cargo Transportation” emerged at the end of 2011, but because of the heated discussion about some of its clauses, the document was revised.
Nowadays, market players are discussing the second version presented by the Transport Ministry in the middle of February. At first sight, it is not so debatable.
The Transport Ministry believes that operators should be divided in network-wide, regional, specialized, corporate, and container ones. Network-wide operators are supposed to have at least 5,000 own or rented units of rolling stock, including specialized railcars. And they are supposed to provide their fleet for transportation of a large number of cargoes in any direction.
Regional operators may have different types of rolling stock (up to 5,000 units). They are supposed to transport cargo on specific lines.
Specialised operators manage specialized rolling stock to transport specific cargoes. Corporate companies have railcars and provide them to some definite clients that, as a rule, are incorporated with the operator into one group of persons. And the last category is container operators, i.e. those who have specialized rolling stock and containers.
A number of questions remain unanswered. Most of them concern whether operators will be obligated to provide their rolling stock. Firstly, will they have to provide it to all applicants, as a public transporter (RZD) has to? Secondly, will they have to supply it in some cases not to cargo owners but to the transporter?
After some debates, the consensus about the first question was reached. RZD offered to oblige all operators to provide their rolling stock for loading, and those who do not would be just wagon owners. The Transport Ministry wanted to enlarge the market and cut the number of operators, putting into operation a quantitative wagon census for such companies without making them obliged to work as a public transporter. At the conference in the Ministry of Transport in February, where all interested parties were present, it was concluded that the obligation to provide rolling stock may be put into operation but only for network-wide operators whose fleet is more than 5,000 railcars, and which work on the entire network of RZD (according to RZD’s Centre of Transport Services, there are approximately 30 such companies now).
The question as to whether an operator is obliged to provide his railcars to the transporter (if “yes”, on which conditions, and haw many) is still under discussion. We will specify: it is “obligation” that is discussed, because an operator has now the right to provide its railcars to the transporter (see Clause 1 of the decree, where the advisability of making private companies interested by means of such instruments as an auction and a public offer is mentioned).

Just Statistics

One more measure is being taken to regulate the activity of operators on RZD’s network – Clause 8 of Decree № 1051 commissioned the Ministry of Transport “to develop and approve the regulatory act setting the order of monitoring the process of supplying cargo owners with rolling stock and its usage by transportation process participants, the methods to evaluate the efficiency of such usage, and the order of information interaction and online data exchange with RZD and other participants of the transportation process.” Also, it is planned that starting from the first quarter of 2012, the Transport Ministry will submit a report about the results of such monitoring to the Government every quarter.
A respective order of the Transport Ministry has not been adopted yet, but its draft exists already (draft order of the Russian Ministry of Transport “On Adopting the Decree on the Order of Monitoring of Supply Cargo Owners with Railway Rolling Stock and Its Usage by Participants of the Transportation Process”).
According to the document, such monitoring will be carried out by specialists of the Federal Agency for Railway Transport (Roszheldor). For that, special automated workplaces will be created with access to the information bases of the transporter and operators (self-regulated organizations of operators).
The methods to evaluate wagon fleet efficiency have been developed already. A method of comparative analysis of the dynamics of several figures –turnover, average daily mileage, and wagon efficiency – will be used. Specialised and universal rolling stock will be analysed separately.
Perhaps, the Transport Ministry should adopt the order as fast as possible. The detail monitoring of fulfillment of cargo owners’ applications and the efficiency of the private fleet will be the best indicator of problems in the sector and will provide a clear vision of the real situation on the network. Until now, we got information about it from statistics and reports of different market players. The results of independent monitoring made by Roszheldor may fail to change our vision of the situation, but they will give more details. According to the results of such monitoring, revision of the regulatory acts developed nowadays may be needed. It is unknown, however, whether they will be revised to liberalise the activity of operators, or to toughen requirements of them.
By Nadezhda Vtorushina [~DETAIL_TEXT] =>

