Wednesday, November 24, 2010

Russian Railway President Outlines Plans For Rail Freight Infrastructure

Volumes with China could Double in a Decade
Shipping News Feature

RUSSIA – CHINA - Russian Railways President Vladimir Yakunin gave a speech today at a plenary session of the 5th Russian-Chinese Economic Forum in Moscow saying he believed that the next ten years the volume of direct rail freight with China could increase by 50-100%. Yakunin said that railway transport accounts for a substantial share of external trade freight between Russia and China. During the first 10 months of 2010, the volume of rail freight between the countries increased by 33% to reach 53 million tonnes. He confirmed that Russian Railways had earmarked improving transport provision and developing rail and intermodal terminal-logistic infrastructure on the main freight routes between Russia and China as a priority.

The vast majority (93.9%) of cargo comprises Russian oil, timber, chemical and mineral fertilizer exports, but in 2010, with the greater volume of Chinese machine and technical goods deliveries, imports also started to gradually increase. In line with the goals set by the Russian government, Russian Railways is developing rail infrastructure in regions of Siberia and Russia’s Far East. During last year alone, Mr Yakunin claimed that more than 12 billion roubles were spent on developing rail infrastructure in the Far East regions, and this year, the company plans to invest another 13 billion roubles.

As part of efforts to develop cooperation in rail container freight, Russian Railways has reached agreements with Chinese and German partners on creating a joint venture for container transport. The Russian Railways subsidiary TransContainer will represent Russia in the joint venture. Additionally under the program for cooperation between regions of Russia’s Far East and East Siberia and China’s northwest provinces up to 2018, Russian Railways will be taking part in a project to create a new border crossing between Russia and China.

The project involves the creation a rail line from Leninsk to the Chinese border, along with the construction of a railway bridge from Nizhneleninskoye to Tongjiang across the Amur River, and the reconstruction of the existing Birobidzhan – Leninsk line. This project is being carried out on the basis of a public-private partnership, and is directly linked to the creation of an ore mining and smelting cluster in the Amur area. Under the project, the parties plan to deliver around 20 million tons of iron ore and other commodities to China annually by 2020.

One of the potential areas for expanding cooperation is shipping container freight from northwest Chinese provinces with no direct access to the coast via Russian Far East ports, for subsequent delivery to south China, Japan, South Korea, and other countries.