Friday, October 28, 2011

Rail Freight Interests Eye Russia Today

RZD Shows Its Cultural Side as Freight One Sale Starts
Shipping News Feature

RUSSIA – SPAIN -Two contrasting events in the next few days take place this week in the world of the country’s rail transport. The long awaited auctioning off of three quarters of Freight One, Russian Railways (RZD) cargo carrying subsidiary, proceeds today with all eyes fixed on the two main contenders, Vladimir Lisin, boss of Universal Cargo Logistics Holdings (UCL) (amongst other things) and Vladimir Putin’s old judo buddy Gennady Timochenko who heads up the Gunvor oil group.

The contest resembles an old US style battle of the magnates with both men truly entitled to the oft used ‘oligarch’ title. Lisin is steel, Timochenko oil, the former has the distinction of being widely recognised as the richest man in Russia, which really means something these days, he has an estimated fortune of $24 billion and already owns around $2 billion in general transport related assets. Meanwhile his rival has the advantage of Presidential favour whilst needing to secure a bigger foothold in the transport sector to control shipments of his own product.

Russian Railways boss Vladimir Yakunin meanwhile is believed to have suffered a slight cooling in his own relationship with Putin recently. Local press reports say the two clashed over delays caused by under capacity to and from the Black Sea ports causing the RZD boss to be sent to Siberia to sort the matter out.

Bidding starts at around $3.8 billion and is just another phase in the sell off of parts of what is the second largest rail system in the world behind the US. Altogether around 25% of RZD holdings are due to go under the hammer by about 2016 with a current estimated value of approximately $50 billion but speaking this week Yakunin indicated that the Eurozone crisis and the general state of the world economy might have an effect on this and future sales.

Freight One owns around 20% of all cargo carrying rail rolling stock in Russia, much of the equipment is over twenty years old and the sale should generate much needed cash for improvement. No doubt the successful bidder will be hoping to finance any investment partially from the sale of freight services to any other bidders or companies like Globaltrans who dropped out of the bidding last month.

Meanwhile the 31st October will see the Winter Garden at Atocha Railway Station in Madrid host the opening of a new photo exhibit, Russia through a Train Window. The exhibition is a joint project between Russian Railways and photographer Anton Lange, and is being presented as part of a year of cultural exchange between Russia and Spain. It also represents a step towards closer cooperation between Russian Railways and ADIF, Spain’s state-owned railway infrastructure administration.

The exhibition features over 120 photographs taken of the most expressive and unique regions of Russia. They feature Siberia, the Far East, Sakhalin Island, the Caucasus, the Urals, the North-West region, Lake Baikal, the Volga River and other regions and all were taken between 2006 and 2009 and a tour of the event is hosted by the photographer himself with the exhibition ending on the 20th November.

Photo: A section of an image by Anton Lange