Couldn’t Do without the Government

The entire wagon fleet was the property of RZD earlier, and the company provided centralized administration of railcars. Nowadays, more than a million wagons belong to more than 1,500 private operators, and every owner disposes of his railcar at his own discretion, reasoning from his own benefit. Thus, the situation that emerged last summer – traffic jams because of empty wagons that idled waiting for loading in one of Russia’s regions (the Kuzbass), and, on the contrary, an acute shortage of wagons in other regions of Russia, – made a lot of cargo owners apply to the Government for help.
As a result, the mass accumulation of wagons at stations was removed due to administrative reduction of the number of operators with which consignors worked. Every such case, however, cannot be regulated in this way. In autumn 2011, it was decided to create a so-called park of own and rented wagons – consolidated or rented, a peculiar kind of RZD’s park restoration. Then, officials faced the following problem: there were neither juridical, nor economic conditions for an activity of such structure.
The target model of railway transportation market development to 2015 envisaged creation of a sector, where private companies would operate, and the transporter and infrastructure owner (i.e. RZD) would have no rolling stock. Consequently, the tariffs, according to which RZD’s park used to work, were to become a matter of the past.
Therefore, a separate regulatory document was needed to legalise the new consolidated park (at first it consisted of railcars of Freight One and the Second Cargo Company – daughter companies of RZD, and then – of private operators’ wagons) in its existing condition. As a result, last December, the Government issued a decree regulating questions concerning the work of the rented rolling stock park (decree №1051 dated December 20, 2011 “On the Order of Borrowing Railway Rolling Stock by RZD to Transport Cargo and on Setting a Special Order of Formation of Prices for Cargo Transportation in Mentioned Rolling Stock”).

Nothing Is More Permanent Than Something Temporary

In practice, this document touched first of all those RZD subsidiaries with a large fleet of gondola railcars – Freight One and the Second Cargo Company. Since November 2011, before the document was approved, the universal rolling stock of Freight One and the Second Cargo Company (100% of the former was owned by RZD at that time) has been aggregated into the owned and rented wagon park under the control of RZD. After the auction of Freight One, in February 2012, the new owner of the company took all its railcars from the consolidated fleet.
Clause 1 of Decree № 1051 obligates RZD to provide rental of gondola cars from the Second Cargo Company (either own or managed by the company) to transport freight. Simultaneously, it is noted that gondola cars of other owners should be rented as well on the basis of an auction or a public offer (on the same conditions). And the period of time when this clause is in force is limited – December 31, 2012, which means that it is temporary.
Nevertheless, some representatives of large operator companies fear now that this extraordinary measure may become permanent. In their opinion, it is not the best way out, because a new scheme of work must be developed to solve the problem of wagon supplies to fulfill cargo owners’ applications and to remove traffic jams on the network.
Such schemes are being developed by groups of scientists on the order of RZD, and by operators, but none of the suggestions has been approved by everyone and chosen as a pattern yet. The Ministry of Transport is trying to solve the problem too. State Secretary – Deputy Minister of Transport of the Russian Federation Sergey Aristov said recently that a new technology of transportation process management should be developed before the end of the current year to provide market normal functioning. This technology should meet the parameters of the Target Model to 2015, considering multiplicity of participants in the sector.

Tariff Chosen

For the transporter to borrow private rolling stock without damaging its own economy, tariffs were to be revised. Representatives of the Centre of Transport Services of RZD noted several times that RZD could rent wagons only on rates set by Tariff Regulation № 10-01, while they had to rent private wagons at market prices only. And there was nobody to compensate for the imbalance.
According to Clause 3 of Decree № 1051, the Federal Tariff Service (FTS) was charged with solving this problem, i.e. to develop and approve the order of calculation and rules of usage of tariffs on cargo transportation in rented wagon parks (it was planned to rent railcars on the conditions of RZD’s fleet with a special order of price formation adjusted). With the help of RZD, the Federal Tariff Service completed this task. At the end of January, order № 444-t/4 of the FTS dated December 27, 2011 “On Enactment of the Order of Calculation of Tariffs on Cargo Transportation in Rented Railcars and Rules of Their Usage” came into force.
According to RZD, an offer suggesting the rental of gondola cars in accordance with the tariffs developed by the FTS has been sent to small and medium-size operators (perhaps, to most interested persons). As far as we know, operators do not rush to give their gondola cars to the consolidated wagon park, which consists of the rolling stock of the Second Cargo Company only. Perhaps, amid the shortage of gondola cars and the necessity to make leasing payments, the offered rate turned out to be too low for private companies. According to the order of the FTS, the transporter can vary the coefficient to readjust such rates.

There Is Some Progress

On the other hand, there is some progress in the field of regulating the empty mileage on the RZD’s network. A respective order of the Transport Ministry (Order № 258 dated October 3, 2011, “On Amendments to Some Acts of the RF Ministry of Railways”) came into force already. After it appeared, RZD became able to control the movement of private empty railcars on the infrastructure by carrying out the transporter’s right to refuse empty wagons transportation if there is no adjusted application for transportation of cargo in them from the destination point.
This decree came into force on January 18, 2012. It sets the interconnection between a definite private empty railcar, received for transportation and moving to the place where it will be loaded, and the consignor that will use it. This measure is aimed at the targeted dispatch of empty wagons in accordance with an adjusted application and further transportation of cargo in it. Also, starting from January 18, the consignor is obligated to mention the owner of wagon in the GU-12 application.
It seems that nothing special is required from a consignor – he is just to name the owner of wagons at cargo dispatch and have an application for the further loading when an empty railcar is dispatched. In practice, it has turned out to be impossible often to meet these two requirements (for example, there is no information about the exact time of a railcar arrival and its owner, etc.). Wagons do not accumulate at places of mass loading today. Instead, they may now accumulate at the places of mass unloading.
Another problem connected with carrying out Order № 258 of the Transport Ministry is that the owner of a wagon is to be named in the application. There are few cargo owners now that work with one or two operators.
To carry out the new idea of the order (only wagon owner, named in the GU-12 application, can form a notification of an empty railcar dispatch), the Centre of Transport Services in cooperation with the Council of the Market of Operators (an organization uniting 33 operators, to whom the larger part of the entire wagon fleet belongs) decided to develop two e-databases – an e-base of notifications from cargo owners of the expected wagon supplies, and an e-base of wagon owners’ warrants.
Despite a number of difficulties faced by consignors because of the new order, the problem of traffic jams at places of mass loading will be solved soon. Perhaps, later, due to amendments to statements in this order, an efficient system of wagons movement (at least, empty ones) may be built in future.

The Second Is Better

According to Clause 4 of the Decree № 1051, some regulators headed by the Transport Ministry were commissioned to develop regulatory acts defining the legal basis for regulation of operators’ activity and their interaction with other market players. The first draft decree of the RF Government “On the Basis of Legal Regulation of Activity of Operators and Their Interaction with Transportation Process Participants at Cargo Transportation” emerged at the end of 2011, but because of the heated discussion about some of its clauses, the document was revised.
Nowadays, market players are discussing the second version presented by the Transport Ministry in the middle of February. At first sight, it is not so debatable.
The Transport Ministry believes that operators should be divided in network-wide, regional, specialized, corporate, and container ones. Network-wide operators are supposed to have at least 5,000 own or rented units of rolling stock, including specialized railcars. And they are supposed to provide their fleet for transportation of a large number of cargoes in any direction.
Regional operators may have different types of rolling stock (up to 5,000 units). They are supposed to transport cargo on specific lines.
Specialised operators manage specialized rolling stock to transport specific cargoes. Corporate companies have railcars and provide them to some definite clients that, as a rule, are incorporated with the operator into one group of persons. And the last category is container operators, i.e. those who have specialized rolling stock and containers.
A number of questions remain unanswered. Most of them concern whether operators will be obligated to provide their rolling stock. Firstly, will they have to provide it to all applicants, as a public transporter (RZD) has to? Secondly, will they have to supply it in some cases not to cargo owners but to the transporter?
After some debates, the consensus about the first question was reached. RZD offered to oblige all operators to provide their rolling stock for loading, and those who do not would be just wagon owners. The Transport Ministry wanted to enlarge the market and cut the number of operators, putting into operation a quantitative wagon census for such companies without making them obliged to work as a public transporter. At the conference in the Ministry of Transport in February, where all interested parties were present, it was concluded that the obligation to provide rolling stock may be put into operation but only for network-wide operators whose fleet is more than 5,000 railcars, and which work on the entire network of RZD (according to RZD’s Centre of Transport Services, there are approximately 30 such companies now).
The question as to whether an operator is obliged to provide his railcars to the transporter (if “yes”, on which conditions, and haw many) is still under discussion. We will specify: it is “obligation” that is discussed, because an operator has now the right to provide its railcars to the transporter (see Clause 1 of the decree, where the advisability of making private companies interested by means of such instruments as an auction and a public offer is mentioned).

Just Statistics

One more measure is being taken to regulate the activity of operators on RZD’s network – Clause 8 of Decree № 1051 commissioned the Ministry of Transport “to develop and approve the regulatory act setting the order of monitoring the process of supplying cargo owners with rolling stock and its usage by transportation process participants, the methods to evaluate the efficiency of such usage, and the order of information interaction and online data exchange with RZD and other participants of the transportation process.” Also, it is planned that starting from the first quarter of 2012, the Transport Ministry will submit a report about the results of such monitoring to the Government every quarter.
A respective order of the Transport Ministry has not been adopted yet, but its draft exists already (draft order of the Russian Ministry of Transport “On Adopting the Decree on the Order of Monitoring of Supply Cargo Owners with Railway Rolling Stock and Its Usage by Participants of the Transportation Process”).
According to the document, such monitoring will be carried out by specialists of the Federal Agency for Railway Transport (Roszheldor). For that, special automated workplaces will be created with access to the information bases of the transporter and operators (self-regulated organizations of operators).
The methods to evaluate wagon fleet efficiency have been developed already. A method of comparative analysis of the dynamics of several figures –turnover, average daily mileage, and wagon efficiency – will be used. Specialised and universal rolling stock will be analysed separately.
Perhaps, the Transport Ministry should adopt the order as fast as possible. The detail monitoring of fulfillment of cargo owners’ applications and the efficiency of the private fleet will be the best indicator of problems in the sector and will provide a clear vision of the real situation on the network. Until now, we got information about it from statistics and reports of different market players. The results of independent monitoring made by Roszheldor may fail to change our vision of the situation, but they will give more details. According to the results of such monitoring, revision of the regulatory acts developed nowadays may be needed. It is unknown, however, whether they will be revised to liberalise the activity of operators, or to toughen requirements of them.
By Nadezhda Vtorushina [DETAIL_TEXT_TYPE] => html [~DETAIL_TEXT_TYPE] => html [PREVIEW_TEXT] =>  The Russian railway transportation market has been going through reforms for several years already. As a result, the entire wagon fleet now belongs to private companies. However, state regulators and senior managers of Russian Railways do not quite understand how to control hundreds of private railcars. [~PREVIEW_TEXT] =>  The Russian railway transportation market has been going through reforms for several years already. As a result, the entire wagon fleet now belongs to private companies. However, state regulators and senior managers of Russian Railways do not quite understand how to control hundreds of private railcars. 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As a result, the entire wagon fleet now belongs to private companies. However, state regulators and senior managers of Russian Railways do not quite understand how to control hundreds of private railcars. [ELEMENT_META_TITLE] => Searching for the Optimal Structure [ELEMENT_META_KEYWORDS] => searching for the optimal structure [ELEMENT_META_DESCRIPTION] => <img src="/ufiles/image/rus/inter/2012/2/9.jpg" border="1" alt=" " hspace="5" width="200" height="264" align="left" />The Russian railway transportation market has been going through reforms for several years already. As a result, the entire wagon fleet now belongs to private companies. However, state regulators and senior managers of Russian Railways do not quite understand how to control hundreds of private railcars. 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Couldn’t Do without the Government

The entire wagon fleet was the property of RZD earlier, and the company provided centralized administration of railcars. Nowadays, more than a million wagons belong to more than 1,500 private operators, and every owner disposes of his railcar at his own discretion, reasoning from his own benefit. Thus, the situation that emerged last summer – traffic jams because of empty wagons that idled waiting for loading in one of Russia’s regions (the Kuzbass), and, on the contrary, an acute shortage of wagons in other regions of Russia, – made a lot of cargo owners apply to the Government for help.
As a result, the mass accumulation of wagons at stations was removed due to administrative reduction of the number of operators with which consignors worked. Every such case, however, cannot be regulated in this way. In autumn 2011, it was decided to create a so-called park of own and rented wagons – consolidated or rented, a peculiar kind of RZD’s park restoration. Then, officials faced the following problem: there were neither juridical, nor economic conditions for an activity of such structure.
The target model of railway transportation market development to 2015 envisaged creation of a sector, where private companies would operate, and the transporter and infrastructure owner (i.e. RZD) would have no rolling stock. Consequently, the tariffs, according to which RZD’s park used to work, were to become a matter of the past.
Therefore, a separate regulatory document was needed to legalise the new consolidated park (at first it consisted of railcars of Freight One and the Second Cargo Company – daughter companies of RZD, and then – of private operators’ wagons) in its existing condition. As a result, last December, the Government issued a decree regulating questions concerning the work of the rented rolling stock park (decree №1051 dated December 20, 2011 “On the Order of Borrowing Railway Rolling Stock by RZD to Transport Cargo and on Setting a Special Order of Formation of Prices for Cargo Transportation in Mentioned Rolling Stock”).

Nothing Is More Permanent Than Something Temporary

In practice, this document touched first of all those RZD subsidiaries with a large fleet of gondola railcars – Freight One and the Second Cargo Company. Since November 2011, before the document was approved, the universal rolling stock of Freight One and the Second Cargo Company (100% of the former was owned by RZD at that time) has been aggregated into the owned and rented wagon park under the control of RZD. After the auction of Freight One, in February 2012, the new owner of the company took all its railcars from the consolidated fleet.
Clause 1 of Decree № 1051 obligates RZD to provide rental of gondola cars from the Second Cargo Company (either own or managed by the company) to transport freight. Simultaneously, it is noted that gondola cars of other owners should be rented as well on the basis of an auction or a public offer (on the same conditions). And the period of time when this clause is in force is limited – December 31, 2012, which means that it is temporary.
Nevertheless, some representatives of large operator companies fear now that this extraordinary measure may become permanent. In their opinion, it is not the best way out, because a new scheme of work must be developed to solve the problem of wagon supplies to fulfill cargo owners’ applications and to remove traffic jams on the network.
Such schemes are being developed by groups of scientists on the order of RZD, and by operators, but none of the suggestions has been approved by everyone and chosen as a pattern yet. The Ministry of Transport is trying to solve the problem too. State Secretary – Deputy Minister of Transport of the Russian Federation Sergey Aristov said recently that a new technology of transportation process management should be developed before the end of the current year to provide market normal functioning. This technology should meet the parameters of the Target Model to 2015, considering multiplicity of participants in the sector.

Tariff Chosen

For the transporter to borrow private rolling stock without damaging its own economy, tariffs were to be revised. Representatives of the Centre of Transport Services of RZD noted several times that RZD could rent wagons only on rates set by Tariff Regulation № 10-01, while they had to rent private wagons at market prices only. And there was nobody to compensate for the imbalance.
According to Clause 3 of Decree № 1051, the Federal Tariff Service (FTS) was charged with solving this problem, i.e. to develop and approve the order of calculation and rules of usage of tariffs on cargo transportation in rented wagon parks (it was planned to rent railcars on the conditions of RZD’s fleet with a special order of price formation adjusted). With the help of RZD, the Federal Tariff Service completed this task. At the end of January, order № 444-t/4 of the FTS dated December 27, 2011 “On Enactment of the Order of Calculation of Tariffs on Cargo Transportation in Rented Railcars and Rules of Their Usage” came into force.
According to RZD, an offer suggesting the rental of gondola cars in accordance with the tariffs developed by the FTS has been sent to small and medium-size operators (perhaps, to most interested persons). As far as we know, operators do not rush to give their gondola cars to the consolidated wagon park, which consists of the rolling stock of the Second Cargo Company only. Perhaps, amid the shortage of gondola cars and the necessity to make leasing payments, the offered rate turned out to be too low for private companies. According to the order of the FTS, the transporter can vary the coefficient to readjust such rates.

There Is Some Progress

On the other hand, there is some progress in the field of regulating the empty mileage on the RZD’s network. A respective order of the Transport Ministry (Order № 258 dated October 3, 2011, “On Amendments to Some Acts of the RF Ministry of Railways”) came into force already. After it appeared, RZD became able to control the movement of private empty railcars on the infrastructure by carrying out the transporter’s right to refuse empty wagons transportation if there is no adjusted application for transportation of cargo in them from the destination point.
This decree came into force on January 18, 2012. It sets the interconnection between a definite private empty railcar, received for transportation and moving to the place where it will be loaded, and the consignor that will use it. This measure is aimed at the targeted dispatch of empty wagons in accordance with an adjusted application and further transportation of cargo in it. Also, starting from January 18, the consignor is obligated to mention the owner of wagon in the GU-12 application.
It seems that nothing special is required from a consignor – he is just to name the owner of wagons at cargo dispatch and have an application for the further loading when an empty railcar is dispatched. In practice, it has turned out to be impossible often to meet these two requirements (for example, there is no information about the exact time of a railcar arrival and its owner, etc.). Wagons do not accumulate at places of mass loading today. Instead, they may now accumulate at the places of mass unloading.
Another problem connected with carrying out Order № 258 of the Transport Ministry is that the owner of a wagon is to be named in the application. There are few cargo owners now that work with one or two operators.
To carry out the new idea of the order (only wagon owner, named in the GU-12 application, can form a notification of an empty railcar dispatch), the Centre of Transport Services in cooperation with the Council of the Market of Operators (an organization uniting 33 operators, to whom the larger part of the entire wagon fleet belongs) decided to develop two e-databases – an e-base of notifications from cargo owners of the expected wagon supplies, and an e-base of wagon owners’ warrants.
Despite a number of difficulties faced by consignors because of the new order, the problem of traffic jams at places of mass loading will be solved soon. Perhaps, later, due to amendments to statements in this order, an efficient system of wagons movement (at least, empty ones) may be built in future.

The Second Is Better

According to Clause 4 of the Decree № 1051, some regulators headed by the Transport Ministry were commissioned to develop regulatory acts defining the legal basis for regulation of operators’ activity and their interaction with other market players. The first draft decree of the RF Government “On the Basis of Legal Regulation of Activity of Operators and Their Interaction with Transportation Process Participants at Cargo Transportation” emerged at the end of 2011, but because of the heated discussion about some of its clauses, the document was revised.
Nowadays, market players are discussing the second version presented by the Transport Ministry in the middle of February. At first sight, it is not so debatable.
The Transport Ministry believes that operators should be divided in network-wide, regional, specialized, corporate, and container ones. Network-wide operators are supposed to have at least 5,000 own or rented units of rolling stock, including specialized railcars. And they are supposed to provide their fleet for transportation of a large number of cargoes in any direction.
Regional operators may have different types of rolling stock (up to 5,000 units). They are supposed to transport cargo on specific lines.
Specialised operators manage specialized rolling stock to transport specific cargoes. Corporate companies have railcars and provide them to some definite clients that, as a rule, are incorporated with the operator into one group of persons. And the last category is container operators, i.e. those who have specialized rolling stock and containers.
A number of questions remain unanswered. Most of them concern whether operators will be obligated to provide their rolling stock. Firstly, will they have to provide it to all applicants, as a public transporter (RZD) has to? Secondly, will they have to supply it in some cases not to cargo owners but to the transporter?
After some debates, the consensus about the first question was reached. RZD offered to oblige all operators to provide their rolling stock for loading, and those who do not would be just wagon owners. The Transport Ministry wanted to enlarge the market and cut the number of operators, putting into operation a quantitative wagon census for such companies without making them obliged to work as a public transporter. At the conference in the Ministry of Transport in February, where all interested parties were present, it was concluded that the obligation to provide rolling stock may be put into operation but only for network-wide operators whose fleet is more than 5,000 railcars, and which work on the entire network of RZD (according to RZD’s Centre of Transport Services, there are approximately 30 such companies now).
The question as to whether an operator is obliged to provide his railcars to the transporter (if “yes”, on which conditions, and haw many) is still under discussion. We will specify: it is “obligation” that is discussed, because an operator has now the right to provide its railcars to the transporter (see Clause 1 of the decree, where the advisability of making private companies interested by means of such instruments as an auction and a public offer is mentioned).

Just Statistics

One more measure is being taken to regulate the activity of operators on RZD’s network – Clause 8 of Decree № 1051 commissioned the Ministry of Transport “to develop and approve the regulatory act setting the order of monitoring the process of supplying cargo owners with rolling stock and its usage by transportation process participants, the methods to evaluate the efficiency of such usage, and the order of information interaction and online data exchange with RZD and other participants of the transportation process.” Also, it is planned that starting from the first quarter of 2012, the Transport Ministry will submit a report about the results of such monitoring to the Government every quarter.
A respective order of the Transport Ministry has not been adopted yet, but its draft exists already (draft order of the Russian Ministry of Transport “On Adopting the Decree on the Order of Monitoring of Supply Cargo Owners with Railway Rolling Stock and Its Usage by Participants of the Transportation Process”).
According to the document, such monitoring will be carried out by specialists of the Federal Agency for Railway Transport (Roszheldor). For that, special automated workplaces will be created with access to the information bases of the transporter and operators (self-regulated organizations of operators).
The methods to evaluate wagon fleet efficiency have been developed already. A method of comparative analysis of the dynamics of several figures –turnover, average daily mileage, and wagon efficiency – will be used. Specialised and universal rolling stock will be analysed separately.
Perhaps, the Transport Ministry should adopt the order as fast as possible. The detail monitoring of fulfillment of cargo owners’ applications and the efficiency of the private fleet will be the best indicator of problems in the sector and will provide a clear vision of the real situation on the network. Until now, we got information about it from statistics and reports of different market players. The results of independent monitoring made by Roszheldor may fail to change our vision of the situation, but they will give more details. According to the results of such monitoring, revision of the regulatory acts developed nowadays may be needed. It is unknown, however, whether they will be revised to liberalise the activity of operators, or to toughen requirements of them.
By Nadezhda Vtorushina [~DETAIL_TEXT] =>

Couldn’t Do without the Government

The entire wagon fleet was the property of RZD earlier, and the company provided centralized administration of railcars. Nowadays, more than a million wagons belong to more than 1,500 private operators, and every owner disposes of his railcar at his own discretion, reasoning from his own benefit. Thus, the situation that emerged last summer – traffic jams because of empty wagons that idled waiting for loading in one of Russia’s regions (the Kuzbass), and, on the contrary, an acute shortage of wagons in other regions of Russia, – made a lot of cargo owners apply to the Government for help.
As a result, the mass accumulation of wagons at stations was removed due to administrative reduction of the number of operators with which consignors worked. Every such case, however, cannot be regulated in this way. In autumn 2011, it was decided to create a so-called park of own and rented wagons – consolidated or rented, a peculiar kind of RZD’s park restoration. Then, officials faced the following problem: there were neither juridical, nor economic conditions for an activity of such structure.
The target model of railway transportation market development to 2015 envisaged creation of a sector, where private companies would operate, and the transporter and infrastructure owner (i.e. RZD) would have no rolling stock. Consequently, the tariffs, according to which RZD’s park used to work, were to become a matter of the past.
Therefore, a separate regulatory document was needed to legalise the new consolidated park (at first it consisted of railcars of Freight One and the Second Cargo Company – daughter companies of RZD, and then – of private operators’ wagons) in its existing condition. As a result, last December, the Government issued a decree regulating questions concerning the work of the rented rolling stock park (decree №1051 dated December 20, 2011 “On the Order of Borrowing Railway Rolling Stock by RZD to Transport Cargo and on Setting a Special Order of Formation of Prices for Cargo Transportation in Mentioned Rolling Stock”).

Nothing Is More Permanent Than Something Temporary

In practice, this document touched first of all those RZD subsidiaries with a large fleet of gondola railcars – Freight One and the Second Cargo Company. Since November 2011, before the document was approved, the universal rolling stock of Freight One and the Second Cargo Company (100% of the former was owned by RZD at that time) has been aggregated into the owned and rented wagon park under the control of RZD. After the auction of Freight One, in February 2012, the new owner of the company took all its railcars from the consolidated fleet.
Clause 1 of Decree № 1051 obligates RZD to provide rental of gondola cars from the Second Cargo Company (either own or managed by the company) to transport freight. Simultaneously, it is noted that gondola cars of other owners should be rented as well on the basis of an auction or a public offer (on the same conditions). And the period of time when this clause is in force is limited – December 31, 2012, which means that it is temporary.
Nevertheless, some representatives of large operator companies fear now that this extraordinary measure may become permanent. In their opinion, it is not the best way out, because a new scheme of work must be developed to solve the problem of wagon supplies to fulfill cargo owners’ applications and to remove traffic jams on the network.
Such schemes are being developed by groups of scientists on the order of RZD, and by operators, but none of the suggestions has been approved by everyone and chosen as a pattern yet. The Ministry of Transport is trying to solve the problem too. State Secretary – Deputy Minister of Transport of the Russian Federation Sergey Aristov said recently that a new technology of transportation process management should be developed before the end of the current year to provide market normal functioning. This technology should meet the parameters of the Target Model to 2015, considering multiplicity of participants in the sector.

Tariff Chosen

For the transporter to borrow private rolling stock without damaging its own economy, tariffs were to be revised. Representatives of the Centre of Transport Services of RZD noted several times that RZD could rent wagons only on rates set by Tariff Regulation № 10-01, while they had to rent private wagons at market prices only. And there was nobody to compensate for the imbalance.
According to Clause 3 of Decree № 1051, the Federal Tariff Service (FTS) was charged with solving this problem, i.e. to develop and approve the order of calculation and rules of usage of tariffs on cargo transportation in rented wagon parks (it was planned to rent railcars on the conditions of RZD’s fleet with a special order of price formation adjusted). With the help of RZD, the Federal Tariff Service completed this task. At the end of January, order № 444-t/4 of the FTS dated December 27, 2011 “On Enactment of the Order of Calculation of Tariffs on Cargo Transportation in Rented Railcars and Rules of Their Usage” came into force.
According to RZD, an offer suggesting the rental of gondola cars in accordance with the tariffs developed by the FTS has been sent to small and medium-size operators (perhaps, to most interested persons). As far as we know, operators do not rush to give their gondola cars to the consolidated wagon park, which consists of the rolling stock of the Second Cargo Company only. Perhaps, amid the shortage of gondola cars and the necessity to make leasing payments, the offered rate turned out to be too low for private companies. According to the order of the FTS, the transporter can vary the coefficient to readjust such rates.

There Is Some Progress

On the other hand, there is some progress in the field of regulating the empty mileage on the RZD’s network. A respective order of the Transport Ministry (Order № 258 dated October 3, 2011, “On Amendments to Some Acts of the RF Ministry of Railways”) came into force already. After it appeared, RZD became able to control the movement of private empty railcars on the infrastructure by carrying out the transporter’s right to refuse empty wagons transportation if there is no adjusted application for transportation of cargo in them from the destination point.
This decree came into force on January 18, 2012. It sets the interconnection between a definite private empty railcar, received for transportation and moving to the place where it will be loaded, and the consignor that will use it. This measure is aimed at the targeted dispatch of empty wagons in accordance with an adjusted application and further transportation of cargo in it. Also, starting from January 18, the consignor is obligated to mention the owner of wagon in the GU-12 application.
It seems that nothing special is required from a consignor – he is just to name the owner of wagons at cargo dispatch and have an application for the further loading when an empty railcar is dispatched. In practice, it has turned out to be impossible often to meet these two requirements (for example, there is no information about the exact time of a railcar arrival and its owner, etc.). Wagons do not accumulate at places of mass loading today. Instead, they may now accumulate at the places of mass unloading.
Another problem connected with carrying out Order № 258 of the Transport Ministry is that the owner of a wagon is to be named in the application. There are few cargo owners now that work with one or two operators.
To carry out the new idea of the order (only wagon owner, named in the GU-12 application, can form a notification of an empty railcar dispatch), the Centre of Transport Services in cooperation with the Council of the Market of Operators (an organization uniting 33 operators, to whom the larger part of the entire wagon fleet belongs) decided to develop two e-databases – an e-base of notifications from cargo owners of the expected wagon supplies, and an e-base of wagon owners’ warrants.
Despite a number of difficulties faced by consignors because of the new order, the problem of traffic jams at places of mass loading will be solved soon. Perhaps, later, due to amendments to statements in this order, an efficient system of wagons movement (at least, empty ones) may be built in future.

The Second Is Better

According to Clause 4 of the Decree № 1051, some regulators headed by the Transport Ministry were commissioned to develop regulatory acts defining the legal basis for regulation of operators’ activity and their interaction with other market players. The first draft decree of the RF Government “On the Basis of Legal Regulation of Activity of Operators and Their Interaction with Transportation Process Participants at Cargo Transportation” emerged at the end of 2011, but because of the heated discussion about some of its clauses, the document was revised.
Nowadays, market players are discussing the second version presented by the Transport Ministry in the middle of February. At first sight, it is not so debatable.
The Transport Ministry believes that operators should be divided in network-wide, regional, specialized, corporate, and container ones. Network-wide operators are supposed to have at least 5,000 own or rented units of rolling stock, including specialized railcars. And they are supposed to provide their fleet for transportation of a large number of cargoes in any direction.
Regional operators may have different types of rolling stock (up to 5,000 units). They are supposed to transport cargo on specific lines.
Specialised operators manage specialized rolling stock to transport specific cargoes. Corporate companies have railcars and provide them to some definite clients that, as a rule, are incorporated with the operator into one group of persons. And the last category is container operators, i.e. those who have specialized rolling stock and containers.
A number of questions remain unanswered. Most of them concern whether operators will be obligated to provide their rolling stock. Firstly, will they have to provide it to all applicants, as a public transporter (RZD) has to? Secondly, will they have to supply it in some cases not to cargo owners but to the transporter?
After some debates, the consensus about the first question was reached. RZD offered to oblige all operators to provide their rolling stock for loading, and those who do not would be just wagon owners. The Transport Ministry wanted to enlarge the market and cut the number of operators, putting into operation a quantitative wagon census for such companies without making them obliged to work as a public transporter. At the conference in the Ministry of Transport in February, where all interested parties were present, it was concluded that the obligation to provide rolling stock may be put into operation but only for network-wide operators whose fleet is more than 5,000 railcars, and which work on the entire network of RZD (according to RZD’s Centre of Transport Services, there are approximately 30 such companies now).
The question as to whether an operator is obliged to provide his railcars to the transporter (if “yes”, on which conditions, and haw many) is still under discussion. We will specify: it is “obligation” that is discussed, because an operator has now the right to provide its railcars to the transporter (see Clause 1 of the decree, where the advisability of making private companies interested by means of such instruments as an auction and a public offer is mentioned).

Just Statistics

One more measure is being taken to regulate the activity of operators on RZD’s network – Clause 8 of Decree № 1051 commissioned the Ministry of Transport “to develop and approve the regulatory act setting the order of monitoring the process of supplying cargo owners with rolling stock and its usage by transportation process participants, the methods to evaluate the efficiency of such usage, and the order of information interaction and online data exchange with RZD and other participants of the transportation process.” Also, it is planned that starting from the first quarter of 2012, the Transport Ministry will submit a report about the results of such monitoring to the Government every quarter.
A respective order of the Transport Ministry has not been adopted yet, but its draft exists already (draft order of the Russian Ministry of Transport “On Adopting the Decree on the Order of Monitoring of Supply Cargo Owners with Railway Rolling Stock and Its Usage by Participants of the Transportation Process”).
According to the document, such monitoring will be carried out by specialists of the Federal Agency for Railway Transport (Roszheldor). For that, special automated workplaces will be created with access to the information bases of the transporter and operators (self-regulated organizations of operators).
The methods to evaluate wagon fleet efficiency have been developed already. A method of comparative analysis of the dynamics of several figures –turnover, average daily mileage, and wagon efficiency – will be used. Specialised and universal rolling stock will be analysed separately.
Perhaps, the Transport Ministry should adopt the order as fast as possible. The detail monitoring of fulfillment of cargo owners’ applications and the efficiency of the private fleet will be the best indicator of problems in the sector and will provide a clear vision of the real situation on the network. Until now, we got information about it from statistics and reports of different market players. The results of independent monitoring made by Roszheldor may fail to change our vision of the situation, but they will give more details. According to the results of such monitoring, revision of the regulatory acts developed nowadays may be needed. It is unknown, however, whether they will be revised to liberalise the activity of operators, or to toughen requirements of them.
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